-----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, LRoNfN/Blcb///oQVbxzlJ4IdUIZSjn/b1yV4n2F+Y3pXJoHnJ3HjmgPEiLlOnv7 SmYQ1WL4BkjD4Xg6CJHQCA== 0000950103-97-000714.txt : 19971203 0000950103-97-000714.hdr.sgml : 19971203 ACCESSION NUMBER: 0000950103-97-000714 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19971126 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971202 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNAMERICA INC CENTRAL INDEX KEY: 0000054727 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 860176061 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-04618 FILM NUMBER: 97731235 BUSINESS ADDRESS: STREET 1: 1 SUNAMERICA CENTER CITY: LOS ANGELES STATE: CA ZIP: 90067-6022 BUSINESS PHONE: 3107726000 FORMER COMPANY: FORMER CONFORMED NAME: KAUFMAN & BROAD INC DATE OF NAME CHANGE: 19890515 FORMER COMPANY: FORMER CONFORMED NAME: KAUFMAN & BROAD BUILDING CO DATE OF NAME CHANGE: 19711006 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) November 26,1997 SUNAMERICA INC. (Exact name of registrant as specified in charter) Maryland 1-4618 86-0176061 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1 SunAmerica Center, Los Angeles, California 90067-6022 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 772-6000 ITEM 5. Other Events. Exhibits are filed herewith in connection with the Registration Statement on Form S-3 (File No. 333-31619) and Amendment No. 1 thereto, filed by SunAmerica Inc. (the "Company") with the Securities and Exchange Commission relating to the Company's Debt Securities, Common Stock, Preferred Stock, Warrants, Stock Purchase Contracts and Stock Purchase Units. ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits. EXHIBITS Exhibit 1.1 - Distribution Agreement dated November 26, 1997 among the Company, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., Deutsche Morgan Grenfell Inc., Donaldson, Lufkin & Jenrette Securities Corporation, Edward Jones & Co., L.P., First Chicago, Capital Markets, Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated, NationsBanc Montgomery Securities, Inc. and Smith Barney Inc. Exhibit 4.1 - Form of Fixed Rate Definitive Medium-Term Note Exhibit 4.2 - Form of Fixed Rate Global Medium-Term Note Exhibit 4.3 - Form of Floating Rate Definitive Medium-Term Note Exhibit 4.4 - Form of Floating Rate Global Medium-Term Note SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SUNAMERICA INC. Date: December 1, 1997 By: /s/ Susan L. Harris ------------------------- Susan L. Harris Senior Vice President and General Counsel - Corporate Affairs EX-1.1 2 SUNAMERICA INC. Medium-Term Notes, Series 3 Due Nine Months or More from Date of Issue DISTRIBUTION AGREEMENT November 26, 1997 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated CHASE SECURITIES INC. DEUTSCHE MORGAN GRENFELL INC. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION EDWARD JONES & CO., L.P. FIRST CHICAGO CAPITAL MARKETS, INC. GOLDMAN, SACHS & CO. J.P. MORGAN SECURITIES INC. MORGAN STANLEY & CO. INCORPORATED NATIONSBANC MONTGOMERY SECURITIES, INC. SMITH BARNEY INC. c/o Merrill Lynch & Co. World Financial Center North Tower, 10th Floor New York, New York 10281-1310 Dear Sirs: SunAmerica Inc., a Maryland corporation (the "Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., Deutsche Morgan Grenfell Inc., Donaldson, Lufkin & Jenrette Securities Corporation, Edward Jones & Co., L.P., First Chicago Capital Markets, Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated, NationsBanc Montgomery Securities, Inc. and Smith Barney Inc. (each, an "Agent" and collectively, the "Agents") with respect to the issue and sale by the Company of its Medium-Term Notes, Series 3 described herein (the "Notes"). The Notes are to be issued pursuant to the Senior Indenture dated as of April 15, 1993, as supplemented by the indenture supplements dated as of June 28, 1993 and October 28, 1996 (as so supplemented, the "Indenture"), between the Company and The First National Bank of Chicago, as trustee (the "Trustee"). As of the date hereof, the Company has authorized the issuance and sale of up to U.S. $500,000,000 aggregate initial offering price (or its equivalent, based upon the applicable exchange rate at the time of issuance, in such foreign or composite currencies as the Company shall designate at the time of issuance) of Notes pursuant to the terms of this Agreement. It is understood, however, that the Company may from time to time authorize the issuance of additional Notes and that such additional Notes may be sold pursuant to the terms of this Agreement, all as though the issuance of such Notes were authorized as of the date hereof. The Company and certain related entities have filed with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-3 (No. 333-31619 and 333-3169-01, -02 and -03) for the registration of securities, including the Notes, under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the SEC under the 1933 Act (the "1933 Act Regulations"). Such registration statement has been declared effective by the SEC and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement (and any further registration statements that may be filed by the Company for the purpose of registering additional Notes and in connection with which this Agreement is included or incorporated by reference as an exhibit) and the prospectus constituting a part thereof (in the case of the registration statement previously filed, excluding the prospectus relating to junior subordinated debt securities of the Company and preferred securities of SunAmerica Capital Trust IV, V and VI), supplemented by any prospectus supplements relating to the Notes, including all documents incorporated therein by reference, as from time to time amended or supplemented by the filing of documents pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), or the 1933 Act or otherwise, are referred to herein as the "Registration Statement" and the "Prospectus," respectively, except that (i) if the Company files a registration statement with the SEC pursuant to Rule 462(b) of the 1933 Act Regulations (a "Rule 462(b) Registration Statement"), then after such filing, all references to "Registration Statement" shall be deemed to include such Rule 462(b) Registration Statement, and (ii) if any revised prospectus shall be provided to the Agents by the Company for use in connection with the offering of the Notes that is not required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term "Prospectus" shall refer to such revised prospectus from and after the time it is first provided to the Agents for such use. Section 1. Appointment as Agent. (a) Appointment. Subject to the terms and conditions stated herein, including Section 17 and the next sentence of this paragraph (a), the Company hereby agrees that the Agents will be its agents for the purpose of soliciting and receiving offers to purchase Notes from the Company. Notwithstanding any provision of this Agreement to the contrary, the Company shall have the right to sell Notes directly on its own behalf, and may in its discretion solicit and accept offers to purchase and accept unsolicited offers to purchase Notes directly on its own behalf or from any broker or dealer not a party to this Agreement (whether acting as principal or as agent). Each Agent acknowledges that, in the case of any sale of Notes by the Company not resulting from a solicitation made or an offer to purchase received by such Agent, or arising in connection with a purchase by such Agent as principal, no commission shall be payable by the Company to such Agent with respect to such sale. (b) Sale of Notes. The Company shall not sell or approve the solicitation of purchases of Notes in excess of the amount that shall be authorized by the Company from time to time or in excess of the principal amount of Notes registered pursuant to the Registration Statement. The Agents will have no responsibility for maintaining records with respect to the aggregate principal amount of Notes sold, or of otherwise monitoring the availability of Notes for sale, under the Registration Statement. (c) Purchases as Principal. The Agents shall not have any obligation to purchase Notes from the Company as principal, but one or more Agents may agree from time to time to purchase Notes as principal. The Agents are authorized to engage the services of any other broker or dealer in connection with the offer or sale of the Notes purchased by one or more of the Agents as principal for resale to others but are not authorized to appoint sub-agents. Any purchase of Notes by one or more Agents as principal shall be made in accordance with Section 3(a) hereof. (d) Solicitations as Agent. Each Agent will communicate to the Company, orally or in writing, each offer to purchase Notes solicited by such Agent on an agency basis that in its judgment should be considered by the Company. The Agents shall have the right, in their discretion, reasonably exercised, to reject any proposed purchase of Notes that it deems to be unacceptable, as a whole or in part, and any such rejection shall not be deemed a breach of the Agents' agreement contained herein. The Company shall have the sole right to accept offers to purchase Notes and may reject any proposed purchase of the Notes, in whole or in part. The Agents shall make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes has been solicited by the Agents and accepted by the Company. The Agents shall not have any liability to the Company in the event any such agency purchase is not consummated for any reason. If the Company shall default on its obligation to deliver Notes to a purchaser whose offer it has accepted, the Company shall (i) hold the Agents harmless against any loss, claim or damage arising from or as a result of such default by the Company and (ii) notwithstanding such default, pay to each Agent any commission to which it would be entitled in connection with such sale. (e) Reliance. The Company and the Agents agree that any Notes purchased by an Agent shall be purchased, and any Notes the placement of which an Agent arranges shall be placed by the Agent, in reliance on the representations, warranties, covenants and agreements of the Company contained herein and on the terms and conditions and in the manner provided herein. Section 2. Representations and Warranties. The Company represents and warrants to the Agents as of the date hereof, as of the date of each acceptance by the Company of an offer for the purchase of Notes (whether from an Agent as principal or through an Agent as agent), as of the date of each delivery of Notes (whether to an Agent as principal or through an Agent as agent) (the date of each such delivery to an Agent as principal being hereafter referred to as a "Settlement Date"), and as of any time that the Registration Statement or the Prospectus shall be amended or supplemented or there is filed with the SEC any document incorporated by reference into the Prospectus (each of the times referenced above being referred to herein as a "Representation Date") as follows: (a) (i) At the time the Registration Statement became effective, the Registration Statement complied, and as of the applicable Representation Date will comply, in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the SEC promulgated thereunder; (ii) the Registration Statement, at the time it became effective, did not, and at each time thereafter at which any amendment to the Registration Statement becomes effective, will not, include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and (iii) the Prospectus, as of the date hereof does not, and as of each Representation Date will not, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Agent expressly for use in the Registration Statement or Prospectus or to that part of the Registration Statement that constitutes the Statement of Eligibility and Qualification (Form T-1) under the 1939 Act of the Trustee; provided further, that the representations and warranties set forth in clauses (i) and (iii) above, when made as of the date hereof or as of any date on which the Company accepts an offer to purchase Notes, shall be deemed not to cover information concerning an offering of particular Notes to the extent the information concerning such offering of particular Notes will be set forth in a supplement to the Prospectus. (b) The documents incorporated by reference in the Prospectus at the time they were or hereafter are filed with the SEC, complied or when so filed will comply, as the case may be, in all material respects with the requirements of the 1934 Act and the rules and regulations promulgated thereunder (the "1934 Act Regulations"). (c) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, and except as otherwise stated or contemplated therein, there has been no material adverse change and no development reasonably likely to result in a prospective material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, taken as a whole, whether or not arising in the ordinary course of business. (d) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, except where the failure to so qualify or be in good standing would not have a material adverse effect on Company and its subsidiaries, taken as a whole. (e) Each of the Company's subsidiaries that are "significant subsidiaries", as defined under Regulation S-X of the 1933 Act Regulations (each, a "Significant Subsidiary"), has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus, and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; all of the issued and outstanding capital stock of each Significant Subsidiary has been duly authorized and validly issued and is fully paid and nonassessable, and all of such issued and outstanding capital stock that is owned directly or through subsidiaries by the Company is owned free and clear of any mortgage, pledge, lien or other encumbrance (except for Permitted Liens (as defined in the Indenture) or as otherwise permitted by the Indenture). (f) The Company and each Significant Subsidiary possesses such certificates, authorizations or permits issued by the appropriate state or federal regulatory agencies or bodies as are necessary to conduct the business as now conducted by them and as described in the Prospectus, except where the failure to so possess such certificates, authorizations or permits would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, taken as a whole; and neither the Company nor any of the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, is reasonably likely to have a material adverse effect on the Company and its subsidiaries, taken as a whole. (g) This Agreement has been duly authorized, executed and delivered by the Company. (h) The Indenture has been duly qualified under the 1939 Act and has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability. (i) The Notes have been duly authorized for issuance, offer and sale pursuant to this Agreement, and, when issued, authenticated and delivered pursuant to the provisions of this Agreement and the Indenture against payment of the consideration therefor specified in the Prospectus or agreed upon pursuant to the provisions of this Agreement, the Notes will be entitled to the benefits of the Indenture and will constitute valid and binding obligations of the Company, enforceable in accordance with their terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability. (j) The Company is not in violation of any of its charter or bylaws. The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Indenture and the Notes will not contravene any provision of applicable law or the articles of incorporation or bylaws of the Company or any agreement or other instrument binding upon the Company or any Significant Subsidiary, which agreement or instrument is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any Significant Subsidiary, except for such a contravention that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, and no consent, approval, authorization or order of or qualification with any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Indenture and the Notes, except such as may be required by the 1933 Act, the 1933 Act Regulations, the securities or Blue Sky laws or insurance securities laws of the various states in connection with the offer and sale of the Notes or such as have been obtained. (k) There are no legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that are required by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations to be described in the Registration Statement or the Prospectus and are not so described; there are no contracts or other documents that are required by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations to be filed as exhibits to the Registration Statement or to any documents incorporated by reference therein that are not filed as so required. (l) The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. Notwithstanding the foregoing, the representations and warranties set forth in Section 2(a), 2(i) (except as to due authorization of the Notes) and 2(i), when made as of the date hereof with respect to any Notes the payments of principal or interest on which will be determined by reference to one or more currency exchange rates, commodity prices, equity indices or other factors, shall be deemed not to address the application of the Commodity Exchange Act, as amended, or the rules, regulations or interpretations of the Commodity Futures Trading Commission. Section 3. Purchases as Principal; Solicitations as Agents. (a) Purchases as Principal. Each sale of Notes to an Agent as principal shall be made in accordance with terms agreed upon by one or more Agents and the Company (which terms shall be agreed upon either (i) in writing or (ii) orally, with written confirmation prepared by the Agent or Agents making such purchase and promptly delivered to the Company). An Agent's commitment to purchase Notes as principal shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each such purchase of Notes by any Agent shall be made by such Agent with the intention of reselling them as soon as practicable, in the sole judgment of such Agent, unless otherwise agreed by the Company and such Agent in connection with such purchase. Each such purchase of Notes, unless otherwise agreed, shall be at a discount equivalent to the applicable commission set forth in Schedule A hereto. The Agents may engage the services of any other broker or dealer in connection with the resale of Notes purchased as principal and may allow any portion of the discount received in connection with such purchases from the Company to such brokers and dealers; provided, however, that such portion shall not exceed the amount set forth in the Prospectus. The Company shall be advised by one or more Agents when a purchase of Notes is proposed to be made by such Agents as principal and as to the proposed terms of any such purchase, and the Company and the Agent or Agents making such purchase shall agree as to any requirements for the stand-off agreement, officer's certificate, opinion of counsel and comfort letter pursuant to Sections 4(i), 7(a), 7(b) and 7(c) hereof, respectively. (b) Solicitations as Agents. On the basis of the representations and warranties herein contained, but subject to the terms and conditions set forth herein and in the Prospectus, when agreed by the Company and one or more Agents, each such Agent, as an agent of the Company, will use its reasonable efforts to solicit offers to purchase the Notes upon terms acceptable to the Company at such times and in such amounts as the Company shall from time to time specify. All Notes sold through one or more Agents as agents will be sold at 100% of their principal amount unless otherwise agreed to by the Company and such Agent or Agents. The Company reserves the right, in its sole discretion, to suspend solicitation of purchases of the Notes through the Agents, as agents, commencing at any time for any period of time or permanently. Upon receipt of instructions from the Company, the Agents will forthwith suspend solicitation of purchases from the Company until such time as the Company has advised the Agents that such solicitation may be resumed. While such solicitation is suspended, the Company shall not be required to deliver any certificates, opinions or letters pursuant to Section 7 hereof; provided, however, that if the Company shall thereafter advise the Agents that such solicitation may be resumed, the Company shall deliver or cause to be delivered to each Agent any certificate, opinion or letter that is requested by such Agent and that would have been required during the period of suspension were it not for this paragraph, except that if, during the period of suspension, the Company shall have filed an Annual Report on Form 10-K, no Agent shall be entitled to receive any such certificate, opinion or letter relating to amendments or supplements to the Registration Statement or the Prospectus made by means of any filing by the Company pursuant to the 1934 Act prior to the date of filing of such Annual Report on Form 10-K; and provided, further, that if, at the time such solicitation is suspended, any Agent owns Notes purchased by it as principal pursuant to this Agreement, the Company shall be required to continue to deliver such certificates, opinions and letters to such Agent during the period of suspension until the earlier of (i) such time as such Agent no longer owns any of such Notes or (ii) 90 days from the last date on which any of such Notes were purchased from the Company by such Agent (except that the Company shall, at the request of such Agent, deliver such certificates, opinions and letters after the date specified in clause (ii), but not after the date specified in clause (i), if such Agent, notwithstanding the provisions of Section 10, pays all expenses incident to the preparation and delivery of the certificates, opinions and letters that the Company is required to deliver solely as a consequence of this parenthetical). The Company agrees to pay each Agent a commission, in the form of a discount, equal to the applicable percentage of the principal amount of each Note sold by the Company as a result of a solicitation made by such Agent as set forth in Schedule A hereto. (c) Administrative Procedures. The Agents and the Company agree to perform the respective duties and obligations specifically provided to be performed by them in the procedures set forth in Exhibit B hereto, as amended from time to time by written agreement of the Company, the Trustee and the Agents. Section 4. Covenants of the Company. The Company covenants with each Agent as follows: (a) The Company will notify the Agents immediately (i) of the effectiveness of any amendment to the Registration Statement, (ii) of the transmittal to the SEC for filing of any supplement to the Prospectus (except that notice of the filing of a supplement to the Prospectus that merely sets forth the terms or a description of particular Notes shall be given only to the Agent or Agents offering such Notes) or any document to be filed pursuant to the 1934 Act that will be incorporated by reference in the Prospectus, (iii) of the receipt of any comments from the SEC with respect to the Registration Statement or the Prospectus, (iv) of any request by the SEC for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (v) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (vi) of the issuance by any state securities commission or other regulatory authority of any order suspending the qualification or the exemption from qualification of the Notes under state securities or Blue Sky laws or the initiation of any proceedings for that purpose and (vii) of any change in (or withdrawal of) the rating assigned by any nationally recognized statistical rating organization to any debt securities of the Company or the public announcement by any nationally recognized statistical rating organization that it has under surveillance or review, with possible negative implications, its rating of any debt securities of the Company. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (b) The Company will furnish the Agents with copies of any additional registration statements with respect to the registration of additional Notes, any amendments to the Registration Statement or any amendments or supplements to the Prospectus (other than an amendment or supplement providing solely for a change in the interest rates of Notes or made by the filing of documents pursuant to the 1934 Act) a reasonable amount of time prior to such proposed filing for their review and comment; provided, however, that any supplement to the Prospectus that merely sets forth the terms or a description of particular Notes shall only be furnished to the Agent or Agents offering such Notes. (c) The Company will deliver to the Agents as many conformed copies of the Registration Statement as originally filed and of each amendment thereto as the Agents may reasonably request. The Company will furnish to each Agent as many copies of the Prospectus (as amended or supplemented) as such Agent shall reasonably request so long as such Agent is required to deliver a Prospectus in connection with sales or solicitations of offers to purchase the Notes. (d) The Company will prepare, with respect to any Notes to be sold through or to one or more Agents pursuant to this Agreement, a pricing supplement with respect to such Notes in a form previously reasonably approved by such Agent or Agents and will file such pricing supplement pursuant to Rule 424(b)(3) under the 1933 Act not later than the deadline for the filing thereof. (e) Except as otherwise provided in the last paragraph of this Section, if at any time during the term of this Agreement any event shall occur as a result of which it is necessary to amend or supplement the Prospectus so that the Prospectus would not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances existing at the time it is delivered to a purchaser, not misleading, or if it shall be necessary to amend or supplement the Registration Statement or the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, notice shall be promptly given, and confirmed in writing, to each of the Agents to cease the solicitation of offers to purchase the Notes in the Agents' capacity as agents and to cease sales of any Notes the Agents may then own as principal and, if so notified by the Company, the Agents shall forthwith suspend such solicitation and sales. If any Agent then owns Notes purchased by it as principal pursuant to this Agreement or has agreed to purchase Notes as principal pursuant to this Agreement, the Company will forthwith amend or supplement the Registration Statement and the Prospectus, whether by filing documents pursuant to the 1934 Act, the 1933 Act or otherwise, so that, as so amended or supplemented, the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or to make the Registration Statement and Prospectus comply with such requirements; the Company will furnish to the Agents a reasonable number of copies of any amendment or supplement to the Registration Statement or Prospectus. (f) The Company will make generally available to its security holders as soon as practicable, but not later than 90 days after the close of the period covered thereby, if the fiscal quarter referred to below is the last fiscal quarter of the Company's fiscal year, and otherwise 45 days after the close of the period covered thereby, an earnings statement (in form and in a manner complying with the provisions of Rule 158 under the 1933 Act Regulations) covering each twelve-month period beginning, in each case, not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in such Rule 158) of the Registration Statement with respect to each sale of Notes. (g) The Company will endeavor, in cooperation with the Agents, to qualify the Notes for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Agents shall reasonably request (with a good faith intent at that time to offer or sell the Notes in such jurisdiction); provided, however, that the Company shall not be obligated to qualify as a foreign corporation or to execute a general consent as to service of process in any jurisdiction in which it is not so qualified or to make any undertakings with respect to the conduct of its business therein. (h) The Company, during the period when the Prospectus is required to be delivered under the 1933 Act, will file promptly all documents required to be filed with the SEC pursuant to Sections 13(a), 13(c), 14 or l5(d) of the 1934 Act. (i) If agreed by the Company and an Agent in connection with a purchase by such Agent of Notes as principal, between the date of the agreement to purchase such Notes and the Settlement Date with respect to such purchase, the Company will not, without such Agent's prior written consent, offer or sell, or enter into any agreement to sell, any debt securities of the Company (other than the Notes that are to be sold pursuant to such agreement, debt securities previously agreed to be sold by the Company of which such Agent was advised by the Company prior to the time of such agreement to purchase and commercial paper in the ordinary course of business). The Company shall not be required to comply with the provisions of Section 4(e) during any period that (i) the Company shall have suspended solicitation of purchases of the Notes (provided, however, that the Company shall continue to comply with such provisions during the period during which the Company shall be obligated to continue to deliver certificates, opinions and letters pursuant to the further proviso to the second paragraph of Section 3(b)), (ii) no Agent shall then hold any Notes purchased by it as principal pursuant hereto or (iii) a prospectus relating to the Notes is not required to be delivered under the Securities Act. Section 5. Conditions of Obligations. The obligations of each Agent to purchase Notes as principal and to solicit offers to purchase the Notes as agent of the Company, and the obligations of any purchasers of the Notes sold through one or more Agents as agents, will be subject to the accuracy of the representations and warranties of the Company herein contained and to the accuracy of the statements of the Company's officers made in any certificate furnished pursuant to the provisions hereof in connection with the sale of such Notes, to the performance by the Company of its obligations hereunder and to the following further conditions: (a) Legal Opinions. On the date hereof, the Agents shall have received the following legal opinions, dated as of the date hereof and in form and substance satisfactory to the Agents: (i) The opinion of Piper & Marbury L.L.P., counsel to the Company, to the effect that: (A) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland; and the Company has the corporate power under the laws of the State of Maryland and under its charter to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus; (B) Each of this Agreement and the Indenture has been duly authorized, executed and delivered by the Company; (C) The Notes, in the forms certified by the Company as of the date hereof, have been duly authorized by the Company; and (D) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Indenture and the Notes will not contravene any provision of any material applicable law of the State of Maryland or the charter or bylaws of the Company (except that no opinion need be expressed with respect to Maryland securities or Blue Sky laws). (ii) The opinion of Susan L. Harris, Esq., Senior Vice President and General Counsel - Corporate Affairs of the Company, to the effect that: (A) To the best of such counsel's knowledge and information, the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, except where the failure to so qualify and be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (B) Each Significant Subsidiary is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, it being understood that, as to each Significant Subsidiary, the foregoing opinion as to valid existence and good standing is based solely on a certificate dated as of a recent date of an appropriate official of the jurisdiction of incorporation of such Significant Subsidiary and, as applicable, a letter from CT Corporation System dated as of a recent date as to the good standing of such Significant Subsidiary in such jurisdiction, copies of which will be delivered to the Agents on the date of such opinion. Nothing has come to the attention of such counsel to lead such counsel to believe that any Significant Subsidiary is not duly qualified as a foreign corporation to transact business or is not in good standing in each jurisdiction in which such qualification is required, except where the failure to so qualify or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. All of the issued and outstanding capital stock of each Significant Subsidiary that is owned directly or through subsidiaries by the Company is owned free and clear, to the best of such counsel's knowledge and information, of any mortgage, pledge, lien or other encumbrance (except for Permitted Liens (as defined in the Indenture) or as otherwise permitted by the Indenture). (C) To the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement is in effect under the 1933 Act, and no proceedings for such purpose are pending before or threatened by the SEC. (D) At the time the Registration Statement became effective, the Registration Statement and at the date of such opinion, the Prospectus (other than the financial statements, supporting schedules and other financial data included or incorporated by reference therein, as to which no opinion need be rendered) appeared on its face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations. (E) Each document filed pursuant to the 1934 Act and incorporated by reference in the Prospectus, at the time it was filed or last amended (other than financial statements, supporting schedules and other financial data included or incorporated by reference therein, as to which no opinion need be rendered), appeared on its face to be appropriately responsive in all material respects to the requirements of the 1934 Act and the 1934 Act Regulations. (F) To the best of such counsel's knowledge and information, there are no statutes, regulations, contracts or other documents required to be described in the Registration Statement or the Prospectus that are not described as required, and there are no legal or governmental proceedings pending or threatened that are required to be disclosed in the Registration Statement, other than those disclosed therein. (G) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Indenture and the Notes will not contravene any provision of any material applicable law or the Charter or bylaws of the Company or, to the best of such counsel's knowledge, any agreement or other instrument binding upon the Company or any Significant Subsidiary, which agreement or instrument is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any Significant Subsidiary, except for such a contravention that would not have a material adverse affect on the Company and its subsidiaries, taken as a whole. (H) No consent, approval, authorization or order of or qualification with any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Indenture and the Notes, except such as may be required under the 1933 Act, the 1933 Act Regulations, or state securities or Blue Sky or insurance securities laws or except as have been obtained. (iii) The opinion of Davis Polk & Wardwell, special counsel to the Company, with respect to the matters set forth in paragraph (G) (solely with respect to Federal law and the laws of the State of New York) of 5(a)(ii) and to the effect that: (A) Assuming due authorization, execution and delivery by the ]Company and the Trustee, the Indenture is a valid and binding agreement of the Company, enforceable in accordance with its terms except as (1) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally, and (2) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). (B) Assuming that the series of Notes has been duly authorized, when the terms of a particular Note and its issuance and sale have been duly established in conformity with the Indenture, and assuming that such Note has been duly executed and authenticated in accordance with the provisions of the Indenture and delivered and paid for by the purchasers thereof in accordance with the terms of this Agreement, such Note will be entitled to the benefits of the Indenture and will be a valid and binding obligation of the Company, enforceable in accordance with its terms, except as (1) enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally, and (2) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). (C) The statements in the Prospectus under the captions "Description of Notes" (other than "Book-Entry System"), "Description of the Senior Debt Securities and Subordinated Debt Securities" (other than "Global Debt Securities") and "United States Taxation," in each case insofar as they constitute summaries of the legal matters or documents referred to therein, fairly summarize, in all material respects, the matters referred to therein. (D) The Indenture has been duly qualified under the 1939 Act. (E) The Registration Statement has become effective under the 1933 Act. (F) The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. In giving such opinion, such counsel may rely, without independent verification, as to matters of Maryland law, on the opinion of Piper & Marbury, L.L.P. delivered pursuant to Section 5(a)(i). (iv) The opinion of Skadden, Arps, Slate, Meagher & Flom, LLP, counsel to the Agents, with respect to the matters set forth in (C) and (D) (but not with respect to any documents incorporated by reference) of subsection (a)(ii) of this Section and in (A), (B), (C) (but not with respect to the statements in the Prospectus under the caption "United States Taxation") and (E) of subsection (a)(iii) of this Section. (v) In giving their opinions required by Sections 5(a)(ii), 5(a)(iii) and 5(a)(iv), respectively, Susan L. Harris, Esq., Davis Polk & Wardwell, and Skadden, Arps, Slate, Meagher & Flom LLP shall each additionally state that they have not themselves checked the accuracy or completeness of, or otherwise verified, the information furnished with respect to matters in the Registration Statement or the Prospectus, except as stated; that they have generally reviewed and discussed with representatives of the Agents and with certain officers and employees of, and counsel and independent public accountants for, the Company, the information furnished, whether or not subject to their check and verification; and that, on the basis of such consideration, review and discussion, but without independent check or verification, except as stated, (A) (in the case of the opinion of Davis Polk & Wardwell only) they are of the opinion that (except for the financial statements, supporting schedules and other financial data included or incorporated by reference therein, and except for those parts of the Registration Statement that constitute the Form T-1s, as to which they express no opinion) the Registration Statement, as of its effective date, and the Prospectus, as of the date of such opinion, appeared on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations, and (B) nothing has come to their attention that would lead them to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein, and except for those parts of the Registration Statement that constitute the Form T-1s, as to which they express no belief), each part of the Registration Statement, at the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus (except as aforesaid), as amended or supplemented at the date of such opinion, includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, the opinions described in Sections 5(a)(ii)(G) and 5(a)(iii)(B) and the statements described in this Section 5(a)(v), when contained in an opinion delivered on the date hereof or pursuant to Section 7(b), shall be deemed not to address the application of the Commodity Exchange Act, as amended, or the rules, regulations or interpretations of the Commodity Futures Trading Commission to Notes the payments of principal or interest on which will be determined by reference to one or more currency exchange rates, commodity prices, equity indices or other factors. (b) Officer's Certificate. At the date hereof, the Agents shall have received a certificate signed by an executive officer of the Company, dated as of the date hereof, to the effect that (i) since the respective dates as of which information is given in the Registration Statement and the Prospectus or, in the case of an officer's certificate delivered on the Settlement Date following the agreement of an Agent to purchase Notes as principal, since the date of such agreement, there has not been any material adverse change, or any development reasonably likely to result in a prospective material adverse change, in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, taken as a whole, (ii) the representations and warranties of the Company contained in Section 2 hereof are true and correct with the same force and effect as though expressly made at and as of the date of such certificate and (iii) the Company has performed or complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the date of such certificate. (c) Comfort Letter. On the date hereof, the Agents shall have received a letter from the Company's independent public accountants, dated as of the date hereof and in form and substance satisfactory to the Agents, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters in accordance with AICPA standards, with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus. (d) Other Documents. On the date hereof and on each Settlement Date, counsel to the Agents shall have been furnished with such documents and opinions as such counsel may reasonably require for the purpose of enabling such counsel to pass upon the issuance and sale of Notes as herein contemplated and related proceedings, or in order to evidence the accuracy and completeness of any of the representations and warranties, or the fulfillment of any of the conditions herein contained; and all proceedings taken by the Company in connection with the issuance and sale of Notes as herein contemplated shall be satisfactory in form and substance to the Agents and to counsel to the Agents. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, any applicable agreement by an Agent to purchase Notes as principal may be terminated by such Agent by notice to the Company, and any such termination shall be without liability of any party to any other party with respect to such agreement, except that Sections 8, 9, 10, 11, 14, and Section 15 hereof shall remain in effect with respect to such agreement. Section 6. Delivery of and Payment for Notes Sold through the Agents. Delivery of Notes sold through one or more Agents as agents shall be made by the Company to such Agent or Agents for the account of any purchaser only against payment therefor in immediately available funds. Section 7. Additional Covenants of the Company. The Company covenants and agrees with the Agents that: (a) Subsequent Delivery of Certificates. Each time that (i) the Registration Statement or the Prospectus shall be amended or supplemented (other than by (A) a pricing supplement or other amendment or supplement providing solely for a change in the interest rates, redemption provisions, amortization schedules or maturities of Notes or similar changes (collectively, "Pricing Terms"), (B) an amendment or supplement that relates exclusively to an offering of debt securities other than the Notes or (C) except as provided below, the filing of any document incorporated by reference therein), (ii) there is filed with the SEC any periodic report on Form 10-K or 10-Q, or a current report on Form 8-K containing information called for by any of Items 1 through 4 thereof, (iii) (if so agreed in connection with the purchase of Notes by an Agent as principal) the Company sells Notes to an Agent as principal or (iv) the Company issues and sells Notes in a form not previously certified to the Agents by the Company, the Company shall furnish or cause to be furnished to the Agents forthwith a certificate dated the date of filing with the SEC of such supplement or document, the date of effectiveness of such amendment, or the date of such sale, as the case may be, in form satisfactory to the Agents to the effect that the statements contained in the certificate referred to in Section 5(b) hereof that were last furnished to the Agents are true and correct at the time of such amendment, supplement, filing or sale, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 5(b), modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificate. (b) Subsequent Delivery of Legal Opinions. Each time that the Company furnishes a certificate pursuant to Section 7(a), the Company shall furnish or cause to be furnished forthwith to the Agents and to counsel to the Agents written opinions of Susan L. Harris, Esq. and Davis Polk & Wardwell, or in either case other counsel satisfactory to the Agents, dated the date of filing with the SEC of such supplement or document, the date of effectiveness of such amendment, or the date of such sale, as the case may be (except that no opinion other than that of Susan L. Harris, Esq. or other counsel satisfactory to the Agents shall be required solely as a result of the filing by the Company with the SEC of any periodic report on Form 10-Q or any current reports on Form 8-K), in form and substance satisfactory to the Agents, of the same tenor in the case of Susan L. Harris, Esq. or such other counsel as the opinion referred to in Section 5(a)(ii) hereof and in the case of Davis Polk & Wardwell or such other counsel as the opinion referred to in Section 5(a)(iii) hereof (including the statements of each required by Section 5(a)(v) hereof) but modified, as necessary, to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion; or, in lieu of such opinion, counsel last furnishing such opinion to the Agents shall furnish the Agents with a letter to the effect that the Agents may rely on such last opinion to the same extent as though it was dated the date of such letter authorizing reliance (except that statements in such last opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance). (c) Subsequent Delivery of Comfort Letters. Each time that the Company delivers a certificate pursuant to Section 7(a), the Company shall cause its independent public accountants forthwith to furnish the Agents a letter, dated the date of effectiveness of such amendment, the date of filing such supplement or document with the SEC, or the date of such sale, as the case may be, in form satisfactory to the Agents, of the same tenor as the letter referred to in Section 5(c) hereof but modified to relate to the Registration Statement and Prospectus, as amended and supplemented to the date of such letter; provided, however, that if the Registration Statement or the Prospectus is amended or supplemented solely to include financial information as of and for a fiscal quarter, Price Waterhouse may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement unless any information included therein of an accounting, financial or statistical nature is of such a nature that, in the reasonable judgment of the Agents, such letter should cover such other information. Section 8. Indemnification. (a) The Company agrees to indemnify and hold harmless each Agent and each person, if any, who controls such Agent within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all losses, claims, damages and liabilities, joint or several (including, without limitation, any legal fees or other expenses reasonably incurred by any Agent or any such controlling person in connection with defending or investigating any such action or claim), caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any prior prospectus relating to the Notes, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information furnished to the Company by such Agent in writing expressly for use therein; provided, however, that the foregoing indemnity agreement shall not inure to the benefit of any Agent, or any person controlling such Agent, if the asserted losses, claims, damages or liabilities arise from any sale of Notes to any person resulting from a solicitation made or an offer to purchase received by such Agent, or from any sale of Notes by such Agent to such person, and a copy of the Prospectus (as then amended or supplemented, if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Agent to such person, if required by law so to have been delivered, at or prior to such sale, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities. This indemnity will be in addition to any liability that the Company may otherwise have. (b) Each Agent agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as the foregoing indemnity from the Company to such Agent, but only to the extent that any untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with information furnished to the Company by such Agent in writing expressly for use in the Registration Statement, the Prospectus, any prior prospectus relating to the Notes or any amendments or supplements thereto. This indemnity will be in addition to any liability that the Agents may otherwise have. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain within a reasonable time counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by the Agent that is a party to the proceeding (or, if more than one Agent is a party to the proceeding, by mutual agreement of the Agents), in the case of parties indemnified pursuant to the second preceding paragraph, and by the Company, in the case of parties indemnified pursuant to the first preceding paragraph. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. Section 9. Contribution. (a) If the indemnification provided for in the first or second paragraph of Section 8 hereof is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Agent or Agents participating in the sale of the Notes that gave rise to such losses, claims, damages or liabilities (the "Relevant Notes") on the other hand from the sale of the Relevant Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Agent or Agents participating in the sale of the Relevant Notes on the other hand, in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Agent or Agents on the other hand in connection with the sale of the Relevant Notes shall be deemed to be in the same respective proportions as the net proceeds from the sale of the Relevant Notes (before deducting expenses) received by the Company and the total discounts and commissions received by the Agents from the sale of the Relevant Notes bear to the aggregate initial offering price of the Relevant Notes. The relative fault of the Company on the one hand and of such Agent or Agents on the other hand 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 by such Agent or Agents and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Agents' respective obligations to contribute pursuant to this Section 9 are several in proportion to the respective principal amounts of Relevant Notes sold to or through each of such Agents and not joint. (b) The Company and the Agents agree that it would not be just or equitable if contribution pursuant to this Section 9 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 that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, 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 Section 9, no Agent shall be required to contribute any amount in excess of the amount by which the total price at which the Relevant Notes were sold through or by it to the public exceeds the amount of any damages that such Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 9 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any indemnified party at law or in equity. (c) The indemnity and contribution provisions contained in Section 8 and Section 9 hereof and the representations and warranties of the Company contained herein shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Agent or any person controlling any Agent or by or on behalf of the Company, its directors or officers or any person controlling the Company and (iii) acceptance of and payment for any of the Notes. Section 10. Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including: (a) The preparation and filing of the Registration Statement and all amendments thereto and the Prospectus and any amendments or supplements thereof; (b) The preparation, filing and reproduction of this Agreement; (c) The preparation, issuance and delivery of the Notes, including any fees and expenses relating to the use of book-entry notes; (d) The fees and disbursements of the Company's accountants and counsel, of the Trustee and its counsel, and of any calculation agents or exchange rate agents; (e) The reasonable fees and disbursements of Skadden, Arps, Slate, Meagher & Flom, counsel to the Agents, or such other counsel to the Agents reasonably acceptable to the Company, incurred in connection with the establishment of the program relating to the Notes and incurred from time to time in connection with the transactions contemplated hereby; (f) The qualification of the Notes under state securities laws in accordance with the provisions of Section 4(g) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Agents in connection therewith and in connection with the preparation of any Blue Sky Survey and any Legal Investment Survey; (g) The printing and delivery to the Agents in quantities as hereinabove stated of copies of the Registration Statement and any amendments thereto, and of the Prospectus and any amendments or supplements thereto, and the delivery by the Agents of the Prospectus and any amendments or supplements thereto in connection with solicitations or confirmations of sales of the Notes; (h) The preparation, reproduction and delivery to the Agents of copies of the Indenture and all supplements and amendments thereto; (i) Any fees charged by rating agencies for the rating of the Notes; (j) The fees and expenses, if any, incurred with respect to any filing with the National Association of Securities Dealers, Inc.; (k) Any advertising and other out-of-pocket expenses of the Agents incurred with the prior written approval of the Company; and (l) The cost of providing any CUSIP or other identification numbers for the Notes. Section 11. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto or thereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Agents or any controlling person of the Agents, or by or on behalf of the Company, and shall survive each delivery of and payment for any of the Notes. Section 12. Termination. (a) This Agreement (excluding any agreement hereunder by one or more Agents to purchase Notes as principal) may be terminated for any reason, at any time by the Company or, as to any Agent, by the Company or such Agent, upon the giving of written notice of such termination to the other parties hereto, but without prejudice to any rights, obligations or liabilities of any party hereto accrued or incurred prior to or upon such termination, subject to the provisions of this Section 12. (b) An Agent may terminate any agreement hereunder by such Agent to purchase Notes as principal, immediately upon notice to the Company, at any time prior to the Settlement Date relating thereto (i) if there has been, since the date of such agreement or since the respective dates as of which information is given in the Registration Statement, any material adverse change or any development reasonably likely to result in a prospective material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred, since the date of such agreement, any outbreak or escalation of hostilities or any change in financial markets or other calamity or crisis that, in the judgment of such Agent, is material and adverse, or (iii) if, since the date of such agreement, trading in any securities of the Company has been suspended by a national securities exchange, or trading generally on the New York Stock Exchange shall have been suspended, or if, since such date, a general moratorium on commercial banking activities in New York shall have been declared by Federal or New York State authorities or if a banking moratorium shall have been declared by the relevant authorities in the country or countries of origin of any foreign currency or currencies in which the Notes are denominated or payable, or (iv) if, since the date of such agreement, the rating assigned by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the 1933 Act, to any debt securities of the Company shall have been lowered or if, since such date, any such rating organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any debt securities of the Company, and in the case of any of the events specified in clause (i), (ii) or (iii), such event, singly or together with any other such event, makes it, in the judgment of such Agent, impracticable to market the Notes on the terms and in the manner contemplated by the Prospectus, as amended or supplemented at the date of the agreement by such Agent to purchase Notes as principal. (c) In the event of any termination under this Section 12, the Company will have no liability to any Agent as to which this Agreement is so terminated and such Agent will have no liability to the Company, except as provided in Section 12(a) and except that with respect to any termination under Section 12(a), (i) such Agent shall be entitled to any commission earned in accordance with the third paragraph of Section 3(b) hereof, (ii) if at the time of termination (a) such Agent shall own any Notes purchased by it as principal pursuant to this Agreement with the intention of reselling them or (b) an offer to purchase any of the Notes has been accepted by the Company but the time of delivery to the purchaser or his agents of the Note or Notes relating thereto has not occurred, the covenants set forth in Section 4 and (in the circumstance described in clause (b)) Section 7 hereof shall remain in effect until such Notes are so resold or delivered, as the case may be, (iii) if at the time of termination such Agent shall own any Notes purchased by it as principal pursuant to this Agreement with the intention of reselling them, the covenants set forth in Section 7 hereof shall remain in effect until the earlier of (x) such time as such Notes are resold or (y) 180 days from the last date on which any of such Notes were purchased from the Company by such Agent (except that the Company shall, at the request of such Agent, deliver the certificates, opinions and letters specified in Section 7 hereof after the date set forth in clause (y), but not after the date set forth in clause (x), if such Agent, notwithstanding the provisions of Section 10, pays all expenses incident to the preparation and delivery of the certificates, opinions and letters that the Company is required to deliver solely as a consequence of this parenthetical), and (iv) the covenant set forth in Section 4(f) hereof, the indemnity and contribution agreements set forth in Sections 8 and 9 hereof, the provisions of Section 10 hereof, and the provisions of Sections 11, 15 and 16 hereof shall remain in effect. Section 13. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Agents shall be directed as follows: Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower - 10th Floor World Financial Center New York, New York 10281-1310 Attention: MTN Product Management Chase Securities Inc. 270 Park Avenue 8th Floor New York, New York 10017 Attention: Medium-Term Note Desk Deutsche Morgan Grenfell Inc. 31 West 52nd Street New York, New York 10019 Donaldson, Lufkin & Jenrette Securities Corporation 277 Park Avenue New York, New York 10172 Edward Jones & Co., L.P. 12555 Manchester Road St. Louis, Missouri 68131 First Chicago Capital Markets, Inc. One First National Plaza, Suite 0595 Chicago, Illinois 60670 Registration Department Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 J.P. Morgan Securities Inc. Transaction Execution Group 60 Wall Street, 13th Floor New York, New York 10260 Morgan Stanley & Co. Incorporated 1585 Broadway, 2nd Floor New York, New York 10036 Attention: Manager - Continuously Offered Products with a copy to: Morgan Stanely & Co. Incorporated 1585 Broadway 34th Floor New York, New York 10036 Attn: Peter Cooper Investment Banking Information Center NationsBanc Montgomery Securities, Inc. 100 North Tryon Street Charlotte, North Carolina 28255 NC-1-007-07-01 Attention: MTN Product Management Smith Barney Inc. 390 Greenwich Street, 4th Floor New York, New York 10013 Attention: MTN Product Management/Origination with a copy to Skadden, Arps, Slate, Meagher & Flom LLP 300 S. Grand Avenue, Suite 3400 Los Angeles, California 90071 Attention: Gregg A. Noel, Esq. Notices to the Company shall be directed as follows: SunAmerica Inc. 1 SunAmerica Center Los Angeles, California 90067-6022 Attention: James R. Belardi with a copy to Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 Attention: Jeffrey Small, Esq. or at such other address as such party may designate from time to time by notice duly given in accordance with the terms of this Section 13. Section 14. Acknowledgment. The Company and each of the Agents acknowledge that Davis Polk & Wardwell, which is acting as special counsel to the Company in connection with the offer and sale of the Notes, also acts as counsel from time to time to one or more of the Agents in connection with unrelated matters. The Company and each of the Agents consent to Davis Polk & Wardwell so acting as special counsel to the Company. The Company and each of the Agents also acknowledge that Skadden, Arps, Slate, Meagher & Flom LLP, which is acting as counsel to the Agents in connection with the offer and sale of the Notes, also acts as counsel from time to time to the Company and certain of its affiliates in connection with unrelated matters. The Company and each of the Agents consent to Skadden, Arps, Slate, Meagher & Flom LLP so acting as counsel to the Agents. Section 15. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. Section 16. Parties. This Agreement shall inure to the benefit of and be binding upon the Agents and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers and directors referred to in Sections 8 and 9 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and respective successors and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes shall be deemed to be a successor by reason merely of such purchase. Section 17. Amendments. This Agreement may be amended or supplemented if, but only if, such amendment or supplement is in writing and is signed by the Company and each Agent; provided, however, that the Company may from time to time, on prior written notice to the Agents but without the consent of any Agent, amend this Agreement to add as party hereto one or more additional firms registered under the 1934 Act, whereupon each such firm shall become an Agent hereunder on the same terms and conditions as the other Agents that are parties hereto. The Agents shall sign any amendment or supplement the sole effect of which is the addition of any such firm pursuant to this Section 17 as an Agent under this Agreement. If the foregoing is in accordance with the Agents' understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument along with all counterparts will become a binding agreement between the Agents and the Company in accordance with its terms. Very truly yours, SUNAMERICA INC. By: /s/ James R. Belardi ---------------------------------- Name: James R. Belardi Title: Executive Vice President Accepted: By: MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Richard N. Doyle, Jr. ------------------------------------ Name: Richard N. Doyle, Jr. --------------------------- Title: Director --------------------------- CHASE SECURITIES INC. By: /s/ Susan Morgan ------------------------------------ Name: Susan Morgan --------------------------- Title: Vice President --------------------------- DEUTSCHE MORGAN GRENFELL INC. By: /s/ Grant Kralheim ------------------------------------ Name: Grant Kralheim --------------------------- Title: Managing Director --------------------------- DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION By: /s/ Edward A. LaScala ------------------------------------ Name: Edward A. LaScala --------------------------- Title: Senior Vice President --------------------------- EDWARD JONES & CO., L.P. By: /s/ Phil Schwab ------------------------------------ Name: Phil Schwab --------------------------- Title: Principal --------------------------- FIRST CHICAGO CAPITAL MARKETS, INC. By: /s/ Evonne W. Taylor ------------------------------------ Name: Evonne W. Taylor --------------------------- Title: Vice President --------------------------- GOLDMAN, SACHS & CO. By: /s/ David B. Lischer ------------------------------------ Name: David B. Lischer --------------------------- Title: Investment Banking Division --------------------------- J.P. MORGAN SECURITIES, INC. By: /s/ Maria E. Sramek ------------------------------------ Name: Maria E. Sramek --------------------------- Title: Vice President --------------------------- MORGAN STANLEY & CO. INCORPORATED By: /s/ Robert Bonafide ------------------------------------ Name: Robert Bonafide --------------------------- Title: Principal --------------------------- NATIONSBANC MONTGOMERY SECURITIES, INC. By: /s/ Lynn T. McConnell ------------------------------------ Name: Lynn T. McConnell --------------------------- Title: Senior Vice President & Director --------------------------- SMITH BARNEY INC. By: /s/ Simon Helwett ------------------------------------ Name: Simon Helwett --------------------------- Title: Managing Director --------------------------- SCHEDULE A As compensation for the services of the Agents hereunder, the Company shall pay it, on a discount basis, a commission for the sale of each Note equal to the principal amount of such Note multiplied by the appropriate percentage set forth below (or with respect to any Note for which the maturity is in excess of 30 years, such commission as shall be agreed to by the Company and an Agent): PERCENT OF MATURITY RANGES PRINCIPAL AMOUNT - --------------- ----------------- From more than 9 months to less than 1 year .125% From 1 year to less than 18 months .150 From 18 months to less than 2 years .200 From 2 years to less than 3 years .250 From 3 years to less than 4 years .350 From 4 years to less than 5 years .450 From 5 years to less than 6 years .500 From 6 years to less than 7 years .550 From 7 years to less than 10 years .600 From 10 years to less than 15 years .625 From 15 years to less than 20 years .700 From 20 years to 30 years .750 EXHIBIT A The following terms, if applicable, shall be agreed to by the Agents and the Company in connection with each sale of Notes: Principal Amount: $ (or principal amount of foreign currency) Interest Rate: If Fixed Rate Note, Interest Rate: If Floating Rate Note: Interest Rate Basis: Initial Interest Rate: Spread or Spread Multiplier, if any: Interest Reset Date(s): Interest Payment Date(s): Index Maturity: Maximum Interest Rate, if any: Minimum Interest Rate, if any: Interest Rate Reset Period: Interest Payment Period: Calculation Agents: If CMT Rate Notes Designated CMT Telerate Page: Designated CMT Maturity Index: If Redeemable: Initial Redemption Date: Initial Redemption Percentage: Annual Redemption Percentage Reduction: If Repayable: Optional Repayment Date(s): Date of Maturity: Purchase Price: _____% Settlement Date and Time: Currency of Denomination: Denominations (if currency is other than U.S. dollar): Currency of Payment: Additional Terms: Also, in connection with the purchase of Notes by an Agent as principal, agreement as to whether the following will be required: Stand-off Agreement pursuant to Section 4(i) of the Distribution Agreement. Officer's Certificate pursuant to Section 7(a) of the Distribution Agreement. Legal Opinion pursuant to Section 7(b) of the Distribution Agreement. Comfort Letter pursuant to Section 7(c) of the Distribution Agreement. EXHIBIT B SUNAMERICA INC. ADMINISTRATIVE PROCEDURES for Fixed and Floating Rate Medium-Term Notes, Series 3 (Dated as of November 26, 1997) Medium Term Notes, Series 3 (the "Notes") are to be offered on a continuing basis by SunAmerica Inc., a Maryland corporation (the "Company"), to or through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., Deutsche Morgan Grenfell Inc., Donaldson, Lufkin & Jenrette Securities Corporation, Edward D. Jones & Co., L.P., First Chicago Capital Markets, Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated, NationsBanc Montgomery Securities, Inc. and Smith Barney Inc. (each an "Agent" and, collectively, the "Agents"), pursuant to a Distribution Agreement dated November 26, 1997 (the "Distribution Agreement") among the Company and the Agents. The Distribution Agreement provides both for the sale of Notes by the Company to one or more of the Agents as principal for resale to investors and other purchasers and for the sale of Notes by the Company directly to investors (as may from time to time be agreed to by the Company and the related Agent or Agents) in which case one or more Agents will act as agents of the Company in soliciting Note purchases. Unless otherwise agreed by the related Agent or Agents and the Company, Notes will be purchased by the related Agent or Agents as principal. Such purchases will be made in accordance with terms agreed upon by the related Agent or Agents and the Company (which terms shall be agreed upon in writing or orally, with written confirmation prepared by the related Agent or Agents and mailed to the Company). If agreed upon by any Agent or Agents and the Company, such Agent or Agents, acting solely as agent or agents for the Company and not as principal, will use reasonable efforts to solicit offers to purchase the Notes. Only those provisions in these Administrative procedures that are applicable to the particular role that an Agent will perform shall apply. The Notes will be issued as a series of debt securities pursuant to a Senior Indenture, dated as of April 15, 1993, as supplemented by the indenture supplements dated as of June 28, 1993 and October 26, 1996 (as so supplemented, the "Indenture"), between the Company and The First National Bank of Chicago, as trustee (the "Trustee"), and are in the respective forms attached as Exhibits E-1, E-2, E-3 and E-4 to the Secretary's Certificate of the Company as referred to in the Officer's Certificate delivered to the Trustee on the date hereof pursuant to Section 2.1 of the Indenture. In accordance with the provisions of the Indenture, First Chicago Trust Company of New York has been duly appointed by the Trustee as Authenticating Agent. The Company has duly appointed First Chicago Trust Company of New York and The First National Bank of Chicago as Transfer Agents and Paying Agents. "Issuing Agent," as used herein, means The First National Bank of Chicago. A Registration Statement (the "Registration Statement," which term shall include any additional registration statements or amendments thereto filed in connection with the Notes as provided in the introductory paragraph of the Distribution Agreement) with respect to the Notes has been filed with the Securities and Exchange Commission (the "Commission"). The most recent base Prospectus included in the Registration Statement, as supplemented with respect to the Notes, is herein referred to as the "Prospectus." The most recent supplement to the Prospectus setting forth the purchase price, interest rate, maturity date and other terms of the Notes (as applicable) is herein referred to as the "Pricing Supplement." The Notes will either be issued (a) in book-entry form and represented by one or more fully registered Notes (each, a "Book-Entry Note") delivered to the Issuing Agent, as agent for The Depository Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC, or (b) in definitive form (each, a "Definitive Note") delivered to the investor or other purchaser thereof or a person designated by such investor or other purchaser. Owners of beneficial interests in Notes issued in book-entry form will be entitled to physical delivery of Notes in definitive form equal in principal amount to their respective beneficial interests only upon certain limited circumstances described in the Prospectus and the Indenture. General procedures relating to the issuance of all Notes are set forth in Part I hereof. Additionally, Notes issued in book-entry form will be issued in accordance with the procedures set forth in Part II hereof and Notes issued in definitive form will be issued in accordance with the procedures set forth in Part III hereof. The following procedures shall also be deemed to include all relevant procedures described in the DTC Letter of Representations dated November 21, 1997, to the extent that such procedures are not set forth below. Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Indenture or the Notes, as the case may be. PART I: PROCEDURES OF GENERAL APPLICABILITY Date of Issuance/ Authentication: Each Note will be dated as of the date of its authentication by the Issuing Agent. Each Note shall also bear an original issue date (the "Original Issue Date"). The Original Issue Date shall remain the same for all Notes subsequently issued upon transfer, exchange or substitution of an original Note regardless of their dates of authentication. Maturities: Each Note will mature on a date selected by the investor or other purchaser and agreed to by the Company that, unless otherwise provided in the applicable Pricing Supplement, is not less than nine months, nor more than 30 years, from its Original Issue Date. Registration: Notes will be issued only in fully registered form. Denominations: Unless otherwise provided in the applicable Pricing Supplement, Notes will be issued in denominations of $1,000 or any integral multiple of $1,000 in excess there of. Base Rates applicable to Floating Rate Notes: Unless otherwise provided in the applicable Pricing Supplement, Notes bearing interest at rates determined by reference to selected indices ("Floating Rate Notes") (except for certain Original Issue Discount Notes) will bear interest at a rate or rates determined by reference to one or more of the CD Rate ("CD Rate Notes"), the Commercial Paper Rate ("Commercial Paper Rate Notes"), the Eleventh District Cost of Funds Rate (the "Eleventh District Notes"), the Federal Funds Rate ("Federal Funds Rate Notes"), LIBOR ("LIBOR Notes"), the Prime Rate ("Prime Rate Notes"), the CMT Rate ("CMT Rate Notes"), the Treasury Rate ("Treasury Rate Notes"), as adjusted by the Spread and/or Spread Multiplier, if any, applicable to such Floating Rate Notes. Redemption/Repayment: The Notes will be subject to repayment at the option of the Holders thereof in accordance with the terms of the Notes on their respective Optional Repayment Dates, if any. Optional Repayment Dates, if any, will be fixed at the time of sale and set forth in the applicable Pricing Supplement and in the applicable Note. If no Optional Repayment Dates are indicated with respect to a Note, such Note will not be repayable at the option of the Holder prior to its Stated Maturity Date. The Notes will be subject to redemption by the Company on and after their respective Initial Redemption Date, if any. The Initial Redemption Date, if any, will be fixed at the time of sale and set forth in the applicable Pricing Supplement and in the applicable Note. If no Initial Redemption Date is indicated with respect to a Note, such Note will not be redeemable prior to its Stated Maturity Date. Calculation of Interest: With respect to any Fixed Rate Note, if the Day Count Convention specified on the applicable Note is "30/360," interest will be calculated and paid on the basis of a 360-day year of twelve 30-day months; if the Day Count Convention specified on the applicable Note is "Actual/360," interest will be calculated and paid on the basis of the actual number of days in the interest period divided by 360; and if the Day Count Convention specified on the applicable Note is "Actual/Actual," interest will be calculated and paid on the basis of the actual number of days in the interest period divided by the actual number of days in the year. With respect to any Floating Rate Note, unless otherwise specified on such Note, if the Day Count Convention specified on the applicable Note is "Actual/360," interest will be calculated and paid on the basis of the actual number of days in the interest period divided by 360; and if the Day Count Convention specified on the applicable Note is "Actual/Actual," interest will be calculated and paid on the basis of the actual number of days in the interest period divided by the actual number of days in the year. With respect to each Floating Rate Note, accrued interest will be calculated by multiplying its face amount by an accrued interest factor. Such accrued interest factor is computed by adding the interest factor calculated for each day in the period for which accrued interest is being calculated. Unless otherwise specified in the applicable Pricing Supplement, the interest factor for each such day is computed by dividing the interest rate applicable to such day by 360 in the case of CD Rate Notes, Commercial Paper Rate Notes, Eleventh District Notes, Federal Funds Rate Notes, LIBOR Notes or Prime Rate Notes, or by the actual number of days in the year in the case of CMT Rate Notes or Treasury Rate Notes. Unless otherwise specified in an applicable Pricing Supplement, the interest factor for Notes for which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated in each period in the same manner as if only one of the applicable Interest Rate Bases applied as specified in the applicable Pricing Supplement and the Notes. Interest: General. Each Note will bear interest in accordance with its terms. Unless otherwise specified in an applicable Pricing Supplement, interest on each Note will accrue from the Original Issue Date of such Note for the first interest period and from the most recent Interest Payment Date to which interest has been paid for all subsequent interest periods. Each payment of interest will include interest accrued through the day preceding, as the case may be, the Interest Payment Date, the Stated Maturity Date, any redemption date or repayment date (each Stated Maturity Date, redemption date or repayment date is referred to herein as "Maturity"). Interest payable at Maturity will be payable to the Person to whom the principal of such Note is payable. If an Interest Payment Date with respect to any Fixed Rate Note falls on a day that is not a Business Day, the payment of interest required to be made on such Interest Payment Date need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date and no interest shall accrue on such payment for the period from and after such Interest Payment Date. If an Interest Payment Date (other than at Maturity) with respect to any Floating Rate Note would otherwise fall on a day that is not a Business Day, such Interest Payment Date will be the following day that is a Business Day, except that in the case of a LIBOR Note, if such day falls in the next calendar month, such Interest Payment Date will be the preceding day that is a Business Day. If the date of Maturity of a Note is not a Business Day, the payment of principal and interest due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Maturity. For additional special provisions relating to Floating Rate Notes, see the Prospectus and the applicable Pricing Supplement. Record Dates. Unless otherwise indicated in an applicable Pricing Supplement, the record date with respect to any Interest Payment Date for a Note shall be the date 15 calendar days (whether or not a Business Day) preceding such Interest Payment Date. Interest Payment Dates. Interest payments will be made on each Interest Payment Date commencing with the first Interest Payment Date following the Original Issue Date; provided, however, the first payment of interest on any Note originally issued between a record date and the related Interest Payment Date will be made on the Interest Payment Date following the next record date to the registered Holder on such record date. Fixed Rate Notes. Unless otherwise provided in an applicable Fixed Rate Note, interest payments on Fixed Rate Notes will be made semiannually on June 1 and December 1 of each year and at Maturity. Floating Rate Notes. Interest payments on Floating Rate Notes will be made as specified in the related Floating Rate Note and Pricing Supplement. Acceptance and Rejection of Offers: If agreed upon by any Agent and the Company, such Agent acting solely as agent for the Company and not as principal will solicit purchases of the Notes. Each Agent will communicate to the Company, orally or in writing, each reasonable offer to purchase Notes solicited by such Agent on an agency basis, other than those offers rejected by such Agent. Each Agent has the right, in its discretion reasonably exercised, to reject any proposed purchase of Notes, as a whole or in part, and any such rejection is not deemed a breach of the Agent's agreement contained in the Distribution Agreement. The Company has the sole right to accept or reject any proposed purchase of the Notes, in whole or in part, and any such rejection is not deemed a breach of the Company's agreement contained in the Distribution Agreement. Each Agent has agreed to make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes has been solicited by such Agent and accepted by the Company. Preparation of Pricing Supplement: If any offer to purchase a Note is accepted by the Company, the Company will promptly prepare a Pricing Supplement reflecting the terms of such Note and file such Pricing Supplement with the Commission in accordance with Rule 424 under the Securities Act of 1933. Information to be included in the Pricing Supplement shall include: 1. the name of the Company; 2. the title of the securities, including series designation, if any; 3. the date of the Pricing Supplement and the dates of the Prospectus and Prospectus Supplement to which the Pricing Supplement relates; 4. the name of the Offering Agent (as hereinafter defined); 5. whether such Notes are being sold to the Offering Agent as principal or to an investor or other purchaser through the Offering Agent acting as agent for the Company; 6. with respect to Notes sold to the Offering Agent as principal, whether such Notes will be resold by the Offering Agent to investors and other purchasers (i) at a fixed public offering price of a specified percentage of their principal amount, (ii) at varying prices related to prevailing market prices at the time of resale to be determined by the Offering Agent or (iii) at 100% of their principal amount; 7. with respect to Notes sold to an investor or other purchaser through the Offering Agent acting as agent for the Company, whether such Notes will be sold at (i) 100% of their principal amount or (ii) at a specified percentage of their principal amount; 8. the Offering Agent's commission or underwriting discount; 9. Net proceeds to the Company; 10. the Principal Amount, Original Issue Date, Stated Maturity Date, Initial Redemption Date, if any, Initial Redemption Percentage, if any, Annual Redemption Percentage Reduction, if any, and Optional Repayment Date or Dates, if any, and, in the case of Fixed Rate Notes, the Interest Rate, the Interest Payment Date or Dates (if other than June 1 and December 1 of each year) and the record date or dates (if other than May 15 and November 15 of each year), and, in the case of Floating Rate Notes, the Interest Rate Basis or Bases, the Index Maturity (if applicable), the Initial Interest Rate, the Maximum Interest Rate, if any, the Minimum Interest Rate, if any, the Interest Payment Date or Dates, the record date or dates, the Interest Reset Date or Dates, the Interest Reset Period, the Interest Determination Date, the Spread and/or Spread Multiplier, if any, and the Calculation Agent, and if one or more of the Specified Interest Rate Bases is LIBOR, the Index Currency and the Designated LIBOR Page; 11. the information with respect to the terms of the Notes set forth below (whether or not the applicable Note is a Book-Entry Note or a Definitive Note) under "Procedures for Notes Issued in Book-Entry Form - Settlement Procedures," items 1, 2, 6, 7 and 8; and 12. any other provisions of the Notes material to investors or other purchasers of the Notes not otherwise specified in the Prospectus or Pricing Supplement. One copy of such filed document will be sent by telecopy or overnight express (for delivery as soon as practicable following the trade, but in no event later than 12:00 noon on the second Business Day following the applicable trade date) to the Agent that made or presented the offer to purchase the applicable Note (in such capacity, the "Offering Agent"), the Trustee and the Issuing Agent at the following applicable address: if to Merrill Lynch, to: Tritech Services, #4 Corporate Place, Corporate Park 287, Piscataway, New Jersey 08854, Attention: Nachman Kimerling / Final Prospectus Unit, (908) 878-6526, telecopier (908) 878-6530; if to Chase Securities Inc., to: 270 Park Avenue, 8th Floor, New York, New York 10017, Attention: Medium-Term Note Desk, (212) 834- 4421, telecopier: (212) 834-6081; Deutsche Morgan Grenfell Inc., 31 West 52nd Street, New York, New York 10019, (212) 469-7595, telecopier: (212) 469-8173; Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172, (212) 892-3035, telecopier: (212) 892-2682; if to Edward Jones & Co., L.P., to: 12555 Manchester Road, St. Louis, Missouri 68131, (314) 515-3344, telecopier: (314) 515-3301; First Chicago Capital Markets, Inc., to: One First National Plaza, Mail Suite 0595, Chicago, Illinois 60670-0595, (312) 732-8270, telecopier: (312) 732-4172; if to Goldman, Sachs & Co., to: Karen Robertson, Medium- Term Note Desk, Goldman, Sachs & Co. 85 Broad Street, New York, New York 10004, (212) 902- 1000, telecopier: (212) 902-3000; if to J.P. Morgan Securities Inc., to: Prospectus Department - 44th Floor, 60 Wall Street, New York, New York 10260-0060, (212) 648-8912, telecopier: (212) 648-5377; if to Morgan Stanley & Co. Incorporated, to: 1585 Broadway, 2nd Floor, New York, New York 10036, Attention: Medium-Term Note Trading Desk, Carlos Cabrera, (212) 761-4000, telecopier: (212) 761-0780; if to NationsBanc Montgomery Securities, Inc., to: 100 North Tryon Street, Charlotte, North Carolina 28255, NC1-007-07-01, Attention: MTN Product Management, (704) 386-6616, telecopier: (704) 388-9939; if to Smith Barney Inc., to: 390 Greenwich Street, 4th Floor, New York, New York 10013, Attention: MTN Product Management/Origination, (212) 723-5123, telecopier: (212) 723-8854; and if to the Trustee/Issuing Agent, to: The First National Bank of Chicago, One First National Plaza, Suite 0126, Chicago, Illinois 60670, Attention: Corporate Trust Services Division, (312) 407-1761, telecopier: (312) 407-1708. For record keeping purposes, one copy of each Pricing Supplement, as so filed, shall also be mailed or telecopied to Skadden, Arps, Slate, Meagher & Flom LLP at 300 S. Grand Avenue, Suite 3400, Los Angeles, California 90071, Attention: Gregg A. Noel, Esq. Outdated Pricing Supplements, and the supplemented Prospectuses to which they are attached (other than those retained for files) will be destroyed. Settlement: The receipt of immediately available funds by the Company in payment for a Note and the authentication and delivery of such Note shall, with respect to such Note, constitute "settlement." Offers accepted by the Company will be settled from three to five Business Days, or at a time as the purchaser and the Company shall agree, pursuant to the timetable for settlement set forth in Parts II and III hereof under "Settlement Procedures" with respect to Book-Entry Notes and Definitive Notes, respectively (each such date fixed for settlement is hereinafter referred to as a "Settlement Date"). If procedures A and B of the applicable Settlement Procedures with respect to a particular offer are not completed on or before the time set forth under the applicable "Settlement Procedures Timetable," such offer shall not be settled until the Business Day following the completion of settlement procedures A and B or such later date as the purchaser and the Company shall agree. The foregoing settlement procedures may be modified, with respect to any purchase of Notes by an Agent as principal, if so agreed by the Company and such Agent. Procedure for Changing Rates or Other Variable Terms: When a decision has been reached to change the interest rate or any other variable term on any Notes being sold by the Company, the Company will promptly advise the Agents and the Issuing Agent by facsimile transmission and the Agents will forthwith suspend solicitation of offers to purchase such Notes. The Agents will telephone the Company with recommendations as to the changed interest rates or other variable terms. At such time as the Company advises the Agents and the Issuing Agent by facsimile transmission of the new interest rates or other variable terms, the Agents may resume solicitation of offers to purchase such Notes. Until such time only "indications of interest" may be recorded. Immediately after acceptance by the Company of an offer to purchase Notes at a new interest rate or new variable term, the Company, the Offering Agent and the Issuing Agent shall follow the procedures set forth under the applicable "Settlement Procedures." Suspension of Solicitation; Amendment or Supplement: The Company may instruct the Agents to suspend solicitation of offers to purchase Notes at any time. Upon receipt of such instructions, the Agents will forthwith suspend solicitation of offers to purchase from the Company until such time as the Company has advised them that solicitation of offers to purchase may be resumed. If the Company decides to amend or supplement the Registration Statement or the Prospectus (other than an amendment or supplement providing solely for a change in interest rates or made by the filing of documents incorporated by reference) it will furnish the Agents and their counsel with copies of the proposed amendment or supplement for their review and comment. One copy of the document filed with the Commission, along with a copy of the cover letter sent to the Commission, will be delivered or mailed to the Agents, their counsel, the Trustee and the Issuing Agent at the following respective addresses: MTN Product Management, Merrill Lynch & Co., Merrill Lynch World Headquarters, North Tower, World Financial Center, 10th Floor, New York, New York 10281-1310, (212) 449-0351, telecopier: (212) 449-2234; Chase Securities Inc., 270 Park Avenue, 8th Floor, New York, New York 10017, (212) 834-4421, telecopier: (212) 834-6081; Deutsche Morgan Grenfell Inc., 31 West 52nd Street, New York, New York 10019, (212) 469- 7595, telecopier: (212) 469-8173; Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172, (212) 892-3035, telecopier: (212) 892-2682; if to Edward Jones & Co., L.P. 12555 Manchester Road, St. Louis, Missouri 68131, (314) 515-3344, telecopier: (314) 515-3301; First Chicago Capital Markets, Inc., One First National Plaza, Suite 0595, Chicago, Illinois 60670, (312) 732-8270, telecopier: (312) 732-4172; Goldman, Sachs & Co., Karen Robertson, Medium-Term Note Desk, 85 Broad Street, New York, New York 10004, (212) 902-9706, telecopier: (212) 357-4451; J.P. Morgan Securities Inc., Transaction Execution Group - 13th Floor, 60 Wall Street, New York, New York 10260, (212) 648-8906, telecopier: (212) 648-5151; Morgan Stanley & Co. Incorporated, 1585 Broadway, 2nd Floor, New York, New York 10036, Attention: Manager: Continuously Offered Products, (212) 761- 4000, telecopier: (212) 761-0780; NationsBanc Montgomery Securities, Inc., 100 North Tryon Street, NC-1-007-07-01, Charlotte, North Carolina 28255, Attention: MTN Product Management, (704) 386-6616, telecopier: (704) 388-9939; Smith Barney Inc., 390 Greenwich Street, 4th Floor, New York, New York 10013, MTN Marketing, (212) 723-5123, telecopier: (212) 723-8854. For record keeping purposes, one copy of each such document, as so filed, shall also be mailed or telecopied to Skadden, Arps, Slate, Meagher & Flom LLP at 300 S. Grand Avenue, Suite 3400, Los Angeles, California 90071, Attention: Gregg A. Noel, Esq. In the event that at the time the solicitation of offers to purchase from the Company is suspended (other than to establish or change interest rates, maturities, prices or other similar variable terms with respect to the Notes) there shall be any offers to purchase Notes that have been accepted by the Company that have not been settled, the Company will promptly advise the Agents and the Issuing Agent whether such offers may be settled and whether copies of the Prospectus as theretofore amended and/or Supplemented as in effect at the time of the suspension may be delivered in connection with the settlement of such offers. The Company will have the sole responsibility for such decision and for any arrangements that may be made in the event that the Company determines that such offers may not be settled or that copies of such Prospectus may not be so delivered. Delivery of Prospectus and applicable Pricing Supplement: A copy of the most recent Prospectus and applicable Pricing Supplement must accompany or precede the earlier of (a) the written confirmation of a sale sent to an investor or other purchaser or its agent and (b) the delivery of Notes to an investor or other purchaser or its agent. Authenticity of Signatures: The Agents will have no obligations or liability to the Company, the Trustee or the Issuing Agent in respect of the authenticity of the signature of any officer, employee or agent of the Company, the Trustee or the Issuing Agent on any Note. Documents Incorporated by Reference: The Company shall supply the Agents with an adequate supply of all documents incorporate by reference in the Registration Statement. Business Day: Unless otherwise provided in the Notes, "Business Day" as used herein, means a day that in The City of New York is not a day on which banking institutions are authorized or required by law or regulation to close and, with respect to Notes as to which LIBOR is an applicable Interest Rate Basis, is also a London Business Day. "London Business Day" means any day (a) if the Index Currency is other than the European Currency Unit ("ECU"), on which dealings in deposits in such Index Currency are transacted in the London interbank market or (b) if the Index Currency is the ECU, that is not designated as an ECU Non-Settlement Day by the ECU Banking Association in Paris or other wise generally regarded in the ECU interbank market as a day on which payments in ECUs will not be made. PART II: PROCEDURES FOR NOTES ISSUED IN BOOK-ENTRY FORM In connection with the qualification of Notes issued in book-entry form for eligibility in the book-entry system maintained by DTC, the Issuing Agent will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under a Letter of Representation from the Company and the Issuing Agent to DTC, dated November 21, 1997, and a Certificate Agreement, dated May 26, 1989, between the Issuing Agent and DTC, as amended (the "Certificate Agreement"), and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). Issuance: All Fixed Rate Notes issued in book-entry form (each, a "Book-Entry Note") having the same Original Issue Date, interest rate, Day Count Convention, redemption and/or repayment terms, if any, and Stated Maturity Date (collectively, the "Fixed Rate Terms") will be represented initially by a single global security in fully registered form without coupons (a "Registered Global Security"); and all Floating Rate Notes issued in book-entry form having the same Original Issue Date, formula for the calculation of interest (which may include terms specifying whether such Floating Rate Note is a Regular Floating Rate Note, Floating Rate/Fixed Rate Note (and which must specify the Fixed Rate Commencement Date), Inverse Floating Rate Note (and which must specify the Fixed Interest Rate)) and specifying the Interest Rate Basis, which may be the CD Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR, the Prime Rate, the CMT Rate or the Treasury Rate or any other rate set forth by the Company, Initial Interest Rate, Index Maturity, Spread and/or Spread Multiplier, if any, Minimum Interest Rate, if any, Maximum Interest Rate, if any, redemption and/or repayment terms, if any, and Stated Maturity Date (collectively, "Floating Rate Terms") will be represented initially by a single Book-Entry Note; provided, however, that in each case no single Book-Entry Note will exceed $200,000,000 principal amount. See "Denominations" below. For other variable terms with respect to the Fixed Rate Notes and Floating Rate Notes, see the Prospectus and the applicable Pricing Supplement. Except as provided in the Indenture, no owner of a beneficial interest in a Book-Entry Note shall be entitled to receive any Note issued in definitive form with respect to such beneficial interest. Identification: The Company has arranged with the CUSIP Service Bureau of Standard & Poor's Corporation (the "CUSIP Service Bureau") for the reservation of one series of CUSIP numbers, which series consists of approximately 900 CUSIP numbers that have been reserved for and relating to Book-Entry Notes and the Company has delivered to each of the Trustee, the Issuing Agent and DTC's Underwriting Department such list of such CUSIP numbers. The Company will assign CUSIP numbers to Book-Entry Notes as described below under Settlement Procedure B. DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the Company has assigned to Book-Entry Notes. The Trustee or the Issuing Agent, as the case may be, will notify the Company at any time when fewer than 100 of the reserved CUSIP numbers remain unassigned to Book-Entry Notes, and, if it deems necessary, the Company will reserve and obtain additional CUSIP numbers for assignment to Book-Entry Notes. Upon obtaining such additional CUSIP numbers, the Company will deliver a list of such additional numbers to the Trustee, the Issuing Agent and DTC's Underwriting Department. Book-Entry Notes having an aggregate principal amount in excess of $200,000,000 and otherwise required to be represented by the same Registered Global Security will instead be represented by an additional Registered Global Security that shall be assigned the same CUSIP number. Registration: Unless otherwise specified by DTC, each Book-Entry Note will be registered in the name of Cede & Co., as nominee for DTC, on the register maintained by the Issuing Agent under the Indenture. The beneficial owner of a beneficial interest in a Book-Entry Note (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Note issued in book-entry form, the "Participants") to act as agent for such beneficial owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such Note issued in book-entry form in the account of such Participants. The ownership interest of such beneficial owner in such Note issued in book-entry form will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC. Transfers: Transfers of beneficial ownership interests in a Book-Entry Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferee of such Book-Entry Note. Exchanges: The Issuing Agent may deliver to DTC and the CUSIP Service Bureau at any time a written notice specifying (a) the CUSIP numbers of two or more Book-Entry Notes outstanding on such date that represent Book-Entry Notes having the same Fixed Rate Terms or Floating Rate Terms, as the case may be (other than Original Issue Dates), and for which interest has been paid to the same date; a date, occurring at least 30 days after such written notice is delivered and at least 30 days before the next Interest Payment Date for the related Notes issued in book-entry form, on which such Book-Entry Notes shall be exchanged for a single replacement Book-Entry Note; and (c) a new CUSIP number, obtained from the Company, to be assigned to such replacement Book-Entry Note. Upon receipt of such a notice, DTC will send to its Participants (including the Issuing Agent) a written reorganization notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, the Issuing Agent will deliver to the CUSIP Service Bureau written notice setting forth such exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Book-Entry Notes to be exchanged will no longer be valid. On the specified exchange date, the Issuing Agent will exchange such Book-Entry Notes for a single Book-Entry Note bearing the new CUSIP number and the CUSIP numbers of the exchanged Book-Entry Notes will, in accordance with CUSIP Service Bureau procedures, be canceled and not immediately reassigned. Notwithstanding the foregoing, if the Book-Entry Notes to be exchanged exceed $200,000,000 in aggregate principal amount, one replacement Book-Entry Note will be authenticated and issued to represent each $200,000,000 of principal amount of the exchanged Book-Entry Notes and an additional Book-Entry Note or Notes will be authenticated and issued to represent any remaining principal amount of such Book-Entry Notes (see "Denominations" below). Denominations: All Notes issued in book-entry form will be denominated in U.S. dollars. Notes issued in book-entry form will be issued in denominations of $1,000 and integral multiples of $1,000 in excess thereof. Book-Entry Notes will be denominated in principal amounts not in excess of $200,000,000. If one or more Notes issued in book-entry form having an aggregate principal amount in excess of $200,000,000 would, but for the preceding sentence, be represented by a single Book-Entry Note, then one Book-Entry Note will be issued to represent each $200,000,000 principal amount of such Note or Notes issued in book-entry form and an additional Book-Entry Note or Notes will be issued to represent any remaining principal amount of such Note or Notes issued in book-entry form. In such a case, each of the Book-Entry Notes representing such Note or Notes issued in book-entry form shall be assigned the same CUSIP number. Payments of Principal and Interest: Payments of Interest Only. Promptly after each record date, the Issuing Agent will deliver to the Company and DTC a written notice specifying by CUSIP number the amount of interest to be paid on each Book-Entry Note on the following Interest Payment Date (other than an Interest Payment Date coinciding with Maturity) and the total of such amounts. DTC will confirm the amount payable on each Book-Entry Note on such Interest Payment Date by reference to the daily bond reports published by Standard & Poor's Corporation. On such Interest Payment Date, the Company will pay to the Issuing Agent in immediately available funds an amount sufficient to pay the interest then due and owing, and upon receipt of such funds from the Company, the Issuing Agent in turn will pay to DTC, such total amount of interest due (other than at Maturity), at the times and in the manner set forth below under "Manner of Payment." Notice of Interest Payments and Record Dates. Promptly after each Interest Determination Date for Floating Rate Notes issued in book-entry form, the Issuing Agent will notify each of Moody's Investors Services, Inc. and Standard & Poor's Corporation of the interest rates determined on such Interest Determination Date. Payments at Maturity. On or about the first Business Day of each month, the Issuing Agent will deliver to the Company and DTC a written list of principal, interest and premium, if any, to be paid on each Book-Entry Note maturing either at the Stated Maturity Date, on a redemption date in, or for which an Option to Elect Repayment has been received with respect to, the following month. The Issuing Agent, the Company and DTC will confirm the amounts of such principal, premium, if any, and interest payments with respect to a Book-Entry Note on or about the fifth Business Day preceding the Maturity of such Book-Entry Note. At such Maturity, the Company will pay to the Issuing Agent in immediately available funds an amount sufficient to make such Maturity payment, and upon receipt of such funds the Issuing Agent in turn will pay to DTC, the principal amount of such Note, together with interest and premium, if any, due at such Maturity, at the times and in the manner set forth below under "Manner of Payment". Promptly after payment to DTC of the principal, interest and premium, if any, due at the Maturity of such Book-Entry Note, the Issuing Agent will cancel such Book-Entry Note and deliver it to the Company with an appropriate debit advice. On the first Business Day of each month, the Issuing Agent will deliver to the Company a written statement indicating the total principal amount of outstanding Book-Entry Notes as of the close of business on the immediately preceding Business Day. Manner of Payment. The total amount of any principal, premium, if any, and interest due on Book-Entry Notes on any Interest Payment Date or at Maturity shall be paid by the Company to the Issuing Agent in funds available for use by the Issuing Agent no later than 1:00 P.M., New York City time, on such date. The Company will make such payment on such Book-Entry Notes to an account specified by the Issuing Agent. Upon receipt of such funds, the Issuing Agent will pay by separate wire transfer (using Fedwire message entry instructions in a form previously specified by DTC) to an account at the Federal Reserve Bank of New York previously specified by DTC, in funds available for immediate use by DTC, each payment of interest, principal and premium, if any, due on a Book-Entry Note on such date. Thereafter on such date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names such Notes are recorded in the book-entry system maintained by DTC. Neither the Company, the Issuing Agent nor the Trustee shall have any responsibility or liability for the payment by DTC of the principal of, premium, if any, or interest on, the Book-Entry Notes to such Participants. Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Note will be determined and withheld by the Participant, indirect participant in DTC or other Person responsible for forwarding payments and materials directly to the beneficial owner of such Note. Settlement Procedures: Settlement Procedures with regard to each Note in book-entry form purchased by each Agent, as principal, or sold by each Agent, as agent of the Company, will be as follows: A. The Offering Agent will advise the Company by telephone, confirmed by facsimile, of the following Settlement information: 1. Principal amount of the Note. 2. (a) Fixed Rate Notes: (i) Interest Rate (ii) Interest Payment Dates (iii) Day Count Convention (A) 30/360 (B) Actual/360 (C) Actual/Actual (and applicable periods) (b) Floating Rate Notes: (i) specify if: (A) Regular Floating Rate (B) Floating Rate/Fixed Rate (Fixed Rate Commencement Date) (C) Inverse Floating Rate (Fixed Interest Rate) (ii) Interest Rate Basis or Bases (and if CMT Rate Notes, the designated CMT Telerate page and the designated CMT Maturity Index) (iii) Initial Interest Rate (iv) Spread and/or Spread Multiplier, if any (v) Initial Interest Reset Date and Interest Reset Dates (vi) Interest Rate Reset Period (vii) Interest Payment Dates (viii) Interest Payment Period (ix) Record Dates (x) Index Maturity (xi) Maximum and Minimum Interest Rates, if any (xii) Day Count Convention (A) Actual/360 (B) Actual/ Actual (and applicable periods) (xiii) Calculation Agent 3. Price to public, if any, of the Note (or whether the Note is being offered at varying prices relating to prevailing market prices at time of resale as determined by the Offering Agent). 4. Trade Date. 5. Settlement Date (Original Issue Date). 6. Stated Maturity Date. 7. Redemption provisions, if any, including Initial Redemption Date, Initial Redemption Percentage and Annual Redemption Percentage Reduction. 8. Optional Repayment Date(s). 9. Net proceeds to the Company. 10. The Offering Agent's commission or underwriting discount. 11. Whether such Notes are being sold to the Offering Agent as principal or to an investor or other purchaser through the Offering Agent acting as agent for the Company. 12. Whether such Note is being issued with Original Issue Discount and the terms thereof. 13. Such other information specified with respect to the Notes (whether by Addendum or otherwise). B. The Company will assign a CUSIP number to the Book-Entry Note representing such Note and then advise the Issuing Agent by facsimile transmission or other electronic transmission of the above settlement information received from the Offering Agent, such CUSIP number and the name of the Offering Agent. C. The Issuing Agent will communicate to DTC and the Offering Agent through DTC's Participant Terminal System, a pending deposit message specifying the following settlement information: 1. The information set forth in the Settlement Procedure A. 2. Identification numbers of the participant accounts maintained by DTC on behalf of the Issuing Agent and the Offering Agent. 3. Identification of the Book-Entry Note as a Fixed Rate Book-Entry Note or Floating Rate Book-Entry Note. 4. Initial Interest Payment Date for such Note, number of days by which such date succeeds the related record date for DTC purposes (or, in the case of Floating Rate Notes that reset daily or weekly, the date five calendar days preceding the Interest Payment Date) and, if then calculable, the amount of interest payable on such Interest Payment Date (which amount shall have been confirmed by the Issuing Agent). 5. CUSIP number of the Book-Entry Note representing such Note. 6. Whether such Book-Entry Note represents any other Notes issued or to be issued in book-entry form. DTC will arrange for each pending deposit message described above to be transmitted to Standard & Poor's Corporation, which will use the information in the message to include certain terms of the related Book-Entry Note in the appropriate daily bond report published by Standard & Poor's Corporation. D. The Issuing Agent complete and authenticate the Book-Entry Note representing such Note. E. DTC will credit such Note to the participant account of the Issuing Agent maintained by DTC. F. The Issuing Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to the Issuing Agent's participant account and credit such Note to the participant account of the Offering Agent maintained by DTC and (ii) to debit the settlement account of the Offering Agent and credit the settlement account of the Issuing Agent maintained by DTC, in an amount equal to the price of such Note less such Offering Agent's discount or underwriting commission, as applicable. Any entry of such a deliver order shall be deemed to constitute a representation and warranty by the Issuing Agent to DTC that (i) the Book-Entry Note representing such Note has been issued and authenticated and (ii) the Issuing Agent is holding such Book-Entry Note pursuant to the Certificate Agreement. G. In the case of Notes sold through an Offering Agent, as agent, the Offering Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to the Offering Agent's participant account and credit such Note to the participant account of the Participants maintained by DTC and (ii) to debit the settlement accounts of such participants and credit the settlement account of the Offering Agent maintained by DTC in an amount equal to the initial public offering price of such Note. H. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures F and G will be settled in accordance with SDFS operating procedures in effect on the Settlement Date. I. Upon receipt, the Issuing Agent will pay the Company, by wire transfer of immediately available funds to an account specified by the Company to the Issuing Agent from time to time, in the amount transferred to the Issuing Agent in accordance with Settlement Procedure F. J. The Issuing Agent will send a copy of the Book-Entry Note by first class mail to the Company together with a statement setting forth the principal amount of Notes outstanding as of the related Settlement Date after giving effect to such transaction and all other offers to purchase Notes of which the Company has advised the Issuing Agent but that have not yet been settled. K. If the Note was sold through the Offering Agent, as agent, the Offering Agent will confirm the purchase of such Note to the investor or other purchaser either by transmitting to the Participant with respect to such Note a confirmation order through DTC's Participant Terminal System or by mailing a written confirmation to such investor or other purchaser. Settlement Procedures Timetable: For offers to purchase Notes accepted by the Company, Settlement Procedures "A" through "K" set forth above shall be completed as soon as possible but not later than the respective time (New York City time) set forth below: Settlement Procedure Time --------- ---- A 11:00 A.M. on the trade date B As soon as practicable following the trade, but in no event later than 12:00 noon on the Second Business Day immediately preceding the Settlement Date C As soon as practicable following the trade, but in no event later than 2:00 P.M. on the second Business Day immediately preceding the Settlement Date D 9:00 A.M. on Settlement Date E 10:00 A.M. on Settlement Date F-G No later than 2:00 P.M. on Settlement Date H 4:45 P.M. on Settlement Date I-J 5:00 P.M. on Settlement Date If a sale is to be settled more than one Business Day after the trade date, Settlement Procedures A, B and C may, if necessary, be completed at any time prior to the specified times on the first Business Day after such trade date. Settlement Procedure H is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the Settlement Date. If settlement of a Note issued in book-entry form is rescheduled or canceled, the Issuing Agent will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 P.M., New York City time, on the Business Day immediately preceding the scheduled Settlement Date. Failure to Settle: If the Issuing Agent fails to enter an SDFS deliver order with respect to a Book-Entry Note issued in book-entry form pursuant to Settlement Procedure F. The Issuing Agent 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 participant account of the Issuing Agent maintained at DTC. DTC will process the withdrawal message, provided that such participant account contains a principal amount of the Book-Entry Note representing such Note that is at least equal to the principal amount to be debited. If withdrawal messages are processed with respect to all the Notes represented by a Book-Entry Note, the Issuing Agent will mark such Book-Entry Note "canceled," make appropriate entries in its records and send certification of destruction of such canceled Book-Entry Note to the Company. The CUSIP number assigned to such Book-Entry Note shall, in accordance with CUSIP Service Bureau procedures, be canceled and not immediately reassigned. If withdrawal messages are processed with respect to a portion of the Notes represented by a Book-Entry Note, the Issuing Agent will exchange such Book-Entry Note for two Book-Entry Notes, one of which shall represent the Book-Entry Notes for which withdrawal messages are processed and shall be canceled immediately after issuance, and the other of which shall represent the other Notes previously represented by the surrendered Book-Entry Note and shall bear the CUSIP number of the surrendered Book-Entry Note. In the case of any Note sold through the Offering Agent, as agent, if the purchase price for any Book-Entry Note is not timely paid to the Participants with respect to such Note by the beneficial investor or other purchaser thereof (or a person, including an indirect participant in DTC, acting on behalf of such investor or other purchaser), such Participants and, in turn, the related Offering Agent may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to settlement Procedures F and G, respectively. Thereafter, the Issuing Agent will deliver the withdrawal message and take the related actions described in the preceding paragraph. If such failure shall have occurred for any reason other than default by the applicable Offering Agent to perform its obligations hereunder or under the Distribution Agreement, the Company will reimburse such Offering Agent on an equitable basis for its reasonable loss of the use of funds during the period when the funds were credited to the account of the Company. Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to a Note that was to have been represented by a Book-Entry Note also representing other Notes, the Issuing Agent will provide, in accordance with Settlement Procedure D, for the authentication and issuance of a Book-Entry Note representing such remaining Notes and will make appropriate entries in its records. PART III: PROCEDURES FOR NOTES ISSUED IN DEFINITIVE FORM Denominations: The Definitive Notes will be issued in denominations of $1,000 and integral multiples thereof, unless otherwise specified in the applicable Pricing Supplement. Payments of Principal and Interest: Upon presentment and delivery of the Definitive Note, the Issuing Agent upon receipt of immediately available funds from the Company will pay the principal amount of each Definitive Note at Maturity and the final installment of interest in immediately available funds. All interest payments on a Definitive Note, other than interest due at Maturity, will be made at the office or agency of the Company maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, or, at the option of the Company, may be made by check mailed to the address of the person entitled thereto as such address shall appear in the registry books of the Company. However, holders of $10,000,000 or more in aggregate principal amount of Definitive Notes having the same Interest Payment Dates will, at the option of the Company, be entitled to receive payments of interest, other than at Maturity, by wire transfer of immediately available funds if appropriate wire transfer instructions have been received in writing by the Issuing Agent not less than 15 days prior to the applicable Interest Payment Date. Such wire instructions, upon receipt by the Trustee, shall remain in effect until revoked by such Holder. The Issuing Agent will provide monthly to the Company a list of the principal, premium, if any, and interest in each currency to be paid on Definitive Notes maturing in the next succeeding month. The Issuing Agent will be responsible for withholding taxes on interest paid as required by applicable law, but shall be relieved from any such responsibility if it acts in good faith and in reliance upon an opinion of counsel. Definitive Notes presented to the Issuing Agent at Maturity for payment will be canceled by the Issuing Agent. All canceled Definitive Notes held by the Issuing Agent shall be destroyed, and the Issuing Agent shall furnish to the Company a certificate with respect to such destruction. Settlement Procedures: Settlement Procedures with regard to each Definitive Note purchased by any Agent, as principal, or through any Agent, as agent, shall be as follows: A. The Offering Agent will advise the Company by telephone of the following Settlement information with regard to each Note: 1. Exact name in which the Definitive Note(s) is to be registered (the "Registered Owner") 2. Exact address or addresses of the Registered Owner for delivery, notices and payments of principal and interest. 3. Taxpayer identification number of the Registered Owner. 4. Principal amount of the Definitive Note. 5. Denomination of the Definitive Note. 6. (a) Fixed Rate Notes: (i) Interest Rate (ii) Interest Payment Dates (iii) Day Count Convention (A) 30/360 (B) Actual/360 (C) Actual/ Actual (and applicable periods) (b) Floating Rate Notes: (i) specify if: (A) Regular Floating Rate (B) Floating Rate/Fixed Rate (Fixed Rate Commencement Date) (C) Inverse Floating Rate (Fixed Interest Rate) (ii) Interest Rate Basis or Bases (and if CMT Rate Notes, the designated CMT Telerate page and the designated CMT Maturity Index) (iii) Initial Interest Rate (iv) Spread and/or Spread Multiplier, if any (iv) Initial Interest, Reset Date and Interest Reset Dates (vi) Interest Rate Reset Period (vii) Interest Payment Dates (viii) Interest Payment Period (ix) Regular Record Dates (x) Index Maturity (xi) Maximum and Minimum Interest Rates, if any (xii) Day Count Convention (A) Actual/360 (B) Actual/ Actual (and applicable periods) (xiii) Calculation Agent 7. Price to public of the Definitive Note (or whether the Note is being offered at varying prices relating to prevailing market prices at time of resale as determined by the Offering Agent). 8. Trade Date. 9. Settlement Date (Original Issue Date). 10. Stated Maturity Date. 11. Redemption provisions, if any, including Initial Redemption Date, Initial Redemption Percentage and Annual Redemption Percentage Reduction. 12. Optional Repayment Date(s) 13. Net proceeds to the Company. 14. The Offering Agent's commission or underwriting discount. 15. Whether such Notes are being sold to the Offering Agent as principal or to an investor or other purchaser through the Offering Agent acting as agent for the Company. 16. Whether such Note is being issued with Original Issue Discount and the terms thereof. 17. Such other information specified with respect to the Notes (whether by Addendum or otherwise). B. After receiving such settlement information from the Offering Agent, the Company will advise the Issuing Agent of the above settlement information by facsimile transmission confirmed by telephone. The Company will prepare a Pricing Supplement to the Prospectus and deliver copies to the Agent and will cause the Issuing Agent to issue, authenticate and deliver Notes. C. The Issuing Agent will complete the Definitive Note in the form approved by the Company, the Offering Agent and the Issuing Agent, and will make three copies thereof (herein called "Stub 1", "Stub 2" and "Stub 3"): 1. Definitive Note with the Offering Agent's confirmation, if traded on a principal basis, or the Offering Agent's customer confirmation, if traded on an agency basis. 2. Stub l for Issuing Agent. 3. Stub 2 for Offering Agent. 4. Stub 3 for the Company. D. With respect to each trade, the Issuing Agent will deliver the Definitive Notes and Stub 2 thereof to the Offering Agent at the following applicable address: Merrill Lynch, Pierce, Fenner & Smith Incorporated, Money Market Clearance - MTNs, 75 Barclay Street, Ground Floor Window C, New York, New York 10080, Attention: Kevin Brennan, (212) 602-6333, telecopier (212) 602-6332; Chase Securities Inc., 55 Water Street, Room 226, New York, New York 10041, Attention: Window 17 and 18, (212) 638-4787, telecopier (212) 638-5618; Deutsche Morgan Grenfell Inc., 31 West 52nd Street, New York, New York 10019, (212) 469-7595, telecopier: (212) 469-8173; Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172, (212) 892-3035, telecopier: (212) 892-2682; Edward Jones & Co., L.P. 12555 Manchester Road, St. Louis, Missouri 68131, (314) 515-3344, telecopier: (314) 515-3301; First Chicago Capital Markets, Inc., One First National Plaza, Suite 0595, Chicago, Illinois 60670, Attention: Corporate Securities Structuring, (312) 732-8270, telecopier: (312) 732-4172; Goldman, Sachs & Co., Corporate Bond Operations, 85 Broad Street, New York, New York 10004; J.P. Morgan Securities Inc., c/o NSCC - NY Window, 55 Water Street, Plaza Level, New York, New York 10041, Attention: Bill Davis; Morgan Stanley & Co. Incorporated, c/o Bank of New York, One Wall Street, Third Floor, Dealers Clearance, Window B, New York, New York, 10005; NationsBanc Montgomery Securities, Inc., c/o Bank of New York, One Wall Street, Third Floor, Dealers Clearance, Window B, New York, New York, 10005; Smith Barney Inc., 390 Greenwich Street, 3rd Floor, New York, New York 10013, Attention: Syndicate Operations - Richard Muszel, (212) 723-4850, telecopier: (212) 723- 8904. The Issuing Agent will keep Stub 1. The Offering Agent will acknowledge receipt of the Definitive Note through a broker's receipt and will keep Stub 2. Delivery of the Definitive Note will be made only against such acknowledgment of receipt. Upon determination that the Definitive Note has been authorized, delivered and completed as aforementioned, the Offering Agent will wire the net proceeds of the Definitive Note after deduction of its applicable commission to the Company pursuant to standard wire instructions given by the Company. E. In the case of Notes sold through the Offering Agent, as agent, the Offering Agent will deliver the Definitive Note (with confirmations), as well as a copy of the Prospectus and any applicable Pricing Supplement or Supplements received from the Issuing Agent to the purchaser against payment in immediately available funds. F. The Issuing Agent will send Stub 3 to the Company. Settlement Procedures Timetable: For offers to purchase Definitive Notes accepted by the Company, Settlement Procedures "A" through "F" set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below: Settlement Procedure Time --------- ---- A 11:00 A.M. on the trade date B 3:00 P.M. on Business Day prior to Settlement Date C-D 2:15 P.M. on Settlement Date E 3:00 P.M. on Settlement Date F 5:00 P.M. on Settlement Date Failure to Settle: In the case of Notes sold through the Offering Agent, as agent, if an investor or other purchaser of a Definitive Note from the Company shall either fail to accept delivery of or make payment for a Definitive Note on the date fixed for settlement, the Offering Agent will forthwith notify the Issuing Agent and the Company by telephone, confirmed in writing, and return the Definitive Note to the Issuing Agent. The Issuing Agent, upon receipt of the Definitive Note from the Offering Agent, will immediately advise the Company and the Company will promptly arrange to credit the account of the Offering Agent in an amount of immediately available funds equal to the amount previously paid to the Company by such Offering Agent in settlement for the Definitive Note. Such credits will be made on the Settlement Date if possible, and in any event not later than the Business Day following the Settlement Date; provided, however, that the Company has received notice on the same day. If such failure shall have occurred for any reason other than failure by such Offering Agent to perform its obligations hereunder or under the Distribution Agreement, the Company will reimburse such Offering Agent on an equitable basis for its reasonable loss of the use of funds during the period when the funds were credited to the account of the Company. Immediately upon receipt of the Definitive Note in respect of which the failure occurred, the Issuing Agent will cancel and destroy the Definitive Note, make appropriate entries in its records to reflect the fact that the Note was never issued, and accordingly notify in writing the Company. EX-4.1 3 [FORM OF FIXED RATE DEFINITIVE MEDIUM-TERM NOTE, SERIES 3] REGISTERED PRINCIPAL AMOUNT No. FX____ CUSIP NO. __________ $__________ SUNAMERICA INC. MEDIUM-TERM NOTE, SERIES 3 (Fixed Rate) NAME AND ADDRESS HOLDER'S TAXPAYER OF HOLDER: IDENTIFICATION NO.: ORIGINAL ISSUE DATE: INTEREST RATE: STATED MATURITY DATE: INTEREST PAYMENT DATES: INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION DATE: PERCENTAGE: PERCENTAGE REDUCTION: OPTIONAL REPAYMENT DATE(S): DAY COUNT CONVENTION [ ] 30/360 FOR THE PERIOD FROM TO [ ] ACTUAL/360 FOR THE PERIOD FROM TO [ ] ACTUAL/ACTUAL FOR THE PERIOD FROM TO ADDENDUM ATTACHED: ORIGINAL ISSUE DISCOUNT [ ] Yes [ ] Yes [ ] No [ ] No Total Amount of OID: Yield to Maturity: Initial Accrual Period: OTHER PROVISIONS: SUNAMERICA INC., a Maryland corporation ("Issuer" or the "Company," which terms include any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to the HOLDER IDENTIFIED ABOVE or registered assigns, the Principal Amount specified above on the Stated Maturity Date specified above (except to the extent redeemed or repaid prior to the Stated Maturity Date), and to pay interest thereon at the Interest Rate per annum specified above, until the principal hereof is paid or duly made available for payment. Reference herein to "this Note," "hereof," "herein" and comparable terms shall include an Addendum hereto if an Addendum is specified above. The Company will pay interest on each Interest Payment Date specified above, commencing on the first Interest Payment Date next succeeding the Original Issue Date specified above, and on the Stated Maturity Date or any Redemption Date or Optional Repayment Date (the date of each such Stated Maturity Date, Redemption Date and Optional Repayment Date and the date on which principal or an installment of principal is due and payable by declaration of acceleration pursuant to the Indenture being referred to hereinafter as a "Maturity" with respect to principal payable on such date); provided, however, that if the Original Issue Date is between a record date (as defined below) and the next succeeding Interest Payment Date, interest payments will commence on the second Interest Payment Date succeeding the Original Issue Date. Except as provided above, interest payments will be made on the Interest Payment Dates shown above. Unless otherwise specified above, the "record date" shall be the date 15 calendar days (whether or not a Business Day) prior to the applicable Interest Payment Date. Interest on this Note will accrue 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, from the Original Issue Date specified above, to, but excluding such Interest Payment Date. If the Maturity or an Interest Payment Date falls on a day which is not a Business Day as defined below, the payment due on such Maturity or Interest Payment Date will be paid on the next succeeding Business Day with the same force and effect as if made on such Maturity or Interest Payment Date, as the case may be, and no interest shall accrue with respect to such payment for the period from and after such Maturity or Interest Payment Date. The interest so payable and punctually paid or duly provided for on any Interest Payment Date will as provided in the Indenture be paid to the Person in whose name this Note is registered at the close of business on the record date for such Interest Payment Date. Any such interest which is payable, but not punctually paid or duly provided for on any Interest Payment Date (herein called "Defaulted Interest"), shall forthwith cease to be payable to the registered Holder on such record date, and may be paid to the Person in whose name this Note is registered at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment of such Defaulted Interest) established by notice given by mail by or on behalf of the Issuer to the Holder of this Note not less than 15 days preceding such subsequent record date, all as more fully provided in the Indenture. Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payments of public and private debts; provided, however, that at the option of the Company, payment of interest due other than at Maturity may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the registry books of the Company; and provided, further, that the repayment of the principal of and interest on this Note on any Optional Repayment Date(s), if any, indicated above shall be made upon satisfaction of the provisions herein; and provided, further, that AT THE OPTION OF THE COMPANY, the Holder of Notes with an aggregate principal amount of $10,000,000 or more will be entitled to receive payments of principal of and interest on this Note by wire transfer of immediately available funds if appropriate wire transfer instructions have been received by the Trustee not less than 15 days prior to the applicable payment date. Such wire instructions, upon receipt by the Trustee, shall remain in effect until revoked by such Holder. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee (as defined below) under the Indenture, by the manual signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. This Note is one of a duly authorized series of Securities (hereinafter called the "Securities") of the Company designated as its Medium-Term Notes, Series 3 (the "Notes"). The Notes are issued and to be issued under an Indenture dated as of April 15, 1993, as amended (herein called the "Indenture") between the Company and The First National Bank of Chicago, a national banking association (the "Trustee," which term includes any successor Trustee with respect to the Notes under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Company, the Trustee and the Holders of the Notes and the terms upon which the Notes are to be authenticated and delivered. The terms of individual Notes may vary with respect to interest rates or interest rate formulas, issue dates, maturity, redemption, repayment, currency of payment and otherwise. Unless otherwise provided above and in accordance with the provisions herein, this Note is not subject to any sinking fund and is not redeemable or repayable prior to the Stated Maturity Date. If so provided above, this Note may be redeemed by the Company on any date on and after the Initial Redemption Date, if any, specified above. If no Initial Redemption Date is set forth above, this Note may not be redeemed prior to the Stated Maturity Date. On and after the Initial Redemption Date, if any, this Note may be redeemed at any time in whole or from time to time in part in increments of $1,000 (provided that any remaining principal hereof shall be at least $1,000) at the option of the Company at the applicable Redemption Price (as defined below), together with accrued interest hereon at the applicable rate payable to the date of redemption (each such date, a "Redemption Date"), on written notice given not more than 60 nor less than 30 days prior to the Redemption Date and in accordance with the provisions of the Indenture. In the event of redemption of this Note in part only, a new Note for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the surrender hereof. Unless otherwise specified above, the "Redemption Price" shall initially be the Initial Redemption Percentage, specified above, of the principal amount of this Note to be redeemed and shall decline at each anniversary of the Initial Redemption Date, shown above, by the Annual Redemption Percentage Reduction, if any, specified above, of the principal amount to be redeemed until the Redemption Price is 100% of such principal amount. This Note may be subject to repayment at the option of the Holder on any Optional Repayment Date(s), if any, indicated above. If no Optional Repayment Date(s) are set forth above, this Note may not be so repaid at the option of the Holder hereof prior to the Stated Maturity Date. On any Optional Repayment Date, this Note shall be repayable in whole or in part in increments of $1,000 (provided that any remaining principal hereof shall be at least $1,000) at the option of the Holder hereof at a repayment price, unless otherwise specified above, equal to 100% of the principal amount to be repaid, together with interest thereon payable to the date of repayment. For this Note to be repaid in whole or in part at the option of the Holder hereof, this Note must be received, with the form entitled "Option to Elect Repayment" below 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 related Optional Repayment Date. Exercise of such repayment option by the Holder hereof shall be irrevocable. Interest payments on this Note shall include interest accrued from, and including, the Original Issue Date indicated above, or the most recent date to which interest has been paid or duly provided for, to, but excluding, the related Interest Payment Date or Maturity, as the case may be. Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months if the Day Count Convention specified above is "30/360" for the period specified thereunder, on the basis of the actual number of days in the related month and a 360-day year if the Day Count Convention specified above is "Actual/360" for the period specified thereunder or on the basis of the actual number of days in the related year and month if the Day Count Convention specified above is "Actual/Actual" for the period specified thereunder. As used herein, "Business Day" means, unless otherwise specified above, any day that in The City of New York is not a day on which banking institutions are authorized or required by law or regulation to close. Any provision contained herein with respect to the calculation of the rate of interest applicable to this Note, its payment dates or any other matter relating hereto may be modified as specified in an Addendum relating hereto if so specified above. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of all the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series issued under such Indenture then Outstanding and affected, voting as one class, to add any provisions to, or change in any manner or eliminate any of the provisions of, such Indenture or modify in any manner the rights of the Holders of the Securities of each series so affected; provided that the Issuer and the Trustee may not, without the consent of the Holder of each outstanding Security affected thereby, (i) extend the stated maturity of the principal of any Security, or reduce the principal amount thereof or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or change the currency in which the principal thereof (including any amount in respect of original issue discount) or interest thereon is payable or reduce the amount of any original issue discount security payable upon acceleration or provable in bankruptcy or impair the right to institute suit for the enforcement of any payment on any Security when due or (ii) reduce the aforesaid percentage in principal amount of Securities of any series issued under such Indenture, the consent of the Holders of which is required for any such modification. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, prior to any declaration accelerating the maturity of such Securities, the Holders of a majority in aggregate principal amount Outstanding of the Securities of such series (or, in the case of certain defaults or Events of Default, all or certain series of the Securities) may on behalf of the Holders of all the Securities of such series (or all or certain series of the Securities, as the case may be) waive any such past default or Event or Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of the principal of or interest on any of the Securities. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor or on registration of transfer hereof, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the time, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the registry books of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder hereof or by its attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed, manually or in facsimile, and in imprint or facsimile of its corporate seal to be imprinted hereon. [FACSIMILE OF SEAL] SUNAMERICA INC. By: ---------------------------- Name: Title: Attest: By: ---------------------------- Name: Title: CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. THE FIRST NATIONAL BANK OF CHICAGO as Trustee By: ---------------------------- Authorized officer Dated: -------------------------- OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably request(s) and instruct(s) the Company to repay this Note (or portion hereof specified below) pursuant to its terms at a price equal to the principal amount hereof together with interest to the repayment date, to the undersigned, at ______________________ _____________________________________________________________________________ (Please print or typewrite name and address of the undersigned) For this Note to be repaid, the Trustee must receive at its Corporate Trust Office, or at such other place or places of which the Company shall from time to time notify the Holder of this Note, not more than 60 nor less than 30 days prior to the Optional Repayment Date, if any, shown on the face of this Note, this Note with this "Option to Elect Repayment" form duly completed. If less than the entire principal amount of this Note is to be repaid, specify the portion hereof (which shall be increments of $1,000) which the Holder elects to have repaid and specify the denomination or denominations (which shall be $1,000 or an integral multiple thereof) of the Notes to be issued to the Holder for the portion of this Note not being repaid (in the absence of any such specification, one such Note will be issued for the portion not being repaid). $ ------------ ------------------------------------------ NOTICE: The signature on this Option to Date: Elect Repayment must correspond with the --------------- name as written upon the face of this Note in every particular, without alteration or enlargement or any change whatever. Signature Guarantee: - -------------------------- ASSIGNMENT/TRANSFER FORM FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto (insert Taxpayer Identification no.) __________________________________________________________________ __________________________________________________________________ (Please print or typewrite name and address including postal zip code of assignee) _____________________________________________________ the within Note and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________ attorney to transfer said Note on the books of the Company with full power of substitution in the premises. Dated: --------------- NOTICE: The signature of the registered Holder 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. Signature Guarantee: - ------------------------ ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM -- as tenants in common UNIF GIFT MIN ACT -- . . . . . . . . . . . . . . . Custodian . . . . . . . . (Cust) (Minor) Under Uniform Gifts to Minors Act . . . . . . . . . . . . . . . . . . . (State) TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. EX-4.2 4 [FORM OF FIXED RATE GLOBAL MEDIUM-TERM NOTE, SERIES 3] Unless and until this certificate is exchanged in whole or in part for Notes in definitive registered form, this Note may not be transferred except as a whole by The Depository Trust Company, a New York corporation ("DTC"), to its nominee or by its nominee to DTC or another nominee of DTC or by DTC or any such nominee to a successor Depositary or a nominee of such successor Depositary. Any certificate issued in exchange herefor shall be registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment in respect hereof shall be made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC). REGISTERED PRINCIPAL AMOUNT No. FX____ CUSIP NO. __________ SUNAMERICA INC. MEDIUM-TERM NOTE, SERIES 3 (Fixed Rate) ORIGINAL ISSUE DATE: INTEREST RATE: STATED MATURITY DATE: INTEREST PAYMENT DATES: INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION DATE: PERCENTAGE: PERCENTAGE REDUCTION: OPTIONAL REPAYMENT DATE(S): DAY COUNT CONVENTION [ ] 30/360 FOR THE PERIOD FROM TO [ ] ACTUAL/360 FOR THE PERIOD FROM TO [ ] ACTUAL/ACTUAL FOR THE PERIOD FROM TO ADDENDUM ATTACHED: ORIGINAL ISSUE DISCOUNT [ ] Yes [ ] Yes [ ] No [ ] No Total Amount of OID: Yield to Maturity: Initial Accrual Period: OTHER PROVISIONS: SUNAMERICA INC., a Maryland corporation ("Issuer" or the "Company," which terms include any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the Principal Amount specified above on the Stated Maturity Date specified above (except to the extent redeemed or repaid prior to the Stated Maturity Date), and to pay interest thereon at the Interest Rate per annum specified above, until the principal hereof is paid or duly made available for payment. Reference herein to "this Note," "hereof," "herein" and comparable terms shall include an Addendum hereto if an Addendum is specified above. The Company will pay interest on each Interest Payment Date specified above, commencing on the first Interest Payment Date next succeeding the Original Issue Date specified above, and on the Stated Maturity Date or any Redemption Date or Optional Repayment Date (the date of each such Stated Maturity Date, Redemption Date and Optional Repayment Date and the date on which principal or an installment of principal is due and payable by declaration of acceleration pursuant to the Indenture being referred to hereinafter as a "Maturity" with respect to principal payable on such date); provided, however, that if the Original Issue Date is between a record date (as defined below) and the next succeeding Interest Payment Date, interest payments will commence on the second Interest Payment Date succeeding the Original Issue Date. Except as provided above, interest payments will be made on the Interest Payment Dates shown above. Unless otherwise specified above, the "record date" shall be the date 15 calendar days (whether or not a Business Day) prior to the applicable Interest Payment Date. Interest on this Note will accrue 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, from the Original Issue Date specified above, to, but excluding such Interest Payment Date. If the Maturity or an Interest Payment Date falls on a day which is not a Business Day as defined below, the payment due on such Maturity or Interest Payment Date will be paid on the next succeeding Business Day with the same force and effect as if made on such Maturity or Interest Payment Date, as the case may be, and no interest shall accrue with respect to such payment for the period from and after such Maturity or Interest Payment Date. The interest so payable and punctually paid or duly provided for on any Interest Payment Date will as provided in the Indenture be paid to the Person in whose name this Note is registered at the close of business on the record date for such Interest Payment Date. Any such interest which is payable, but not punctually paid or duly provided for on any Interest Payment Date (herein called "Defaulted Interest"), shall forthwith cease to be payable to the registered Holder on such record date, and may be paid to the Person in whose name this Note is registered at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment of such Defaulted Interest) established by notice given by mail by or on behalf of the Issuer to the Holder of this Note not less than 15 days preceding such subsequent record date, all as more fully provided in the Indenture. Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payments of public and private debts; provided, however, that at the option of the Company, payment of interest due other than at Maturity may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the registry books of the Company; and provided, further, that the repayment of the principal of and interest on this Note on any Optional Repayment Date(s), if any, indicated above shall be made upon satisfaction of the provisions herein; and provided, further, that AT THE OPTION OF THE COMPANY, the Holder of Notes with an aggregate principal amount of $10,000,000 or more will be entitled to receive payments of principal of and interest on this Note by wire transfer of immediately available funds if appropriate wire transfer instructions have been received by the Trustee not less than 15 days prior to the applicable payment date. Such wire instructions, upon receipt by the Trustee, shall remain in effect until revoked by such Holder. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee (as defined below) under the Indenture, by the manual signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. This Note is one of a duly authorized series of Securities (hereinafter called the "Securities") of the Company designated as its Medium-Term Notes, Series 3 (the "Notes"). The Notes are issued and to be issued under an Indenture dated as of April 15, 1993, as amended (herein called the "Indenture") between the Company and The First National Bank of Chicago, a national banking association (the "Trustee," which term includes any successor Trustee with respect to the Notes under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Company, the Trustee and the Holders of the Notes and the terms upon which the Notes are to be authenticated and delivered. The terms of individual Notes may vary with respect to interest rates or interest rate formulas, issue dates, maturity, redemption, repayment, currency of payment and otherwise. Except as otherwise provided in the Indenture, this Note will be issued in global form only registered in the name of the Depositary or its nominee. This Note will not be issued in definitive form, except as otherwise provided in the Indenture, and ownership of this Note shall be maintained in book-entry form by the Depositary for the accounts of participating organizations of the Depositary. Unless otherwise provided above and in accordance with the provisions herein, this Note is not subject to any sinking fund and is not redeemable or repayable prior to the Stated Maturity Date. If so provided above, this Note may be redeemed by the Company on any date on and after the Initial Redemption Date, if any, specified above. If no Initial Redemption Date is set forth above, this Note may not be redeemed prior to the Stated Maturity Date. On and after the Initial Redemption Date, if any, this Note may be redeemed at any time in whole or from time to time in part in increments of $1,000 (provided that any remaining principal hereof shall be at least $1,000) at the option of the Company at the applicable Redemption Price (as defined below), together with accrued interest hereon at the applicable rate payable to the date of redemption (each such date, a "Redemption Date"), on written notice given not more than 60 nor less than 30 days prior to the Redemption Date and in accordance with the provisions of the Indenture. In the event of redemption of this Note in part only, a new Note for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the surrender hereof. Unless otherwise specified above, the "Redemption Price" shall initially be the Initial Redemption Percentage, specified above, of the principal amount of this Note to be redeemed and shall decline at each anniversary of the Initial Redemption Date, shown above, by the Annual Redemption Percentage Reduction, if any, specified above, of the principal amount to be redeemed until the Redemption Price is 100% of such principal amount. This Note may be subject to repayment at the option of the Holder on any Optional Repayment Date(s), if any, indicated above. If no Optional Repayment Date(s) are set forth above, this Note may not be so repaid at the option of the Holder hereof prior to the Stated Maturity Date. On any Optional Repayment Date, this Note shall be repayable in whole or in part in increments of $1,000 (provided that any remaining principal hereof shall be at least $1,000) at the option of the Holder hereof at a repayment price, unless otherwise specified above, equal to 100% of the principal amount to be repaid, together with interest thereon payable to the date of repayment. For this Note to be repaid in whole or in part at the option of the Holder hereof, this Note must be received, with the form entitled "Option to Elect Repayment" below 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 related Optional Repayment Date. Exercise of such repayment option by the Holder hereof shall be irrevocable. With respect to Notes represented by global securities, any option for repayment may be exercised by the applicable participant that has an account with the Depositary, on behalf of the owners of the beneficial interests in the Notes represented by such global securities, by delivering a written notice substantially similar to the above- referenced form, duly completed, to the Trustee at the place and within the period described above. All such notices shall be executed by a duly authorized officer of such participant (with signature guaranteed) and shall be irrevocable. Interest payments on this Note shall include interest accrued from, and including, the Original Issue Date indicated above, or the most recent date to which interest has been paid or duly provided for, to, but excluding, the related Interest Payment Date or Maturity, as the case may be. Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months if the Day Count Convention specified above is "30/360" for the period specified thereunder, on the basis of the actual number of days in the related month and a 360-day year if the Day Count Convention specified above is "Actual/360" for the period specified thereunder or on the basis of the actual number of days in the related year and month if the Day Count Convention specified above is "Actual/Actual" for the period specified thereunder. As used herein, "Business Day" means, unless otherwise specified above, any day that in The City of New York is not a day on which banking institutions are authorized or required by law or regulation to close. Any provision contained herein with respect to the calculation of the rate of interest applicable to this Note, its payment dates or any other matter relating hereto may be modified as specified in an Addendum relating hereto if so specified above. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of all the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series issued under such Indenture then Outstanding and affected, voting as one class, to add any provisions to, or change in any manner or eliminate any of the provisions of, such Indenture or modify in any manner the rights of the Holders of the Securities of each series so affected; provided that the Issuer and the Trustee may not, without the consent of the Holder of each outstanding Security affected thereby, (i) extend the stated maturity of the principal of any Security, or reduce the principal amount thereof or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or change the currency in which the principal thereof (including any amount in respect of original issue discount) or interest thereon is payable or reduce the amount of any original issue discount security payable upon acceleration or provable in bankruptcy or impair the right to institute suit for the enforcement of any payment on any Security when due or (ii) reduce the aforesaid percentage in principal amount of Securities of any series issued under such Indenture, the consent of the Holders of which is required for any such modification. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, prior to any declaration accelerating the maturity of such Securities, the Holders of a majority in aggregate principal amount Outstanding of the Securities of such series (or, in the case of certain defaults or Events of Default, all or certain series of the Securities) may on behalf of the Holders of all the Securities of such series (or all or certain series of the Securities, as the case may be) waive any such past default or Event or Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of the principal of or interest on any of the Securities. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor or on registration of transfer hereof, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the time, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the registry books of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder hereof or by its attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed, manually or in facsimile, and an imprint or facsimile of its corporate seal to be imprinted hereon. [FACSIMILE OF SEAL] SUNAMERICA INC. By: ---------------------------- Name: Title: Attest: By: ---------------------------- Name: Title: CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. THE FIRST NATIONAL BANK OF CHICAGO as Trustee By: ---------------------------- Authorized officer Dated: ------------------------- OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably request(s) and instruct(s) the Company to repay this Note (or portion hereof specified below) pursuant to its terms at a price equal to the principal amount hereof together with interest to the repayment date, to the undersigned, at ______________________ _____________________________________________________________________________ (Please print or typewrite name and address of the undersigned) For this Note to be repaid, the Trustee must receive at its Corporate Trust Office, or at such other place or places of which the Company shall from time to time notify the Holder of this Note, not more than 60 nor less than 30 days prior to the Optional Repayment Date, if any, shown on the face of this Note, this Note with this "Option to Elect Repayment" form duly completed. If less than the entire principal amount of this Note is to be repaid, specify the portion hereof (which shall be increments of $1,000) which the Holder elects to have repaid and specify the denomination or denominations (which shall be $1,000 or an integral multiple thereof) of the Notes to be issued to the Holder for the portion of this Note not being repaid (in the absence of any such specification, one such Note will be issued for the portion not being repaid). $ ------------ NOTICE: The signature on this Option to Date: Elect Repayment must correspond with the --------------- name as written upon the face of this Note in every particular, without alteration or enlargement or any change whatever. Signature Guarantee: - -------------------------- ASSIGNMENT/TRANSFER FORM FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto (insert Taxpayer Identification no.) ________________________________________________________________________ ____________________________________________________________________________ (Please print or typewrite name and address including postal zip code of assignee) ______________________________________________________ the within Note and all rights thereunder, hereby irrevocably constituting and appointing _________________________________________________________ attorney to transfer said Note on the books of the Company with full power of substitution in the premises. Dated: ---------------------------------------- ------------ NOTICE: The signature of the registered Holder 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. Signature Guarantee: - ------------------------ ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM -- as tenants in common UNIF GIFT MIN ACT -- . . . . . . . . . . . . . . . Custodian . . . . . . . . (Cust) (Minor) Under Uniform Gifts to Minors Act . . . . . . . . . . . . . . . . . . . (State) TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. EX-4.3 5 [FORM OF FLOATING RATE DEFINITIVE MEDIUM-TERM NOTE, SERIES 3] REGISTERED CUSIP No. __________ PRINCIPAL AMOUNT No. FLR___ $______________ SUNAMERICA INC. MEDIUM-TERM NOTE, SERIES 3 (Floating Rate) NAME AND ADDRESS OF HOLDER: HOLDER`S TAXPAYER IDENTIFICATION NO.: INTEREST RATE BASIS: ORIGINAL ISSUE DATE: STATED MATURITY DATE: INDEX MATURITY: INITIAL INTEREST RATE: INTEREST PAYMENT PERIOD: SPREAD: INITIAL INTEREST RESET INTEREST PAYMENT DATE: DATES: SPREAD MULTIPLIER: INTEREST RATE RESET INTEREST RESET DATES: PERIOD: MAXIMUM INTEREST MINIMUM INTEREST RATE: INITIAL REDEMPTION RATE: DATE: INITIAL REDEMPTION ANNUAL REDEMPTION OPTIONAL REPAYMENT PERCENTAGE: PERCENTAGE REDUCTION: DATE(S): CALCULATION AGENT: INTEREST CALCULATION DAY COUNT CONVENTION [ ] Regular Floating Rate Note [ ] Actual/360 for the period [ ] Floating Rate/Fixed Rate from to Fixed Rate Commencement Date: [ ] Actual/Actual to the period from to Fixed Interest Rate: [ ] Inverse Floating Rate Note Fixed Interest Rate: ADDENDUM ATTACHED: ORIGINAL ISSUE DISCOUNT [ ] Yes [ ] Yes [ ] No [ ] No Total Amount of OID: Yield to Maturity: Initial Accrual Period: IF THE INTEREST RATE BASIS IS THE CMT RATE: Designated CMT Telerate Designated CMT Maturity Index: Page: [ ] Page 7055 [ ] Page 7052 OTHER PROVISIONS: SUNAMERICA INC., a Maryland corporation ("Issuer" or the "Company," which terms include any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to the HOLDER IDENTIFIED ABOVE, or registered assigns, the Principal Amount specified above on the Stated Maturity Date specified above (except to the extent redeemed or repaid prior to the Stated Maturity Date), and to pay interest thereon, at a rate per annum equal to the Initial Interest Rate specified above until the Initial Interest Reset Date specified above and thereafter at a rate per annum determined in accordance with the provisions hereof and any Addendum relating hereto depending upon the Interest Rate Basis or Bases, if any, and such other terms specified above, until the principal hereof is paid or duly made available for payment. Reference herein to "this Note," "hereof," "herein" and comparable terms shall include an Addendum hereto if an Addendum is specified above. The Company will pay interest monthly, quarterly, semi-annually, annually or such other period as specified above under "Interest Payment Period," on each Interest Payment Date specified above, commencing on the first Interest Payment Date specified above next succeeding the Original Issue Date specified above, and on the Stated Maturity Date or any Redemption Date or Optional Repayment Date (the date of each such Stated Maturity Date, Redemption Date and Optional Repayment Date and the date on which principal or an installment of principal is due and payable by declaration of acceleration pursuant to the Indenture being referred to hereinafter as a "Maturity" with respect to principal payable on such date); provided, however, that if the Original Issue Date is between a Regular Record Date (as defined below) and the next succeeding Interest Payment Date, interest payments will commence on the second Interest Payment Date succeeding the Original Issue Date; and provided, further, that if an Interest Payment Date (other than an Interest Payment Date at Maturity) would fall on a day that is not a Business Day (as defined below), such Interest Payment Date shall be the following day that is a Business Day, except that in the case the Interest Rate Basis is LIBOR, as indicated above, if such next Business Day falls in the next calendar month, such Interest Payment Date shall be the next preceding day that is a Business Day. Except as provided above, interest payments will be made on the Interest Payment Dates shown above. Unless otherwise specified above, the "record date" shall be the date 15 calendar days (whether or not a Business Day) prior to the applicable Interest Payment Date. Interest on this Note will accrue from and including the Original Issue Date specified above, at the rates determined from time to time as specified herein, until the principal hereof has been paid or made available for payment. If the Maturity falls on a day which is not a Business Day as defined below, the payment due on such Maturity will be paid on the next succeeding Business Day with the same force and effect as if made on such Maturity and no interest shall accrue with respect to such payment for the period from and after such Maturity. The interest so payable and punctually paid or duly provided for on any Interest Payment Date will as provided in the Indenture be paid to the Person in whose name this Note is registered at the close of business on the record date for such Interest Payment Date. Any such interest which is payable, but not punctually paid or duly provided for on any Interest Payment Date (herein called "Defaulted Interest"), shall forthwith cease to be payable to the registered Holder on such record date, and may be paid to the Person in whose name this Note is registered at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment of such Defaulted Interest) established by notice given by mail by or on behalf of the Issuer to the Holder of this Note not less than 15 days preceding such subsequent record date, all as more fully provided in the Indenture. Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company, payment of interest due other than at Maturity may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the registry books of the Company; and provided, further, that the repayment of the principal of and interest on this Note on any Optional Repayment Date(s), if any, indicated above shall be made upon satisfaction of the provisions herein; and provided, further, that AT THE OPTION OF THE COMPANY, the Holder of Notes with an aggregate principal amount of $10,000,000 or more will be entitled to receive payments of principal of and interest on this Note by wire transfer of immediately available funds if appropriate wire transfer instructions have been received by the Trustee not less than 15 days prior to the applicable payment date. Such wire instructions, upon receipt by the Trustee, shall remain in effect until revoked by such Holder. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee under the Indenture, by the manual signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. This Note is one of a duly authorized series of Securities (hereinafter called the "Securities") of the Company designated as its Medium-Term Notes, Series 3 (the "Notes"). The Notes are issued and to be issued under an Indenture dated as of April 15, 1993, as amended (herein called the "Indenture") between the Company and The First National Bank of Chicago, a national banking association (the "Trustee," which term includes any successor Trustee with respect to the Notes under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Company, the Trustee and the Holders of the Notes and the terms upon which the Notes are to be authenticated and delivered. The terms of individual Notes may vary with respect to interest rates or interest rate formulas, issue dates, maturity, redemption, repayment, currency of payment and otherwise. Unless otherwise provided above and in accordance with the provisions herein, this Note is not subject to any sinking fund and is not redeemable or repayable prior to the Stated Maturity Date. If so provided above, this Note may be redeemed by the Company on any date on and after the Initial Redemption Date, if any, specified above. If no Initial Redemption Date is set forth above, this Note may not be redeemed prior to the Stated Maturity Date. On and after the Initial Redemption Date, if any, this Note may be redeemed at any time in whole or from time to time in part in increments of $1,000 (provided that any remaining principal hereof shall be at least $1,000) at the option of the Company at the applicable Redemption Price (as defined below), together with accrued interest hereon at the applicable rate payable to the date of redemption (each such date, a "Redemption Date"), on written notice given not more than 60 nor less than 30 days prior to the Redemption Date and in accordance with the provisions of the Indenture. In the event of redemption of this Note in part only, a new Note for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the surrender hereof. Unless otherwise specified above, the "Redemption Price" shall initially be the Initial Redemption Percentage, specified above, of the principal amount of this Note to be redeemed and shall decline at each anniversary of the Initial Redemption Date, shown above, by the Annual Redemption Percentage Reduction, if any, specified above, of the principal amount to be redeemed until the Redemption Price is 100% of such principal amount. This Note may be subject to repayment at the option of the Holder on any Optional Repayment Date(s), if any, indicated above. If no Optional Repayment Date(s) are set forth above, this Note may not be so repaid at the option of the Holder hereof prior to the Stated Maturity Date. On any Optional Repayment Date, this Note shall be repayable in whole or in part in increments of $1,000 (provided that any remaining principal hereof shall be at least $1,000) at the option of the Holder hereof at a repayment price, unless otherwise specified above, equal to 100% of the principal amount to be repaid, together with interest thereon payable to the date of repayment. For this Note to be repaid in whole or in part at the option of the Holder hereof, this Note must be received, with the form entitled "Option to Elect Repayment" below 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 related Optional Repayment Date. Exercise of such repayment option by the Holder hereof shall be irrevocable. The interest rate borne by this Note shall be determined as follows: 1. If this Note is designated as a Regular Floating Rate Note above, then, except as described below, this Note shall bear interest at the rate determined by reference to the applicable Interest Rate Basis shown above (i) plus or minus the applicable Spread, if any, and/or (ii) multiplied by the applicable Spread Multiplier, if any, specified and applied in the manner described above. Commencing on the Initial Interest Reset Date, the rate at which interest on this Note is payable shall be reset as of each Interest Reset Date specified above; provided, however, that the interest rate in effect for the period from the Original Issue Date to the Initial Interest Reset Date will be the Initial Interest Rate. 2. If this Note is designated as a Floating Rate/Fixed Rate Note above, then, except as described below, this Note shall bear interest at the rate determined by reference to the applicable Interest Rate Basis shown above (i) plus or minus the applicable Spread, if any, and/or (ii) multiplied by the applicable Spread Multiplier, if any, specified and applied in the manner described above. Commencing on the Initial Interest Reset Date, the rate at which interest on this Note is payable shall be reset as of each Interest Reset Date specified above; provided, however, that (i) the interest rate in effect for the period from the Original Issue Date to the Initial Interest Reset Date shall be the Initial Interest Rate; and (ii) the interest rate in effect commencing on, and including, the Fixed Rate Commencement Date to Maturity shall be the Fixed Interest Rate, if such a rate is specified above, or if no such Fixed Interest Rate is so specified, the interest rate in effect hereon on the day immediately preceding the Fixed Rate Commencement Date. 3. If this Note is designated as an Inverse Floating Rate Note above, then, except as described below, this Note will bear interest equal to the Fixed Interest Rate indicated above minus the rate determined by reference to the Interest Rate Basis shown above (i) plus or minus the applicable Spread, if any, and/or (ii) multiplied by the applicable Spread Multiplier, if any, specified and applied in the manner described above. Commencing on the Initial Interest Reset Date, the rate at which interest on this Note is payable shall be reset as of each Interest Rate Reset Date specified above; provided, however, that the interest rate in effect for the period from the Original Issue Date to the Initial Interest Reset Date shall be the Initial Interest Rate. 4. Notwithstanding the foregoing, if this Note is designated above as having an Addendum attached, the Note shall bear interest in accordance with the terms described in such Addendum. Except as provided above, the interest rate in effect on each day shall be (a) if such day is an Interest Reset Date, the interest rate determined as of the Interest Determination Date (as defined below) immediately preceding such Interest Reset Date or (b) if such day is not an Interest Reset Date, the interest rate determined as of the Interest Determination Date immediately preceding the next preceding Interest Reset Date. The interest rate with respect to each Interest Rate Basis shall be determined in accordance with the applicable provision below. If any Interest Reset Date (which term includes the term Initial Interest Reset Date unless the context otherwise requires) would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding day that is a Business Day, except that if an Interest Rate Basis specified on the face hereof is LIBOR and such next Business Day falls in the next succeeding calendar month, such Interest Reset Date shall be the next preceding Business Day. Unless otherwise specified above, interest payable on this Note on any Interest Payment Date shall be the amount of interest accrued from and including the next preceding Interest Payment Date in respect of which interest has been paid (or from and including the Original Issue Date specified above, if no interest has been paid), to but excluding the related Interest Payment Date or maturity, as the case may be. Unless otherwise specified above, accrued interest hereon shall be an amount calculated by multiplying the face amount hereof by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factor calculated for each day in the period for which accrued interest is being calculated. Unless otherwise specified above, the interest factor for each such day shall be computed by dividing the interest rate applicable to such day by 360 if the Day Count Convention specified above is "Actual/360" for the period specified thereunder or by the actual number of days in the year if the Day Count Convention specified above is "Actual/Actual" for the period specified thereunder. The interest factor for Notes for which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated in each period in the same manner as if only one of the applicable Interest Rate Bases applied as specified above. Unless otherwise specified above, the "Interest Determination Date" with respect to the CD Rate, the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will be the second Business Day preceding each Interest Reset Date; the "Interest Determination Date" with respect to LIBOR shall be the second London Business Day (as defined below) preceding each Interest Reset Date; the "Interest Determination Date" with respect to the Eleventh District Cost of Funds Rate shall be the last working day of the month immediately preceding each Interest Reset Date on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Index (as defined below); the "Interest Determination Date" with respect to the Treasury Rate will be the day in the week in which the related Interest Reset Date falls on which day Treasury bills (as defined below) normally would be auctioned (Treasury bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday); provided, however, that if, as a result of a legal holiday, an auction is held on the Friday of the week preceding the related Interest Reset Date, the related Interest Determination Date shall be such preceding Friday; and provided, further, that if an auction shall fall on any Interest Reset Date, then the Interest Reset Date shall instead be the first Business Day following such auction. If the interest rate of this Note is determined with reference to two or more Interest Rate Bases, the Interest Determination Date pertaining to this Note will be the latest Business Day which is at least two Business Days prior to such Interest Reset Date on which each Interest Rate Basis shall be determinable. Each Interest Rate Basis shall be determined on such date, and the applicable interest rate shall take effect on the related Interest Reset Date. Unless otherwise specified above, the "Calculation Date" pertaining to any Interest Determination Date will be the earlier of (i) the tenth calendar day after such Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity, as the case may be. All calculations on this Note shall be made by the Calculation Agent specified above or such successor thereto as is duly appointed by the Company. All percentages resulting from any calculation on this Note will be rounded to the nearest one hundred-thousandth of a percentage point, with five one millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upward). As used herein, "Business Day" means, unless otherwise specified above, any day that in The City of New York is not a day on which banking institutions are authorized or required by law or regulation to close and, if the Interest Rate Basis shown above is LIBOR, is also a London Business Day. As used herein, "London Business Day" means any day on which dealings in deposits in U.S. dollars are transacted in the London interbank market. Determination of CD Rate. If an Interest Rate Basis for this Note is the CD Rate, as indicated above, the CD Rate shall be determined on the applicable Interest Determination Date (a "CD Rate Interest Determination Date"), as the rate on such date for negotiable certificates of deposit having the Index Maturity specified above as published by the Board of Governors of the Federal Reserve System in "Statistical Release H.15(519), Selected Interest Rates" or any successor publication ("H.15(519)"), under the heading "CDs (Secondary Market)," or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such CD Rate Interest Determination Date for negotiable certificates of deposit of the Index Maturity specified above as published by the Federal Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M. Quotations for U.S. Government Securities" or any successor publication ("Composite Quotations") under the heading "Certificates of Deposit." If such rate is not yet published in either H.15(519) or the Composite Quotations by 3:00 P.M., New York City time, on the related Calculation Date, then the CD Rate on such CD Rate Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date, of three leading non-bank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable certificates of deposit of major United States money market banks for negotiable certificates of deposit with a remaining maturity closest to the Index Maturity designated above in an amount that is representative for a single transaction in that market at that time; provided, however, that if the dealers so selected as aforesaid by the Calculation Agent are not quoting as set forth above, the CD Rate determined on such CD Rate Interest Determination Date shall be the CD Rate in effect on such CD Rate Interest Determination Date. Determination of CMT Rate. If an Interest Rate Basis for this Note is the CMT Rate, as indicated above, the CMT Rate shall be determined on the applicable Interest Determination Date (a "CMT Rate Interest Determination Date"), as the rate displayed on the Designated CMT Telerate Page under the caption "...Treasury Constant Maturities...Federal Reserve Board Release H.15...Mondays Approximately 3:45 P.M.," under the column for the Designated CMT Maturity Index for (i) if the Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as applicable, ended immediately preceding the week in which the related CMT Rate Interest Determination Date occurs. If such rate is no longer displayed on the relevant page or is not displayed by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate for such CMT Rate Interest Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index as published in the relevant H.15(519). If such rate is no longer published or is not published by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on such CMT Rate Interest Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index (or other United States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with respect to such Interest Reset Date as may then be published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on the Designated CMT Telerate Page and published in the relevant H.15(519). If such information is not provided by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on the CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity, based on the arithmetic mean of the secondary market closing offer side prices as of approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date reported, according to their written records, by three leading primary United States government securities dealers (each, a "Reference Dealer") in The City of New York selected by the Calculation Agent (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for the most recently issued direct noncallable fixed rate obligations of the United States ("Treasury Notes") with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the CMT Rate on such CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of three Reference Dealers in The City of New York (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining term to maturity closest to the Designated CMT Maturity Index and in an amount of at least $100 million. If three or four (and not five) of such Reference Dealers are quoting as described above, then the CMT Rate will be based on the arithmetic mean of the offer prices obtained and neither the highest nor the lowest of such quotes will be eliminated; provided however, that if fewer than three Reference Dealers so selected by the Calculation Agent are quoting as mentioned herein, the CMT Rate determined as of such CMT Rate Interest Determination Date will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If two Treasury Notes with an original maturity as described in the second preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the Calculation Agent will obtain from five Reference Dealers quotations for the Treasury Note with the shorter remaining term to maturity. "Designated CMT Telerate Page" means the display on the Dow Jones Telerate Service specified above (or any other page as may replace such page on that service for the purpose of displaying Treasury Constant Maturities as reported in H.15(519)) for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified above, the Designated CMT Telerate Page shall be 7052 for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified above with respect to which the CMT Rate will be calculated. If no such maturity is specified above, the Designated CMT Maturity Index shall be 2 years. Determination of Commercial Paper Rate. If an Interest Rate Basis for this Note is the Commercial Paper Rate, as indicated above, the Commercial Paper Rate shall be determined on the applicable Interest Determination Date (a "Commercial Paper Rate Interest Determination Date"), as the Money Market Yield (as defined below) on such date of the rate for commercial paper having the Index Maturity specified above as published in H.15(519) under the heading "Commercial Paper." In the event such rate is not published by 3:00 P.M., New York City time, on the related Calculation Date, then the Commercial Paper Rate shall be the Money Market Yield on such Commercial Paper Rate Interest Determination Date of the rate for commercial paper having the Index Maturity shown above as published in Composite Quotations under the heading "Commercial Paper" (with an Index Maturity of one month or three months being deemed to be equivalent to an Index Maturity of 30 days or 90 days, respectively). If by 3:00 P.M., New York City time, on the related Calculation Date such rate is not yet published in either H.15(519) or Composite Quotations, then the Commercial Paper Rate on such Commercial Paper Rate Interest Determination Date shall be as calculated by the Calculation Agent and shall be the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on such Commercial Paper Rate Interest Determination Date of three leading dealers of commercial paper in The City of New York selected by the Calculation Agent for commercial paper having the Index Maturity specified above placed for an industrial issuer whose bond rating is "AA," or the equivalent, from a nationally recognized securities rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate determined on such Commercial Paper Rate Interest Determination Date shall be the Commercial Paper Rate in effect on such Commercial Paper Rate Interest Determination Date. "Money Market Yield" shall be 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 interest period for which interest is being calculated. Eleventh District Cost of Funds Rate. If an Interest Rate Basis for this Note is the Eleventh District Cost of Funds Rate, as indicated above, the Eleventh District Cost of Funds Rate shall be determined on the applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate Interest Determination Date"), and shall be the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Eleventh District Cost of Funds Rate Interest Determination Date as set forth under the caption "11th District" on Telerate Page 7175 as of 11:00 A.M., San Francisco time, on such Eleventh District Cost of Funds Rate Interest Determination Date. If such rate does not appear on Telerate Page 7175 on any related Eleventh District Cost of Funds Rate Interest Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Interest Determination Date shall be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Index") by the FHLB of San Francisco as such cost of funds for the calendar month preceding the date of such announcement. If the FHLB of San Francisco fails to announce such rate for the calendar month next preceding such Eleventh District Cost of Funds Rate Interest Determination Date, then the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Interest Determination Date shall be the Eleventh District Cost of Funds Rate in effect on such Eleventh District Cost of Funds Rate Interest Determination Date. Determination of Federal Funds Rate. If an Interest Rate Basis for this Note is the Federal Funds Rate, as indicated above, the Federal Funds Rate shall be determined on the applicable Interest Determination Date (a "Federal Funds Rate Interest Determination Date"), as the rate on that date for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)" or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such Federal Funds Rate Interest Determination Date as published in Composite Quotations under the heading "Federal Funds/Effective Rate." If by 3:00 P.M., New York City time, on the related Calculation Date, such rate is not yet published in either H.15(519) or Composite Quotations, then the Federal Funds Rate for such Federal Funds Rate Interest Determination Date shall be calculated by the Calculation Agent and shall be the arithmetic mean of the rates for the last transaction in overnight United States dollar Federal funds arranged by three leading brokers of Federal funds transactions in The City of New York selected by the Calculation Agent prior to 9:00 A.M., New York City time on such Federal Funds Rate Interest Determination Date; provided, however, that if the brokers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Federal Funds Rate determined on such Federal Funds Rate Interest Determination Date shall be the Federal Funds Rate in effect on such Federal Funds Rate Interest Determination Date. Determination of LIBOR. If an Interest Rate Basis for this Note is LIBOR, as indicated above, LIBOR will be determined on the applicable Interest Determination Date (a "LIBOR Interest Determination Date"), as follows: (a) (i) if "LIBOR Reuters" is specified above, the arithmetic mean of the offered rates (unless the specified Designated LIBOR Page (as defined below) by its terms provides only for a single rate, in which case such single rate shall be used) for deposits in United States dollars having the Index Maturity specified above, commencing on the second London Business Day immediately following such LIBOR Interest Determination Date, that appear on the Designated LIBOR Page specified above as of 11:00 A.M. London time, on that LIBOR Interest Determination Date, if at least two such offered rates appear (unless, as aforesaid, only a single rate is required) on such Designated LIBOR Page, or (ii) if "LIBOR Telerate" is specified above, the rate for deposits in United States dollars having the Index Maturity specified above commencing on the second London Business Day immediately following that LIBOR Interest Determination Date that appears on the Designated LIBOR Page specified above as of 11:00 A.M. London time, on that LIBOR Interest Determination Date. If fewer than two offered rates appear, or no rate appears, as applicable, LIBOR in respect of the related LIBOR Interest Determination Date will be determined as if the parties had specified the rate described in paragraph (b) below. "Designated LIBOR Page" means either (a) if "LIBOR Reuters" is specified above, the display on the Reuters Monitor Money Rates Service for the purpose of displaying the London interbank rates of major banks for United States dollars, or (b) if "LIBOR Telerate" is specified above, the display on the Dow Jones Telerate Service for the purpose of displaying the London interbank rates of major banks for United States dollars. If neither LIBOR Reuters nor LIBOR Telerate is specified above, LIBOR for United States dollars will be determined as if LIBOR Telerate Page 3750 had been specified. (b) With respect to a LIBOR Interest Determination Date on which fewer than two offered rates appear on the Designated LIBOR Page as specified above, the Calculation Agent shall request the principal London offices of each of four major reference banks in the London interbank market, as selected by the Calculation Agent, to provide the Calculation Agent with its offered quotation for deposits in United States dollars for the period of the Index Maturity shown above, commencing on the second London Business Day immediately following such LIBOR Interest Determination Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date and in a principal amount that is representative for a single transaction in such U.S. dollars in such market at such time. If at least two such quotations are provided, LIBOR determined on such LIBOR Interest Determination Date shall be the arithmetic mean of such quotations as determined by the Calculation Agent. If fewer than two quotations are provided, LIBOR determined on such LIBOR Interest Determination Date shall be calculated by the Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., New York City time, on such LIBOR Interest Determination Date by three major banks in The City of New York selected by the Calculation Agent for loans in United States dollars to leading European banks having the Index Maturity specified above and in a principal amount that is representative for a single transaction in such U.S. dollars in such market at such time; provided, however, that if the banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR determined on such LIBOR Interest Determination Date shall be LIBOR in effect on such LIBOR Interest Determination Date. Determination of Prime Rate. If an Interest Rate Basis for this Note is the Prime Rate, as indicated above, the Prime Rate shall be determined on the applicable Interest Determination Date (a "Prime Rate Interest Determination Date") as the rate on such date as such rate is published in H.15(519) under the heading "Bank Prime Loan." If such rate is not published prior to 9:00 A.M., New York City time, on the related Calculation Date, then the Prime Rate shall be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 Page as such bank's prime rate or base lending rate as in effect for that Prime Rate Interest Determination Date. If fewer than four such rates but more than one such rate appear on the Reuters Screen USPRIME1 Page for such Prime Rate Interest Determination Date, the Prime Rate shall be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date by four major money center banks in The City of New York selected by the Calculation Agent. If fewer than two such rates appear on the Reuters Screen USPRIME1 Page, the Prime Rate will be determined by the Calculation Agent on the basis of the rates furnished in The City of New York by three substitute banks or trust companies organized and doing business under the laws of the United States, or any State thereof, having total equity capital of at least $500 million and being subject to supervision or examination by Federal or state authority, selected by the Calculation Agent to provide such rate or rates; provided, however, that if the banks or trust companies selected as aforesaid are not quoting as mentioned in this sentence, the Prime Rate for such Prime Rate Interest Determination Date will be the Prime Rate as determined based on the last such rate published in H.15(519). "Reuters Screen USPRIME1 Page" means the display designated as page USPRIME1 on the Reuters Monitor Money Rates Service (or such other page as may replace the USPRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). Determination of Treasury Rate. If an Interest Rate Basis for this Note is the Treasury Rate, as specified above, the Treasury Rate shall be determined on the applicable Interest Determination Date (a "Treasury Rate Interest Determination Date") as the rate applicable to the most recent auction of direct obligations of the United States ("Treasury Bills") having the Index Maturity specified above, as such rate is published in H.15(519) under the heading "Treasury Bills auction average (investment)" or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the auction average rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) as otherwise announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury Bills having the Index Maturity specified above are not reported as provided by 3:00 P.M., New York City time, on such Calculation Date, or if no such auction is held in a particular week, then the Treasury Rate hereon shall be calculated by the Calculation Agent and shall be a yield to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on such Treasury Rate Interest Determination Date of three leading primary United States government securities dealers as selected by the Calculation Agent for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified above; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Treasury Rate will be the Treasury Rate in effect on such Treasury Rate Interest Determination Date. Any provision contained herein with respect to the determination of an Interest Rate Basis, the specification of Interest Rate Basis, calculation of the Interest Rate applicable to this Note, its payment dates or any other matter relating hereto may be modified as specified in an Addendum relating hereto if so specified above. 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. The Calculation Agent shall calculate the interest rate hereon in accordance with the foregoing on or before each Calculation Date. The interest rate on this 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. At the request of the Holder hereof, the Calculation Agent shall provide to the Holder hereof the interest rate hereon then in effect and, if determined, the interest rate which shall become effective as of the next Interest Reset Date. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of all the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series issued under such Indenture then Outstanding and affected, voting as one class, to add any provisions to, or change in any manner or eliminate any of the provisions of, such Indenture or modify in any manner the rights of the Holders of the Securities of each series so affected; provided that the Issuer and the Trustee may not, without the consent of the Holder of each outstanding Security affected thereby, (i) extend the stated maturity of the principal of any Security, or reduce the principal amount thereof or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or change the currency in which the principal thereof (including any amount in respect of original issue discount) or interest thereon is payable or reduce the amount of any original issue discount security payable upon acceleration or provable in bankruptcy or impair the right to institute suit for the enforcement of any payment on any Security when due or (ii) reduce the aforesaid percentage in principal amount of Securities of any series issued under such Indenture, the consent of the Holders of which is required for any such modification. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, prior to any declaration accelerating the maturity of such Securities, the Holders of a majority in aggregate principal amount Outstanding of the Securities of such series (or, in the case of certain defaults or Events of Default, all or certain series of the Securities) may on behalf of the Holders of all the Securities of such series (or all or certain series of the Securities, as the case may be) waive any such past default or Event or Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of the principal of or interest on any of the Securities. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor or on registration of transfer hereof, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the time, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the registry books of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company maintained by the Company for such purpose in the Borough of Manhattan, The City of New York duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder hereof or by its attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed, manually or in facsimile, and an imprint or facsimile of its corporate seal to be imprinted hereon. [FACSIMILE OF SEAL] SUNAMERICA INC. By: ----------------------------- Name: Title: Attest: By: --------------------------- Name: Title: CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. THE FIRST NATIONAL BANK OF CHICAGO as Trustee By: --------------------------- Authorized officer Dated: ------------------------ OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably request(s) and instruct(s) the Company to repay this Note (or portion hereof specified below) pursuant to its terms at a price equal to the principal amount hereof together with interest to the repayment date, to the undersigned, at _____________________ ____________________________________________________________________________ ____________________________________________________________________________ (Please print or typewrite name and address of the undersigned) For this Note to be repaid, the Trustee must receive at its Corporate Trust Office, or at such other place or places of which the Company shall from time to time notify the Holder of this Note, not more than 60 nor less than 30 days prior to an Optional Repayment Date, if any, shown on the face of this Note, this Note with this "Option to Elect Repayment" form duly completed. If less than the entire principal amount of this Note is to be repaid, specify the portion hereof (which shall be increments of $1,000) which the Holder elects to have repaid and specify the denomination or denominations (which shall be $1,000 or an integral multiple thereof) of the Notes to be issued to the Holder for the portion of this Note not being repaid (in the absence of any such specification, one such Note will be issued for the portion not being repaid). $ ------------- -------------------------------------- NOTICE: The signature on this Option Date to Elect Repayment must correspond with ------------------ the name as written upon the face of this Note in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: - ------------------------ ASSIGNMENT/TRANSFER FORM FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto (insert Taxpayer Identification No.) __________________________________ ___________________________________________________________________________ ___________________________________________________________________________ (Please print or typewrite name and address including postal zip code of assignee) _________________________________________________________________ the within Note and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________________ attorney to transfer said Note on the books of the Company with full power of substitution in the premises. Dated: ---------------- -------------------------------------------- NOTICE: The signature of the registered Holder 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. Signature Guarantee: - -------------------------- ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM -- as tenants in common UNIF GIFT MIN ACT -- . . . . . . . . . . . . Custodian . . . . . . . . . . . (Cust) (Minor) Under Uniform Gifts to Minors Act . . . . . . . . . . . . . . . . . . (State) TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. EX-4.4 6 [FORM OF FLOATING RATE GLOBAL MEDIUM-TERM NOTE, SERIES 3] Unless and until this certificate is exchanged in whole or in part for Notes in definitive registered form, this Note may not be transferred except as a whole by The Depository Trust Company, a New York corporation ("DTC"), to its nominee or by its nominee to DTC or another nominee of DTC or by DTC or any such nominee to a successor Depositary or a nominee of such successor Depositary. Any certificate issued in exchange herefor shall be registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment in respect hereof shall be made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC). REGISTERED CUSIP No. PRINCIPAL AMOUNT No. FLR $___ SUNAMERICA INC. MEDIUM-TERM NOTE, SERIES 3 (Floating Rate) INTEREST RATE ORIGINAL ISSUE STATED MATURITY BASIS DATE DATE INITIAL INTEREST INTEREST PAYMENT INDEX MATURITY RATE PERIOD INITIAL INTEREST INTEREST PAYMENT SPREAD RESET DATE DATES SPREAD INTEREST RATE INTEREST RESET MULTIPLIER RESET PERIOD DATES MAXIMUM MINIMUM INTEREST INITIAL INTEREST RATE RATE REDEMPTION DATE INITIAL ANNUAL OPTIONAL REDEMPTION REDEMPTION REPAYMENT PERCENTAGE PERCENTAGE DATE(S) INTEREST CALCULATION DAY COUNT CONVENTION [ ] Regular Floating Rate Note [ ] Actual/360 for the period [ ] Floating Rate/Fixed Rate from to Fixed Rate Commencement Date: [ ] Actual/Actual to the period from to Fixed Interest Rate: [ ] Inverse Floating Rate Note Fixed Interest Rate: ADDENDUM ATTACHED: ORIGINAL ISSUE DISCOUNT [ ] Yes [ ] Yes [ ] No [ ] No Total Amount of OID: Yield to Maturity: Initial Accrual Period: IF THE INTEREST RATE BASIS IS THE CMT RATE: Designated CMT Telerate Designated CMT MATURITY INDEX Page: [ ] Page 7055 [ ] Page 7052 OTHER PROVISIONS: SUNAMERICA INC., a Maryland corporation ("Issuer" or the "Company," which terms include any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the Principal Amount specified above on the Stated Maturity Date specified above (except to the extent redeemed or repaid prior to the Stated Maturity Date), and to pay interest thereon, at a rate per annum equal to the Initial Interest Rate specified above until the Initial Interest Reset Date specified above and thereafter at a rate per annum determined in accordance with the provisions hereof and any Addendum relating hereto depending upon the Interest Rate Basis or Bases, if any, and such other terms specified above, until the principal hereof is paid or duly made available for payment. Reference herein to "this Note," "hereof," "herein" and comparable terms shall include an Addendum hereto if an Addendum is specified above. The Company will pay interest monthly, quarterly, semi-annually, annually or such other period as specified above under "Interest Payment Period," on each Interest Payment Date specified above, commencing on the first Interest Payment Date specified above next succeeding the Original Issue Date specified above, and on the Stated Maturity Date or any Redemption Date or Optional Repayment Date (the date of each such Stated Maturity Date, Redemption Date and Optional Repayment Date and the date on which principal or an installment of principal is due and payable by declaration of acceleration pursuant to the Indenture being referred to hereinafter as a "Maturity" with respect to principal payable on such date); provided, however, that if the Original Issue Date is between a Regular Record Date (as defined below) and the next succeeding Interest Payment Date, interest payments will commence on the second Interest Payment Date succeeding the Original Issue Date; and provided, further, that if an Interest Payment Date (other than an Interest Payment Date at Maturity) would fall on a day that is not a Business Day (as defined below), such Interest Payment Date shall be the following day that is a Business Day, except that in the case the Interest Rate Basis is LIBOR, as indicated above, if such next Business Day falls in the next calendar month, such Interest Payment Date shall be the next preceding day that is a Business Day. Except as provided above, interest payments will be made on the Interest Payment Dates shown above. Unless otherwise specified above, the "record date" shall be the date 15 calendar days (whether or not a Business Day) prior to the applicable Interest Payment Date. Interest on this Note will accrue from and including the Original Issue Date specified above, at the rates determined from time to time as specified herein, until the principal hereof has been paid or made available for payment. If the Maturity falls on a day which is not a Business Day as defined below, the payment due on such Maturity will be paid on the next succeeding Business Day with the same force and effect as if made on such Maturity and no interest shall accrue with respect to such payment for the period from and after such Maturity. The interest so payable and punctually paid or duly provided for on any Interest Payment Date will as provided in the Indenture be paid to the Person in whose name this Note is registered at the close of business on the record date for such Interest Payment Date. Any such interest which is payable, but not punctually paid or duly provided for on any Interest Payment Date (herein called "Defaulted Interest"), shall forthwith cease to be payable to the registered Holder on such record date, and may be paid to the Person in whose name this Note is registered at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment of such Defaulted Interest) established by notice given by mail by or on behalf of the Issuer to the Holder of this Note not less than 15 days preceding such subsequent record date, all as more fully provided in the Indenture. Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company, payment of interest due other than at Maturity may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the registry books of the Company; and provided, further, that the repayment of the principal of and interest on this Note on any Optional Repayment Date(s), if any, indicated above shall be made upon satisfaction of the provisions herein; and provided, further, that AT THE OPTION OF THE COMPANY, the Holder of Notes with an aggregate principal amount of $10,000,000 or more will be entitled to receive payments of principal of and interest on this Note by wire transfer of immediately available funds if appropriate wire transfer instructions have been received by the Trustee not less than 15 days prior to the applicable payment date. Such wire instructions, upon receipt by the Trustee, shall remain in effect until revoked by such Holder. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee under the Indenture, by the manual signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. This Note is one of a duly authorized series of Securities (hereinafter called the "Securities") of the Company designated as its Medium-Term Notes, Series 3 (the "Notes"). The Notes are issued and to be issued under an Indenture dated as of April 15, 1993, as amended (herein called the "Indenture") between the Company and The First National Bank of Chicago, a national banking association (the "Trustee," which term includes any successor Trustee with respect to the Notes under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Company, the Trustee and the Holders of the Notes and the terms upon which the Notes are to be authenticated and delivered. The terms of individual Notes may vary with respect to interest rates or interest rate formulas, issue dates, maturity, redemption, repayment, currency of payment and otherwise. Except as otherwise provided in the Indenture, this Note will be issued in global form only registered in the name of the Depositary or its nominee. This Note will not be issued in definitive form, except as otherwise provided in the Indenture, and ownership of this Note shall be maintained in book-entry form by the Depositary for the accounts of participating organizations of the Depositary. Unless otherwise provided above and in accordance with the provisions herein, this Note is not subject to any sinking fund and is not redeemable or repayable prior to the Stated Maturity Date. If so provided above, this Note may be redeemed by the Company on any date on and after the Initial Redemption Date, if any, specified above. If no Initial Redemption Date is set forth above, this Note may not be redeemed prior to the Stated Maturity Date. On and after the Initial Redemption Date, if any, this Note may be redeemed at any time in whole or from time to time in part in increments of $1,000 (provided that any remaining principal hereof shall be at least $1,000) at the option of the Company at the applicable Redemption Price (as defined below), together with accrued interest hereon at the applicable rate payable to the date of redemption (each such date, a "Redemption Date"), on written notice given not more than 60 nor less than 30 days prior to the Redemption Date and in accordance with the provisions of the Indenture. In the event of redemption of this Note in part only, a new Note for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the surrender hereof. Unless otherwise specified above, the "Redemption Price" shall initially be the Initial Redemption Percentage, specified above, of the principal amount of this Note to be redeemed and shall decline at each anniversary of the Initial Redemption Date, shown above, by the Annual Redemption Percentage Reduction, if any, specified above, of the principal amount to be redeemed until the Redemption Price is 100% of such principal amount. This Note may be subject to repayment at the option of the Holder on any Optional Repayment Date(s), if any, indicated above. If no Optional Repayment Date(s) are set forth above, this Note may not be so repaid at the option of the Holder hereof prior to the Stated Maturity Date. On any Optional Repayment Date, this Note shall be repayable in whole or in part in increments of $1,000 (provided that any remaining principal hereof shall be at least $1,000) at the option of the Holder hereof at a repayment price, unless otherwise specified above, equal to 100% of the principal amount to be repaid, together with interest thereon payable to the date of repayment. For this Note to be repaid in whole or in part at the option of the Holder hereof, this Note must be received, with the form entitled "Option to Elect Repayment" below 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 related Optional Repayment Date. Exercise of such repayment option by the Holder hereof shall be irrevocable. With respect to Notes represented by global securities, any option for repayment may be exercised by the applicable participant that has an account with the Depositary, on behalf of the owners of the beneficial interests in the Notes represented by such global securities, by delivering a written notice substantially similar to the above-referenced form, duly completed, to the Trustee at the place and within the period described above. All such notices shall be executed by a duly authorized officer of such participant (with signature guaranteed) and shall be irrevocable. The interest rate borne by this Note shall be determined as follows: If this Note is designated as a Regular Floating Rate Note above, then, except as described below, this Note shall bear interest at the rate determined by reference to the applicable Interest Rate Basis shown above (i) plus or minus the applicable Spread, if any, and/or (ii) multiplied by the applicable Spread Multiplier, if any, specified and applied in the manner described above. Commencing on the Initial Interest Reset Date, the rate at which interest on this Note is payable shall be reset as of each Interest Reset Date specified above; provided, however, that the interest rate in effect for the period from the Original Issue Date to the Initial Interest Reset Date will be the Initial Interest Rate. If this Note is designated as a Floating Rate/Fixed Rate Note above, then, except as described below, this Note shall bear interest at the rate determined by reference to the applicable Interest Rate Basis shown above (i) plus or minus the applicable Spread, if any, and/or (ii) multiplied by the applicable Spread Multiplier, if any, specified and applied in the manner described above. Commencing on the Initial Interest Reset Date, the rate at which interest on this Note is payable shall be reset as of each Interest Reset Date specified above; provided, however, that (i) the interest rate in effect for the period from the Original Issue Date to the Initial Interest Reset Date shall be the Initial Interest Rate; and (ii) the interest rate in effect commencing on, and including, the Fixed Rate Commencement Date to Maturity shall be the Fixed Interest Rate, if such a rate is specified above, or if no such Fixed Interest Rate is so specified, the interest rate in effect hereon on the day immediately preceding the Fixed Rate Commencement Date. If this Note is designated as an Inverse Floating Rate Note above, then, except as described below, this Note will bear interest equal to the Fixed Interest Rate indicated above minus the rate determined by reference to the Interest Rate Basis shown above (i) plus or minus the applicable Spread, if any, and/or (ii) multiplied by the applicable Spread Multiplier, if any, specified and applied in the manner described above. Commencing on the Initial Interest Reset Date, the rate at which interest on this Note is payable shall be reset as of each Interest Rate Reset Date specified above; provided, however, that the interest rate in effect for the period from the Original Issue Date to the Initial Interest Reset Date shall be the Initial Interest Rate. Notwithstanding the foregoing, if this Note is designated above as having an Addendum attached, the Note shall bear interest in accordance with the terms described in such Addendum. Except as provided above, the interest rate in effect on each day shall be (a) if such day is an Interest Reset Date, the interest rate determined as of the Interest Determination Date (as defined below) immediately preceding such Interest Reset Date or (b) if such day is not an Interest Reset Date, the interest rate determined as of the Interest Determination Date immediately preceding the next preceding Interest Reset Date. The interest rate with respect to each Interest Rate Basis shall be determined in accordance with the applicable provision below. If any Interest Reset Date (which term includes the term Initial Interest Reset Date unless the context otherwise requires) would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding day that is a Business Day, except that if an Interest Rate Basis specified on the face hereof is LIBOR and such next Business Day falls in the next succeeding calendar month, such Interest Reset Date shall be the next preceding Business Day. Unless otherwise specified above, interest payable on this Note on any Interest Payment Date shall be the amount of interest accrued from and including the next preceding Interest Payment Date in respect of which interest has been paid (or from and including the Original Issue Date specified above, if no interest has been paid), to but excluding the related Interest Payment Date or maturity, as the case may be. Unless otherwise specified above, accrued interest hereon shall be an amount calculated by multiplying the face amount hereof by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factor calculated for each day in the period for which accrued interest is being calculated. Unless otherwise specified above, the interest factor for each such day shall be computed by dividing the interest rate applicable to such day by 360 if the Day Count Convention specified above is "Actual/360" for the period specified thereunder or by the actual number of days in the year if the Day Count Convention specified above is "Actual/Actual" for the period specified thereunder. The interest factor for Notes for which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated in each period in the same manner as if only one of the applicable Interest Rate Bases applied as specified above. Unless otherwise specified above, the "Interest Determination Date" with respect to the CD Rate, the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will be the second Business Day preceding each Interest Reset Date; the "Interest Determination Date" with respect to LIBOR shall be the second London Business Day (as defined below) preceding each Interest Reset Date; the "Interest Determination Date" with respect to the Eleventh District Cost of Funds Rate shall be the last working day of the month immediately preceding each Interest Reset Date on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Index (as defined below); the "Interest Determination Date" with respect to the Treasury Rate will be the day in the week in which the related Interest Reset Date falls on which day Treasury bills (as defined below) normally would be auctioned (Treasury bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday); provided, however, that if, as a result of a legal holiday, an auction is held on the Friday of the week preceding the related Interest Reset Date, the related Interest Determination Date shall be such preceding Friday; and provided, further, that if an auction shall fall on any Interest Reset Date, then the Interest Reset Date shall instead be the first Business Day following such auction. If the interest rate of this Note is determined with reference to two or more Interest Rate Bases, the Interest Determination Date pertaining to this Note will be the latest Business Day which is at least two Business Days prior to such Interest Reset Date on which each Interest Rate Basis shall be determinable. Each Interest Rate Basis shall be determined on such date, and the applicable interest rate shall take effect on the related Interest Reset Date. Unless otherwise specified above, the "Calculation Date" pertaining to any Interest Determination Date will be the earlier of (i) the tenth calendar day after such Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity, as the case may be. All calculations on this Note shall be made by the Calculation Agent specified above or such successor thereto as is duly appointed by the Company. All percentages resulting from any calculation on this Note will be rounded to the nearest one hundred-thousandth of a percentage point, with five one millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upward). As used herein, "Business Day" means, unless otherwise specified above, any day that in The City of New York is not a day on which banking institutions are authorized or required by law or regulation to close and, if the Interest Rate Basis shown above is LIBOR, is also a London Business Day. As used herein, "London Business Day" means any day on which dealings in deposits in U.S. dollars are transacted in the London interbank market. Determination of CD Rate. If an Interest Rate Basis for this Note is the CD Rate, as indicated above, the CD Rate shall be determined on the applicable Interest Determination Date (a "CD Rate Interest Determination Date"), as the rate on such date for negotiable certificates of deposit having the Index Maturity specified above as published by the Board of Governors of the Federal Reserve System in "Statistical Release H.15(519), Selected Interest Rates" or any successor publication ("H.15(519)"), under the heading "CDs (Secondary Market)", or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such CD Rate Interest Determination Date for negotiable certificates of deposit of the Index Maturity specified above as published by the Federal Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M. Quotations for U.S. Government Securities" or any successor publication ("Composite Quotations") under the heading "Certificates of Deposit." If such rate is not yet published in either H.15(519) or the related Composite Quotations by 3:00 P.M., New York City time, on the Calculation Date, then the CD Rate on such CD Rate Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date, of three leading non-bank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable certificates of deposit of major United States money market banks for negotiable certificates of deposit with a remaining maturity closest to the Index Maturity designated above in an amount that is representative for a single transaction in that market at that time; provided, however, that if the dealers so selected as aforesaid by the Calculation Agent are not quoting as set forth above, the CD Rate determined on such CD Rate Interest Determination Date shall be the CD Rate in effect on such CD Rate Interest Determination Date. Determination of CMT Rate. If an Interest Rate Basis for this Note is the CMT Rate, as indicated above, the CMT Rate shall be determined on the applicable Interest Determination Date (a "CMT Rate Interest Determination Date"), as the rate displayed on the Designated CMT Telerate Page under the caption "... Treasury Constant Maturities...Federal Reserve Board Release H.15...Mondays Approximately 3:45 P.M.," under the column for the Designated CMT Maturity Index for (i) if the Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as applicable, ended immediately preceding the week in which the related CMT Rate Interest Determination Date occurs. If such rate is no longer displayed on the relevant page or is not displayed by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate for such CMT Rate Interest Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index as published in the relevant H.15(519). If such rate is no longer published or is not published by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on such CMT Rate Interest Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index (or other United States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with respect to such Interest Reset Date as may then be published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on the Designated CMT Telerate Page and published in the relevant H.15(519). If such information is not provided by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on the CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity, based on the arithmetic mean of the secondary market closing offer side prices as of approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date reported, according to their written records, by three leading primary United States government securities dealers (each, a "Reference Dealer") in The City of New York selected by the Calculation Agent (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for the most recently issued direct noncallable fixed rate obligations of the United States ("Treasury Notes") with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the CMT Rate on such CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of three Reference Dealers in The City of New York (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining term to maturity closest to the Designated CMT Maturity Index and in an amount of at least $100 million. If three or four (and not five) of such Reference Dealers are quoting as described above, then the CMT Rate will be based on the arithmetic mean of the offer prices obtained and neither the highest nor the lowest of such quotes will be eliminated; provided however, that if fewer than three Reference Dealers so selected by the Calculation Agent are quoting as mentioned herein, the CMT Rate determined as of such CMT Rate Interest Determination Date will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If two Treasury Notes with an original maturity as described in the second preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the Calculation Agent will obtain from five Reference Dealers quotations for the Treasury Note with the shorter remaining term to maturity. "Designated CMT Telerate Page" means the display on the Dow Jones Telerate Service specified above (or any other page as may replace such page on that service for the purpose of displaying Treasury Constant Maturities as reported in H.15(519)) for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified above, the Designated CMT Telerate Page shall be 7052 for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified above with respect to which the CMT Rate will be calculated. If no such maturity is specified above, the Designated CMT Maturity Index shall be 2 years. Determination of Commercial Paper Rate. If an Interest Rate Basis for this Note is the Commercial Paper Rate, as indicated above, the Commercial Paper Rate shall be determined on the applicable Interest Determination Date (a "Commercial Paper Rate Interest Determination Date"), as the Money Market Yield (as defined below) on such date of the rate for commercial paper having the Index Maturity specified above as published in H.15(519) under the heading "Commercial Paper." In the event such rate is not published by 3:00 P.M., New York City time, on the related Calculation Date, then the Commercial Paper Rate shall be the Money Market Yield on such Commercial Paper Rate Interest Determination Date of the rate for commercial paper having the Index Maturity shown above as published in Composite Quotations under the heading "Commercial Paper" (with an Index Maturity of one month or three months being deemed to be equivalent to an Index Maturity of 30 days or 90 days, respectively). If by 3:00 P.M., New York City time, on the related Calculation Date such rate is not yet published in either H.15(519) or Composite Quotations, then the Commercial Paper Rate on such Commercial Paper Rate Interest Determination Date shall be as calculated by the Calculation Agent and shall be the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on such Commercial Paper Rate Interest Determination Date of three leading dealers of commercial paper in The City of New York selected by the Calculation Agent for commercial paper having the Index Maturity specified above placed for an industrial issuer whose bond rating is "AA," or the equivalent, from a nationally recognized securities rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate determined on such Commercial Paper Rate Interest Determination Date shall be the Commercial Paper Rate in effect on such Commercial Paper Rate Interest Determination Date. "Money Market Yield" shall be 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 interest period for which interest is being calculated. Eleventh District Cost of Funds Rate. If an Interest Rate Basis for this Note is the Eleventh District Cost of Funds Rate, as indicated above, the Eleventh District Cost of Funds Rate shall be determined on the applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate Interest Determination Date"), and shall be the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Eleventh District Cost of Funds Rate Interest Determination Date as set forth under the caption "11th District" on Telerate Page 7175 as of 11:00 A.M., San Francisco time, on such Eleventh District Cost of Funds Rate Interest Determination Date. If such rate does not appear on Telerate Page 7175 on any related Eleventh District Cost of Funds Rate Interest Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Interest Determination Date shall be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Index") by the FHLB of San Francisco as such cost of funds for the calendar month preceding the date of such announcement. If the FHLB of San Francisco fails to announce such rate for the calendar month next preceding such Eleventh District Cost of Funds Rate Interest Determination Date, then the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Interest Determination Date shall be the Eleventh District Cost of Funds Rate in effect on such Eleventh District Cost of Funds Rate Interest Determination Date. Determination of Federal Funds Rate. If an Interest Rate Basis for this Note is the Federal Funds Rate, as indicated above, the Federal Funds Rate shall be determined on the applicable Interest Determination Date (a "Federal Funds Rate Interest Determination Date"), as the rate on that date for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)" or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such Federal Funds Rate Interest Determination Date as published in Composite Quotations under the heading "Federal Funds/Effective Rate." If by 3:00 P.M., New York City time, on the related Calculation Date, such rate is not yet published in either H.15(519) or Composite Quotations, then the Federal Funds Rate for such Federal Funds Rate Interest Determination Date shall be calculated by the Calculation Agent and shall be the arithmetic mean of the rates for the last transaction in overnight United States dollar Federal funds arranged by three leading brokers of Federal funds transactions in The City of New York selected by the Calculation Agent prior to 9:00 A.M., New York City time on such Federal Funds Rate Interest Determination Date; provided, however, that if the brokers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Federal Funds Rate determined on such Federal Funds Rate Interest Determination Date shall be the Federal Funds Rate in effect on such Federal Funds Rate Interest Determination Date. Determination of LIBOR. If an Interest Rate Basis for this Note is LIBOR, as indicated above, LIBOR will be determined on the applicable Interest Determination Date (a "LIBOR Interest Determination Date"), as follows: (a)(i) if "LIBOR Reuters" is specified above, the arithmetic mean of the offered rates (unless the specified Designated LIBOR Page (as defined below) by its terms provides only for a single rate, in which case such single rate shall be used) for deposits in United States dollars having the Index Maturity specified above, commencing on the second London Business Day immediately following such LIBOR Interest Determination Date, that appear on the Designated LIBOR Page specified above as of 11:00 A.M. London time, on that LIBOR Interest Determination Date, if at least two such offered rates appear (unless, as aforesaid, only a single rate is required) on such Designated LIBOR Page, or (ii) if "LIBOR Telerate" is specified above, the rate for deposits in United States dollars having the Index Maturity specified above commencing on the second London Business Day immediately following that LIBOR Interest Determination Date that appears on the Designated LIBOR Page specified above as of 11:00 A.M. London time, on that LIBOR Interest Determination Date. If fewer than two offered rates appear, or no rate appears, as applicable, LIBOR in respect of the related LIBOR Interest Determination Date will be determined as if the parties had specified the rate described in paragraph (b) below. "Designated LIBOR Page" means either (a) if "LIBOR Reuters" is specified above, the display on the Reuters Monitor Money Rates Service for the purpose of displaying the London interbank rates of major banks for United States dollars, or (b) if "LIBOR Telerate" is specified above, the display on the Dow Jones Telerate Service for the purpose of displaying the London interbank rates of major banks for United States dollars. If neither LIBOR Reuters nor LIBOR Telerate is specified above, LIBOR for United States dollars will be determined as if LIBOR Telerate Page 3750 had been specified. (b) With respect to a LIBOR Interest Determination Date on which fewer than two offered rates appear on the Designated LIBOR Page as specified above, the Calculation Agent shall request the principal London offices of each of four major reference banks in the London interbank market, as selected by the Calculation Agent, to provide the Calculation Agent with its offered quotation for deposits in United States dollars for the period of the Index Maturity shown above, commencing on the second London Business Day immediately following such LIBOR Interest Determination Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date and in a principal amount that is representative for a single transaction in such U.S. dollars in such market at such time. If at least two such quotations are provided, LIBOR determined on such LIBOR Interest Determination Date shall be the arithmetic mean of such quotations as determined by the Calculation Agent. If fewer than two quotations are provided, LIBOR determined on such LIBOR Interest Determination Date shall be calculated by the Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., New York City time, on such LIBOR Interest Determination Date by three major banks in The City of New York selected by the Calculation Agent for loans in United States dollars to leading European banks having the Index Maturity specified above and in a principal amount that is representative for a single transaction in such U.S. dollars in such market at such time; provided, however, that if the banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR determined on such LIBOR Interest Determination Date shall be LIBOR in effect on such LIBOR Interest Determination Date. Determination of Prime Rate. If an Interest Rate Basis for this Note is the Prime Rate, as indicated above, the Prime Rate shall be determined on the applicable Interest Determination Date (a "Prime Rate Interest Determination Date") as the rate on such date as such rate is published in H.15(519) under the heading "Bank Prime Loan." If such rate is not published prior to 9:00 A.M., New York City time, on the related Calculation Date, then the Prime Rate shall be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 Page as such bank's prime rate or base lending rate as in effect for that Prime Rate Interest Determination Date. If fewer than four such rates but more than one such rate appear on the Reuters Screen USPRIME1 Page for such Prime Rate Interest Determination Date, the Prime Rate shall be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date by four major money center banks in The City of New York selected by the Calculation Agent. If fewer than two such rates appear on the Reuters Screen USPRIME1 Page, the Prime Rate will be determined by the Calculation Agent on the basis of the rates furnished in The City of New York by three substitute banks or trust companies organized and doing business under the laws of the United States, or any State thereof, having total equity capital of at least $500 million and being subject to supervision or examination by Federal or state authority, selected by the Calculation Agent to provide such rate or rates; provided, however, that if the banks or trust companies selected as aforesaid are not quoting as mentioned in this sentence, the Prime Rate for such Prime Rate Interest Determination Date will be the Prime Rate as determined based on the last such rate published in H.15(519). "Reuters Screen USPRIME1 Page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service (or such other page as may replace the USPRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). Determination of Treasury Rate. If an Interest Rate Basis for this Note is the Treasury Rate, as specified above, the Treasury Rate shall be determined on the applicable Interest Determination Date (a "Treasury Rate Interest Determination Date") as the rate applicable to the most recent auction of direct obligations of the United States ("Treasury Bills") having the Index Maturity specified above, as such rate is published in H.15(519) under the heading "Treasury Bills -- auction average (investment)" or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the auction average rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) as otherwise announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury Bills having the Index Maturity specified above are not reported as provided by 3:00 P.M., New York City time, on such Calculation Date, or if no such auction is held in a particular week, then the Treasury Rate hereon shall be calculated by the Calculation Agent and shall be a yield to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on such Treasury Rate Interest Determination Date of three leading primary United States government securities dealers as selected by the Calculation Agent for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified above; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Treasury Rate will be the Treasury Rate in effect on such Treasury Rate Interest Determination Date. Any provision contained herein with respect to the determination of an Interest Rate Basis, the specification of Interest Rate Basis, calculation of the Interest Rate applicable to this Note, its payment dates or any other matter relating hereto may be modified as specified in an Addendum relating hereto if so specified above. 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. The Calculation Agent shall calculate the interest rate hereon in accordance with the foregoing on or before each Calculation Date. The interest rate on this 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. At the request of the Holder hereof, the Calculation Agent shall provide to the Holder hereof the interest rate hereon then in effect and, if determined, the interest rate which shall become effective as of the next Interest Reset Date. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of all the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series issued under such Indenture then Outstanding and affected, voting as one class, to add any provisions to, or change in any manner or eliminate any of the provisions of, such Indenture or modify in any manner the rights of the Holders of the Securities of each series so affected; provided that the Issuer and the Trustee may not, without the consent of the Holder of each outstanding Security affected thereby, (i) extend the stated maturity of the principal of any Security, or reduce the principal amount thereof or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or change the currency in which the principal thereof (including any amount in respect of original issue discount) or interest thereon is payable or reduce the amount of any original issue discount security payable upon acceleration or provable in bankruptcy or impair the right to institute suit for the enforcement of any payment on any Security when due or (ii) reduce the aforesaid percentage in principal amount of Securities of any series issued under such Indenture, the consent of the Holders of which is required for any such modification. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, prior to any declaration accelerating the maturity of such Securities, the Holders of a majority in aggregate principal amount Outstanding of the Securities of such series (or, in the case of certain defaults or Events of Default, all or certain series of the Securities) may on behalf of the Holders of all the Securities of such series (or all or certain series of the Securities, as the case may be) waive any such past default or Event or Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of the principal of or interest on any of the Securities. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor or on registration of transfer hereof, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the time, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the registry books of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company maintained by the Company for such purpose in the Borough of Manhattan, The City of New York duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder hereof or by its attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed, manually or in facsimile, and an imprint or facsimile of its corporate seal to be imprinted hereon. [FACSIMILE OF SEAL] SUNAMERICA INC. By: ----------------------------------- Name: Title: Attest: By: -------------------------- Name: Title: CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. THE FIRST NATIONAL BANK OF CHICAGO as Trustee By: -------------------------- Authorized Officer Dated: ----------------------- OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably request(s) and instruct(s) the Company to repay this Note (or portion hereof specified below) pursuant to its terms at a price equal to the principal amount hereof together with interest to the repayment date, to the undersigned, at (Please print or typewrite name and address of the undersigned) For this Note to be repaid, the Trustee must receive at its Corporate Trust Office, or at such other place or places of which the Company shall from time to time notify the Holder of this Note, not more than 60 nor less than 30 days prior to an Optional Repayment Date, if any, shown on the face of this Note, this Note with this "Option to Elect Repayment" form duly completed. If less than the entire principal amount of this Note is to be repaid, specify the portion hereof (which shall be increments of $1,000) which the Holder elects to have repaid and specify the denomination or denominations (which shall be $1,000 or an integral multiple thereof) of the Notes to be issued to the Holder for the portion of this Note not being repaid (in the absence of any such specification, one such Note will be issued for the portion not being repaid). $ Date: NOTICE: The signature on this Option to Elect Repayment must correspond with the name as written upon the face of this Note in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: ASSIGNMENT/TRANSFER FORM FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto (insert Taxpayer Identification No.) (Please print or typewrite name and address including postal zip code of assignee) the within Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Note on the books of the Company with full power of substitution in the premises. Dated: NOTICE: The signature of the registered Holder 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. Signature Guarantee: ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM -- as tenants in common UNIF GIFT MIN ACT -- . . . . . . . . . . . . . Custodian . . . . . . . . . . (Cust) (Minor) Under Uniform Gifts to Minors Act . . . . . . . . . . . . . . . . . . . (State) TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. -----END PRIVACY-ENHANCED MESSAGE-----