-----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, OziMFS3IVYG6g5pTMgVbQPHOmh8/1gOGcrgBSFiGZEKQ9t7e0Xw/1B/ZVrwtTvJk 3v/cyUTixUdyeQwVJOL6LQ== 0000950117-98-000894.txt : 19980430 0000950117-98-000894.hdr.sgml : 19980430 ACCESSION NUMBER: 0000950117-98-000894 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19980428 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AT&T CAPITAL CORP /DE/ CENTRAL INDEX KEY: 0000897708 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 223211453 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-48415 FILM NUMBER: 98603066 BUSINESS ADDRESS: STREET 1: 44 WHIPPANY ROAD CITY: MORRISTOWN STATE: NJ ZIP: 07962-1983 BUSINESS PHONE: 2013973000 MAIL ADDRESS: STREET 1: 44 WHIPPANY RD CITY: MORRISTOWN STATE: NJ ZIP: 07962-1983 S-3/A 1 AT&T CAPITAL CORPORATION S-3, AM #2 AND NEWCOURT CREDIT GROUP INC. F-9, AM #1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 1998 REGISTRATION NO. 333-48415 ________________________________________________________________________________ U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 2 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ AT&T CAPITAL CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ------------------------ DELAWARE 22-3211453 (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 44 WHIPPANY ROAD MORRISTOWN, NEW JERSEY 07962 (973) 397-3000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ SCOTT J. MOORE SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY 44 WHIPPANY ROAD MORRISTOWN, NEW JERSEY 07962 (973) 397-3000 (AGENT FOR SERVICE) ------------------------ COPIES TO: M. DAVID GALAINENA JAMES D. JOHNSON DAVID J. TOSWELL WINSTON & STRAWN SIDLEY & AUSTIN BLAKE, CASSELS & GRAYDON 35 WEST WACKER DRIVE 875 THIRD AVENUE BOX 25, COMMERCE COURT WEST CHICAGO, ILLINOIS 60601 NEW YORK, NEW YORK 10022 TORONTO, ONTARIO, M5L 1A9 (312) 558-5600 (212) 906-2000 (416) 863-2400
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to time after the effective date of this Registration Statement as determined by market conditions. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: [x] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ]_________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ]_________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: [ ] ------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. ________________________________________________________________________________ AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 1998 REGISTRATION STATEMENT NO. 333-48415 ________________________________________________________________________________ U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 1 TO FORM F-9 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ NEWCOURT CREDIT GROUP INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ------------------------ NOT APPLICABLE (TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH (IF APPLICABLE)) ONTARIO NOT APPLICABLE NOT APPLICABLE (PROVINCE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER (IF APPLICABLE) (IF APPLICABLE)
BCE PLACE, 181 BAY STREET SUITE 3500, TORONTO, ONTARIO, M5J 2T3, CANADA (416) 594-2400 (ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ ATTENTION: SCOTT J. MOORE SENIOR VICE PRESIDENT, GENERAL COUNSEL & SECRETARY AT&T CAPITAL CORPORATION 44 WHIPPANY ROAD MORRISTOWN, NEW JERSEY 07963 (973) 397-3000 (NAME, ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER (INCLUDING AREA CODE) OF AGENT FOR SERVICE IN THE UNITED STATES) ------------------------ COPIES TO: M. DAVID GALAINENA JAMES D. JOHNSON DAVID J. TOSWELL WINSTON & STRAWN SIDLEY & AUSTIN BLAKE, CASSELS & GRAYDON 35 WEST WACKER DRIVE 875 THIRD AVENUE BOX 25, COMMERCE COURT WEST CHICAGO, ILLINOIS 60601 NEW YORK, NEW YORK 10022 TORONTO, ONTARIO, M5L 1A9 (312) 558-5600 (212) 906-2000 (416) 863-2400
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: From time to time after the effective date of this Registration Statement as determined by market conditions. PROVINCE OF ONTARIO, CANADA (PRINCIPAL JURISDICTION REGULATING THIS OFFERING) It is proposed that this filing shall become effective (check appropriate box below): A. [ ] upon filing with the Commission, pursuant to Rule 467(a) (if in connection with an offering being made contemporaneously in the United States and Canada). B. [ ] as some future date (check appropriate box below). 1. [ ] pursuant to Rule 467(b) on ( ) at ( ) (designate a time not sooner than seven calendar days after filing). 2. [ ] pursuant to Rule 467(b) on ( ) at ( ) (designate a time seven calendar days or sooner after filing) because the securities regulatory authority in the review jurisdiction has issued a receipt or notification of clearance on ( ). 3. [x] pursuant to Rule 467(b) as soon as practicable after notification of the Commission by the Registrant or the Canadian securities regulatory authority of the review jurisdiction that a receipt or notification of clearance has been issued with respect hereto. 4. [ ] after the filing of the next amendment to this Form (if preliminary material is being filed).
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to the home jurisdiction's shelf prospectus offering procedures, check the following box. [ ] ------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE AS PROVIDED IN RULE 467 UNDER THE SECURITIES ACT OF 1933 OR ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a) OF THE ACT, MAY DETERMINE. ________________________________________________________________________________ SUBJECT TO COMPLETION DATED APRIL 28, 1998 PRICING SUPPLEMENT (TO PROSPECTUS SUPPLEMENT AND PROSPECTUS DATED MAY , 1998) $750,000,000 [LOGO] GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY [LOGO] % Notes due ISSUE PRICE: % % Notes due ISSUE PRICE: % Interest payable May 15 and November 15 Interest on the % Medium-Term Notes, Series F due (the ' Notes') and on the % Medium-Term Notes, Series F due (the ' Notes') (collectively, the 'Notes') of AT&T Capital Corporation (the 'Company') offered hereby is payable semiannually on May 15 and November 15 of each year, commencing November 15, 1998. The Notes are not redeemable and will not be subject to any sinking fund. The Notes will be represented by one or more global securities registered in the name of a nominee of The Depository Trust Company as Depositary (the 'Depositary'). Beneficial interests in the Notes will be shown on and transfers thereof will be effected only through records maintained by the Depositary and its participants (including Euroclear and Cedel). Except as described herein, Notes will not be issued in definitive form. The Notes will trade in the Same-Day Funds Settlement System of the Depositary until maturity, and secondary market trading activity for the Notes will therefore settle in same-day funds. See 'Description of Notes' in this Pricing Supplement and 'Description of Medium-Term Notes, Series F' in the accompanying Prospectus Supplement and 'Description of the Guarantee' in the accompanying Prospectus. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRICING SUPPLEMENT OR THE PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------------------------------------------ PRICE TO UNDERWRITING PROCEEDS TO PUBLIC(1) DISCOUNT(2) THE COMPANY(1)(3) Per Note % % % Total $ $ $ Per Note % % % Total $ $ $
(1) Plus accrued interest, if any, from . (2) The Company and Newcourt have agreed to indemnify the Underwriters against certain liabilities under the Securities Act of 1933. See 'Underwriting'. (3) Before deducting expenses payable by the Company estimated at $ . The Notes are offered, subject to prior sale, when, as and if accepted by the Underwriters and subject to approval of certain legal matters by Winston & Strawn, counsel for the Underwriters. It is expected that delivery of the Notes will be made on or about May , 1998 through the facilities of the Depositary against payment therefor in same-day funds. J.P. MORGAN & CO. CHASE SECURITIES INC. CREDIT SUISSE FIRST BOSTON GOLDMAN, SACHS & CO. LEHMAN BROTHERS SALOMON SMITH BARNEY May , 1998 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE NOTES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. No person has been authorized to give any information or to make any representations other than those contained or incorporated by reference in this Pricing Supplement, the Prospectus Supplement or the Prospectus in connection with the offer made by this Pricing Supplement, the Prospectus Supplement and the Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Company, Newcourt or the Underwriters. This Pricing Supplement, the Prospectus Supplement and the Prospectus do not constitute an offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this Pricing Supplement, the Prospectus Supplement or the Prospectus nor any sale made hereunder and thereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company or Newcourt since the date thereof or hereof or that the information contained therein or herein is correct as of any time subsequent to their respective dates. DESCRIPTION OF NOTES The Notes will be issued as a part of a series of debt securities designated as Medium-Term Notes, Series F (the 'Medium-Term Notes') and issued under an Indenture, dated as of April 1, 1998 (the 'Indenture'), by and among the Company, Newcourt Credit Group Inc. ('Newcourt') and The Chase Manhattan Bank, as trustee (the 'Trustee'). The Medium-Term Notes are currently limited to $5,000,000,000 aggregate principal amount. The following summary of certain provisions of the Notes, of the Medium-Term Notes and of the Indenture does not purport to be complete and is qualified in its entirety by reference to the Indenture, a copy of which has been filed an as exhibit to the Registration Statement of which this Pricing Supplement and the accompanying Prospectus Supplement and Prospectus are a part. Capitalized terms used but not defined herein generally are defined in the accompanying Prospectus Supplement or Prospectus. Capitalized terms used but not defined herein or in the accompanying Prospectus Supplement or Prospectus have the meanings given to them in the Indenture. The term 'Securities,' as used under this caption, refers to all Securities issuable from time to time under the Indenture and includes the Notes. The term 'Medium-Term Notes' includes the Notes. GENERAL All Securities, including the Notes, issued and to be issued under the Indenture will be unsecured obligations of the Company, and will rank pari passu with all other unsecured indebtedness of the Company from time to time outstanding. The Indenture does not limit the aggregate principal amount of Securities which may be issued thereunder, and Securities may be issued thereunder from time to time as a single series or in two or more separate series up to the aggregate principal amount from time to time authorized by the Company for each series. The Company may, from time to time, without the consent of the holders of the Notes, provide for the issuance of additional Medium-Term Notes or other Securities under the Indenture in addition to the $5,000,000,000 aggregate principal amount of Securities authorized as of the date of this Pricing Supplement. Newcourt will provide an irrevocable unconditional guarantee of payment of principal, premium, if any, and interest on the Notes. Such guarantee will be an unsecured obligation of Newcourt and will rank pari passu with all other unsecured and unsubordinated indebtedness of Newcourt. The Notes will mature on and the Notes will mature on , and will bear interest from the date of issuance payable semiannually in arrears on May 15 and November 15 (each an 'Interest Payment Date') beginning November 15, 1998. If any Interest Payment Date would otherwise be a day that is not a Business Day, such Interest Payment Date 2 will be postponed to the next succeeding Business Day. Payments of principal of premium, if any, and interest on the Notes will be made by the Company through the Trustee to the Depositary. See 'Description of Medium-Term Notes, Series F' in the accompanying Prospectus Supplement and 'Description of the Guarantee' in the accompanying Prospectus. The Notes will pay interest at the rates set forth on the cover of this Pricing Supplement. Reference is hereby made to 'Description of Medium-Term Notes, Series F' in the accompanying Prospectus Supplement and 'Description of the Guarantee' in the accompanying Prospectus. UNDERWRITING Subject to the terms and conditions set forth in the Underwriting Agreement, dated the date hereof (the 'Underwriting Agreement'), among the Company, Newcourt and the underwriters named below (the 'Underwriters'), the Company has agreed to sell to each of the Underwriters, and each of the Underwriters has severally agreed to purchase from the Company, the principal amount of the Notes set forth opposite its name below:
PRINCIPAL UNDERWRITER AMOUNT - -------------------------------------------------------------------------------------------------- ------------ J.P. Morgan Securities Inc. ...................................................................... $ Chase Securities Inc.............................................................................. Credit Suisse First Boston Corporation............................................................ Goldman, Sachs & Co............................................................................... Lehman Brothers Inc............................................................................... Salomon Brothers Inc.............................................................................. ------------ Total........................................................................................ $750,000,000 ------------ ------------
The Underwriting Agreement provides that the obligations of the Underwriters are subject to certain conditions precedent and that the Underwriters will be obligated to take and pay for all the Notes if any are taken. The Underwriters have advised the Company that they propose initially to offer the Notes directly to the public at the public offering price set forth on the cover page of this Pricing Supplement and to certain dealers at such price less a concession not in excess of % of the principal amount of the Notes. The Underwriters may allow, and such dealers may reallow, a discount not in excess of % of the principal amount of the Notes to certain other dealers. After the initial public offering, the public offering price and such concessions may be changed. The Company does not intend to apply for listing of the Notes on a national securities exchange, but has been advised by the Underwriters that they intend to make a market in the Notes. The Underwriters are not obligated, however, to make a market in the Notes and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of any trading market for the Notes. The Company and Newcourt have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. In the ordinary course of their respective businesses, affiliates of the Underwriters have engaged and may in the future engage in commercial and investment banking transactions with the Company and the Guarantor. 3 SUBJECT TO COMPLETION DATED APRIL 28, 1998 PRELIMINARY PROSPECTUS SUPPLEMENT (To Prospectus Dated May , 1998) U.S. $5,000,000,000 [LOGO] MEDIUM-TERM NOTES, SERIES F DUE NINE MONTHS OR MORE FROM DATE OF ISSUE GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY [LOGO] --------------------------- AT&T Capital Corporation (the 'Company'), an indirect wholly-owned subsidiary of Newcourt Credit Group Inc. ('Newcourt'), may offer from time to time its medium-term notes, which are issuable in one or more series. The Medium-Term Notes, Series F (the 'Notes') offered by this Prospectus Supplement are offered in the United States with an aggregate offering price not exceeding U.S. $5,000,000,000 or the equivalent thereof in other currencies or currency units, as such amount shall be reduced by the aggregate offering price of any other debt securities and the aggregate purchase price of any warrants issued by the Company, whether inside or outside of the United States (the 'Other Securities'), pursuant to the Registration Statement of which the accompanying Prospectus is a part (see 'Plan of Distribution'). The Notes may be denominated in U.S. dollars or other currencies or currency units as may be designated by the Company (the 'Specified Currency'). See 'Important Currency Exchange Information'. The Notes will be offered in varying maturities nine months or more from their dates of issue and may be subject to redemption at the option of the Company or repayment at the option of the Holder, in each case, in whole or in part prior to the maturity date thereof, as set forth in the applicable pricing supplement to this Prospectus Supplement (a 'Pricing Supplement'). The Notes will be unconditionally guaranteed as to payment of principal, premium, if any, and interest by Newcourt. See 'The Company -- Relationship with Newcourt'. THE NOTES ARE NOT GUARANTEED OR SUPPORTED IN ANY WAY BY AT&T CORP. ('AT&T'). The interest rate on each Note will be either a fixed rate (a 'Fixed Rate Note'), which may be zero in the case of certain Notes issued at a price representing a substantial discount from the principal amount payable upon maturity, or a floating rate (a 'Floating Rate Note') determined by reference to one or more of the Commercial Paper Rate, the Federal Funds Rate, the CD Rate, LIBOR, the Treasury Rate, the Prime Rate, the CMT Rate or any other Base Rate (each as defined below) or interest rate formula set forth in the applicable Pricing Supplement, as adjusted by the Spread and/or Spread Multiplier (each as defined below), if any, applicable to such Note. A Fixed Rate Note may pay a level amount in respect of both interest and principal amortized over the life of the Note (an 'Amortizing Note'). A Note may be issued as an indexed note (an 'Indexed Note'), the principal amount payable at maturity of which, or premium or interest on which, will be determined by reference to the level of a designated stock index or a designated currency or commodity or other prices or indices or will otherwise be determined by application of a formula. See 'Description of Medium-Term Notes, Series F -- Indexed Notes'. The Specified Currency, interest rate or interest rate formula, reset provisions, issue price, maturity, interest payment dates, redemption, repayment, and amortization provisions and certain other terms with respect to each Note will be established at the time of issuance and set forth in the applicable Pricing Supplement. Except as otherwise indicated herein or in the applicable Pricing Supplement, interest on each Fixed Rate Note (other than an Amortizing Note) is payable each May 15 and November 15 and at maturity. Interest on each Floating Rate Note is payable on the dates set forth therein and in the applicable Pricing Supplement. --------------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Price to Agent's Discount and Proceeds to Public(1)(2) Commission(2)(3) the Company(2)(3)(4) Per Note......................................... 100.000% % % Total............................................ U.S.$5,000,000,000 U.S.$ U.S.$
(1) Unless otherwise indicated in a Pricing Supplement, the Notes will be issued at 100% of their principal amount. (2) Or, in the case of Notes not denominated in U.S. dollars, the equivalent thereof in the Specified Currency. (3) The Company will pay a commission to certain investment banking firms (collectively, the 'Agents'), in the form of a discount of the principal amount of any Note sold through the Agents, depending upon the maturity of the Note, except that the commission payable by the Company to the Agents with respect to Notes with maturities of greater than thirty years will be negotiated at the time the Company issues such Notes. An Agent, acting as principal, or a group of underwriters for whom one or more Agents are acting as representatives, may also purchase Notes at a discount, to be agreed upon at the time of sale, for resale to one or more investors, or one or more broker-dealers (acting as principal for purposes of resale) at varying prices related to prevailing market prices at the time of resale, as determined by such Agent, or, if so agreed, at a fixed public offering price. See 'Plan of Distribution'. (4) Before deducting expenses payable by the Company estimated at U.S. $ , including reimbursement of the Agents' expenses. --------------------------- The Notes are being offered on a continual basis by the Company through the Agents, who have agreed to use their reasonable best efforts to solicit purchases of the Notes. The Company also may arrange for the Notes to be sold through other agents, dealers or underwriters or may sell the Notes directly to investors on its own behalf in those jurisdictions where it is authorized to do so. The Notes will not be listed on any securities exchange, and there can be no assurance that the Notes will be sold or that there will be a secondary market for the Notes. The Company reserves the right to withdraw, cancel or modify the offer made hereby without notice. The Company, or the Agents which solicit any offer, may reject such offer in whole or in part. See 'Plan of Distribution'. --------------------------- The date of this Prospectus Supplement is May , 1998. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. IN CONNECTION WITH THIS OFFERING, THE AGENTS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE 'PLAN OF DISTRIBUTION'. IMPORTANT CURRENCY EXCHANGE INFORMATION Purchasers are required to pay for the Notes in the Specified Currency, and payments of principal of, premium, if any, and any interest on, such Notes will be made in the Specified Currency, unless otherwise provided in the applicable Pricing Supplement. Currently, there are limited facilities in the United States for the conversion of U.S. dollars into foreign currencies or currency units, and vice versa, and few banks offer non-U.S. dollar denominated checking or savings account facilities in the United States. However, if requested by a prospective purchaser of Notes denominated in a Specified Currency other than U.S. dollars, the Agent soliciting the offer to purchase will arrange for the conversion of U.S. dollars into such Specified Currency to enable the purchaser to pay for such Notes. Such request must be made on or before the third Business Day (as defined below) preceding the date of delivery of the Notes, or by such other date as determined by such Agent. Each such conversion will be made by the relevant Agent on such terms and subject to such conditions, limitations and charges as such Agent may from time to time establish in accordance with its regular foreign exchange practice. All costs of exchange will be borne by purchasers of the Notes. References herein to 'U.S. dollars' or 'U.S. $' or '$' are to the currency of the United States of America. DESCRIPTION OF MEDIUM-TERM NOTES, SERIES F The information herein concerning the Notes should be read in conjunction with the statements under 'Description of the Debt Securities' in the Prospectus dated May , 1998. The following description of the Notes will apply unless otherwise specified in the applicable Pricing Supplement. GENERAL The Notes are to be issued under Registration Statement No. 333-48415 (the 'Registration Statement'), pursuant to which the Company has registered debt securities, warrants to purchase debt securities, currency warrants, index warrants and interest rate warrants having an aggregate purchase price of $5,000,000,000 (or the equivalent thereof in other currencies or currency units). The Medium-Term Notes, Series F, constitute a single series and are to be issued under an Indenture dated as of April 1, 1998, as amended (the 'Indenture'), between the Company and The Chase Manhattan Bank, as trustee (the 'Trustee'). Under this Prospectus Supplement, Notes may be issued with an aggregate offering price of up to U.S. $5,000,000,000 (or the equivalent thereof in other currencies or currency units), as such amount may be reduced by any Other Securities issued by the Company pursuant to the Registration Statement (see 'Plan of Distribution'). The Notes will be offered on a continuous basis. The Notes will mature on any day nine months or more from the date of issue, as selected by the purchaser and agreed to by the Company and specified in the applicable Pricing Supplement. 'Business Day' means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation (including any executive order) to close in The City of New York and (i) with respect to Notes denominated in a Specified Currency other than U.S. dollars or Euros (as defined below), in the Principal Financial Center (as defined below) of the country of the Specified Currency or (ii) with respect to Notes denominated in Euros, in Brussels, Belgium or (iii) with respect to LIBOR Notes (as defined below), that is also a London Banking Day. 'London Banking Day' means any day on which dealings in deposits in the Index Currency (as defined below) are transacted in the London interbank market. 'Principal Financial Center' means the principal financial center of such country, which is generally the capital city of the country of the Specified Currency, except that with respect to U.S. S-2 dollars and Deutsche marks, the Principal Financial Center shall be The City of New York and Frankfurt, respectively. A Note may be issued as a zero coupon Note or at a price which is at a substantial discount from its principal amount (a 'Discount Note'), in which event such Note will provide that upon redemption or repayment prior to maturity or acceleration of maturity thereof an amount less than the principal amount thereof shall become due and payable. If a bankruptcy proceeding is commenced in respect of the Company, the claim of the holders of Discount Notes may be limited under section 502(b) of Title 11 of the United States Code to the initial public offering price of such Notes, plus that portion of the original issue discount that is amortized from the date of issue to the commencement of the bankruptcy proceeding plus accrued interest. Accordingly, the holders of Discount Notes under such circumstances may receive a lesser amount than they would be entitled to under the express terms of such Notes. Notwithstanding anything in the Prospectus Supplement to the contrary, unless otherwise specified in the applicable Pricing Supplement, if a Note is a Discount Note, the amount payable on such Note in the event of redemption or repayment prior to its maturity shall be the Amortized Face Amount of such Note as of the date of redemption or the date of repayment, as the case may be. The 'Amortized Face Amount' of a Discount Note shall be the amount equal to (i) the issue price set forth in the applicable Pricing Supplement plus (ii) the portion of the difference between the issue price and the principal amount of such Note that has accrued at the yield to maturity set forth in the Pricing Supplement (computed in accordance with generally accepted United States bond yield computation principles) to such date of redemption or repayment, but in no event shall the Amortized Face Amount of a Discount Note exceed its principal amount. The Pricing Supplement relating to each Note will describe the following terms: (1) the Specified Currency (and, if such Specified Currency is other than U.S. dollars, certain other terms relating to such Note); (2) whether such Note is a Fixed Rate Note, an Amortizing Note, or a Floating Rate Note; (3) whether such Note is an Original Issue Discount Note; (4) whether such Note is an Indexed Note and, if so, the special terms thereof; (5) if other than 100%, the price (generally expressed as a percentage of the aggregate principal amount thereof) at which such Note will be issued; (6) the date on which such Note will be issued; (7) the date on which such Note will mature; (8) if such Note is a Fixed Rate Note, the rate per annum at which such Note will bear interest; (9) if such Note is a Floating Rate Note, the Base Rate, the Initial Interest Rate, the Interest Reset Dates, the Interest Payment Dates, the Index Maturity, the Maximum and Minimum Interest Rates, if any, and the Spread or Spread Multiplier, if any (all as defined below), and any other terms relating to the method of calculating interest on such Note; (10) if such Note is an Amortizing Note, whether payments of principal thereof and interest thereon will be made quarterly or semiannually, and the repayment information in respect thereof; (11) the terms of redemption at the option of the Company, repayment at the option of the holder, or amortization provisions, if any; and (12) any other terms of such Note not inconsistent with the provisions of the Indenture. Notes will be issued in fully registered form only. Each Note to be issued will initially be represented by either a global security (a 'Book-Entry Note') registered in the name of a nominee of The Depository Trust Company, as depositary (the 'Depositary'), or a certificate issued in definitive form (a 'Certificated Note'). Except as set forth under 'Book-Entry System' below, Book-Entry Notes will not be issuable as Certificated Notes. Unless otherwise specified in the applicable Pricing Supplement, Notes denominated in U.S. dollars will be issued in denominations that are integral multiples of U.S. $1,000 and Notes denominated in a Specified Currency other than U.S. dollars will be issued in denominations of the Specified Currency approximately equivalent to U.S. $1,000 based upon the noon buying rate in New York City for cable transfers of such Specified Currency, as determined by the Federal Reserve Bank of New York (or in the case of Euros, based upon the rate of exchange determined by the Commission of the European Communities (or any successor thereto) as published in the Official Journal of the European Communities, or any successor publication), on the Business Day immediately preceding the trade date for such Notes, rounded to the nearest integral multiple of 1,000 units of such Specified Currency, or any amount in excess thereof which is an integral multiple of 1,000 units of such Specified Currency. S-3 The Company has initially designated The Chase Manhattan Bank, acting through its principal corporate trust office in New York, New York, as the registrar and transfer agent for the Notes (the 'Registrar', which term includes any additional or successor Registrar appointed by the Company), as the paying agent for the Notes (the 'Paying Agent', which term includes any additional or successor Paying Agent appointed by the Company), and as the authenticating agent for the Notes (the 'Authenticating Agent', which term includes any additional or successor Authenticating Agent appointed by the Company). The Notes will constitute unsecured and unsubordinated indebtedness of the Company and will rank on a parity with the Company's other unsecured and unsubordinated indebtedness. Unless otherwise specified in the applicable Pricing Supplement, the Notes are not subject to redemption at the option of the Company or repayment at the option of the holder prior to maturity. The Notes will not be subject to any sinking fund, except to the extent otherwise provided in the applicable Pricing Supplement. In the case of Notes denominated in, and with respect to which principal, premium, if any, and interest is payable in, U.S. dollars, principal, premium, if any, and interest will be payable, and the Notes will be transferable, at the office of the Paying Agent, The Chase Manhattan Bank, 450 West 33rd Street, New York, New York, or at such other place or places as may be designated pursuant to the Indenture, provided that the Company, at its option, may pay interest other than interest due at maturity by check mailed to registered holders (which, in the case of Book-Entry Notes represented by a global security, will be a nominee of the Depositary). Unless otherwise specified in the applicable Pricing Supplement, interest on Notes (other than interest due at maturity) payable in a Specified Currency other than U.S. dollars will be paid by mailing a check or draft in the Specified Currency drawn on an account at a bank outside of the United States. If any Notes are denominated in a Specified Currency other than U.S. dollars or if the principal of, premium, if any, or interest on any Notes is payable in a Specified Currency other than U.S. dollars, the applicable Pricing Supplement will provide additional information pertaining to the terms of such Notes and other matters of interest to the holders thereof. At the maturity of any Note, the principal thereof, together with accrued interest thereon, will be payable in immediately available funds upon surrender thereof at the office of the Trustee at the above address or at such other place or places as may be designated pursuant to the Indenture. Interest rates and interest rate formulas are subject to change by the Company, but no change will affect any Note theretofore issued or as to which an offer to purchase has been accepted by the Company. Interest rates offered by the Company with respect to the Notes may differ depending upon, among other things, the aggregate principal amount of the Notes purchased in any single transaction. PAYMENT CURRENCY If the principal of, premium, if any, or interest on, any Note is payable in a Specified Currency other than U.S. dollars and such Specified Currency is not available to the Company for making payments thereof due to the imposition of exchange controls or other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligations to holders of the Notes by making such payments in U.S. dollars on the basis of the noon buying rate in New York City for cable transfers of such Specified Currency as determined by the Federal Reserve Bank of New York (the 'Market Exchange Rate') on the date of such payment, or if such rate of exchange is not then available, on the basis of the Market Exchange Rate as of the most recent Record Date (as defined below). Any payment made under such circumstances in U.S. dollars where the required payment is in a Specified Currency other than U.S. dollars will not constitute an Event of Default under the Indenture. Under the treaty establishing the European Economic and Monetary Union (the 'EMU'), it is provided that at or before January 1, 1999, and subject to the fulfilment of certain conditions, a single currency (the 'Euro'), will become a currency in its own right. The Euro may replace all or some of the currencies of the 15 member states of the EMU (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom). If, pursuant to such treaty, all or some of the currencies of the member states of the EMU are replaced by the Euro as a currency in its own right, or by an alternative single European currency, S-4 the payment of principal, premium, if any, or interest on, the Notes denominated in such currencies shall, unless otherwise specified in the applicable Pricing Supplement, be effected in Euro or such alternative European currency in conformity with legally applicable measures taken pursuant to, or by virtue of, such treaty, and such currency so replaced shall not be deemed to be unavailable to the Company for purposes of the immediately preceding paragraph. PAYMENT OF PRINCIPAL AND INTEREST Each Floating Rate Note will bear interest from the date of issue at the rate per annum stated or the interest rate formula set forth therein and in the applicable Pricing Supplement, until the principal thereof is paid or made available for payment. Each Fixed Rate Note will bear interest from the date of issue at the rate or rates per annum stated (calculated on the basis of a year of twelve thirty-day months) therein and in the applicable Pricing Supplement, until the principal thereof is paid or made available for payment. Interest, if any, will be payable on each Interest Payment Date. Interest will be payable to the person in whose name a Note is registered at the close of business on the Record Date with respect to the Interest Payment Date (which, in the case of Book-Entry Notes represented by a global security, will be a nominee of the Depositary); provided, however, that interest payable at maturity (whether or not the maturity date is an Interest Payment Date) will be payable to the person to whom principal shall be payable. Interest on any Note (or, in the case of an Amortizing Note, principal and interest) originally issued between a Record Date and an Interest Payment Date will first be payable on the Interest Payment Date following the next succeeding Record Date to the registered holder on such next succeeding Record Date of such Note. Unless otherwise specified in the applicable Pricing Supplement, the 'Record Date' with respect to any Interest Payment Date shall be the date fifteen calendar days prior to such Interest Payment Date, whether or not such date shall be a Business Day. Unless otherwise specified in the applicable Pricing Supplement, interest on Fixed Rate Notes (other than an Amortizing Note) will be payable on May 15 and November 15 of each year (except as provided above with respect to Notes issued between a Record Date and an Interest Payment Date) and at maturity. Unless otherwise specified in the applicable Pricing Supplement, payments of principal and interest on each Amortizing Note will be made semi-annually each May 15 and November 15, and at maturity. See also ' -- Amortizing Notes' below. Except as provided below, unless otherwise specified in the applicable Pricing Supplement, interest on Floating Rate Notes will be payable: (i) in the case of Notes with a daily, weekly or monthly Interest Reset Date, on the third Wednesday of each month or on the third Wednesday of February, May, August and November, as specified in the applicable Pricing Supplement; (ii) in the case of Notes with a quarterly Interest Reset Date, on the third Wednesday of February, May, August and November; (iii) in the case of Notes with a semiannual Interest Reset Date, on the third Wednesday of the two months specified in the applicable Pricing Supplement; (iv) in the case of Notes with an annual Interest Reset Date, on the third Wednesday of the month specified in the applicable Pricing Supplement and (v) in each case, at maturity. Each date on which interest is payable on a Note is referred to herein as an 'Interest Payment Date'. Unless otherwise specified in the applicable Pricing Supplement, interest payments on Notes shall be the amount of interest accrued from, and including, the date of issue or the last date to which interest has been paid to, but excluding, the next succeeding Interest Payment Date or maturity date, as the case may be. If any Interest Payment Date or the maturity date of a Fixed Rate Note would otherwise be a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be made on the next succeeding Business Day as if made on the date such payment was due, and no interest will accrue on such payment for the period from and after such Interest Payment Date or the maturity date, as the case may be, to the date of such payment on the next succeeding Business Day. If any Interest Payment Date for any Floating Rate Note (other than the maturity date) would otherwise be a day that is not a Business Day such Interest Payment Date will be postponed to the next succeeding day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day falls in the next succeeding calendar month, such Interest Payment Date will be the immediately preceding Business Day. If the maturity date of a Floating Rate Note falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be made S-5 on the next succeeding Business Day as if made on the date such payment was due, and no interest shall accrue on such payment for the period from and after the maturity date to the date of such payment on the next succeeding Business Day. Unless otherwise specified in the applicable Pricing Supplement, the interest rate on each Floating Rate Note will be calculated by reference to a specified interest rate (the 'Base Rate') (i) plus or minus the Spread, if any, and/or (ii) multiplied by the Spread Multiplier, if any. The 'Spread' is the number of basis points (one one-hundredth of a percentage point) specified in the applicable Pricing Supplement as being applicable to the interest rate for such Floating Rate Note, and the 'Spread Multiplier' is the percentage specified in the applicable Pricing Supplement as being applicable to the interest rate for such Floating Rate Note. The applicable Pricing Supplement will designate one or more of the following Base Rates as applicable to each Floating Rate Note: (a) the Commercial Paper Rate (a 'Commercial Paper Rate Note'), (b) the Federal Funds Rate (a 'Federal Funds Rate Note'), (c) the Certificate of Deposit Rate (a 'CD Rate Note'), (d) LIBOR (a 'LIBOR Note'), (e) the Treasury Rate (a 'Treasury Rate Note'), (f) the Prime Rate (a 'Prime Rate Note'), (g) the Constant Maturity Treasury Rate (a 'CMT Rate Note') or (h) such other Base Rate or interest rate formula as is set forth in such Pricing Supplement and in such Floating Rate Note. The 'Index Maturity' for any Floating Rate Note is the period of maturity of the instrument or obligation from which the Base Rate is calculated and will be specified in the applicable Pricing Supplement. As specified in the applicable Pricing Supplement, a Floating Rate Note may also have either or both of the following: (i) a maximum limitation, or ceiling, on the rate of interest that may accrue during any interest period (a 'Maximum Interest Rate'); and (ii) a minimum limitation, or floor, on the rate of interest that may accrue during any interest period (a 'Minimum Interest Rate'). In addition to any Maximum Interest Rate which may be applicable to any Floating Rate Note, the interest rate on a Floating Rate Note will in no event be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. The rate of interest on each Floating Rate Note will be reset daily, weekly, monthly, quarterly, semi-annually or annually (such period being the 'Interest Reset Period' for such Note and the first date of each Interest Reset Period, on which such interest rate becomes effective, being an 'Interest Reset Date'), as specified in the applicable Pricing Supplement. Unless otherwise specified in the Pricing Supplement, the Interest Reset Date will be, in the case of Floating Rate Notes which reset daily, each Business Day; in the case of Floating Rate Notes (other than Treasury Rate Notes) which reset weekly, the Wednesday of each week; in the case of Treasury Rate Notes which reset weekly, the Tuesday of each week (except as provided below); in the case of Floating Rate Notes which reset monthly, the third Wednesday of each month; in the case of Floating Rate Notes which reset quarterly, the third Wednesday of February, May, August and November; in the case of Floating Rate Notes which reset semiannually, the third Wednesday of two months of each year, as specified in the applicable Pricing Supplement; and in the case of Floating Rate Notes which reset annually, the third Wednesday of one month of each year, as specified in the applicable Pricing Supplement; provided, however, that the interest rate in effect from the date of issue to the first Interest Reset Date with respect to a Floating Rate Note will be the Initial Interest Rate (as set forth in the applicable Pricing Supplement). If any Interest Reset Date for any Floating Rate Note is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Each adjusted rate shall be applicable on and after the Interest Reset Date to which it relates, to, but not including, the next succeeding Interest Rate Date or the maturity date or the date of redemption, as the case may be. Unless otherwise specified in the applicable Pricing Supplement, Fixed Rate Notes will bear interest from the date of issue and will be calculated on the basis of a year of twelve thirty-day months. With respect to a Floating Rate Note, accrued interest shall be calculated by multiplying the principal amount of such Floating Rate Note (or, in the case of an Indexed Note, unless otherwise specified in the applicable Pricing Supplement, the Face Amount (as defined below under 'Indexed Notes') of such Indexed Note) by an accrued interest factor. Such accrued interest factor will be computed by adding S-6 the interest factors calculated for each day in the Interest Reset Period or from the last date from 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 cases of Commercial Paper Rate Notes, Federal Funds Rate Notes, CD Rate Notes, LIBOR Notes and Prime Rate Notes, or by the actual number of days in the year, in the case of Treasury Rate Notes and CMT Rate Notes. The interest rate applicable to any day that is an Interest Reset Date is the applicable rate as reset on such date. The interest rate applicable to any other day is the interest rate for the immediately preceding Interest Reset Date (or, if none, the Initial Interest Rate, as described below). Unless otherwise provided in the applicable Pricing Supplement, The Chase Manhattan Bank will be the calculation agent (the 'Calculation Agent') with respect to any issue of Floating Rate Notes. Upon the request of the holder of any Floating Rate Note, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate which will become effective on the next Interest Reset Date with respect to such Floating Rate Note. All percentages resulting from any calculation of the rate of interest on a Floating Rate Note will be rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point (.0000001), with five one-millionths of a percentage point rounded upward, and all dollar amounts used in or resulting from such calculation on Floating Rate Notes will be rounded to the nearest cent (with one-half cent rounded upward). The interest rate in effect with respect to a Floating Rate Note from the Issue Date to the first Interest Reset Date (the 'Initial Interest Rate') will be specified in the applicable Pricing Supplement. The interest rate for each subsequent Interest Reset Date will be determined by the Calculation Agent as follows. Unless otherwise specified in the applicable Pricing Supplement, the 'Calculation Date' pertaining to any Commercial Paper Interest Determination Date, Federal Funds Interest Determination Date, CD Interest Determination Date, Treasury Rate Determination Date, Prime Rate Interest Determination Date and CMT Rate Interest Determination Date (each as hereinafter defined) will be the earlier of (i) the tenth calendar day after such date, or, if such tenth day is not a Business Day, the next succeeding Business Day and (ii) the Business Day preceding the applicable Interest Payment Date or date of maturity, as the case may be. COMMERCIAL PAPER RATE NOTES Commercial Paper Rate Notes will bear interest at the interest rate (calculated with reference to the Commercial Paper Rate and the Spread and/or Spread Multiplier, if any) specified in the Commercial Paper Rate Notes and in the applicable Pricing Supplement. Unless otherwise specified in the applicable Pricing Supplement, the 'Commercial Paper Rate' for each Interest Reset Date will be determined on the Calculation Date by the Calculation Agent as of the second Business Day prior to such Interest Reset Date (a 'Commercial Paper Interest Determination Date') and shall be the Money Market Yield (as defined below) on such Commercial Paper Interest Determination Date of the rate for commercial paper having the Index Maturity specified in the applicable Pricing Supplement, as such rate shall be 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 'Commercial Paper -- Financial'. In the event that such rate is not published prior to 9:00 A.M., New York City time, on the Calculation Date, then the Commercial Paper Rate shall be the Money Market Yield on such Commercial Paper Interest Determination Date of the rate for commercial paper of the specified Index Maturity 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' ('Composite Quotations') under the heading 'Commercial Paper'. If by 3:00 P.M., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or Composite Quotations, then the Commercial Paper Rate shall be the Money Market Yield of the arithmetic mean (each as rounded to the nearest one-hundred-thousandth of a percentage point) of the offered rates as of 11:00 A.M., New York City time, on such Commercial Paper Interest Determination Date of three leading dealers of commercial paper in The City of New York selected by S-7 the Calculation Agent for commercial paper of the specified Index Maturity, placed for an industrial issuer whose bond rating is 'Aa', or the equivalent, from a nationally recognized rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the rate of interest determined as of such Commercial Paper Interest Determination Date will be the rate of interest in effect on such Commercial Paper Interest Determination Date. 'Money Market Yield' shall be a yield (expressed as a percentage rounded to the nearest one hundred-thousandth of a percentage point) 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 period for which interest is being calculated. FEDERAL FUNDS RATE NOTES Federal Funds Rate Notes will bear interest at the interest rate (calculated with reference to the Federal Funds Rate and the Spread and/or Spread Multiplier, if any) specified in the Federal Funds Rate Notes and in the applicable Pricing Supplement. Unless otherwise specified in the applicable Pricing Supplement, the 'Federal Funds Rate' for each Interest Reset Date will be determined on the Calculation Date by the Calculation Agent as of the second Business Day prior to such Interest Reset Date (a 'Federal Funds Interest Determination Date') and shall be the effective rate for Federal Funds on such Federal Funds Interest Determination Date as published in H.15(519) under the heading 'Federal Funds (Effective)' or, if not so published by 9:00 A.M., New York City time, on the Calculation Date pertaining to such Federal Funds Interest Determination Date, the Federal Funds Rate will be the interest rate on such Federal Funds Interest Determination Date as published in Composite Quotations under the heading 'Federal Funds/Effective Rate'. If such rate is not yet published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Federal Funds Interest Determination Date, the Federal Funds Rate for such Federal Funds Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the rates for the last transaction in overnight United States dollar federal funds arranged by three leading brokers of federal funds transactions in The City of New York (which may include an Agent or its affiliates) selected by the Calculation Agent prior to 9:00 A.M., New York City time, on such Federal Funds Interest Determination Date; provided, however, that if the brokers so selected by the Calculation Agent are not quoting as mentioned in this sentence, the rate of interest determined as of such Federal Funds Interest Determination Date will be the rate of interest in effect on such Federal Funds Interest Determination Date. CD RATE NOTES CD Rate Notes will bear interest at the interest rates (calculated with reference to the CD Rate and the Spread and/or Spread Multiplier, if any) specified in the CD Rate Notes and in the applicable Pricing Supplement. Unless otherwise specified in the applicable Pricing Supplement, the 'CD Rate' for each Interest Reset Date will be determined on the Calculation Date by the Calculation Agent as of the second Business Day prior to the Interest Reset Date (a 'CD Interest Determination Date') and shall be the rate for negotiable certificates of deposit having the Index Maturity designated in the applicable Pricing Supplement on such CD Interest Determination Date, as such rate is published in H.15(519) under the heading 'CDs (Secondary Market)'. If such rate is not so published by 9:00 A.M., New York City time, on the Calculation Date pertaining to such CD Interest Determination Date, the CD Rate will be the rate on such CD Interest Determination Date for negotiable certificates of deposit of the Index Maturity specified in the applicable Pricing Supplement as published in Composite Quotations under the heading 'Certificates of Deposit'. If by 3:00 P.M., New York City time, on such Calculation Date such rate is not yet published in Composite Quotations, the CD Rate for such CD Interest S-8 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 Interest Determination Date of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable certificates of deposit of major United States money center banks (in the market for negotiable certificates of deposit) with a remaining maturity closest to the Index Maturity specified in the applicable Pricing Supplement in the denomination of $5,000,000. However, if such dealers are not so quoting such rates, the rate of interest determined as of such CD Interest Determination Date will be the rate of interest in effect on such CD Interest Determination Date. LIBOR NOTES LIBOR Notes will bear interest at the interest rate (calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified in the LIBOR Notes and in the applicable Pricing Supplement. Unless otherwise specified in the applicable Pricing Supplement, 'LIBOR' for each Interest Reset Date will be determined by the Calculation Agent as follows: (i) With respect to the second London Banking Day prior to such Interest Reset Date (a 'LIBOR Determination Date'), LIBOR will be either: (a) if 'LIBOR Reuters' is specified as the reporting service in the applicable Pricing Supplement, 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 the Index Currency (as defined below) having the Index Maturity designated in the applicable Pricing Supplement, commencing on such Interest Reset Date, that appear on the Designated LIBOR Page as of 11:00 A.M., London time, on that LIBOR 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 (b) if 'LIBOR Telerate' is specified as the reporting service in the applicable Pricing Supplement, the rate for deposits in the Index Currency having the Index Maturity designated in the applicable Pricing Supplement, commencing on such Interest Reset Date, that appears on the Designated LIBOR Page as of 11:00 A.M., London time, on that LIBOR Determination Date. If fewer than two offered rates appear, or no rate appears, as applicable, LIBOR in respect of the related LIBOR Determination Date will be determined as if the parties had specified the rate described in clause (ii) below. (ii) With respect to a LIBOR Determination Date on which fewer than two offered rates appear (unless, as aforesaid, only a single rate is required), or no rate appears, as the case may be, on the applicable Designated LIBOR Page as specified in clause (i) above, the Calculation Agent will 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 the Index Currency for the period of the Index Maturity designated in the applicable Pricing Supplement, commencing on such Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on such LIBOR Determination Date and in a principal amount of not less than $1,000,000 (or the equivalent in the Index Currency, if the Index Currency is not the U.S. dollar) that is representative for a single transaction in such Index Currency in such market at such time. If at least two such quotations are provided, LIBOR determined on such LIBOR Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR determined on such LIBOR Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 A.M. (or such other time specified in the applicable Pricing Supplement), in the applicable Principal Financial Center for the country of the Index Currency on such LIBOR Determination Date, by three major banks in such Principal Financial Center selected by the Calculation Agent for loans in the Index Currency to leading European banks, having the Index Maturity designated in the applicable Pricing Supplement and in a principal amount of not less than $1,000,000 (or the equivalent in the Index Currency, if the Index Currency is not the U.S. dollar) that is representative for a single transaction in such Index Currency in such market at such time; S-9 provided, however, that if the banks so selected by the Calculation Agent are not quoting as mentioned in this sentence, the rate of interest determined on such LIBOR Determination Date will be the rate of interest otherwise in effect on such LIBOR Determination Date. 'Index Currency' means the currency (including composite currencies) specified in the applicable Pricing Supplement as the currency for which LIBOR shall be calculated. If no such currency is specified in the applicable Pricing Supplement, the Index Currency shall be U.S. dollars. 'Designated LIBOR Page' means either (a) if 'LIBOR Reuters' is designated in the applicable Pricing Supplement, the display designated as page 'LIBO' with respect to the applicable Index Currency on the Reuters Monitor Money Rates Service (or such other page as may replace page 'LIBO' on such service for the purpose of displaying the London interbank rates of major banks for the applicable Index Currency), or (b) if 'LIBOR Telerate' is designated in the applicable Pricing Supplement, the display designated as page '3750' with respect to the applicable Index Currency on the Dow Jones Telerate Service (or such other page as may replace page '3750' on such service or such other service as may be nominated by the British Bankers' Association for the purpose of displaying the London interbank rates of major banks for the applicable Index Currency). If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable Pricing Supplement, LIBOR for the applicable Index Currency will be determined as if LIBOR Telerate (and, if the U.S. dollar is the Index Currency, Page 3750) had been specified. TREASURY RATE NOTES Treasury Rate Notes will bear interest at the interest rate (calculated with reference to the Treasury Rate and the Spread and/or Spread Multiplier, if any) specified in the Treasury Rate Notes and in the applicable Pricing Supplement. Unless otherwise specified in the applicable Pricing Supplement, the 'Treasury Rate' for each Interest Reset Date will be determined on the Calculation Date by the Calculation Agent as of the Treasury Rate Determination Date (as defined below) pertaining to such Interest Reset Date and shall be the rate for the auction held on such Treasury Rate Determination Date of direct obligations of the United States ('Treasury bills') having the Index Maturity designated in the applicable Pricing Supplement, as published in H.15(519) under the heading 'U.S. Government Securities-Treasury bills-auction average (investment)', or, if not so published by 9:00 A.M., New York City time, on the Calculation Date pertaining to such Treasury Rate Determination 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 designated in the applicable Pricing Supplement are not published or reported as provided above by 3:00 P.M., New York City time, on such Calculation Date or if no such auction is held on such Treasury Rate Determination Date, then the Treasury Rate shall be calculated by the Calculation Agent and shall be a yield to maturity (expressed as a bond equivalent, 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 Determination Date, of three leading primary United States government securities dealers selected by the Calculation Agent for the issue of Treasury bills with a remaining maturity closest to the Index Maturity designated in the applicable Pricing Supplement; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting bid rates as mentioned in this sentence, the rate of interest for such Interest Reset Date will be the rate of interest in effect on such Interest Reset Date. The 'Treasury Rate Determination Date' pertaining to an Interest Reset Date will be the day of the week in which such Interest Reset Date falls on which Treasury bills would normally be auctioned. Treasury bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Treasury Rate Determination Date pertaining to the Interest Reset Date occurring in the next succeeding week. If an auction date shall fall on any day that would otherwise be S-10 an Interest Reset Date for a Treasury Rate Note, then such Interest Reset Date shall instead be the Business Day immediately following such auction date. PRIME RATE NOTES Prime Rate Notes will bear interest at the interest rate (calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier, if any) specified in the Prime Rate Notes and in the applicable Pricing Supplement. Unless otherwise specified in the applicable Pricing Supplement, the 'Prime Rate' for each Interest Reset Date will be determined on the Calculation Date by the Calculation Agent as of the second Business Day prior to such Interest Reset Date (a 'Prime Rate Interest Determination Date') and shall be the rate on such date as published in H.15(519) under the heading 'Bank Prime Loan'. If such rate is not published by 9:00 A.M., New York City time, on the Calculation Date pertaining to such Prime Rate Interest Determination Date, the Prime Rate will be determined by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank named on the 'Reuters Screen USPRIME1' (as defined below) as such bank's prime rate or base lending rate as in effect for such Prime Rate Interest Determination Date. 'Reuters Screen USPRIME1' means the display designated as page 'USPRIME1' on the Reuters Monitor Money Rates Service (such term to include such other page as may replace the page USPRIME1 on that Service for the purpose of displaying prime rates or base lending rates of major United States banks). If fewer than four such rates appear on the Reuters Screen USPRIME1 for such Prime Rate Interest Determination Date, the Prime Rate will be determined by the Calculation Agent and will be the arithmetic mean of the prime rates quoted on the basis of the actual number of days elapsed divided by 360 as of the close of business on such Prime Rate Interest Determination Date by at least two major money center banks in The City of New York selected by the Calculation Agent from a list of at least three such banks approved by the Company. If fewer than two such rates are quoted as aforesaid the Prime Rate will be calculated by the Calculation Agent and will be determined as the arithmetic mean of the prime rates furnished in The City of New York by an appropriate number (in the judgment of the Calculation Agent) of substitute banks or trust companies organized and doing business under the laws of the United States, or any State thereof, in each case having total equity capital of at least U.S.$500,000,000 and being subject to supervision or examination by federal or state authority, selected by the Calculation Agent from a list approved by the Company to provide such rate or rates; provided that if the banks or trust companies selected as aforesaid by the Calculation Agent from a list approved by the Company are not quoting as mentioned in this sentence, the rate of interest determined as of such Prime Rate Interest Determination Date will be the rate of interest in effect on such Prime Rate Interest Determination Date. CMT RATE NOTES CMT Rate Notes will bear interest at the rates (calculated with reference to the Constant Maturity Treasury Rate and the Spread and/or Spread Multiplier, if any) specified in such CMT Rate Notes and in the applicable Pricing Supplement. Unless otherwise specified in the applicable Pricing Supplement, the 'CMT Rate' for each Interest Reset Date will be determined on the Calculation Date by the Calculation Agent as of the related CMT Rate Interest Determination Date (as hereinafter defined) and shall be the rate displayed on the Designated CMT Telerate Page (as hereinafter defined) 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 (as hereinafter defined) for (i) if the Designated CMT Telerate Page is 7055, such CMT Rate Interest Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as set forth in the Pricing Supplement, 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 if 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 H.15(519) for such date. If such rate is no longer published, or if not published by 3:00 S-11 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 (or other United States Treasury rate for the Designated CMT Maturity Index) for such CMT Rate Interest Determination 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 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 for 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 offer side prices as of approximately 3:30 P.M. (New York City time) on the 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 cannot obtain three such Treasury Note quotations, the CMT Rate for 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 the 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 lowest of such quotes will be eliminated; provided however, that if fewer than three Reference Dealers selected by the Calculation Agent are quoting as described herein, the rate of interest determined as of such CMT Rate Interest Determination Date will be the rate of interest 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 quotes for the CMT Rate Note with the shorter remaining term to maturity will be used. 'Designated CMT Telerate Page' means the display on the Dow Jones Telerate Service on the page designated in the applicable Pricing Supplement (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 in the applicable Pricing Supplement, 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 in the applicable Pricing Supplement with respect to which the CMT Rate will be calculated. If no such maturity is specified in the applicable Pricing Supplement, the Designated CMT Maturity Index shall be 2 years. The 'CMT Rate Interest Determination Date' pertaining to an Interest Reset Date for CMT Rate Notes will be the second Business Day prior to such Interest Reset Date. AMORTIZING NOTES The Company may from time to time offer Notes for which payments of principal and interest are made in installments over the life of the Note ('Amortizing Notes'). Interest on each Amortizing Note will be computed as set forth in the applicable Pricing Supplement or in the Book-Entry Note representing such Amortizing Note. Unless otherwise provided in such Pricing Supplement or in such S-12 Book-Entry Note, payments with respect to Amortizing Notes will be applied first to interest due and payable thereon and then to the reduction of the unpaid principal amount thereof. A table setting forth repayment information with respect to each Amortizing Note will be provided to the original purchaser of such Note and will be available upon request to the subsequent Holders thereof. INDEXED NOTES The Company may from time to time offer Indexed Notes the principal amount payable at maturity (the 'Indexed Principal Amount') of which, or premium or interest on which, is determined by reference to a measure (the 'Index') which will be related to (i) the rate of exchange between the Specified Currency for such Note and the other currency or composite currency (the 'Indexed Currency') specified in the applicable Pricing Supplement (such Indexed Notes, 'Currency Indexed Notes'); (ii) the difference in the price of a specified commodity (the 'Indexed Commodity') on specified dates; (iii) the difference in the level of a specified stock index (the 'Stock Index'), which may be based on U.S. or foreign stocks, on specified dates; or (iv) such other objective price or economic measures as are described in the applicable Pricing Supplement. The manner of determining the Indexed Principal Amount of, and interest and premium, if any, on an Indexed Note, and historical and other information concerning the Indexed Currency, Indexed Commodity, Stock Index or other price or economic measures used in such determination, will be set forth in the applicable Pricing Supplement, together with information concerning tax consequences to the holders of such Indexed Notes. If the determination of the Indexed Principal Amount of, and interest and premium, if any, on an Indexed Note is based on an Index calculated or announced by a third party and such third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated (other than changes consistent with policies in effect at the time such Indexed Note was issued and permitted changes described in the applicable Pricing Supplement), then such Index shall be calculated for purposes of such Indexed Note by an independent calculation agent named in the applicable Pricing Supplement on the same basis, and subject to the same conditions and controls, as applied to the original third party. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then the Indexed Principal Amount of such Indexed Note shall be calculated in the manner set forth in the applicable Pricing Supplement. Any determination of such independent calculation agent shall in the absence of manifest error be binding on all parties. Unless otherwise specified in the applicable Pricing Supplement, interest on an Indexed Note will be payable by the Company based on the amount designated in the applicable Pricing Supplement as the 'Face Amount' of such Indexed Note. The applicable Pricing Supplement will describe whether the principal amount of the related Indexed Note that would be payable upon redemption or repayment prior to maturity will be the Face Amount of such Indexed Note, the Indexed Principal Amount of such Indexed Note at the time of redemption or repayment, or another amount described in such Pricing Supplement. REDEMPTION AND REPURCHASE Unless otherwise specified in the Pricing Supplement relating to a Note, such Note cannot be redeemed prior to maturity. If any Note will be redeemable at the option of the Company, the applicable Pricing Supplement will indicate the date or dates for redemption prior to such maturity and the price or prices payable upon such redemption, together with accrued interest to the date of redemption. The Company may redeem any of the Notes that are redeemable and remain outstanding either in whole or from time to time in part, upon not less than 30 nor more than 60 days' notice. If less than all Notes with like tenor and terms are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate. Unless otherwise indicated in the Pricing Supplement relating to each Note, the Notes will not be subject to any sinking fund. The Company may at any time purchase Notes at any price in the open market or otherwise. Notes so purchased by the Company may, at its discretion, be held, resold or surrendered to the Trustee for cancellation. S-13 REPAYMENT AT OPTION OF THE HOLDER Unless otherwise specified in the Pricing Supplement relating to a Note, the holder of such Note will not have the right to require the Company to repay such Note prior to maturity. If any Note will be repayable at the option of the holder the applicable Pricing Supplement will indicate the date or dates for repayment prior to maturity, and the price or prices, together with accrued interest to the date of repayment, payable upon such repayment. In order for any repayment option applicable to a Note to be exercised, the Trustee must receive at least 30 days but no more than 45 days prior to the repayment date (i) the Note with the form entitled 'Option to Elect Repayment' on the reverse of the Note duly completed or (ii) a telegram, telex, facsimile transmission or a letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States setting forth the name of the holder of the Note, the principal amount of the Note, the principal amount of the Note to be repaid, the certificate number or a description of the tenor and terms of the Note, and containing a statement that the option to elect repayment is being exercised thereby and a guarantee that the Note to be repaid with the form entitled 'Option to Elect Repayment' on the reverse of the Note duly completed will be received by the Trustee not later than three Business Days after the date of such telegram, telex, facsimile transmission or letter and such Note and form duly completed are received by the Trustee by such third Business Day. A repayment option may be exercised by the holder of a Note for less than the entire principal amount of the Note, provided that the principal amount of the Note remaining outstanding after repayment is an authorized denomination. BOOK-ENTRY SYSTEM Upon issuance, all Book-Entry Notes having the same Issue Date, maturity date, redemption or repayment provisions, interest payment dates and, in the case of Fixed Rate Notes, interest rate and amortization schedule or, in the case of Floating Rate Notes, Base Rate, Initial Interest Rate, Interest Payment Dates, Index Maturity, Interest Reset Dates, Spread or Spread Multiplier, if any, Minimum Interest Rate, if any, and Maximum Interest Rate, if any, will be represented by a single global security (a 'Global Security'). Each Global Security representing Book-Entry Notes will be deposited with, or on behalf of, the Depositary and registered in the name of a nominee of the Depositary. Except under circumstances described below, Book-Entry Notes will not be exchangeable for Certificated Notes and will not otherwise be issuable in definitive form. The Depositary has advised the Company that it is a limited-purpose trust company organized under the New York Banking Law, a 'banking organization' within the meaning of the New York Banking Law, a member of the Federal Reserve System, a 'clearing corporation' within the meaning of the New York Uniform Commercial Code, and a 'clearing agency' registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. The Depositary holds securities that its participants ('Participants') deposit with the Depositary. The Depositary also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities. Direct Participants ('Direct Participants') include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. The Depositary is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Security Dealers (the 'NASD'). Access to the Depositary's system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly. The rules applicable to the Depositary and its Participants are on file with the Securities and Exchange Commission. Upon the issuance of a Global Security, the Depositary will credit on its book-entry registration and transfer system its Participants' accounts with their respective principal amounts of the Notes represented by such Global Security. Such accounts shall be designated by the Agent with respect to such Notes or by the Company if such Notes are offered and sold directly by the Company. Ownership of beneficial interests in a Global Security will be limited to Participants or persons that hold interests through Participants. Ownership of beneficial interests in such Global Security will be shown on, and S-14 the transfer of that ownership will be effected only through, records maintained by the Depositary or its nominee (with respect to interests of Participants) and on the records of Participants (with respect to interests of persons other than Participants). The laws of some states may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and laws may impair the ability of a purchaser of an interest in a Book-Entry Note to transfer such interest. So long as the Depositary or its nominee is the registered owner of such Global Security, the Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Global Security for all purposes under the Indenture. Except as provided below or as the Company may otherwise agree in its sole discretion, owners of beneficial interests in a Global Security will not be entitled to have Notes represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of Notes in definitive form and will not be considered the owners or holders thereof under the Indenture. Principal, premium, if any, and interest payments on Notes registered in the name of the Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner of the Global Security representing such Notes. None of the Company, the Trustee, any paying agent or the registrar for such Notes will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in such Global Security for such Notes or for maintaining, supervising or reviewing any records relating to such beneficial interests. The Company expects that the Depositary for the Notes or its nominee, upon receipt of any payment of principal, premium or interest, will credit immediately Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Security for such Notes as shown on the records of the Depositary or its nominee. The Company also expects that payments by Participants to owners of beneficial interest in such Global Security held through such Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in 'street name' (i.e., the name of a securities broker or dealer), and will be the responsibility of such Participants. If the Depositary is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the Company within 90 days, the Company will issue Notes in definitive form in exchange for the entire Global Security representing such Notes. In addition, the Company may at any time and in its sole discretion determine not to have the Notes represented by Global Securities and, in such event, will issue Notes in definitive form in exchange for the Global Securities representing such Notes. In any such instance, an owner of a beneficial interest in a Global Security will be entitled to physical delivery in definitive form of Notes represented by such Global Security equal in principal amount to such beneficial interest and to have such Notes registered in its name. Notes so issued in definitive form will be issued as registered Notes in denominations that are integral multiples of $1,000 (or of 1,000 units of the applicable Specified Currency, as the case may be), unless otherwise specified by the Company. DESCRIPTION OF GUARANTEE Newcourt will unconditionally guarantee the due and punctual payment of the principal, premium, if any, and interest on the Notes when and as the same shall become due and payable, whether at maturity, upon redemption, or otherwise. The Guarantee will rank equally with all other unsecured and unsubordinated obligations of Newcourt. The right of Newcourt and, hence, the right of creditors of Newcourt (including the holders of the Notes, as beneficiaries of the Guarantee) to participate in any distribution of the assets of any subsidiary of Newcourt, whether upon liquidation, reorganization, or otherwise, is subject to prior claims of creditors of each such subsidiary, except to the extent that claims of Newcourt itself as a creditor of a subsidiary may be allowed. S-15 FOREIGN CURRENCY AND INDEXED NOTE RISKS FOREIGN CURRENCY RISKS GENERAL. An investment in Notes that are denominated in a Specified Currency other than United States dollars entails significant risks that are not associated with a similar investment in a security denominated in United States dollars. Such risks include, without limitation, the possibility of significant changes in rates of exchange between the United States dollar and the various foreign currencies and the possibility of the imposition or modification of foreign exchange controls by either the United States or foreign governments. Such risks generally depend on economic and political events over which the Company has no control. In recent years, rates of exchange between United States dollars and certain foreign currencies have been highly volatile and such volatility may be expected to continue in the future. Fluctuations in any particular exchange rate that have occurred in the past are not necessarily indicative, however, of fluctuations in such rate that may occur during the term of any Note. Depreciation of the currency specified in a Note against the United States dollar would result in a decrease in the effective yield of such Note below its coupon rate, and under certain circumstances could result in a loss to the investor on a United States dollar basis. THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN NOTES DENOMINATED IN A FOREIGN CURRENCY OR A CURRENCY UNIT AND THE COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE PURCHASERS OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN NOTES DENOMINATED IN SPECIFIED CURRENCIES OTHER THAN UNITED STATES DOLLARS. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS. Notes denominated in foreign currencies other than Euros will generally not be sold in, or to residents of, the country of the Specified Currency in which such Notes are denominated. The information set forth in this Prospectus Supplement is directed to prospective purchasers who are United States residents, and the Company disclaims any responsibility to advise prospective purchasers who are residents of countries other than the United States with respect to any matters that may affect the purchase, holding or receipt of payments of principal of and premium and interest, if any, on the Notes. Such persons should consult their own counsel or financial advisers with regard to such matters. GOVERNING LAW AND JUDGMENTS. The Notes will be governed by and construed in accordance with the laws of the State of New York. In the event an action based on Notes denominated in a Specified Currency other than United States dollars were commenced in a New York court, such court would render or enter a judgment or decree in the Specified Currency. Such judgment would then be converted into United States dollars at the rate of exchange prevailing on the date of entry of the judgment or decree. The Indenture provides that the rate of exchange to be used in determining any such judgment shall be the rate at which, in accordance with normal banking procedures, the Trustee could purchase such Specified Currency in The City of New York on the day on which final judgment is entered, unless such day is not a New York Banking Day (as defined in the Indenture) in which case on the New York Banking Day preceding the day on which final judgment is entered. EXCHANGE CONTROLS AND AVAILABILITY OF SPECIFIED CURRENCY. Governments have imposed from time to time, and may in the future impose, exchange controls which could affect exchange rates as well as the availability of a Specified Currency at the time of payment of principal of, premium, if any, or interest on a Note. In the case of any Note issued in a Specified Currency that is not currently subject to exchange controls, there can be no assurance that the absence of exchange controls will continue to exist. Even if there are no actual exchange controls, it is possible that the Specified Currency for any particular Note would not be available at such Note's maturity. In that event, the Company would make required payments in United States dollars on the basis of the Market Exchange Rate on the date of S-16 such payment, or if such rate of exchange is not then available, on the basis of the Market Exchange Rate as of the most recent Record Date. See 'Description of Medium-Term Notes, Series F -- Payment Currency'. Information concerning exchange rates for the Specified Currency, if other than United States dollars, in which principal of, premium, if any, and interest on the Notes is payable, as against the United States dollar at selected times during the last five years, as well as any exchange controls affecting such currencies, will be set forth in the applicable Pricing Supplement. INDEXED NOTE RISKS An investment in Notes indexed, as to principal or interest or both, to one or more values of currencies (including exchange rates between currencies), commodities or interest rate indices entails significant risks that are not associated with similar investments in a conventional debt security. If the interest rate of such a Note is so indexed, it may result in an interest rate that is less than that payable on a conventional debt security issued at the same time, including the possibility that no interest will be paid, and, if the principal amount of such a Note is so indexed, the principal amount payable at maturity may be less than the original purchase price of such Note if allowed pursuant to the terms of such Note, including the possibility that no principal will be paid. The secondary market for such Notes will be affected by a number of factors, independent of the creditworthiness of the Company and the value of the applicable currency, commodity or interest rate index, including the volatility of the applicable currency, commodity or interest rate index, the time remaining to the maturity of such Notes, the amount outstanding of such Notes and market interest rates. The value of the applicable currency, commodity or interest rate index depends on a number of interrelated factors, including economic, financial and political events, over which the Company has no control. Additionally, if the formula used to determine the principal amount or interest payable with respect to such Notes contains a multiple or leverage factor, the effect of any change in the applicable currency, commodity or interest rate index may be increased. The historical experience of the relevant currencies, commodities or interest rate indices should not be taken as an indication of future performance of such currencies, commodities or interest rate indices during the term of any Note. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN INDEXED NOTES AND THE SUITABILITY OF SUCH NOTES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES. MATERIAL FEDERAL INCOME TAX CONSEQUENCES The following summary of the material United States federal income tax consequences of the purchase, ownership and disposition of Notes constitutes the opinion of Sidley & Austin, special tax counsel to the Company. This summary is based on the Internal Revenue Code of 1986, as amended to the date hereof (the 'Code'), administrative pronouncements, judicial decisions and existing and proposed Treasury Regulations, including final Treasury Regulations concerning the treatment of debt instruments issued with original issue discount (the 'OID Regulations'), changes to any of which subsequent to the date of this Prospectus Supplement may affect the tax consequences described herein. These statements address only the tax consequences to persons holding Notes as capital assets and do not address the tax consequences of holding Notes to dealers in securities or currencies, persons holding Notes as a part of a 'hedging transaction' within the meaning of Treasury Regulations, or as a hedge against, or that are hedged against, currency risks, certain financial institutions, insurance companies, or United States Holders (as defined below) whose 'functional currency', as defined in section 985 of the Code, is not the U.S. dollar. Any special rules applicable to Floating Rate Notes, to the extent not discussed in this summary, will be set forth in an applicable Pricing Supplement, if appropriate. This summary does not discuss Original Issue Discount Notes which qualify as 'applicable high-yield discount obligations' under section 163(i) of the Code. Holders of such obligations may be subject to special rules which will be set forth in an applicable Pricing Supplement, if appropriate. Persons considering the purchase of Notes should consult their own tax advisors concerning the application of United States federal income tax laws, as well as the laws of any state, local or foreign jurisdictions, to their particular situations. S-17 UNITED STATES HOLDERS As used herein, a 'United States Holder' means a beneficial owner of a Note who or which is, for United States federal income tax purposes, either (i) a citizen or resident of the United States, (ii) a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof or (iii) an estate the income of which is subject to United States federal income taxation regardless of its source or (iv) any trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more United States fiduciaries have the authority to control all substantial decisions of the trust. The term also includes certain holders who are former citizens of the United States whose income and gain from the Notes are subject to United States taxation. The term 'non-United States Holder' means a holder that is not a United States Holder. PAYMENTS OF INTEREST. Interest on a Note (whether paid in a foreign currency or in United States dollars) will generally be taxable to a United States Holder as ordinary interest income at the time it accrues or is received in accordance with the United States Holder's method of accounting for United States federal income tax purposes. Special rules governing the treatment of interest received or accrued with respect to certain Floating Rate Notes, Foreign Currency Notes (as defined below) and Contingent Notes are described under 'Original Issue Discount Notes', 'Foreign Currency Notes' and 'Contingent Payment Notes', respectively, below. SALE, EXCHANGE OR RETIREMENT OF THE NOTES. Upon the sale, exchange or retirement of a Note, a United States Holder will recognize taxable gain or loss equal to the difference between the amount realized on the sale, exchange or retirement (not including any amount attributable to accrued but unpaid interest) and such Holder's adjusted tax basis in the Note. A United States Holder's adjusted tax basis in a Note will equal the cost of the Note to such Holder, increased by any amounts of market discount and original issue discount (each as defined below), if any, previously includible in taxable income by such Holder with respect to such Note and reduced by any amortized bond premium and any principal payments received by such Holder and, in the case of an Original Issue Discount Note, by the amounts of any other payments that do not constitute qualified stated interest (as defined below). Any gain or loss recognized upon the sale, exchange or retirement of a Note will generally be capital gain or loss, except that any such gain will be treated as ordinary income to the extent that such gain represents accrued market discount not previously included in the United States Holder's income or, in the case of a short-term Original Issue Discount Note (as defined below), to the extent of the ratable share of any original issue discount and except to the extent of any exchange gain or loss with respect to Foreign Currency Notes (see 'Foreign Currency Notes' below). In addition, under Treasury Regulations relating to contingent payment debt instruments discussed below under 'Contingent Payment Notes', gain recognized upon the sale, exchange or retirement of certain Notes that provide for contingent payments is interest income and any loss is an ordinary loss to the extent the United States Holder's total interest inclusions exceed the total net negative adjustments with respect to the Notes. Under current law, the excess of net long-term capital gains over net short-term capital losses is taxed at a lower rate than ordinary income for certain non-corporate taxpayers. The distinction between capital gain or loss and ordinary income or loss is also relevant for purposes of, among other things, the limitations on the deductibility of capital losses. MARKET DISCOUNT AND PREMIUM. If a United States Holder acquires a Note having a maturity date of more than one year from the date of its issuance and has a tax basis in the Note that is, in the case of a Note other than an Original Issue Discount Note, less than its 'stated redemption price at maturity' (as defined below), or, in the case of an Original Issue Discount Note, less than its 'revised issue price', the amount of the difference will be treated as 'market discount' for United States federal income tax purposes, unless such difference is less than a specified de minimis amount. Under the market discount rules of the Code, a United States Holder is required to treat any principal payment (or, in the case of an Original Issue Discount Note, any payment that does not constitute a payment of qualified stated interest) on, or any gain on the sale, exchange, retirement or other disposition of, a Note as ordinary income to the extent of the market discount that has not previously been included in income and is treated as having accrued on such Note at the time of such payment or disposition. If such Note is S-18 disposed of in certain otherwise nontaxable transactions, accrued market discount will be includible as ordinary income to the United States Holder as if such Holder had sold the Note at its then fair market value. A United States Holder may not be allowed to deduct immediately a portion of the interest expense on any indebtedness incurred or continued to purchase or to carry such Note. Any market discount will be considered to accrue on a straight-line basis during the period from the date of acquisition to the maturity date of the Note, unless the United States Holder makes an irrevocable election to compute the accrual on a constant yield basis. A United States Holder may elect to include market discount in income currently as it accrues (on either a straight-line or a constant yield basis), in which case the interest deferral rule set forth in the last sentence of the preceding paragraph will not apply. Such an election will apply to all bonds acquired by the United States Holder on or after the first day of the first taxable year to which such election applies, and may not be revoked without the consent of the Internal Revenue Service. In lieu of the foregoing rules, different rules apply in the case of Notes that provide for contingent payments where a United States Holder's tax basis in such a Note is less than the Note's adjusted issue price (determined under special rules set out in Treasury Regulations relating to contingent payment debt instruments). Accordingly, prospective purchases of Notes that provide for contingent payments should consult with their tax advisors with respect to the application of such rules to such Notes. If a United States Holder acquires a Note for an amount that is greater than its stated redemption price at maturity, the United States Holder will be considered to have purchased such Note at a premium and may elect to amortize such premium, using a constant yield method, over the remaining term of the Note. If such Note is callable prior to its maturity date, the amortizable bond premium is determined with reference to the amount payable on the call date, if it results in a smaller amortizable bond premium deduction. A United States Holder that elects to amortize bond premium must reduce its tax basis in the Note by the amount of the premium amortized in any year. An election to amortize bond premium applies to all taxable debt obligations then owned and thereafter acquired by the United States Holder and may be revoked only with the consent of the Internal Revenue Service. Bond premium on a Note held by a United States Holder that does not make such an election will decrease the gain or increase the loss otherwise recognized on disposition of a Note. On December 31, 1997, the Internal Revenue Service published final regulations on the amortization of bond premium. The final regulations describe the constant yield method under which such premium is amortized and provide that the resulting offset to interest income can be taken into account only as a United States Holder takes the corresponding interest income into account under such Holder's regular accounting method. In the case of instruments that may be redeemed at the option of the Company or repaid at the option of the United States Holder prior to maturity, such regulations provide that the premium is calculated by assuming that the Company will exercise or not exercise its redemption rights in the manner that maximizes the United States Holder's yield and the United States Holder will exercise or not exercise its repayment option in a manner that maximizes the United States Holder's yield. Such regulations are generally effective for debt instruments acquired on or after March 2, 1998. In lieu of the foregoing rules, different rules apply in the case of Notes that provide for contingent payments where a United States Holder's tax basis in such Note is greater than the Note's adjusted issue price (determined under special rules set out in the Treasury Regulations relating to contingent payment debt instruments). Accordingly, prospective purchasers of Notes that provide for contingent payments should consult with their tax advisors with respect to the applications of such rules to such Notes. A United States Holder that purchases an Original Issue Discount Note for an amount that is greater than its adjusted issue price but less than or equal to its stated redemption price at maturity will be considered to have purchased such Note at an 'acquisition premium'. Rules applicable to such a Holder are set forth under 'Original Issue Discount Notes' below. S-19 ORIGINAL ISSUE DISCOUNT NOTES The following discussion is a summary of the principal United States federal income tax consequences to United States Holders of the ownership of Notes issued at an original issue discount for United States federal income tax purposes ('Original Issue Discount Notes'). The principal United States federal income tax consequences to non-United States Holders of the ownership of Original Issue Discount Notes are described under 'Non-United States Holders' below. Additional rules applicable to Original Issue Discount Notes that are denominated in a currency other than the U.S. dollar are described under 'Foreign Currency Notes' below. Under the Code and the OID Regulations, a Note whose 'issue price' is less than its 'stated redemption price at maturity' will generally be considered to have been issued at an original issue discount for United States federal income tax purposes. United States Holders of Original Issue Discount Notes that mature more than one year from the date of issuance generally will be required to include original issue discount in gross income for United States federal income tax purposes as it accrues, in accordance with a constant yield method based on a compounding of interest, in advance of receipt of the cash payments attributable to such income. However, if the difference between a Note's stated redemption price at maturity and its issue price is less than 1/4 of 1 percent of the stated redemption price at maturity multiplied by the number of complete years to maturity (or, in the case of a Note providing for payments prior to maturity other than payments of 'qualified stated interest', the weighted average maturity), the Note will not be considered to have original issue discount. United States Holders of Notes with a de minimis amount of original issue discount will be required to include such original issue discount in income, as capital gain, on a pro rata basis as principal payments are made on the Notes. Notwithstanding the foregoing, United States Holders may elect to include in gross income all interest that accrues on the Notes, including any stated interest, acquisition discount, original issue discount, market discount, de minimis original issue discount, de minimis market discount and unstated interest (as adjusted by amortizable premium and acquisition premium), by using the constant yield method described below with respect to original issue discount. The 'issue price' of a Note will equal the initial offering price to the public (not including bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Notes is sold. A Note's 'stated redemption price at maturity' is, generally, the principal amount payable at maturity plus any additional amounts payable under the debt instrument that do not constitute 'qualified stated interest'. 'Qualified stated interest' is defined to include stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually during the entire term of the Note at a single fixed rate. Interest is payable at a single fixed rate only if the rate takes into account the length of the interval between payments. If a Floating Rate Note constitutes a 'variable rate debt instrument', qualified stated interest also includes stated interest that is payable in cash or property (other than debt instruments of the issuer) at least annually during the entire term of the Note at a single 'qualified floating rate' or a single 'objective rate' (each as defined below). In order to qualify as a 'variable rate debt instrument', a Floating Rate Note must not provide for any stated interest other than stated interest, compounded or paid annually, at (i) one or more qualified floating rates, (ii) a single fixed rate and one or more qualified floating rates, (iii) a single objective rate or (iv) a single fixed rate and a single objective rate that is a 'qualified inverse floating rate' (as defined below). In each case, a qualified floating rate or objective rate in effect at any time during the term of the Note must be set at a 'current value' of that rate, which means the value of the rate on any day during the 15-month period beginning three months before, and ending one year after, the first day on which the value is in effect. In addition, the issue price of a variable rate debt instrument must not exceed the total noncontingent principal payments by more than a specified amount. Subject to certain exceptions, a variable rate of interest is a 'qualified floating rate' if variations in the value of the rate can reasonably be expected to measure contemporaneous fluctuations in the cost of newly borrowed funds in the currency in which the Note is denominated. A variable rate will be considered a qualified floating rate if the variable rate equals (i) the product of an otherwise qualified floating rate and a fixed multiple (i.e., a Spread Multiplier) that is greater than .65 but not more than S-20 1.35 or (ii) an otherwise qualified floating rate (or the product described in clause (i) of this sentence) plus or minus a fixed rate (i.e., a Spread). If the variable rate equals the product of an otherwise qualified floating rate and a single fixed multiplier greater than 1.35, however, such rate will generally constitute an objective rate, described more fully below. A variable rate will not be considered a qualified floating rate if the variable rate is subject to a maximum interest rate (a 'cap'), minimum interest rate (a 'floor') or 'governor' (i.e., a restriction on the amount of increase or decrease in the stated interest rate) or similar restriction that is reasonably expected as of the issue date to cause the yield on the Note to be significantly more or less than the expected yield determined without the restriction (other than a cap, floor or governor that is fixed throughout the term of the Note). An 'objective rate' is defined as a rate (other than a qualified floating rate) that is determined using a single fixed formula and that is based on objective financial or economic information that is not within the control of the issuer (or related party) or that is unique to the circumstances of the issuer (or related party). A variable rate of interest on a Note will not be considered an objective rate if it is reasonably expected that the average value of the rate during the first half of the Note's term will be either significantly less than or significantly greater than the average value of the rate during the final half of the Note's term. A rate is a 'qualified inverse floating rate' only if (i) the rate is equal to a fixed rate minus a qualified floating rate and (ii) variations in the rate can reasonably be expected inversely to reflect contemporaneous variations in the cost of newly-borrowed funds. Under these rules, interest paid on Commercial Paper Rate Notes, Federal Funds Rate Notes, CD Rate Notes, LIBOR Notes, Treasury Rate Notes, Prime Rate Notes, CMT Rate Notes, other than certain Notes subject to caps, floors or governors described above, will generally be treated as 'qualified stated interest'. If interest on a Note is stated at a fixed rate for an initial period of one year or less followed by a variable rate that is either a qualified floating rate or an objective rate for a subsequent period, and the value of the variable rate on the issue date is intended to approximate the fixed rate, the fixed rate and the variable rate together constitute a single qualified floating rate or objective rate. If a Note provides for (i) more than one qualified floating rate, (ii) a single fixed rate and one or more qualified floating rates or (iii) in certain cases a single fixed rate and a single objective rate, then all or a portion of the Note's stated interest may be treated as qualified stated interest. However, in certain instances a portion of that Note's stated interest will not be so treated, but instead will be included in the Note's stated redemption price at maturity. As a result, such Notes may be treated as being issued with original issue discount. The Company does not currently expect to issue Notes with the terms described in the first sentence of this paragraph. In the event such Notes are issued, the tax consequences to purchasers thereof will be discussed in the applicable Pricing Supplement. United States Holders of Original Issue Discount Notes will be required to include any payments of qualified stated interest in income at the time they are accrued or received, in accordance with the Holder's method of accounting for federal income tax purposes. The amount of original issue discount includible in income during a taxable year by a United States Holder of an Original Issue Discount Note that matures more than one year from its date of issuance will equal the sum of the daily portions of the original issue discount with respect to the Original Issue Discount Note for each day during the taxable year on which such Holder held the Original Issue Discount Note. The daily portion of the original issue discount on any Original Issue Discount Note is determined by allocating to each day in any 'accrual period' a ratable portion of the original issue discount allocable to such accrual period. A United States Holder of a Note may use accrual periods that are of any length and that vary in length over the term of the debt instrument provided that each accrual period is no longer than one year and that each scheduled payment of principal or interest occurs either on the final day of an accrual period or on the first day of an accrual period. The Company will specify the accrual period it intends to use with respect to Original Issue Discount Notes in the applicable Pricing Supplement. The original issue discount allocable to any accrual period is equal to the excess (if any) of (a) the product of the Original Issue Discount Note's 'adjusted issue price' at the beginning of such accrual period and its yield to maturity (determined on the basis of compounding at the close of each accrual period and adjusted for the length of the accrual period) over (b) the sum of all qualified stated interest, if any, payable on such Original Issue Discount Note during such accrual period or allocable to such accrual period. The S-21 'adjusted issue price' of an Original Issue Discount Note at the beginning of the first accrual period is its issue price, and the 'adjusted issue price' at the beginning of a subsequent accrual period is the issue price increased by the amount of original issue discount includible in the gross income of any holder (without reduction for any amortized acquisition premium) with respect to the Original Issue Discount Note for all prior accrual periods, and decreased by the amount of any payment previously made on such Note other than a payment of qualified stated interest. Under these rules, United States Holders of Original Issue Discount Notes generally will be required to include in income increasingly greater amounts of original issue discount in successive accrual periods. A subsequent purchaser of an Original Issue Discount Note that purchases the Note at a cost lower than the remaining stated redemption price at maturity but greater than its adjusted issue price (i.e., at an 'acquisition premium') will also be required to include in gross income the sum of the daily portions of original issue discount on that Original Issue Discount Note. In computing the daily portions of original issue discount with respect to an Original Issue Discount Note for such a purchaser, however, the daily portion for any day is reduced by the amount that would be the daily portion for such day (computed in accordance with the rules set forth above) multiplied by a fraction, the numerator of which is the amount, if any, by which the price paid by the United States Holder for that Note exceeds the adjusted issue price and the denominator of which is the sum of the daily portions for that Note for all days beginning on the date after the purchase date and ending on the stated maturity date. In the case of an Original Issue Discount Note that matures one year or less from the date of its issuance (a 'short-term Original Issue Discount Note'), United States Holders that report income for United States federal income tax purposes on the accrual method and certain other United States Holders, including banks and dealers in securities, are required to include original issue discount on such short-term Original Issue Discount Notes on a straight-line basis, unless an election is made to accrue the original issue discount according to a constant yield method based on daily compounding. Any other United States Holder of a short-term Original Issue Discount Note is not required to accrue original issue discount for United States federal income tax purposes, unless it elects to do so. In the case of a United States Holder that is not required, and does not elect, to include original issue discount in income currently, any gain realized on the sale, exchange or retirement of the short-term Original Issue Discount Note will be ordinary income to the extent of the original issue discount accrued on a straight-line basis (or, if elected, according to a constant yield method based on daily compounding) through the date of sale, exchange or retirement. In addition, such non-electing United States Holders that are not subject to the current inclusion requirement described in the first sentence of this paragraph will be required to defer deductions for any interest paid on indebtedness incurred or continued to purchase or carry short-term Original Issue Discount Notes in an amount not exceeding the deferred interest income, until such deferred interest income is realized. The OID Regulations contain certain language (the 'aggregation rules') stating in general that, with some exceptions, if more than one type of Note is issued in connection with the same transaction or related transactions, such Notes may be treated together as a single debt instrument with a single issue price, maturity date, yield to maturity and stated redemption price at maturity for purposes of calculating and accruing any original issue discount. Unless otherwise provided in the applicable Pricing Supplement, the Company does not expect to treat different types of Notes as being subject to the aggregation rules for purposes of computing original issue discount. NOTES SUBJECT TO CONTINGENCIES INCLUDING OPTIONAL REDEMPTION If a Note provides for an alternative payment schedule or schedules applicable upon the occurrence of a contingency or contingencies (other than a remote or incidental contingency), whether such contingency relates to payments of interest or of principal, if the timing and amount of the payments that comprise each payment schedule are known as of the issue date and if one of such schedules is significantly more likely than not to occur, the yield and maturity of the Note are determined by assuming that the payments will be made according to that payment schedule. If there is no single payment schedule that is significantly more likely than not to occur (other than because of a mandatory sinking fund), the Note will be subject to the general rules that govern contingent payment debt instruments described below under 'Contingent Payment Notes'. S-22 Notwithstanding the general rules for determining yield and maturity in the case of a Note subject to contingencies, if the Company or the United States Holder has an unconditional option or options that, if exercised, would require payments to be made on the Note under an alternative payment schedule or schedules, then (i) in the case of an option or options of the Company, the Company will be deemed to exercise or not exercise an option or combination of options in the manner that minimizes the yield on the Note and (ii) in the case of an option or options of the United States Holder, the United States Holder will be deemed to exercise or not exercise an option or combination of options in the manner that maximizes the yield on the Note. If both the Company and the United States Holder have options described in the preceding sentence, those rules apply to such options in the order in which they may be exercised. For purposes of those calculations, the yield on the Note is determined by using any date on which the Note may be redeemed or repurchased as the maturity date and the amount payable on such date in accordance with the terms of the Note as the principal amount payable at maturity. If a contingency (including the exercise of an option) actually occurs or does not occur contrary to an assumption made according to the above rules (a 'change in circumstances') then, except to the extent that a portion of the Note is repaid as a result of the change in circumstances and solely for the purposes of determining the amount and accrual of original issue discount, the yield and maturity of the Note are redetermined by treating the Note as having been retired and reissued on the date of the change in circumstances for an amount equal to the Note's adjusted issue price on that date. FOREIGN CURRENCY NOTES The following discussion summarizes the principal United States federal income tax consequences to a United States Holder of the ownership and disposition of Notes, payments under which are denominated in or determined by reference to the value of one or more currency units other than the U.S. dollar (a 'Foreign Currency Note'). The following summary is based upon the final Treasury Regulations issued under section 988 of the Code (the 'Section 988 Regulations') and upon Treasury Regulations proposed on March 17, 1992 (the 'Proposed Amendment to the Section 988 Regulations'). INTEREST INCLUDIBLE IN INCOME UPON RECEIPT. An interest payment on a Foreign Currency Note that is not required to be included in income by the United States Holder prior to receipt of such payment will be includible in income by the United States Holder based on the U.S. dollar value of the foreign currency payment determined on the date such payment is received, regardless of whether the payment is in fact converted to U.S. dollars at that time. Such U.S. dollar value will be the United States Holder's tax basis in the foreign currency received. INTEREST INCLUDIBLE IN INCOME PRIOR TO RECEIPT. In the case of interest income on a Foreign Currency Note that is required to be included in income by the United States Holder prior to receipt of payment, a United States Holder will be required to include in income the U.S. dollar value of the amount of interest income that has accrued and is otherwise required to be taken into account with respect to a Foreign Currency Note during an accrual period. Unless the United States Holder makes the election discussed in the next paragraph, the U.S. dollar value of such accrued income will be determined by translating such income at the average rate of exchange for the accrual period or, with respect to an accrual period that spans two taxable years, at the average rate for the partial period within the taxable year. The average rate of exchange for the accrual period (or partial period) is the simple average of the exchange rates for each business day of such period (or other method if such method is reasonably derived and consistently applied). Such United States Holder will recognize, as ordinary gain or loss, foreign currency exchange gain or loss with respect to accrued interest income on the date such income is actually received, reflecting fluctuations in currency exchange rates between the last day of the relevant accrual period and the date of payment. The amount of gain or loss recognized will equal the difference between the U.S. dollar value of the foreign currency payment received in respect of such accrual period determined based on the exchange rate on the date such payment is received and the U.S. dollar value of interest income that has accrued during such accrual period (as determined above). S-23 Under the so-called 'spot rate convention election', a United States Holder may, in lieu of applying the rules described in the preceding paragraph, elect to translate accrued interest income into U.S. dollars at the exchange rate in effect on the last day of the relevant accrual period for the original issue discount, market discount or accrued interest, or in the case of an accrual period that spans two taxable years, at the exchange rate in effect on the last day of the taxable year. Additionally, if a payment of such income is actually received within five business days of the last day of the accrual period or taxable year, an electing United States Holder may instead translate such income into U.S. dollars at the exchange rate in effect on the day of actual receipt. Any such election will apply to all debt instruments held by the United States Holder at the beginning of the first taxable year to which the election applies or thereafter acquired by the United States Holder, and will be irrevocable without the consent of the Internal Revenue Service. PURCHASE, SALE, EXCHANGE OR RETIREMENT. A United States Holder's tax basis in a Foreign Currency Note, and the amount of any subsequent adjustment to such Holder's tax basis, will be the U.S. dollar value of the foreign currency amount paid for such Foreign Currency Note, or of the foreign currency amount of the adjustment, determined on the date of such purchase or adjustment or, in the case of an adjustment resulting from accrual of original issue discount or market discount, at the rate at which such original issue discount or market discount is translated into U.S. dollars under the rules described above. A United States Holder that converts U.S. dollars to a foreign currency and immediately uses that currency to purchase a Foreign Currency Note denominated in the same currency normally will not recognize gain or loss in connection with such conversion and purchase. However, a United States Holder that purchases a Foreign Currency Note with previously owned foreign currency will recognize ordinary income or loss in an amount equal to the difference, if any, between such United States Holder's tax basis in the foreign currency and the U.S. dollar market value of the Foreign Currency Note on the date of purchase. For purposes of determining the amount of any gain or loss recognized by a United States Holder on the sale, exchange or retirement of a Foreign Currency Note, the amount realized upon such sale, exchange or retirement generally will be the U.S. dollar value of the foreign currency received, determined on the date of disposition in the case of an accrual basis United States Holder and on the date payment is received in the case of a cash basis United States Holder. The portion of any gain or loss realized upon the sale, exchange or retirement of a Foreign Currency Note that is attributable to fluctuations in currency exchange rates will be ordinary income or loss. Such portion will equal the difference between (i) the U.S. dollar value of the foreign currency principal amount of such Foreign Currency Note determined on the date such Note is disposed of and (ii) the U.S. dollar value of the foreign currency principal amount of such Note determined at the exchange rate on the date such United States Holder acquired such Note. Any portion of the proceeds of such sale, exchange or retirement attributable to accrued interest will result in exchange gain or loss under the rules set forth above pertaining to payments of interest income. The foreign currency principal amount of a Foreign Currency Note generally equals, in the case of the original purchaser, the issue price in foreign currency of such Note, and in the case of a subsequent purchaser, the holder's purchase price in foreign currency. Such foreign currency gain or loss will be recognized only to the extent of the total gain or loss realized by a United States Holder on the sale, exchange or retirement of the Foreign Currency Note. Any gain or loss recognized by such a United States Holder in excess of such foreign currency gain or loss will be capital gain or loss (except to the extent of any accrued market discount or, in the case of a short-term Original Issue Discount Note, any accrued original issue discount). A United States Holder will have a tax basis in any foreign currency received on the sale, exchange or retirement of a Note equal to the U.S. dollar value of such foreign currency. Any gain or loss realized by a United States Holder on a sale or other disposition of foreign currency (including its exchange for U.S. dollars or its use to purchase Foreign Currency Notes) will be ordinary income or loss. OTHER MATTERS. Any gain or loss that is treated as ordinary income or loss, as described above, generally will not be treated as interest income or expense except to the extent provided in the Section 988 Regulations or by administrative pronouncements of the Internal Revenue Service. S-24 Market discount, acquisition premium and amortizable bond premium of a Foreign Currency Note are determined in the relevant foreign currency. The amount of such market discount or acquisition premium that is included in (or reduces) income currently is determined for any accrual period in the relevant foreign currency and then translated into U.S. dollars on the basis of the average exchange rate in effect during such accrual period or with reference to the spot rate convention election as described above. Exchange gain or loss realized with respect to such accrued market discount or acquisition premium is determined and recognized in accordance with the rules relating to accrued interest described above. The amount of accrued market discount (other than the market discount that is included in income currently) taken into account upon the receipt of any partial principal payment or upon the sale, exchange, retirement or other disposition of a Foreign Currency Note is the U.S. dollar value of such accrued market discount, determined on the date of receipt of such partial principal payment or upon the sale, exchange, retirement or other disposition, and no portion thereof is treated as exchange gain or loss. Exchange gain or loss with respect to amortizable bond premium is determined by treating the portion of premium amortized with respect to any period as a return of principal. With respect to a United States Holder of a Foreign Currency Note that does not elect to amortize premium under section 171 of the Code, the amount of premium, if any, is treated as a capital loss when such Note matures. CONTINGENT PAYMENT NOTES If a Note (i) provides for contingent payments of either interest or principal, (ii) does not qualify as a variable rate debt instrument, (iii) is not a Note subject to section 988 of the Code, (iv) is not eligible to have its yield and maturity determined in the manner described above under 'Original Issue Discount Notes' and 'Notes Subject to Contingencies Including Optional Redemption' and (v) has a maturity at issue or more than one year (a 'Contingent Note'), the Contingent Note will generally be subject to special rules, set forth in Treasury Regulations, governing contingent payment debt instruments. The general tax treatment of Contingent Notes is as follows. First, the Company is required to determine, as of the issue date, the comparable yield for the Contingent Note. The comparable yield is generally the yield at which the Company would issue a fixed rate debt instrument with terms and conditions similar to those of the Contingent Note (including the level or subordination, term, timing of payments and general market conditions, but not taking into consideration the riskiness of the contingencies or the liquidity of the Contingent Note), but not less than the applicable federal rate announced monthly by the Internal Revenue Service (the 'AFR'). In certain cases where Contingent Notes are marketed or sold in substantial part to tax-exempt investors or other investors for whom the prescribed inclusion of interest is not expected to have a substantial effect on their United States tax liability, the comparable yield for the Contingent Note, without proper evidence to the contrary, is presumed to be the AFR. Second, solely for tax purposes, the Company constructs a projected schedule of payments determined under the OID Regulations for the Contingent Note (the 'Schedule'). The Schedule is determined as of the issue date and generally remains in place throughout the term of the Contingent Note. If a right to a contingent payment is based on market information, the amount of the projected payment is the forward price of the contingent payment. If a contingent payment is not based on market information, the amount of the projected payment is the expected value of the contingent payment as of the issue date. The Schedule must produce the comparable yield determined as set forth above. Otherwise, the Schedule must be adjusted under the rules set forth in the OID Regulations. Third, under the usual rules applicable to original issue discount and based on the Schedule, the interest income on the Contingent Note for each accrual period is determined by multiplying the comparable yield of the Contingent Note (adjusted for the length of the accrual period) by the Contingent Note's adjusted issue price at the beginning of the accrual period (determined under rules set forth in the OID Regulations). The amount so determined is then allocated on a ratable basis to each day in the accrual period that the United States Holder held the Contingent Note. Fourth, appropriate adjustments are made to the interest income determined under the foregoing rules to account for any differences between the Schedule and actual contingent payments. Under the S-25 rules set forth in the OID Regulations, differences between the actual amounts of any contingent payments made in a calendar year and the projected amounts of such payments are generally aggregated and taken into account, in the case of a positive difference, as additional interest income, or, in the case of a negative difference, first as a reduction in interest income for such year and thereafter, subject to certain limitations, as ordinary loss. The Company is required to provide each United States Holder of a Contingent Note with the Schedule described above. If the Company does not create a Schedule or the Schedule is unreasonable, a United States Holder must set its own projected payment schedule and explicitly disclose the use of such schedule and the reason therefor. Unless otherwise prescribed by the Internal Revenue Service, the United States Holder must make such disclosure on a statement attached to the United States Holder's timely filed federal income tax return for the taxable year in which the Contingent Note was acquired. In general, any gain realized by a United States Holder on the sale, exchange, redemption, or retirement of a Contingent Note is interest income. In general, any loss on a Contingent Note accounted for under the method described above is ordinary loss to the extent it does not exceed such Holder's prior interest inclusions on the Contingent Note (net of negative adjustments). Special rules apply in determining the tax basis of a Contingent Note and the amount realized on the retirement of a Contingent Note. In the case of certain Contingent Notes, it is possible, depending on the terms of the Contingent Note, that such Note might not be treated as a debt instrument for federal income tax purposes but rather as a cash settlement option, a forward contract or in some other fashion. If such Notes are offered, the applicable Pricing Supplement will discuss the likely federal income tax treatment. NON-UNITED STATES HOLDERS On October 14, 1997, final Treasury Regulations were issued which affect the United States taxation of non-United States Holders. The final regulations are effective for payments after December 31, 1998, regardless of the issue date of the Note with respect to which such payments are made, subject to certain transition rules. The discussion under this heading and under ' -- Backup Withholding and Information Reporting,' below, is not intended to be a complete discussion of the provisions of such regulations, and prospective purchasers of Notes are urged to consult their tax advisors with respect to the effect of such regulations. Under United States federal income tax law now in effect, and subject to the discussion of backup withholding in the following section, payments of principal and interest (including original issue discount) and premium by the Company or any paying agent to any non-United States Holder of a Note will not be subject to United States federal withholding tax, provided, in the case of interest, that (i) such Holder does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (ii) such Holder is not for United States federal income tax purposes a controlled foreign corporation related to the Company through stock ownership, (iii) such Holder is not a bank receiving interest described in section 881(c)(3)(A) of the Code, and (iv) either (A) the beneficial owner of the Note certifies, under penalties of perjury, to the Company or paying agent, as the case may be, that such Holder is a non-United States Holder and provides such Holder's name and address, and U.S. taxpayer identification number, if any, or (B) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a 'financial institution') and holds the Note, certifies, under penalties of perjury, to the Company or paying agent, as the case may be, that such certificate has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy thereof. A certificate described in this paragraph is effective only with respect to payments of interest (including original issue discount) made to the certifying non-United States Holder after the issuance of the certificate in the calendar year of its issuance and the two immediately succeeding calendar years. The final regulations provide optional documentation procedures designed to simplify compliance by withholding agents. Such regulations would not affect documentation rules described in the S-26 preceding paragraph, but would add 'intermediary certification' options for certain qualifying withholding agents. Under one such option, a withholding agent would be allowed to rely on Internal Revenue Service Form W-8 furnished by a financial institution or other intermediary on behalf of one or more beneficial owners (or other intermediaries) without having to obtain the beneficial owner certificate described in the preceding paragraph, provided that the financial institution or intermediary has entered into a withholding agreement with the Internal Revenue Service and thus is a 'qualified intermediary.' Under another option, an authorized foreign agent of a U.S. withholding agent would be permitted to act on behalf of the U.S. withholding agent, provided certain conditions are met. For purposes of establishing entitlement to the withholding exemption described above, the final regulations treat as the beneficial owners of payments on a Note those persons that, under United States tax principles, are the taxpayers with respect to such payments. Thus, for example, the partners of a foreign partnership, rather than the partnership itself, would be required to provide the required certifications to qualify for such withholding exemption. For purposes of determining entitlement to the benefits of an income tax treaty, however, the tax principles in effect under the laws of the relevant foreign jurisdiction would control in identifying the beneficial owners of payments on the Notes, and therefore the persons entitled to claim treaty benefits and required to provide the relevant certifications. Notwithstanding the foregoing, interest described in section 871(h)(4) of the Code will be subject to United States federal withholding tax at a 30% rate (or such lower rate provided by an applicable treaty). In general, interest described in section 871(h)(4) of the Code includes (subject to certain exceptions) any interest the amount of which is determined by reference to receipts, sales or other cash flow of the Company or related person, any income or profits of the Company or a related person, any change in the value of any property of the Company or related person or any dividend, partnership distributions or similar payment made by the Company or related person. Interest described in section 871(h)(4) of the Code may include other types of contingent interest identified by the Internal Revenue Service in future Treasury Regulations. The Company does not currently expect to issue Notes the interest on which is described in section 871(h)(4) of the Code, and the United States federal withholding tax consequences of any such Notes issued by the Company will be described in the applicable Pricing Supplement. If a non-United States Holder is engaged in a trade or business in the United States and interest (including original issue discount) on the Note is effectively connected with the conduct of such trade or business, the non-United States Holder, although exempt from the withholding tax discussed in the preceding paragraphs, will be subject to United States federal income tax on such interest and original issue discount in the same manner as if it were a United States Holder. See 'United States Holders' and 'Original Issue Discount Notes' above. In lieu of the certificate described above, such a Holder will be required to provide to the Company a properly executed Internal Revenue Service Form 4224 in order to claim an exemption from withholding tax. In addition, if such a Holder is a foreign corporation, it may be subject to a branch profits tax equal to 30% (or such lower rate provided by an applicable treaty) of its effectively connected earnings and profits for the taxable year, subject to adjustments. For this purpose, interest (including original issue discount) on a Note will be included in such effectively connected earnings and profits if such interest and original issue discount are effectively connected with the conduct by the non-United States Holder of a trade or business in the United States. Generally, any gain or income realized upon the sale, exchange, retirement or other disposition of a Note will not be subject to United States federal withholding or income tax unless (i) such gain or income is effectively connected with a trade or business in the United States of the non-United States Holder or (ii) in the case of a non-United States Holder who is an individual, the non-United States Holder is present in the United States for 183 days or more in the taxable year of such sale, retirement or other disposition and either (a) such individual has a 'tax home' (as defined in section 911(d)(3) of the Code) in the United States or (b) the gain is attributable to an office or other fixed place of business maintained by such individual in the United States. A Note held by an individual who is a non-United States Holder at the time of death will not be subject to United States federal estate tax on the Note if (i) such Holder does not own, actually or constructively, 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (ii) at the time of such individual's death, the interest payments with respect to the S-27 Notes would not have been effectively connected with a United States trade or business of such Holder and (iii) no portion of the value of the Note held by such estate is attributable to interest described in section 871(h)(4) of the Code (as described above). BACKUP WITHHOLDING AND INFORMATION REPORTING Under current United States federal income tax law, information reporting requirements apply to interest and principal payments made to, and to the proceeds of sales before maturity by, non-corporate United States Holders. In addition, a 31% backup withholding tax will apply if the non-corporate United States Holder (i) fails to furnish its Taxpayer Identification Number ('TIN'), which, for an individual, would be its Social Security Number, (ii) furnishes an incorrect TIN, (iii) is notified by the Internal Revenue Service that it has failed properly to report payments of interest and dividends or (iv) in certain circumstances, fails to certify, under penalties of perjury, that it has furnished a correct TIN and has not been notified by the Internal Revenue Service that it is subject to backup withholding for failure to report interest and dividend payments. Backup withholding will not apply with respect to payments made to certain exempt recipients, such as corporations and tax-exempt organizations. In the case of a non-United States Holder, under current Treasury Regulations, backup withholding and information reporting will not apply to payments of principal and interest made by the Company or any paying agent thereof on a Note with respect to which such Holder has provided the required certification under penalties of perjury of its non-United States Holder status or has otherwise established an exemption, provided that the Company or paying agent, as the case may be, does not have actual knowledge that the payee is a United States person (as defined in section 7701(a)(30) of the Code). In addition, if principal or interest payments are collected outside the United States by a foreign office of a custodian, nominee or other agent acting on behalf of a beneficial owner of a Note, such custodian, nominee or other agent will not be required to apply backup withholding to such payments made to such beneficial owner and will not be subject to information reporting. However, if such custodian, nominee or other agent is a United States person, a controlled foreign corporation for United States tax purposes, or a foreign person 50% or more of whose gross income is effectively connected with its conduct of a United States trade or business for a specified three-year period, such custodian, nominee or other agent may be subject to certain information reporting requirements with respect to such payments unless it has in its records documentary evidence that the beneficial owner is not a United States person and certain conditions are met or the beneficial owner otherwise establishes an exemption. Under applicable Treasury Regulations, payments on the sale, exchange or retirement of a Note to or through a foreign office of a broker will not be subject to backup withholding. However, if such broker is a United States person, a controlled foreign corporation for United States tax purposes, or a foreign person 50% or more of whose gross income is effectively connected with its conduct of a United States trade or business for a specified three-year period, information reporting will be required unless the broker has in its records documentary evidence that the beneficial owner is not a United States person and certain other conditions are met or the beneficial owner otherwise establishes an exemption. Payments to or through the United States office of a broker will be subject to backup withholding and information reporting unless the holder certifies under penalties of perjury that it is not a United States person or otherwise establishes an exemption. Furthermore, the final regulations require backup withholding with respect to the payments described in this paragraph in the event that the custodian, nominee, agent or broker has actual knowledge that the beneficial owner is a United States person. Any amounts withheld from a payment to a holder under the backup withholding rules will be allowed as a refund or a credit against such holder's United States federal income tax, provided that the required information is furnished to the Internal Revenue Service. Holders should consult their tax advisors regarding the application of information reporting and backup withholding to their particular situations, the availability of an exemption therefrom, and the procedure for obtaining such an exemption, if available. S-28 PLAN OF DISTRIBUTION Unless otherwise provided in the applicable Pricing Supplement, the Notes are being offered on a continual basis by the Company through Agents, who have agreed to use their reasonable best efforts to solicit purchases of the Notes. The Company will pay an Agent a commission, in the form of a discount ranging from .050% to .750% of the principal amount of the Note sold through it as agent, depending upon maturity of the Note, except that the commission payable by the Company to the Agents with respect to Notes with maturities of greater than thirty years will be negotiated at the time the Company issues such Notes. The Company also may sell the Notes to any Agent, acting as principal, or to a group of underwriters for whom one or more Agents are acting as representatives, at a discount to be agreed upon at the time of sale (or if no compensation is indicated therein, in accordance with the agreed schedule of commissions as set forth on the cover of this Prospectus Supplement), for resale to investors or dealers at varying prices related to prevailing market prices at the time of resale, to be determined by the Agents or, if so agreed, at a fixed public offering price. The Agent, acting as principal, may sell Notes it has purchased from the Company to other dealers for resale to investors and other purchasers, and may allow any portion of the discount received in connection with such purchase from the Company to such dealers. After the initial public offering of Notes, the public offering price (in the case of Notes to be resold at a fixed public offering price), the concession and the discount may be changed. In addition, the Company may arrange for the Notes to be sold through other agents, dealers or underwriters or may sell the Notes directly to investors on its own behalf in those jurisdictions where it is authorized to do so. In the case of sales made directly by the Company, no commission will be payable. The Company will have the sole right to accept offers to purchase Notes and may reject any proposed purchase of Notes in whole or in part. The Agents will have the right, in their reasonable discretion, to reject any offer to purchase Notes received by them in whole or in part. The Company has agreed to indemnify the Agents against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the Agents may be required to make in respect thereof. The Agents may be deemed to be 'underwriters' within the meaning of the Securities Act. The Company may offer an additional series of medium-term notes of the Company outside the United States to prospective non-United States Holders. Such other series of medium-term notes may have terms substantially similar to the terms of the Notes offered hereby (but will constitute a separate series for purposes of the Indenture), and will be offered in bearer form only. Such other series of medium-term notes will reduce correspondingly the principal amount of Notes which may be offered by this Prospectus Supplement and the Prospectus. In addition, the amount of Notes which may be offered will be reduced by the aggregate principal amount of any other securities and the purchase price of any warrants issued by the Company inside or outside the United States under the Registration Statement. Each of the Agents may from time to time purchase and sell Notes in the secondary market, but is not obligated to do so, and there can be no assurance that there will be a secondary market for the Notes or liquidity in the secondary market if one develops. From time to time, each of the Agents may make a market in the Notes. S-29 SUBJECT TO COMPLETION DATED APRIL 28, 1998 PRELIMINARY PROSPECTUS $5,000,000,000 [LOGO] DEBT SECURITIES, DEBT WARRANTS, CURRENCY WARRANTS, INDEX WARRANTS, AND INTEREST RATE WARRANTS ------------------------ AT&T Capital Corporation ('AT&T Capital' or the 'Company'), an indirect wholly-owned subsidiary of Newcourt Credit Group Inc. ('Newcourt'), directly, through agents designated from time to time, or through dealers or underwriters also to be designated, may offer and sell from time to time, one or more series of (i) debt securities (the 'Debt Securities') of the Company, (ii) warrants to purchase Debt Securities (the 'Debt Warrants'), (iii) warrants entitling the holders thereof to receive from the Company, upon exercise, an amount in cash equal to the cash value of the right to purchase (the 'Currency Call Warrants') or to sell (the 'Currency Put Warrants' and, together with the Currency Call Warrants, the 'Currency Warrants') a certain amount of one currency or currency unit for a certain amount of a different currency or currency unit, all as shall be designated by the Company at the time of offering, (iv) warrants entitling the holders thereof to receive from the Company, upon exercise, an amount in cash determined by reference to decreases (the 'Index Put Warrants') or increases (the 'Index Call Warrants') in the level of a specified index (an 'Index') which may be based on one or more U.S. or foreign stocks, bonds or other securities, one or more U.S. or foreign interest rates, one or more currencies or currency units, or any combination of the foregoing, or determined by reference to the differential between any two Indices (the 'Index Spread Warrants' and, together with the Index Put Warrants and the Index Call Warrants, the 'Index Warrants') or (v) warrants entitling the holders thereof to receive from the Company, upon exercise, an amount in cash determined by reference to decreases (the 'Interest Rate Put Warrants') or increases (the 'Interest Rate Call Warrants' and, together with the Interest Rate Put Warrants, the 'Interest Rate Warrants' and, together with the Index Warrants, the Currency Warrants and the Debt Warrants, the 'Warrants') in the yield or closing price of one or more specified debt instruments issued either by the United States government or by a foreign government (the 'Sovereign Debt Instrument'), in the interest rate or interest rate swap rate established from time to time by one or more specified financial institutions (the 'Rate') or in any specified combination of Sovereign Debt Instruments and/or Rates, for an aggregate offering price of up to $5,000,000,000, or the equivalent thereof in one or more foreign currencies or currency units (such amount being the aggregate proceeds to the Company from all Debt Securities, Debt Warrants, Currency Warrants, Index Warrants and Interest Rate Warrants (collectively, the 'Securities') issued and the aggregate exercise price of any Debt Securities issuable upon the exercise of any Debt Warrants). Securities may be offered either together or separately and in one or more series or amounts, at prices and on terms to be determined at the time of sale. The Securities will receive the benefit of an irrevocable unconditional Newcourt guarantee. See 'The Company -- Relationship with Newcourt.' If this Prospectus is being delivered in connection with the offering and sale of Debt Securities, the specific designation, aggregate principal amount, the currency or currency unit for which the Debt Securities may be purchased and in which the principal and interest, if any, is payable, the rate (or method of calculation) and time of payment of interest, if any, authorized denominations, maturity, any redemption terms, and any other terms in connection with such offering and sale are set forth in the accompanying Prospectus Supplement and pricing supplement (together, the 'Prospectus Supplement'). If this Prospectus is being delivered in connection with the offering and sale of Warrants, the specific designation and aggregate number thereof, the currency or currency unit for which the Warrants may be purchased and/or in which the cash settlement value or the exercise price, if applicable, is payable, the method of calculation of the cash settlement value, if applicable, the date on which such Warrants become exercisable and the expiration date, provisions, if any, for the automatic exercise and/or cancellation prior to the expiration date, and any other terms in connection with such offering and sale will be set forth in the Prospectus Supplement. The Company reserves the sole right to accept and, together with its agents from time to time, to reject in whole or in part any proposed purchase of Securities to be made directly or through agents. The Debt Securities and Debt Warrants may be issued in registered or bearer form (in the case of Debt Securities, with or without interest coupons) or both or, in the case of Debt Securities, in uncertificated form. The Currency Warrants, Index Warrants and Interest Rate Warrants will be issued in registered form only. In addition, all or a portion of the Securities of a series may be issued in temporary or permanent global form. Debt Securities in bearer form will be offered only outside the United States to non-United States persons and to offices located outside the United States of certain United States institutions. See 'Description of the Debt Securities -- Limitations on Issuance of Bearer Debt Securities.' The initial public offering price, the agent, dealer or underwriter, if any, in connection with the offering and sale of the Securities, a discussion of certain federal income taxation consequences to holders of Securities and, if applicable, a discussion of certain risks associated with an investment in Securities will be set forth in the Prospectus Supplement. THE SECURITIES ARE NOT GUARANTEED OR SUPPORTED IN ANY WAY BY AT&T CORP. ('AT&T'). ------------------------ SEE RISK FACTORS ON PAGE 3 FOR CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE SECURITIES. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ If an agent of the Company or a dealer or an underwriter is involved in the sale of the Securities in respect of which this Prospectus is being delivered, the agent's commission or dealer's or underwriter's discount is set forth in, or may be calculated from, the Prospectus Supplement, and the net proceeds to the Company from such sale will be the purchase price of such Securities less such commission in the case of an agent, the purchase price of such Securities less such discount in the case of a dealer or the public offering price less such discount in the case of an underwriter, and less, in each case, the other attributable issuance expenses. The aggregate proceeds to the Company from all the Securities will be the purchase price of the Securities sold, less the aggregate of agents' commissions and dealers' and underwriters' discounts and other expenses of issuance and distribution. The net proceeds to the Company from the sale of Securities offered pursuant to a particular Prospectus Supplement are also set forth in such Prospectus Supplement. See 'Plan of Distribution' for possible indemnification arrangements for the agents, dealers and underwriters. ------------------------ May , 1998 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY AGENT, DEALER OR UNDERWRITER. THIS PROSPECTUS AND PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH THEY RELATE. ------------------------ THE GUARANTOR IS A CANADIAN ISSUER THAT IS PERMITTED, UNDER A MULTIJURISDICTIONAL DISCLOSURE SYSTEM ADOPTED BY THE UNITED STATES, TO PREPARE THIS PROSPECTUS INSOFAR AS IT RELATES TO THE GUARANTOR AND THE GUARANTEE IN ACCORDANCE WITH THE DISCLOSURE REQUIREMENTS OF ITS HOME JURISDICTION. PROSPECTIVE INVESTORS SHOULD BE AWARE THAT SUCH REQUIREMENTS ARE DIFFERENT FROM THOSE OF THE UNITED STATES. THE FINANCIAL STATEMENTS OF THE GUARANTOR INCLUDED OR INCORPORATED BY REFERENCE HEREIN, HAVE BEEN PREPARED IN ACCORDANCE WITH CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, AND ARE SUBJECT TO CANADIAN AUDITING AND AUDITOR INDEPENDENCE STANDARDS, AND SUCH FINANCIAL STATEMENTS MAY NOT BE COMPARABLE TO FINANCIAL STATEMENTS OF UNITED STATES COMPANIES. THE ENFORCEMENT BY INVESTORS OF CIVIL LIABILITIES UNDER THE FEDERAL SECURITIES LAWS MAY BE AFFECTED ADVERSELY BY THE FACT THAT THE GUARANTOR IS INCORPORATED AND ORGANIZED UNDER THE LAWS OF THE PROVINCE OF ONTARIO, THAT SOME OR ALL OF ITS OFFICERS AND DIRECTORS MAY BE RESIDENTS OF CANADA, THAT SOME OR ALL OF THE EXPERTS NAMED IN THE REGISTRATION STATEMENT MAY BE RESIDENTS OF CANADA AND THAT A SUBSTANTIAL PORTION OF THE ASSETS OF THE GUARANTOR AND SAID PERSONS MAY BE LOCATED OUTSIDE THE UNITED STATES. AVAILABLE INFORMATION The Company has filed with the Securities and Exchange Commission (the 'Commission') a Registration Statement on Form S-3, pursuant to the Securities Act of 1933, as amended (the 'Securities Act'), and the rules and regulations promulgated thereunder, with respect to the Securities offered hereby. Newcourt has filed with the Commission a Registration Statement on Form F-9 pursuant to the Securities Act and the rules and regulations promulgated thereunder with respect to the Guarantee of the Securities offered hereby. The term 'Registration Statement' means the combined Registration Statement of the Company on Form S-3 and the Registration Statement of Newcourt on Form F-9 and includes all amendments, exhibits and schedules thereto. This Prospectus, which constitutes a part of the Registration Statement, does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission, and to which reference is hereby made. The Company is subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance therewith files periodic reports and other information with the Commission. The Registration Statement, as well as such reports and other information filed by the Company with the Commission, may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at 7 World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission maintains a Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The address of such Web site is http://www.sec.gov. Statements made in this Prospectus concerning the provisions of any contract, agreement or other document referred to herein are not necessarily complete. With respect to each such statement concerning a contract, agreement or other document filed as an exhibit to the Registration Statement or otherwise filed with the Commission, reference is made to such exhibit or other filing for a more complete description of the matter involved, and each such statement is qualified in its entirety by such reference. 2 INCORPORATION OF DOCUMENTS BY REFERENCE The following documents have been filed by the Company (File No. 001-11237) with the Commission and are incorporated by reference in the Prospectus that constitutes a part of the Registration Statement on Form S-3: (1) The Company's Annual Report on Form 10-K for the year ended December 31, 1997; and (2) The Company's Current Reports on Form 8-K dated March 9, 1998, March 4, 1998, February 20, 1998, February 9, 1998, January 12, 1998, January 5, 1998, November 19, 1997, May 30, 1997, May 12, 1997 and February 12, 1997, respectively and the Company's Current Reports on Form 8-K/A dated March 17, 1998 (amending the Report on Form 8-K dated January 12, 1998), February 18, 1998 (amending the Report on Form 8-K dated February 9, 1998) and February 11, 1998 (amending the Report on Form 8-K dated November 19, 1997). The following documents have been filed by Newcourt (File No. 001-14604) with the Commission and are incorporated by reference in the Prospectus that constitutes a part of the Registration Statement on Form F-9: (1) the Renewal Annual Information Form of Newcourt dated May 2, 1997 on Form 40-F; (2) the audited comparative consolidated financial statements of Newcourt and the auditors' report there on for the fiscal year ended December 31, 1997 on Form 6-K; and (3) the Management Information Circular of Newcourt dated February 4, 1998, except the sections entitled 'Compensation and Conduct Review Committee', 'Report on Executive Compensation', 'Corporate Governance' and the 'Share Performance Graph' on Form 6-K. All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Securities shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein or in the accompanying Prospectus Supplement modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. COPIES OF THE ABOVE DOCUMENTS OF THE COMPANY MAY BE OBTAINED UPON REQUEST WITHOUT CHARGE FROM AT&T CAPITAL CORPORATION, 44 WHIPPANY ROAD, MORRISTOWN, NJ 07962-1983 (TELEPHONE NUMBER 973-397-3000), ATTENTION: TREASURY DEPARTMENT; COPIES OF THE ABOVE DOCUMENTS OF NEWCOURT MAY BE OBTAINED UPON REQUEST WITHOUT CHARGE FROM NEWCOURT CREDIT GROUP INC., BCE PLACE, 181 BAY STREET, SUITE 3500, P.O. BOX 827, TORONTO, ONTARIO, CANADA M5J2T3 (TELEPHONE NUMBER 416-777-6066), ATTENTION: COMMUNICATIONS DEPARTMENT. RISK FACTORS The following risk factors in addition to the other information included in this Prospectus should be given careful consideration. To the extent any of the information constitutes a 'forward-looking statement' for purposes of Section 21E(i) of the Exchange Act or Section 27A(i) of the Securities Act, the risk factors set forth below are meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated in the forward looking statements, and no assurance can be given that actual results will not in fact differ materially. RISKS RELATED TO PLANS INVOLVING NEWCOURT Integration of Business. Both the Company and Newcourt have completed a number of acquisitions during the past five years. Integration of these two businesses will require a significant amount of management's time. Diversion of management attention from the Company's existing business could have a material adverse impact on the revenues and operating results of the Company. Guarantee of Certain Newcourt Debt. In connection with the Newcourt Acquisition (as defined below), on February 20, 1998 the Company entered into an agreement pursuant to which the Company 3 will guarantee (the 'Company Guarantee') the payment of certain indebtedness and liquidity facilities issued, guaranteed or entered into by Newcourt (as amended, supplemented, restated or replaced, collectively, the 'Newcourt Debt Securities') for the timely benefit of the holders of the Newcourt Debt Securities (collectively, the 'Newcourt Noteholders'). A copy of the Company Guarantee is filed as Exhibit 10 to the Company's Current Report on Form 8-K dated February 20, 1998 filed on March 12, 1998. Because the Company Guarantee is anticipated to cover future indebtedness under various documents evidencing or relating to the Newcourt Debt Securities, as well as amendments, supplements, restatements or replacements of or to the Newcourt Debt Securities, the aggregate outstanding principal amount of the Newcourt Debt Securities to be covered by the Company Guarantee is expected to increase in the future. The Company's obligations under the Company Guarantee represent an irrevocable and unconditional guarantee of the due and punctual payment to the Newcourt Noteholders, on demand, whether at stated maturity or otherwise, of all debts, liabilities and obligations of Newcourt under the Newcourt Debt Securities, including present and future, direct and indirect, absolute and contingent and matured and unmatured debts, liabilities and obligations. The liability of the Company under the Company Guarantee is anticipated to be unlimited as to amount and to be absolute and unconditional irrespective of any conditions or circumstances that might otherwise constitute a defense available to the Company or Newcourt, including any defense based on the lack of validity or the unenforceability of the Newcourt Debt Securities or any defense or counterclaim available to Newcourt. Sensitivity to Ratings on Debt. As a result of the consummation of the Newcourt Acquisition, each of the four statistical rating organizations that have been rating the Company's securities maintained or upgraded their respective ratings on the Company's short-term and (where applicable) long-term senior unsecured debt. No assurance can be given that any or all of such rating organizations will not at any future time or from time to time establish different ratings on the Company's senior unsecured short-term or long-term debt. To the extent that any of such rating organizations assigns a lower rating than the existing ratings, such downgrading would result in relatively higher borrowing costs for the Company, reduce its access to its traditional funding sources and reduce its competitiveness, particularly if any such assigned rating is in a generic rating category that signifies that the relevant debt of the Company is less than investment grade. In addition, certain ratings downgrading could result in the termination of one or more of the License Agreements with AT&T and NCR (as defined below) or the 1998 Lucent Agreement (as defined below). See ' -- Changes in Relationship with AT&T/Lucent/NCR -- Operating and Certain Other Agreements with AT&T/Lucent/NCR' below. Any such downgrading could have a material adverse effect on the Company. Liquidity and Debt Service. The Company's business requires substantial amounts of cash to support its growth and operations. The Merged Company's (as defined below) ability to obtain funds and the cost of such funds could be affected by its credit rating and restrictions contained in existing or future debt instruments and by other events beyond its control, such as interest rates, general economic conditions and the perception of its business, results of operations, leverage, financial condition and business prospects. Securitization Program. The Company's securitization transactions, structured as both private conduit programs and the sale of publicly offered securities, are an important part of the Company's financing to manage its leverage ratio and to transfer credit risk. Any delay in the securitization of finance receivables would cause leverage to fluctuate, postpone the recognition of the gain on such finance receivables and cause the Company's net income to fluctuate from period to period. CONTINUITY OF MANAGEMENT The Merged Company's success depends to a significant extent upon the continued services of its management. There is no assurance that any of Newcourt's or the Company's existing officers and key employees will remain in their current positions for any period of time following the date hereof. The unavailability of the continued services of such persons could have a material adverse effect on the Company's business. 4 CHANGES IN RELATIONSHIPS WITH AT&T/LUCENT/NCR RELIANCE ON MAJOR VENDORS. A substantial portion of the Company's net income is attributable to the financing provided by the Company to customers of AT&T Corp. ('AT&T'), Lucent Technologies Inc. ('Lucent') and NCR Corporation ('NCR') with respect to products manufactured or distributed by them ('AT&T/Lucent/NCR Products') and, to a lesser extent, to AT&T, Lucent and NCR as end-users, primarily with respect to the lease of information technology and other equipment to them as end-users and the administration and management of certain leased assets on behalf of AT&T, Lucent and NCR. The Company's commercial relationships with AT&T, Lucent and NCR are currently governed by certain agreements. Although the proportion of the Company's total revenues from sources not attributable to AT&T, Lucent and NCR has grown over the last several years, a substantial portion of the Company's net income has been generated by the Company's relationship with AT&T, Lucent and NCR. A significant decrease in the portion of the sales of the AT&T/Lucent/NCR Products that are financed by the Company, or in the absolute amount of AT&T, Lucent and/or NCR product sales (in either case, particularly with respect to Lucent), or in the amount of transactions effected by the Company with AT&T, Lucent and/or NCR as end-user (particularly with respect to AT&T) would have a material adverse effect on the Company's results of operations and financial condition. Operating and Certain Other Agreements with AT&T/Lucent/NCR. The initial terms of each of the Operating Agreements (see 'The Company -- Relationship with AT&T/Lucent/NCR') (pursuant to which, among other things, the Company serves as preferred provider of financing services and has certain related and other rights and privileges in connection with the financing of equipment of the customers of AT&T and NCR) will expire on August 4, 2000, but will be automatically renewed for successive two-year periods unless either party thereto gives the other a non-renewal notice at least one year prior to the end of the initial or renewal term. Neither AT&T nor NCR is required to renew the term of its Operating Agreement beyond the expiration of the current term on August 4, 2000. On March 9, 1998, Newcourt signed a new five-year agreement with Lucent (the '1998 Lucent Agreement') which expands the global financing program established to serve Lucent's business systems customers. The term of the 1998 Lucent Agreement is from October 1, 1997 through September 30, 2002. The 1998 Lucent Agreement replaces the Lucent Operating Agreement (as defined below) and the letter agreements between the Company and Lucent, the initial terms of which were scheduled to expire on August 4, 2000. See 'The Company -- Relationship with AT&T/Lucent/NCR' below. In addition to the extended term of the 1998 Lucent Agreement, other changes from the previous Lucent Operating Agreement include Newcourt being the preferred provider of financing services for a greater portion of Lucent's equipment and related product sales, a change in the methodology in calculating the amount required to be paid to Lucent (based upon specific financial, service and performance levels tied to compensation) which is expected to result in an increase in such amount, and a single point of contact for customers. The 1998 Lucent Agreement also includes certain early termination provisions and a buy-out option that could have a material impact on the Company's future operations, if exercised. Lucent is not required to renew the term of the 1998 Lucent Agreement beyond the current term. In the event of either (a) an early termination or buy-out or (b) a non-renewal of the 1998 Lucent Agreement by Lucent, Newcourt will have an extended wind-down period with cost recovery. The impact of the 1998 Lucent Agreement on the Company's future net income is at this time unknown. While there is a possibility that the Company's future net income from Lucent transactions may increase as a result of an anticipated increase in financing volume arising from Newcourt being the preferred provider of financing services for a greater portion of Lucent's equipment and related product sales, there also is a possibility that the Company's future net income from Lucent transactions may decrease as a result of the increased amounts due to Lucent under the 1998 Lucent Agreement. Although the Company intends to seek to maintain and improve its existing relationships with Lucent, NCR and AT&T, no assurance can be given that the Operating Agreements or the 1998 Lucent Agreement, will be extended beyond their respective termination dates or, if extended, that the terms and conditions thereof will not be modified in a manner adverse to the Company. Failure to renew the Operating Agreements and the 1998 Lucent Agreement, on terms not adverse to the Company could have a material adverse effect on the Company. Moreover, in certain circumstances the Operating 5 Agreements and the 1998 Lucent Agreement may be terminated prior to their respective expiration dates. CERTAIN INCREASED COSTS AND EXPENSES As a result of the Newcourt Acquisition and the related integration plan for the Merged Company, AT&T Capital's net income will be adversely impacted over the next eighteen months. Such integration plan is expected to result in additional costs which include, but are not limited to, severance and other employee benefit costs, systems conversions, location closures and other restructuring costs. AT&T Capital is targeting to reduce its ratio of operating expenses to owned and managed assets over the next few years. These reductions are expected to result from extensive cost savings programs and economies of scale in processing operations, administration and centralized services. While it is anticipated that these savings will be recognized, any unanticipated event in the integration of the businesses by both Newcourt and AT&T Capital may require significant management time and cause a delay in recognition of the cost savings. COMPETITION The equipment leasing and finance industry in which the Company operates is highly competitive and is undergoing a process of consolidation. As a result, certain of the Company's competitors' relative cost bases have been reduced. Participants in the industry compete through price (including the ability to control costs), risk management, innovation and customer services. Principal cost factors include the cost of funds, the cost of selling to or obtaining new end-user customers and vendors and the cost of managing portfolios. The Company's competitors include captive or related leasing companies (such as General Electric Capital Corporation and IBM Credit Corporation), independent leasing companies (such as Comdisco, Inc.), certain banks engaged in leasing, lease brokers and investment banking firms that arrange for the financing of leased equipment, and manufacturers and vendors which lease their own products to customers. In addition, the Company competes with all banking and other financial institutions, manufacturers, vendors and others who extend or arrange credit for the acquisition of equipment, and in a sense, with end-users' available cash resources to purchase equipment that the Company may otherwise finance. Many of the competitors of the Company are large companies that have substantial capital, technological and marketing resources; some of these competitors are significantly larger than the Company and have access to debt at a lower cost than the Company. In addition, the Company may not have, in the immediate future, access to sufficient U.S. Federal tax capacity to pursue efficiently U.S. tax based lease financing. CERTAIN OTHER RISKS The Company is subject to certain other risks including the risk that its allowance for credit losses may not prove adequate to cover ultimate losses and that its estimated residual values will not be realized at the end of the lease terms. There can be no assurance that such allowance will prove adequate to cover losses in connection with the Company's investment in finance receivables, capital leases and operating leases or that such residual values (which have historically been a significant element of the net income of the Company) will be realized. READINESS FOR YEAR 2000 Prior to its acquisition by Newcourt, AT&T Capital had begun addressing the Year 2000 issue, also known as the 'millennium bug'. This included inventories of most systems as well as some conversion effort on major systems. The Merged Company (as defined below) is addressing the Year 2000 issue from a global perspective. In early 1998, the Merged Company established a global Year 2000 Program Office to provide oversight from both a business and technical perspective. The program will coordinate vendors, consultants and regional Year 2000 resources. The Merged Company, including AT&T Capital, plans to convert its critical systems by the end of 1998 with conversion of remaining systems and compliance testing and certification to be completed in 1999. As part of the integration strategy, the Merged Company plans to aggressively consolidate onto a limited set of identified Year 2000 compliant systems in order to achieve operational efficiencies and to minimize the Year 2000 exposures and costs. Management does not anticipate that the total cost to the Company of these Year 2000 compliance activities will be material to its financial position or results of operations in any given year. 6 THE COMPANY GENERAL AT&T Capital Corporation ('AT&T Capital' or the 'Company') is a full-service, diversified equipment leasing and finance company that operates principally in the United States and also has operations in Europe, Canada, the Asia/Pacific region, Mexico and South America. The Company is one of the largest equipment leasing and finance companies in the United States and is the largest lessor of telecommunications equipment in the United States, in each case, based on the aggregate value of equipment leased or financed. AT&T Capital's principal executive offices are located at 44 Whippany Road, Morristown, New Jersey 07962 and its telephone number is (973) 397-3000. AT&T Capital, through its various subsidiaries, leases and finances a wide variety of equipment, including telecommunications equipment (such as private branch exchanges, telephone systems and voice processing units), information technology equipment (such as personal computers, retail point of sale systems and automated teller machines), general office, manufacturing and medical equipment ('General Equipment'), and transportation equipment. In addition, AT&T Capital provides franchise financing for franchisees and financing collateralized by real estate. At December 31, 1997, the Company's portfolio assets (investment in finance receivables, capital leases and operating leases) were comprised of, or collateralized by, General Equipment (33%), information technology equipment (22%), telecommunications equipment (22%), loans secured by real estate (12%) and transportation equipment (11%). The Company's leasing and financing services are marketed (i) to customers of equipment manufacturers, distributors and dealers with which the Company has a marketing relationship for financing services and (ii) directly to end-users of equipment. The Company's approximately 500,000 customers include large global companies, small and mid-sized businesses and federal, state and local governments and their agencies. During the period since its founding in 1985, the Company has achieved significant growth in assets, finance volume (total principal amount of loans and total cost of equipment associated with finance and lease transactions recorded by the Company and the increase, if any, in outstanding inventory financing and asset-based lending transactions), revenues and net income. At December 31, 1997, the Company's total assets were $8.8 billion, an increase of 8.4% over the prior year-end; finance volume for 1997 was $5.7 billion, an increase of 8.0% over 1996; total revenues for 1997 were $1.8 billion, a decrease of 7.1% from 1996; and net income of $21.0 million for 1997 was 87.5% less than the Company's net income for 1996. The 1997 decrease in total revenues was primarily due to lower capital lease revenue resulting from the Company's securitization program, introduced by its $3.1 billion asset securitization in October 1996, and lower securitization gains, net of service fee revenue. The 1997 decrease in net income was due to the decline in total revenues as previously discussed, higher costs due to increased leverage associated with the Company's post-1996 merger capital structure and certain restructure charges of $23.0 million, certain other severance charges of $13.9 million and a net loss on the December sales of the Company's commercial fleet automotive and inventory finance businesses and the anticipated sale of the Company's remaining U.S. consumer automotive business of $12.2 million, all on an after-tax basis. The restructure charges and net loss on sales of businesses were the result of the Company's continued objective to streamline costs, improve operating efficiencies and exit non-strategic businesses. AT&T Capital provides its financial products and services to its worldwide customers and clients through three principal market channels: Vendor Finance, Direct Customer Finance and International Finance. For the year ended December 31, 1997, the percentage of the Company's aggregate finance volume derived from the Company's Vendor Finance, Direct Customer Finance and International Finance programs was 40%, 33% and 27%, respectively. See 'The Merged Company' below. AT&T Capital seeks to implement its strategies by taking advantage of what it believes are its competitive strengths: (i) high-volume processing capabilities that enable it to serve a large number of customers in a timely and efficient manner; (ii) significant experience in structuring and managing financing programs tailored to specific customer needs; (iii) risk management skills (including initial credit review and residual value assessment and continuing portfolio management capabilities); (iv) 7 asset management skills (including equipment remarketing skills that enhance the ability of the Company to realize the residual values of its equipment); and (v) financial structuring capabilities. The Company was founded in 1985 by AT&T as a captive finance company to assist AT&T's equipment marketing and sales efforts by providing its customers with sophisticated financing. AT&T Capital has operated independently since its initial public offering in 1993 (the 'IPO'). On October 1, 1996, the Company consummated a merger (the 'Merger') with Antigua Acquisition Corporation, a Delaware corporation ('Merger Sub'), pursuant to an Agreement and Plan of Merger (the 'Merger Agreement') among AT&T, the former indirect owner of approximately 86% of the outstanding common stock of the Company, Hercules Holdings (Cayman) Limited, a Cayman Islands corporation ('Holdings'), and Merger Sub, a majority-owned subsidiary of Holdings. Pursuant to the Merger Agreement, Merger Sub was merged with and into the Company, with the Company continuing its corporate existence under Delaware law as the surviving corporation. NEWCOURT ACQUISITION On November 17, 1997, Newcourt agreed to acquire all of the issued and outstanding common shares of the Company. On January 12, 1998 the acquisition of the shares of the Company by Newcourt (the 'Newcourt Acquisition') was completed and the Company became an indirect wholly-owned subsidiary of Newcourt. The aggregate purchase price paid by Newcourt on the acquisition closing was approximately $1.6 billion (C$2.3 billion). Of this amount, approximately $1.0 billion (C$1.5 billion) was paid in cash and the remaining approximately $0.6 billion (C$0.8 billion) was satisfied by the issuance of approximately 17.6 million common shares of Newcourt to Holdings, which is indirectly owned by Nomura International plc and which owned 97.4% of the outstanding shares of the Company. Holdings has agreed, subject to certain exceptions, that such Newcourt common shares shall not be sold, transferred or otherwise disposed of for periods of six, twelve and eighteen months following the acquisition closing. THE MERGED COMPANY The resulting combination of Newcourt and the Company (the 'Merged Company') has created one of the largest providers of vendor finance in the world, and one of the world's largest non-bank commercial asset finance companies. With corporate headquarters in Toronto, Canada, the Merged Company has approximately $23.5 billion (C$33.7 billion) of owned and managed assets at December 31, 1997. In addition, the Merged Company remains well capitalized with equity of $2.7 billion (C$3.9 billion) resulting in a leverage ratio (defined as total debt to total equity plus preferred securities) of 3.2 times at December 31, 1997. The Merged Company's international origination and servicing capabilities now span 24 countries around the globe. The acquisition provides a platform that enables both Newcourt and the Company to better serve their respective manufacturing clients in Canada, the U.S. and the U.K. and creates new opportunities for serving clients in the Asia/Pacific region, Europe, Mexico and South America. The businesses of Newcourt and the Company are complementary in many respects. The Company possesses asset management and processing skills, systems capabilities, a broad range of clients, a solid credit underwriting performance and a consistent operating history. Newcourt originates asset finance business through innovative financing techniques, provides focused client services and complementary product offerings. In addition, both Newcourt and the Company have a conservative risk management culture. The Merged Company will offer its financing services to clients through three primary business units: Newcourt Financial, Newcourt Capital, and Newcourt Services. Newcourt Financial, the Merged Company's commercial finance business, will provide asset-based financing for a variety of equipment to vendors and customers. Newcourt Capital, the Merged Company's corporate finance business, will provide structured corporate finance to a growing list of international clients, including major corporations, governments and agencies. Finally, Newcourt Services, the Merged Company's control, growth and support services, will be responsible for the underwriting, funding, administration and risk management needs of Newcourt Financial and Newcourt Capital. 8 Newcourt Financial offers its lending services through select strategic relationships with equipment manufacturers, dealers and distributors and certain professional associations and organizations. Newcourt Financial's strategy focuses on the creation, maintenance and enhancement of vendor programs ensuring its position as the premier provider of global asset based financial products. Newcourt Financial focuses on the following sectors: Transportation and Industrial Finance, Technology Finance, Telecommunications Finance, Business Finance, Specialty Finance, Technology Services, International/Joint Ventures, and Operations. Newcourt Capital is the corporate finance business which provides asset based financing for high value assets and related advisory services to equipment manufacturers, corporate clients, governments and public sector agencies. Newcourt Capital focuses on the following sectors: Aerospace Finance, Rail Finance, Public Sector Finance, Project Finance, Structured Finance, Telecommunication and Media Finance, Business Finance, and Underwriting and Syndication. Newcourt Services is the service business unit responsible for providing cost effective control and support services to Newcourt Financial and Newcourt Capital. Newcourt Services consists of the following corporate functions: Treasury, Credit and Risk Management, Financial Reporting and Administration, Human Resources, Communications & Marketing, Tax Planning and Compliance, Systems Development, and Quality Assurance. A successful integration is key to the Merged Company's future performance, which makes it imperative that the Company be quickly and effectively integrated. To this end, the Merged Company has established an integration office to oversee the implementation of the merger. The integration office consists of 6 full time senior management members and 11 task forces staffed by 90 employees of the Company and Newcourt. Going forward, the Merged Company will focus a great deal of attention on the significant cost saving opportunities created by geographic and business segment synergies. The Merged Company plans to achieve substantial cost reductions through the consolidation of facilities, systems and functions in Canada, the U.S. and the U.K. The Company has provided an irrevocable unconditional guarantee of payment of certain of Newcourt's outstanding and future debt instruments as well as a subordinated guarantee of certain affiliate debentures and certain distribution, redemption and liquidation payments in connection with the issuance and sale by the Company of certain affiliate preferred securities. Likewise Newcourt will provide an irrevocable unconditional guarantee of all Securities. RELATIONSHIP WITH NEWCOURT Newcourt is an independent financial services company which originates and manages asset-based financings. Newcourt was formed in 1984 as an investment bank which originated and structured asset based financings for the corporate and institutional asset finance market and syndicated such financings to Canadian financial institutions. In 1988, Newcourt broadened its activities to include vendor and direct equipment financing. Newcourt and its subsidiaries originate their asset-based financings by providing services to specific segments of the vendor asset finance market and corporate and institutional asset finance market. Newcourt's strategy has been to sell and manage, rather than own, the majority of the finance assets it and its subsidiaries originate, thereby reducing its capital requirements. Consequently, Newcourt's consolidated revenues are generated primarily by gains and fees earned from the sale of financings it and its subsidiaries originate and by management fees earned following such sales. Newcourt's principal executive offices are located at BCE Place, 181 Bay Street, Suite 3500, P.O. Box 827, Toronto, Ontario, Canada M5J 2T3 and its telephone number is (416) 594-2400. As of December 31, 1997, on a Canadian GAAP basis, Newcourt had total assets of $4.3 billion (C$6.2 billion) compared with $1.6 billion (C$2.2 billion) as of December 31, 1996, total liabilities of $2.2 billion (C$3.1 billion) as of December 31, 1997 compared with $1.2 billion (C$1.7 billion) as of December 31, 1996, shareholders' equity of $2.1 billion (C$3.1 billion) as of December 31, 1997 compared with $0.4 billion (C$0.5 billion) as of December 31, 1996 and total revenues and net income 9 of $230.1 million (C$318.4 million) and $26.3 million (C$36.4 million), respectively for the year ended December 31, 1997 compared with $125.8 million (C$171.6 million) and $37.2 million (C$50.7 million), respectively for the year ended December 31, 1996. RELATIONSHIP WITH AT&T/LUCENT/NCR In connection with the Company's IPO in 1993, the Company entered into a series of agreements with AT&T to formalize the relationship between the two companies, including the following three significant agreements, each dated as of June 25, 1993: (i) an Operating Agreement (the 'AT&T Operating Agreement'), (ii) an Intercompany Agreement (the 'Intercompany Agreement') and (iii) a License Agreement (the 'License Agreement'). The Company executed agreements comparable to the AT&T Operating Agreement with each of Lucent Technologies, Inc. ('Lucent') and NCR Corporation ('NCR') (the 'Lucent Operating Agreement' and 'NCR Operating Agreement,' respectively, and, together with the AT&T Operating Agreement, the 'Operating Agreements'). In addition, the Company also entered into letter agreements (the 'Agreement Supplements') with Lucent and NCR pursuant to which Lucent and NCR agreed that various provisions of the Intercompany Agreement and the License Agreement would apply equally to them. The initial term of each of the Operating Agreements, the Intercompany Agreement, the License Agreement and the Agreement Supplements is scheduled to end on August 4, 2000. In addition, AT&T has the right under the License Agreement, after two years' prior notice, to require the Company to discontinue use of the 'AT&T' trade name as part of the Company's corporate or 'doing business' name. On March 9, 1998, Newcourt signed the 1998 Lucent Agreement which expands the global financing program established to serve Lucent's business systems customers. The 1998 Lucent Agreement replaces the Lucent Operating Agreement and the letter agreements previously discussed between the Company and Lucent. The 1998 Lucent Agreement covers the period from October 1, 1997 through September 30, 2002. See 'Risk Factors -- Changes in Relationship with AT&T/Lucent/NCR.' At December 31, 1997, on an owned and securitized basis, the Company's 100 largest customers (including AT&T and Lucent) accounted for approximately 18% of the Company's owned and securitized portfolio assets, and no customer (with the exception of AT&T and Lucent, in the aggregate) accounted for more than 1% of such portfolio assets. USE OF PROCEEDS The proceeds from the sale of the Securities will be used primarily to finance installment sale and lease agreements with respect to direct financing programs and to repay debt of the Company and its subsidiaries as they become due. In addition, the proceeds will be used for borrowings by affiliated entities, all of whom are within the Merged Company's consolidated group, in connection with the acquisition of equipment, repayment of debt and general corporate purposes. Ongoing purchases of finance receivables and installment sale and lease agreements, direct financing programs and any future financing arrangements will be financed from various sources, including the issuance of commercial paper and the sale of Securities. The amount and timing of the sales of the Securities will depend on the timing of asset purchases, market conditions and the availability of other funds to the Company. The debt to be repaid with the proceeds from such sales consists generally of medium-term notes and commercial paper. Such debt has various maturities and bears interest at various fixed rates. At December 31, 1997, the aggregate principal amount of the Company's outstanding medium-term notes was approximately $4.9 billion, and the Company had approximately $1.6 billion in principal amount of commercial paper outstanding at such date. The weighted average interest rate of such medium-term notes and commercial paper at December 31, 1997 was approximately 6.30% and 6.37%, respectively. The net proceeds of all the outstanding medium-term notes and commercial paper issued or incurred by the Company within the last year to be repaid with net proceeds from the sale of Securities have been used by the Company as working capital for general corporate purposes or to repay previously outstanding commercial paper or medium-term notes. 10 RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the historical ratios of earnings to fixed charges for the Company for the years ended December 31, 1993 through 1997. The table also includes such ratio calculated on a pro forma basis to give effect to the Newcourt Acquisition.
PRO FORMA(1)(2) HISTORICAL(1) ----------------------- ------------------------------------- YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, ----------------------- ------------------------------------- 1997 1997 1996 1995 1994 1993 ----------------------- ----- ----- ----- ----- ----- (UNAUDITED) (UNAUDITED) Ratio of earnings to fixed charges................ 1.03 1.07 1.60 1.50 1.62 1.57
- ------------ (1) Earnings before income taxes and cumulative effect on prior years of accounting change plus fixed charges (the sum of interest on indebtedness and the portion of rentals representative of the interest factor) divided by fixed charges. Fixed charges do not include distributions on Company-obligated preferred securities of the company's subsidiaries. See 'The Company -- General' for a discussion regarding the reduction of the Company's net income for 1997. Prior to the Merger, a portion of the Company's indebtedness to AT&T did not bear interest. (2) The pro forma data represents the Company's ratio of earnings to fixed charges as if the Newcourt Acquisition had occurred on January 1, 1997. See 'AT&T Capital Corporation and Subsidiaries and Newcourt Credit Group Inc. Unaudited Pro Forma Consolidated Financial Statements'. 11 DESCRIPTION OF THE DEBT SECURITIES The Debt Securities are to be issued under the Indenture dated as of April 1, 1998, as amended (the 'Indenture'), between the Company and The Chase Manhattan Bank, as Trustee (the 'Trustee'). A copy of the Indenture is filed as an exhibit to the Registration Statement. The following summaries of certain provisions of the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Indenture, including the definitions therein of certain terms. Section references are to sections of the Indenture, and wherever particular provisions are referred to, such provisions are incorporated by reference as part of the statement made, and the statement is qualified in its entirety by such reference. The Debt Securities are not guaranteed or supported in any way by AT&T. GENERAL The Indenture does not limit the aggregate principal amount of Debt Securities that may be issued thereunder and provides that the Debt Securities may be issued from time to time in one or more series. Reference is made to the Prospectus Supplement which accompanies this Prospectus for a description of the Debt Securities being offered thereby including: (1) the title of the series of the Debt Securities; (2) the aggregate principal amount of such Debt Securities; (3) the percentage of their principal amount at which such Debt Securities will be sold; (4) the date(s) on which such Debt Securities will mature, or whether such securities are payable on demand; (5) the rate(s) per annum at which such Debt Securities will bear interest, if any, or the method of calculating such rate or rates of interest; (6) the times at which such interest, if any, will be payable; (7) the terms for redemption, early repayment or amortization, if any; (8) the denominations in which such Debt Securities are authorized to be issued; (9) the coin or currency in which the Debt Securities are denominated, which may be a Euro; (10) any provision permitting payments of the principal of or any premium or interest on the Debt Securities in a coin or currency other than the currency in which the Debt Securities are denominated, including a non-U.S. dollar denominated currency; (11) the manner in which the amount of payments of principal of and any premium or interest on the Debt Securities is to be determined if such determination is to be made with reference to one or more indices (which will be based on one or more U.S. or foreign stocks, bonds or other securities, one or more U.S. or foreign interest rates, one or more currencies or currency units, one or more commodities, or one or more equipment leases, third-party loans, tax receipts, real property values, SWAP receivables, reinsurance contracts, pooled receivables, or any combination of the foregoing); (12) whether such Debt Securities are issuable in registered form ('registered Debt Securities') or bearer form (with or without interest coupons) ('bearer Debt Securities') or both, and whether such Debt Securities shall be uncertificated; (13) whether any series of Debt Securities will be represented by one or more temporary or permanent global Debt Securities ('global Debt Securities') and, if so, whether any such global Debt Securities will be in registered or bearer form, the identity of the depositary for such global Debt Security or Securities and the method of transferring beneficial interests in such global Debt Security or Securities; (14) if a temporary global Debt Security is to be issued with respect to a series, the terms upon which interests in such temporary global Debt Security may be exchanged for interests in a permanent global Debt Security or for definitive Debt Securities of the series and the terms upon 12 which interest in a permanent global Debt Security, if any, may be exchanged for definitive Debt Securities of the series; (15) information with respect to book-entry procedures, if any; (16) whether and under what circumstances the Company will pay additional amounts on any Debt Securities held by a person who is not a U.S. person in respect of taxes or similar charges withheld and, if so, whether the Company will have the option to redeem such Debt Securities rather than pay such additional amounts; and (17) any other terms, including any terms which may be required by or advisable under United States laws and regulations or advisable in connection with the marketing of the Debt Securities of such series, which will not be inconsistent with the provisions of the Indenture. Debt Securities of any series may be registered Debt Securities or bearer Debt Securities or both as specified in the terms of the series. Additionally, Debt Securities of any series may be represented by one or more global Debt Securities registered in the name of a depositary's nominee and, if so represented, beneficial interests in such a global Debt Security will be shown on, and transfers thereof will be effected only through, records maintained by a designated depositary and its participants. Debt Securities of any series may also be uncertificated. Unless otherwise indicated in the Prospectus Supplement, no bearer Debt Securities (including Debt Securities in permanent global bearer form) will be offered, sold, resold or delivered to any United States person (as defined under 'Limitations on Issuance of Bearer Debt Securities' below) in connection with their original issuance or their exchange for a portion of a temporary or permanent global Debt Security. Unless otherwise indicated in the Prospectus Supplement, principal and interest, if any, will be payable at the office of one or more paying agents as specified in the Prospectus Supplement; provided that, in the case of registered Debt Securities, payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as it appears in the register of the Debt Securities. To the extent set forth in the Prospectus Supplement, except in special circumstances set forth in the Indenture, interest, if any, on bearer Debt Securities will be payable only against presentation and surrender of the coupons for the interest installments evidenced thereby as they mature at the office of a paying agent of the Company located outside of the United States and its possessions. The Company will maintain one or more such agents for a period of two years after the principal of such bearer Debt Securities has become due and payable. During any period thereafter for which it is necessary in order to conform to United States tax laws or regulations, the Company will maintain a paying agent outside of the United States and its possessions to which the bearer Debt Securities and coupons related thereto may be presented for payment and will provide the necessary funds therefor to such paying agent upon reasonable notice. No payment with respect to any bearer Debt Security will be made at any office or agency of the Company in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States. Notwithstanding the foregoing, payment of principal of (and premium, if any) and interest on bearer Debt Securities denominated and payable in U.S. dollars will be made at the office of the Company's Paying Agent in the Borough of Manhattan, The City of New York if, and only if, payment of the full amount thereof in U.S. dollars at all offices or agencies outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions. In connection with any sale during the 'restricted period' as defined in Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations (generally, the first 40 days after the closing date and, with respect to unsold allotments, until sold), no bearer Debt Security shall be mailed or otherwise delivered to any location in the United States (as defined under 'Limitations on Issuance of Bearer Debt Securities' below). A bearer Debt Security in definitive form (including interests in a permanent global Security) may be delivered only if the person entitled to receive such bearer Debt Security furnishes written certification, in the form required by the applicable Indenture, to the effect that such bearer Debt Security is not owned by or on behalf of a United States person (as defined under 'Limitations on Issuance of Bearer Debt Securities' below), or, if a beneficial interest in such bearer Debt Security is owned by or on behalf of a United States person, that such United States person (i) acquired and holds the bearer Debt Security through a foreign branch of a United States financial institution, (ii) is a foreign branch of a United States financial institution purchasing for its own account 13 or resale (and in either case (i) or (ii) such financial institution agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended (the 'Code'), and the regulations thereunder) or (iii) is a financial institution purchasing for resale during the restricted period only to non-United States persons outside the United States. See 'Limitations on Issuance of Bearer Debt Securities' below and 'Global Securities -- Bearer Debt Securities'. Bearer Debt Securities and the coupons related thereto will be transferable by delivery. Unless otherwise indicated in the Prospectus Supplement, registered Debt Securities will be transferable at the office of one or more registrars as specified in the Prospectus Supplement. The Debt Securities will be unsecured obligations of the Company and will rank pari passu (equal in right of payment) with all other unsecured and unsubordinated indebtedness of the Company. At December 31, 1997, the Company's consolidated indebtedness (all of which is unsecured and unsubordinated) was approximately $7.1 billion. The Debt Securities will, however, be effectively subordinate (with respect to the assets of the Company's subsidiaries) to the indebtedness and other liabilities of such subsidiaries. At December 31, 1997, such indebtedness and other liabilities aggregated approximately $1.1 billion. The Company has no current intention or plan to increase the amount of such indebtedness in the future, other than in connection with the growth of the Company's business. Unless otherwise indicated in the Prospectus Supplement, the Debt Securities will be issued only in denominations that are integral multiples of $1,000. No service charge will be made for any transfer or exchange of the Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Debt Securities may be issued as original issue discount Debt Securities (bearing no interest or interest at a rate which at the time of issuance is below market rates) to be sold at a substantial discount below their stated principal amount. United States federal income tax consequences and other special considerations applicable to any such original issue discount Debt Securities will be described in the Prospectus Supplement relating thereto. Registered Debt Securities may be exchanged for an equal aggregate principal amount of registered Debt Securities of the same series, date of maturity, interest rate and original issue date in such authorized denominations as may be requested upon surrender of the registered Debt Securities to the registrar or a paying agent of the Company as specified in the Prospectus Supplement and upon fulfillment of all other requirements of such agent. To the extent permitted by the terms of a series of Debt Securities authorized to be issued in registered form and bearer form, bearer Debt Securities may be exchanged for an equal aggregate principal amount of registered or bearer Debt Securities of the same series, date of maturity, interest rate and original issue date in such authorized denominations as may be requested upon delivery of the bearer Debt Securities with all unpaid coupons relating thereto to the registrar or a paying agent of the Company as specified in the Prospectus Supplement and upon fulfillment of all other requirements of such agent. Registered Debt Securities will not be exchangeable for bearer Debt Securities. COVENANTS Set forth below is a description of the principal covenants of the Company contained in the Indenture. The Indenture does not restrict the Company, other than as set forth below, from engaging in any highly leveraged transaction, reorganization, restructuring, merger or similar transaction, or from incurring additional indebtedness or causing its subsidiaries to incur additional indebtedness, any of which transactions could have a material adverse effect on the holders of the Debt Securities. CONSOLIDATION, MERGER, SALE OR CONVEYANCE OF ASSETS OF THE COMPANY. Pursuant to the Indenture, each of the Company and Newcourt (together with any successor or assign, the 'Guarantor') covenants that it will not merge or consolidate with any other corporation or sell or convey all or substantially all its assets to any person (other than such a sale or conveyance to a Subsidiary (as defined below) of the Company or the Guarantor or any successor thereto (such a sale or conveyance being called an 'Asset Drop-Down')), unless (1) either the Company or the Guarantor is the continuing corporation or the successor corporation or the person which acquires by sale or conveyance substantially all the assets of the Company or the Guarantor (if other than the Company or the Guarantor) is a corporation 14 organized under the laws of the United States of America or any state thereof or of Canada or any province or territory thereof and expressly assumes the due and punctual payment of the principal of, premium, if any, and interest, if any, on all the Debt Securities and the due and punctual performance and observance of all the covenants and conditions of the Indenture to be performed or observed by the Company or the Guarantor, by supplemental indenture in form satisfactory to the Trustee, executed and delivered to the Trustee by such corporation, and (2) the Company or the Guarantor or such successor corporation, as the case may be, is not, immediately after such merger or consolidation, or such sale or conveyance, in default in the performance of any such covenant or condition. In the case of any such consolidation, merger, sale or conveyance, and following such an assumption by the successor corporation, such successor corporation will succeed to and be substituted for the Company or the Guarantor, as applicable, with the same effect as if it had been named in the Indenture, and, in the case of any such sale or conveyance (other than a conveyance by way of lease), the Company or the Guarantor, as applicable, will be released and discharged from all obligations and covenants under the Indenture and the Securities. In the event of any Asset Drop-Down after the date of the Indenture, any subsequent sale or conveyance of assets by the Subsidiary of the Company or the Guarantor, as applicable, to which assets were transferred in such Asset Drop-Down (the 'Drop-Down Subsidiary') will be deemed to be a sale or conveyance of assets by the Company or the Guarantor for purposes of the covenant described in this paragraph. (Sections 5.01 and 5.02) The term 'all or substantially all', which appears in the foregoing covenant, is not defined in the Indenture, and it does not have a precise established definition under applicable law. The application of the covenant may depend on the facts and circumstances of a particular transaction, including the qualitative as well as the quantitative aspects of such transaction. Accordingly, there may be uncertainty in connection with any particular transaction as to whether a sale or conveyance of all or substantially all of the assets of the Company or the Guarantor has occurred and thus as to whether the Company or the Guarantor has complied with this covenant. Because New York law governs the Indenture, New York law will govern the interpretation of such term. LIMITATIONS ON INCURRENCE OF SECURED DEBT. The Company will not, nor will it permit any Restricted Subsidiary (as defined below) to, incur, issue, assume or guarantee any indebtedness for money borrowed ('debt') secured by any pledge, mortgage, security interest or lien ('lien') on any property or assets of the Company or any Restricted Subsidiary, or on any shares of stock or debt of any Restricted Subsidiary, without effectively providing that the principal of, premium, if any, and interest on the Debt Securities of each series (together with, if the Company so determines, any other debt of the Company or such Restricted Subsidiary, which is not subordinated to the Debt Securities of each series) shall be secured equally and ratably with (or prior to) such debt, so long as any such debt shall be so secured, unless, after giving effect thereto, the aggregate amount of all such secured debt of the Guarantor would not exceed 10% of the Consolidated Net Tangible Assets (as defined below); provided, however, that (i) any recourse provided by the Company or any Restricted Subsidiary in connection with any sale, transfer or other disposition by the Company or any Restricted Subsidiary of Accounts Receivable (as defined below) or of any Restricted Subsidiary substantially all the assets of which are Accounts Receivable which constitutes a 'sale' under generally accepted accounting principles (as in effect at the time of such sale, transfer or other disposition) shall not, in any event, constitute debt and (ii) no Asset Drop-Down shall, in any event, constitute a lien; and provided further that neither the satisfaction and discharge of any debt pursuant to the Indenture or pursuant to any similar provision in any other indenture or instrument governing any debt, nor the defeasance of any debt pursuant to the Indenture or pursuant to any similar provision in any other indenture or instrument governing any debt, shall be deemed the incurrence, issue, assumption or guarantee of debt secured by a lien for purposes of this provision. Notwithstanding the foregoing, this restriction does not apply to: (1) liens on property of, or on any shares of stock or debt of, any corporation existing at the time such corporation becomes a Restricted Subsidiary; (2) liens on property, shares of stock, other equity interests, or debt existing at the time of acquisition or repossession thereof by the Company or any Restricted Subsidiary; (3) liens on physical property (or any Accounts Receivable arising in connection with the lease thereof), shares of stock, other equity interests, or debt acquired (or, in the case of physical property, constructed) after the date of the Indenture by the Company or any Restricted Subsidiary, which liens are created prior to, at the time of, or within one year after such 15 acquisition (or, in the case of physical property, the completion of such construction or commencement of commercial operation of such property, whichever is later) to secure any debt issued, incurred, assumed or guaranteed prior to, at the time of, or within one year after such acquisition (or such completion or commencement, whichever is later) or to secure any other debt issued, incurred, assumed or guaranteed at any time thereafter for the purpose of refinancing all or any part of such debt; (4) liens on Accounts Receivable of the Company or any Restricted Subsidiary arising from or in connection with transactions entered into by the Company or such Restricted Subsidiary after the date of the Indenture or on Accounts Receivable acquired by the Company or such Restricted Subsidiary after such date from others, which liens are created prior to, at the time of, or within one year after such Accounts Receivable arise or are acquired or, if later, the completion of the delivery or installation of the equipment or goods or the rendering of the services or the advancement or loaning of funds relating thereto (i) as a result of any guarantee, repurchase or other contingent (direct or indirect) or recourse obligation of the Company or such Restricted Subsidiary in connection with the discounting, sale, assignment, transfer or other disposition of such Accounts Receivable or any interest therein, or (ii) to secure or provide for the payment of all or any part of the investment of the Company or such Restricted Subsidiary in any such Accounts Receivable (whether or not such Accounts Receivable are the Accounts Receivable on which such liens are created) or the purchase price thereof or to secure any debt (including without limitation Non-Recourse Debt (as defined below)) issued, incurred, assumed or guaranteed for the purpose of financing or refinancing all or any part of such investment or purchase price; (5) liens in favor of the Guarantor or any of the Guarantor's Subsidiaries; (6) liens in favor of the United States of America or any State thereof or the District of Columbia, or any agency, department or other instrumentality thereof, to secure progress, advance or other payments pursuant to any contract or provision of any statute; (7) liens securing the performance of letters of credit, bids, tenders, sales contracts, purchase agreements, leases, surety and performance bonds, and other similar obligations not incurred in connection with the borrowing of money; (8) liens to secure Non-Recourse Debt in connection with the Company or any Restricted Subsidiary engaging in any leveraged or single-investor or other lease transactions, whether (in the case of liens on or relating to leases or groups of leases or the particular properties subject thereto) such liens be on the particular properties subject to any leases involved in any of such transactions and/or the rental or other payments or rights under such leases or, in the case of any group of related or unrelated leases, on the properties subject to the leases comprising such group and/or on the rental or other payments or rights under such leases, or on any direct or indirect interest therein, and whether (in any case) (i) such liens be created prior to, at the time of, or at any time after the entering into of such lease transactions and/or (ii) such leases be in existence prior to, or be entered into by the Company or such Restricted Subsidiary at the time of or at any time after, the purchase or other acquisition by the Company or such Restricted Subsidiary of the properties subject to such leases; and (9) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any of the foregoing; provided, however, that any such extension, renewal or replacement shall be limited to all or a part of the property or assets which secured the lien so extended, renewed or replaced (plus any improvements on such property). (Section 4.03) 'Accounts Receivable' means (i) any accounts receivable (whether or not earned by performance), chattel paper, instruments, documents, general intangibles, trade acceptances, any other rights to receive installment, rental or other payments for, or relating to amounts due or to become due on account of equipment or goods sold or leased or to be sold or leased or services rendered or to be rendered or funds advanced or loaned or to be advanced or loaned and other rights to payment of any kind, (ii) any proceeds of any of the foregoing and (iii) any interest in any property or asset of any kind (whether of the obligor under such Accounts Receivable or any other person) securing the payment of any item listed in clause (i) hereof. (Section 1.01) 'Consolidated Net Tangible Assets' means, at the date of any determination, the total assets appearing on the consolidated balance sheet of the Guarantor as at the end of the most recent fiscal quarter of the Guarantor for which such balance sheet is available, prepared in accordance with generally accepted accounting principles, less (a) all current liabilities (obligations whose liquidation is reasonably expected to occur within twelve months), (b) investments in and advances to Subsidiaries of 16 the Guarantor other than Restricted Subsidiaries or other entities accounted for on the equity method of accounting and (c) Intangible Assets. (Section 1.01) 'Intangible Assets' means the value (net of any applicable reserves), as shown on or reflected in the Guarantor's consolidated balance sheet, of: (i) all trade names, trademarks, licenses, patents, copyrights and goodwill; (ii) organization and development costs; (iii) deferred charges (other than prepaid items such as insurance, taxes, interest, commissions, rents and similar items and tangible assets being amortized); and (iv) unamortized debt discount and expense, less unamortized premium. (Section 1.01) 'Non-Recourse Debt' of the Company or any Restricted Subsidiary means any indebtedness for borrowed money of the Company or such Restricted Subsidiary, as the case may be, which is secured by any lien on, or payable solely from the income and proceeds of, any property (including, without limiting the generality of such term, any intangible assets), shares of stock, other equity interests or debt of the Company or such Restricted Subsidiary, as the case may be, and which is not a general obligation of the Company or such Restricted Subsidiary, as the case may be. (Section 1.01) 'Restricted Subsidiary' means each Subsidiary of the Company organized under the laws of any State of the United States or the District of Columbia, no substantial portion of the business of which is carried on outside the United States; provided that each Drop-Down Subsidiary will be a Restricted Subsidiary. (Section 1.01) 'Subsidiary' means any corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by any person. For purposes of such definition, 'voting stock' means stock ordinarily having voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. (Section 1.01) EVENTS OF DEFAULT, NOTICE AND WAIVER The Indenture provides that, if an Event of Default specified therein in respect of any series of Debt Securities shall have occurred and be continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the outstanding Debt Securities of such series may declare the principal of all the securities of such series to be due and payable. (Section 6.01) Events of Default in respect of the Debt Securities of any series are defined in the Indenture as being: default for 90 days in payment of any interest installment when due; unless otherwise specified in the Prospectus Supplement with respect to the Debt Securities of any series, default in payment of principal of or premium, if any, on Debt Securities of such series when due; default for 90 days after written notice to the Company by the Trustee or by the holders of not less than 25% in aggregate principal amount of the outstanding Debt Securities of such series in the performance of any other agreement in the Debt Securities or Indenture in respect of such series; and certain events of bankruptcy, insolvency and reorganization of the Company or the Guarantor. (Section 6.01) The Indenture provides that the Company will, within 120 days after the close of each fiscal year, commencing with the first fiscal year following the issuance of any series of Debt Securities, file with the Trustee a certificate stating whether or not the Company has complied with all conditions and covenants on its part contained in the Indenture and, if not, specifying each default (without regard to any grace period or requirement of notice under the Indenture) and the nature thereof. (Section 4.04) The Indenture provides that the Trustee will, within 90 days after the occurrence of a default in respect of any series of Debt Securities, if such default is known to the Trustee, give to the holders of such series notice of all defaults known to it; provided that, except in the case of default in payment on any of the Debt Securities of such series, the Trustee will be protected in withholding such notice if it in good faith determines that the withholding of such notice is in the interest of the holders of such series. The term 'default' for the purpose of this provision means any event which is, or after notice or passage of time or both would be, an Event of Default. (Section 7.05) The Indenture contains provisions entitling the Trustee, subject to the duty of the Trustee during an Event of Default in respect of any series of Debt Securities to act with the required standard of care, to 17 refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it. (Section 7.01) The Indenture provides that the holders of a majority in aggregate principal amount of the outstanding securities of any series affected (with each series voting as a separate class) may direct the time, method and place of conducting proceedings for remedies available to the Trustee, or exercising any trust or power conferred on the Trustee, in respect of such series. (Section 6.06) In certain cases, the holders of a majority in principal amount of the outstanding Debt Securities of a series may on behalf of the holders of all Debt Securities of such series waive any past default or Event of Default, or compliance with certain provisions of the Indenture, except, among other things, a default in payment of the principal of, premium, if any, or interest on, any of the Debt Securities of such series. (Sections 6.01 and 6.06) DISCHARGE AND DEFEASANCE Under terms satisfactory to the Trustee, the Company may discharge certain obligations to holders of any series of Debt Securities issued under the Indenture which have not already been delivered to the Trustee for cancellation and which have either become due and payable or are by their terms due and payable within one year (or scheduled for redemption within one year) by irrevocably depositing with the Trustee as trust funds an amount in cash sufficient to pay at maturity (or upon redemption) the principal of, premium, if any, and interest on such Debt Securities. (Section 8.01) In the case of any series of Debt Securities with respect to which the exact amounts (including the currency of payment) of principal of and interest due on such series can be determined at the time of making the deposit referred to below (which include Debt Securities with a floating or variable rate of interest that cannot exceed a specified or determinable maximum rate), the Company at its option may also (i) discharge any and all of its obligations to holders of such series of Debt Securities ('defeasance') on the 91st day after the conditions set forth below have been satisfied, but may not thereby avoid its duty to register the transfer or exchange of such series of Debt Securities, to replace any temporary, mutilated, destroyed, lost or stolen Debt Securities of such series or to maintain an office or agency in respect of such series of Debt Securities, or (ii) be released with respect to such series of Debt Securities from the obligations imposed by the covenants described under 'Covenants' above ('covenant defeasance'). Defeasance and covenant defeasance may be effected only if, among other things, (i) the Company irrevocably deposits with the Trustee as trust funds (a) money in an amount, (b) in the case of Debt Securities payable only in U.S. Dollars, U.S. Governmental Obligations (as defined in the Indenture) which through the payment of interest and principal in respect thereof will provide money in an amount, or (c) a combination of (a) and (b), certified by a nationally recognized firm of independent public accountants to be sufficient to pay each installment of principal of and interest on all outstanding Debt Securities of such series on the dates such installments of principal and interest are due; and (ii) the Company delivers to the Trustee an opinion of independent counsel to the effect that the holders of such series of Debt Securities will not recognize income, gain or loss for United States federal income tax purposes as a result of such defeasance or covenant defeasance and will be subject to United States federal income tax on the same amount and in the same manner and at the same time as would have been the case if such defeasance or covenant defeasance had not occurred (which opinion may include or be based on a ruling to that effect received from or published by the Internal Revenue Service). (Section 8.02) MODIFICATION OF THE INDENTURE The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of a majority in principal amount of the outstanding Debt Securities of each series affected thereby (with such series voting as a separate class), to execute supplemental indentures adding any provisions to or changing or eliminating any of the provisions of the Indenture or modifying the rights of the holders of Debt Securities of each such series, except that no such supplemental indenture may, without the consent of each holder affected, among other things, change the maturity of any Debt Securities, or change the principal amount thereof, or any premium thereon, or change the rate or 18 change the time of payment of interest thereon, make any Debt Security payable in money other than that stated in the Debt Security, or reduce the aforesaid percentage of outstanding Debt Securities required to approve any such supplemental indenture. (Section 9.02) CONCERNING THE TRUSTEE The Company may from time to time maintain lines of credit, and have other customary banking relationships, with The Chase Manhattan Bank, the Trustee under the Indenture. In addition, The Chase Manhattan Bank is the trustee under the Indentures dated as of April 9, 1990, and as of June 1, 1992, each as amended, among the Company, AT&T, AT&T Capital Holdings, Inc., a wholly-owned subsidiary of AT&T, and The Chase Manhattan Bank, pursuant to which, the Company assumed and AT&T guaranteed certain medium-term notes and long-term debt issued by AT&T Capital Holdings, Inc. As of December 31, 1997 the aggregate outstanding principal amount of such medium-term and long-term notes was approximately $106.8 million. Furthermore, The Chase Manhattan Bank is the trustee under the Indenture dated as of July 1, 1993 between the Company and The Chase Manhattan Bank pursuant to which the Company has issued $4.8 billion aggregate principal amount of medium-term notes. LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES In compliance with United States federal tax laws and regulations, bearer Debt Securities may not be offered or sold during the restricted period (as defined under 'General' above), or delivered in definitive form in connection with a sale during the restricted period, in the United States or to United States persons other than to (a) the United States office of (i) an international organization (as defined in Section 7701(a)(18) of the Code and the regulations thereunder), (ii) a foreign central bank (as defined in Section 895 of the Code and the regulations thereunder), or (iii) any underwriter, agent, or dealer offering or selling bearer Debt Securities during the restricted period (a 'Distributor') pursuant to a written contract with the issuer or with another Distributor, that purchases bearer Debt Securities for resale or for its own account and agrees to comply with the requirements of Section 165(j)(3)(A), (B), or (C) of the Code, or (b) the foreign branch of a United States financial institution purchasing for its own account or for resale, which institution agrees to comply with the requirements of Section 165 (j)(3)(A), (B), or (C) of the Code. In addition, a sale of a bearer Debt Security may be made during the restricted period to a United States person who acquired and holds the bearer Debt Security on the Certification Date through a foreign branch of a United States financial institution that agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Code. Any Distributor (including an affiliate of a Distributor) offering or selling bearer Debt Securities during the restricted period must agree not to offer or sell bearer Debt Securities in the United States or to United States persons (except as discussed above) and must employ procedures reasonably designed to ensure that its employees or agents directly engaged in selling bearer Debt Securities are aware of these restrictions. Bearer Debt Securities and their interest coupons will bear the following legend: 'Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code'. Purchasers of bearer Debt Securities may be affected by certain limitations under United States tax laws. See the applicable Prospectus Supplement for a summary of material U.S. federal income tax consequences to United States persons investing in bearer Debt Securities. As used herein, 'United States person' means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States and an estate or trust the income of which is subject to United States federal income taxation regardless of its source, and 'United States' means the United States of America (including the States and the District of Columbia) and its possessions including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands. 19 DESCRIPTION OF THE WARRANTS The Debt Warrants, Currency Warrants, Index Warrants and Interest Rate Warrants are to be issued under separate warrant agreements (each a 'Warrant Agreement' and respectively a 'Debt Warrant Agreement', a 'Currency Warrant Agreement', an 'Index Warrant Agreement' and an 'Interest Rate Warrant Agreement') to be entered into between the Company and one or more banks or trust companies, as warrant agent (each a 'Warrant Agent' and respectively a 'Debt Warrant Agent', a 'Currency Warrant Agent', an 'Index Warrant Agent' and an 'Interest Rate Warrant Agent'), all as shall be set forth in the Prospectus Supplement relating to the Warrants being offered thereby. A form of each type of Warrant Agreement, including a form of warrant certificate representing each type of Warrant (each a 'Warrant Certificate' and respectively a 'Debt Warrant Certificate', a 'Currency Warrant Certificate', an 'Index Warrant Certificate' and an 'Interest Rate Warrant Certificate'), reflecting the alternative provisions that may be included in the Warrant Agreements to be entered into with respect to particular offerings of Warrants, are herein incorporated by reference to exhibits to the Registration Statement of which this Prospectus is a part. The descriptions contained herein of the Warrant Agreements and the Warrant Certificates and summaries of certain provisions of the Warrant Agreements and the Warrant Certificates do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the applicable Warrant Agreements and the Warrant Certificates, including the definitions therein of certain terms not otherwise defined in this Prospectus. Wherever particular sections of, or terms defined in, the Warrant Agreements are referred to, such sections or defined terms are incorporated herein by reference. The particular terms of each issue of Warrants, as well as any modifications or additions to the general terms of the applicable Warrant Agreement or Warrant Certificate, will be described in the Prospectus Supplement relating to such Warrants. Accordingly, for a description of the terms of a particular issue of Warrants, reference must be made to the Prospectus Supplement relating thereto and to the descriptions set forth below. DEBT WARRANTS The Company may issue, together with Debt Securities, Currency Warrants, Index Warrants or Interest Rate Warrants, or separately, Debt Warrants for the purchase of Debt Securities. If any of the Debt Warrants are sold for foreign currencies or foreign currency units or if any series of Debt Warrants is exercisable in foreign currencies or foreign currency units, the restrictions, elections, tax consequences, specific terms and other information with respect to such issue of Debt Warrants and such currencies or currency units will be set forth in the Prospectus Supplement relating thereto. If so specified in the Prospectus Supplement, the Debt Warrants may, in certain circumstances, be cancelled by the Company prior to their expiration date and the holders thereof will be entitled to receive only the applicable Cancellation Amount. The Cancellation Amount may be either a fixed amount or an amount that varies during the term of the Debt Warrants in accordance with a schedule or formula. GENERAL The Prospectus Supplement will describe the terms of any Debt Warrants offered thereby, the Debt Warrant Agreement relating to such Debt Warrants and the Debt Warrant Certificates representing such Debt Warrants, including the following: (1) the title of such Debt Warrants; (2) the aggregate amount of such Debt Warrants; (3) the initial offering price of such Debt Warrants; (4) the exercise price; (5) the currency or currency unit in which the initial offering price and/or the exercise price of such Debt Warrants is payable; (6) whether the Debt Warrants are to be issuable in registered or bearer form or both, and if in bearer form whether such Debt Warrants may be exchanged for Debt Warrants in registered form and the circumstances and places for such exchange, if permitted; (7) if applicable, the title and terms of related Debt Securities with which such Debt Warrants are issued, the number of such Debt Warrants issued with each such Debt Security and the date, if any, on and after which such Debt Warrants and such Debt Securities will be separately transferable; (8) the title, aggregate principal 20 amount and terms of the Debt Securities purchasable upon exercise of all such Debt Warrants; (9) the principal amount of Debt Securities purchasable upon exercise of each Debt Warrant and the price at which such principal amount of Debt Securities may be purchased upon such exercise; (10) the date on which the right to exercise such Debt Warrants shall commence and the date (the 'Debt Warrant Expiration Date') on which such right shall expire; (11) any minimum number of Debt Warrants which must be exercised at any one time, other than upon automatic exercise; (12) the maximum number, if any, of such Debt Warrants that may, subject to election by the Company, be exercised by all owners (or by any person or entity) on any day; (13) any provisions for the automatic exercise of such Debt Warrants; (14) whether and under which circumstances such Debt Warrants may be cancelled by the Company prior to expiration; (15) any other procedures and conditions relating to the exercise of such Debt Warrants; (16) the identity of the Debt Warrant Agent; (17) any national securities exchange on which such Debt Warrants will be listed; (18) provisions, if any, for issuing such Debt Warrants in certificated form; (19) if applicable, a discussion of certain United States federal income tax, accounting or other special considerations applicable thereto; and (20) any other terms of the Debt Warrants. Debt Warrant Certificates will be exchangeable for new Debt Warrant Certificates of different denominations and, if in registered form, may be presented for registration of transfer and Debt Warrants may be exercised at the corporate trust office of the Debt Warrant Agent or any other office indicated in the Prospectus Supplement relating thereto (Section 3.1). Prior to the exercise of Debt Warrants, holders of Debt Warrants will not be entitled to payments of principal of (or premium, if any) or interest, if any, on the Debt Securities purchasable upon such exercise, or to enforce any of the covenants in the Indenture (Section 4.1). EXERCISE OF DEBT WARRANTS Unless otherwise provided in the Prospectus Supplement, each Debt Warrant will entitle the holder thereof to purchase for cash such principal amount of Debt Securities at such exercise price as shall in each case be set forth in, or be determinable as set forth in, the Prospectus Supplement relating to the Debt Warrants offered thereby (Section 2.1). Debt Warrants may be exercised at any time up to the close of business on the Debt Warrant Expiration Date specified in the Prospectus Supplement relating to the Debt Warrants offered thereby. After the close of business on the Debt Warrant Expiration Date (or such later date to which such Debt Warrant Expiration Date may be extended by the Company), unexercised Debt Warrants will become void (Section 2.2). Debt Warrants may be exercised as set forth in the Prospectus Supplement relating to the Debt Warrants offered thereby. Upon receipt of payment and the Debt Warrant Certificate properly completed and duly executed at the corporate trust office of the Debt Warrant Agent or any other office indicated in the Prospectus Supplement, the Company will, as soon as practicable, forward to the person entitled thereto the Debt Securities purchasable upon such exercise. If fewer than all the Debt Warrants represented by such Debt Warrant Certificate are exercised, a new Debt Warrant Certificate will be issued for the remaining amount of Debt Warrants (Section 2.3). OTHER INFORMATION Other important information concerning Debt Warrants is set forth below under 'Certain Items Applicable to All Warrants -- Modifications', ' -- Merger, Consolidation, Sale or Other Disposition' and ' -- Enforceability of Rights by Beneficial Owner; Governing Law'. CURRENCY WARRANTS The Company may issue, together with Debt Securities, Debt Warrants, Index Warrants or Interest Rate Warrants, or separately, Currency Warrants (a) in the form of Currency Put Warrants, entitling the owners thereof to receive from the Company the Currency Warrant Cash Settlement Value (as shall be defined in the Prospectus Supplement) of the right to sell a specified amount of one currency (whether U.S. dollars or a foreign currency or foreign currency unit) (a 'Base Currency') for a specified amount of a different currency (whether U.S. dollars or a foreign currency or foreign currency unit) (a 'Reference Currency'), (b) in the form of Currency Call Warrants, entitling the owners thereof to 21 receive from the Company the Currency Warrant Cash Settlement Value of the right to purchase a specified amount of a Base Currency for a specified amount of a Reference Currency, or (c) in such other form as shall be specified in the related Prospectus Supplement. The Prospectus Supplement for an issue of Currency Warrants will set forth the formula pursuant to which the Currency Warrant Cash Settlement Value will be determined, including any multipliers, if applicable. The Prospectus Supplement will describe the terms of any Currency Warrants offered thereby, the Currency Warrant Agreement relating to such Currency Warrants and the Currency Warrant Certificates representing such Currency Warrants, including the following: (1) the title of such Currency Warrants; (2) the aggregate amount of such Currency Warrants; (3) the initial offering price of such Currency Warrants; (4) the exercise price, if any; (5) the currency or currency unit in which the initial offering price, the exercise price, if any, and the Currency Warrant Cash Settlement Value of such Currency Warrants is payable; (6) the Base Currency and the Reference Currency for such Currency Warrants; (7) whether such Currency Warrants shall be Currency Put Warrants, Currency Call Warrants or otherwise; (8) the formula for determining the Currency Warrant Cash Settlement Value, if applicable, of each Currency Warrant; (9) whether and under what circumstances a minimum and/or maximum expiration value is applicable upon the expiration or exercise of such Currency Warrants; (10) the effect or effects, if any, of the occurrence of a Market Disruption Event or Force Majeure Event (each as defined in the Currency Warrant Agreement); (11) the date on which the right to exercise such Currency Warrants shall commence and the date (the 'Currency Warrant Expiration Date') on which such right shall expire; (12) any minimum number (or maximum number) of Currency Warrants which must be exercised at any one time, other than upon automatic exercise; (13) the maximum number, if any, of such Currency Warrants that may, subject to election by the Company, be exercised by all owners (or by any person or entity) on any day; (14) any provisions for the automatic exercise of such Currency Warrants other than at expiration; (15) whether and under what circumstances such Currency Warrants may be cancelled by the Company prior to their expiration date; (16) any provisions permitting a Holder to condition any notice of exercise on the absence of certain specified changes in the Spot Rate (as defined in the Currency Warrant Agreement); (17) any other procedures and conditions relating to the exercise of such Currency Warrants; (18) the identity of the Currency Warrant Agent; (19) any national securities exchange on which such Currency Warrants will be listed; (20) provisions, if any, for issuing such Currency Warrants in certificated form; (21) if such Currency Warrants are not issued in book-entry form, the place or places at which payments in respect of such Currency Warrants are to be made by the Company; (22) if applicable, a discussion of certain United States federal income tax, accounting or other special considerations applicable thereto; and (23) any other terms of such Currency Warrants. Other important information concerning Currency Warrants is set forth below under 'Certain Items Applicable to All Warrants -- Modifications', ' -- Merger, Consolidation, Sale or Other Disposition' and ' -- Enforceability of Rights by Beneficial Owner; Governing Law' and 'Certain Items Applicable to Currency Warrants, Index Warrants and Interest Rate Warrants -- Exercise of Warrants', ' -- Market Disruption and Force Majeure Events', ' -- Settlement Currency' and ' -- Listing'. INDEX WARRANTS The Company may issue, together with Debt Securities, Debt Warrants, Currency Warrants or Interest Rate Warrants, or separately, Index Warrants (a) in the form of Index Put Warrants, entitling the owners thereof to receive from the Company the Index Cash Settlement Value (as shall be defined in the Prospectus Supplement) in cash, which amount will be determined by reference to the amount, if any, by which the Fixed Amount (as shall be defined in the Prospectus Supplement) at the time of exercise exceeds the Index Value (as shall be defined in the Prospectus Supplement), (b) in the form of Index Call Warrants, entitling the owners thereof to receive from the Company the Index Cash Settlement Value in cash, which amount will be determined by reference to the amount, if any, by which the Index Value at the time of exercise exceeds the Fixed Amount, (c) in the form of Index Spread Warrants, entitling the owners thereof to receive from the Company the Index Cash Settlement Value in cash, which amount will be determined by reference to the amount, if any, by which the Reference Index Value (as shall be defined in the Prospectus Supplement) at the time of exercise exceeds the Base 22 Index Value (as shall be defined in the Prospectus Supplement) or (d) in such other form as shall be specified in the related Prospectus Supplement. The Prospectus Supplement for an issue of Index Warrants will set forth the formula pursuant to which the Index Cash Settlement Value will be determined, including any multipliers, if applicable. The Prospectus Supplement will describe the terms of Index Warrants offered thereby, the Index Warrant Agreement relating to such Index Warrants and the Index Warrant Certificate representing such Index Warrants, including the following: (1) the title of such Index Warrants; (2) the aggregate amount of such Index Warrants; (3) the initial offering price of such Index Warrants; (4) the exercise price, if any; (5) the currency or currency unit in which the initial offering price, the exercise price, if any, and the Index Cash Settlement Value of the Index Warrants is payable; (6) the Index or Indices for such Index Warrants, which may be based on one or more U.S. or foreign stocks, bonds, or other securities, one or more U.S. or foreign interest rates, one or more currencies or currency units, or any combination of the foregoing, and may be a preexisting U.S. or foreign index compiled and published by a third party or an index based on one or more securities, interest rates or currencies selected by the Company solely in connection with the issuance of such Index Warrants, and certain information regarding such Index or Indices and the underlying securities, interest rates or currencies or currency units (including, to the extent possible, the policies of the publisher of the Index with respect to additions, deletions and substitutions of such securities, interests rates or currencies or currency units); (7) whether such Index Warrants shall be Index Put Warrants, Index Call Warrants, Index Spread Warrants or otherwise; (8) the method of providing for a substitute Index or Indices or otherwise determining the amount payable in connection with the exercise of such Index Warrants if any Index changes or ceases to be made available by its publisher, which determination will be made by an independent expert; (9) the formula for determining the Index Cash Settlement Value, if applicable, of each Index Warrant; (10) whether and under what circumstances a minimum and/or maximum expiration value is applicable upon the expiration or exercise of such Index Warrants; (11) the effect or effects, if any, of the occurrence of a Market Disruption Event or Force Majeure event (each as defined in the Index Warrant Agreement); (12) the date on which the right to exercise such Index Warrants shall commence and the date (the 'Index Warrant Expiration Date') on which such right shall expire; (13) any minimum number of Index Warrants which must be exercised at any one time, other than upon automatic exercise; (14) the maximum number if any, of such Index Warrants that may, subject to election by the Company, be exercised by all owners (or by any person or entity) on any day; (15) any provisions for the automatic exercise of such Index Warrants other than at expiration; (16) whether and under what circumstances such Index Warrants may be cancelled by the Company prior to their expiration date; (17) any provisions permitting a Holder to condition any notice of exercise on the absence of certain specified changes in the Index Value, the Base Index Value or the Referenced Index Value after the date of exercise; (18) any other procedures and conditions relating to the exercise of such Index Warrants; (19) the identity of the Index Warrant Agent; (20) any national securities exchange on which such Index Warrants will be listed; (21) provisions, if any, for issuing such Index Warrants in certificated form; (22) if such Index Warrants are not issued in book-entry form, the place or places at which payments in respect of such Index Warrants are to be made by the Company; (23) if applicable, a discussion of certain United States federal income tax, accounting or other special considerations applicable thereto; and (24) any other terms of such Index Warrants. Other important information concerning Index Warrants is set forth below under 'Certain Items Applicable to All Warrants -- Modifications', ' -- Merger, Consolidation, Sale or Other Disposition' and ' -- Enforceability of Rights by Beneficial Owner; Governing Law' and 'Certain Items Applicable to Currency Warrants, Index Warrants and Interest Rate Warrants -- Exercise of Warrants', ' -- Market Disruption and Force Majeure Events', ' -- Settlement Currency' and ' -- Listing'. INTEREST RATE WARRANTS The Company may issue, together with Debt Securities, Debt Warrants, Currency Warrants or Index Warrants, or separately, Interest Rate Warrants (a) in the form of Interest Rate Put Warrants, entitling the owners thereof to receive from the Company the Interest Rate Cash Settlement Value (as shall be defined in the Prospectus Supplement) in cash, which amount will be determined by reference 23 to the amount, if any, by which the Spot Amount (as shall be defined in the Prospectus Supplement) is less than the Strike Amount (as shall be defined in the Prospectus Supplement) on the applicable valuation date following exercise, (b) in the form of Interest Rate Call Warrants, entitling the owners thereof to receive from the Company the Interest Rate Cash Settlement Value in cash, which amount will be determined by reference to the amount, if any, by which the Spot Amount on the applicable valuation date following exercise exceeds the Strike Amount or (c) in such other form as shall be specified in the related Prospectus Supplement. The Prospectus Supplement for an issue of Interest Rate Warrants will set forth the formula pursuant to which the Interest Rate Cash Settlement Value will be determined, including any multipliers, if applicable. The Strike Amount may either be a fixed yield, price or rate of a Sovereign Debt Instrument, a Rate or any combination of Sovereign Debt Instruments and/or Rates or a yield, price or rate that varies during the term of the Interest Rate Warrants in accordance with a schedule or formula. The Sovereign Debt Instrument will be one or more instruments specified in the applicable Prospectus Supplement issued either by the United States government or by a foreign government. The Rate will be one or more interest rates or interest rate swap rates established from time to time by one or more financial institutions specified in the applicable Prospectus Supplement. The Prospectus Supplement will describe the terms of Interest Rate Warrants offered thereby, the Interest Rate Warrant Agreement relating to such Interest Rate Warrants and the Interest Rate Warrant Certificate representing such Interest Rate Warrants, including the following: (1) the title of such Interest Rate Warrants; (2) the aggregate amount of such Interest Rate Warrants; (3) the initial offering price of such Interest Rate Warrants; (4) the exercise price, if any; (5) the currency or currency unit in which the initial offering price, the exercise price, if any, and the Interest Rate Cash Settlement Value of such Interest Rate Warrants is payable; (6) the Sovereign Debt Instrument (which may be one or more debt instruments issued either by the United States government or by a foreign government), the Rate (which may be one or more interest rates or interest rate swap rates established from time to time by one or more specified financial institutions) or the other yield, price or rate utilized for such Interest Rate Warrants, and certain information regarding such Sovereign Debt Instrument, Rate or such other yield, price or rate; (7) whether such Interest Rate Warrants shall be Interest Rate Put Warrants, Interest Rate Call Warrants or otherwise; (8) the Strike Amount, the method of determining the Spot Amount and the method of expressing movements in the yield or closing price of the Sovereign Debt Instrument or in the level of the Rate or such other yield, price or rate as a cash amount in the currency in which the Interest Rate Cash Settlement Value of such Warrants is payable; (9) the formula for determining the Interest Rate Cash Settlement Value, if applicable, of each Interest Rate Warrant; (10) whether and under what circumstances a minimum and/or maximum expiration value is applicable upon the expiration or exercise of such Interest Rate Warrants; (11) the effect or effects, if any, of the occurrence of a Market Disruption Event or Force Majeure Event (each as defined in the Interest Rate Warrant Agreement); (12) the date on which the right to exercise such Interest Rate Warrants shall commence and the date (the 'Interest Rate Warrant Expiration Date') on which such right shall expire; (13) any minimum number of Interest Rate Warrants which must be exercised at any one time, other than upon automatic exercise; (14) the maximum number, if any, of such Interest Rate Warrants that may, subject to elections by the Company, be exercised by all owners (or by any person or entity) on any day; (15) any provisions for the automatic exercise of such Interest Rate Warrants other than at expiration; (16) whether and under what circumstances such Interest Rate Warrants may be cancelled by the Company prior to their expiration date; (17) any provisions permitting a Holder to condition any notice of exercise on the absence of certain specified changes in the Spot Amount after the date of exercise; (18) any other procedures and conditions relating to the exercise of such Interest Rate Warrants; (19) the identity of the Interest Rate Warrant Agent; (20) any national securities exchange on which such Interest Rate Warrants will be listed; (21) provisions, if any, for issuing such Interest Rate Warrants in certificated form; (22) if such Interest Rate Warrants are not issued in book-entry form, the place or places at which payments in respect of such Interest Rate Warrants are to be made by the Company; (23) if applicable, a discussion of certain United States federal income tax, accounting or other special considerations applicable thereto; and; (24) any other terms of such Interest Rate Warrants. 24 Other important information concerning Interest Rate Warrants is set forth below under 'Certain Items Applicable to All Warrants -- Modifications', ' -- Merger, Consolidation, Sale or Other Disposition' and ' -- Enforceability of Rights by Beneficial Owner; Governing Law' and 'Certain Items Applicable to Currency Warrants, Index Warrants and Interest Rate Warrants -- Exercise of Warrants', ' -- Market Disruption and Force Majeure Events', ' -- Settlement Currency' and ' -- Listing'. CERTAIN ITEMS APPLICABLE TO ALL WARRANTS MODIFICATIONS. Each Warrant Agreement and the terms of each issue of Warrants may be amended by the Company and the applicable Warrant Agent, without the consent of the beneficial owners or the registered holders, for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective or inconsistent provision contained therein, or in any other manner which the Company may deem necessary or desirable and which will not materially adversely affect the interests of the beneficial owners of the then outstanding unexercised Warrants (Section 6.1). The Company and the applicable Warrant Agent may also modify or amend the applicable Warrant Agreement and the terms of the related Warrants, with the consent of the beneficial owners of not less than a majority in number of the then outstanding unexercised Warrants affected, provided that no such modification or amendment that reduces the amount receivable upon exercise, shortens the period of time during which the Warrants may be exercised, increases the minimum or decreases the maximum number of Warrants that may be exercised by or on behalf of any one beneficial owner at any one time, changes the formula for determining the Cash Settlement Value or otherwise materially and adversely affects the exercise rights of the owners or reduces the number of outstanding Warrants the consent of whose beneficial owners is required for modification or amendment of the applicable Warrant Agreement or the terms of the Warrants may be made without the consent of each beneficial owner affected thereby (Section 6.1). MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITION. The Company will covenant in the Warrant Agreements that it will not merge or consolidate with any other corporation or sell or convey all or substantially all its assets to any person (other than an Asset Drop-Down (as defined under 'Description of the Debt Securities -- Covenants -- Consolidation, Merger, Sale or Conveyance of Assets of the Company')), unless (i) either the Company is the continuing corporation or the successor corporation or the person which acquires by sale or conveyance substantially all the assets of the Company (if other than the Company) is a corporation organized under the laws of the United States of America or any state thereof and expressly assumes the due and punctual performance and observance of all the covenants and conditions of each Warrant Agreement to be performed or observed by the Company, by amendment to the Warrant Agreements satisfactory to the respective Warrant Agents, executed and delivered to the Warrant Agents by such corporation, and (ii) the Company or such successor corporation, as the case may be, is not, immediately after such merger or consolidation, or such sale or conveyance, in default in the performance of any such covenant or condition. In the case of any such consolidation, merger, sale or conveyance, and following such an assumption by the successor corporation, such successor corporation will succeed to and be substituted for the Company, with the same effect as if it had been named in the Warrant Agreements, and, in the case of any such sale or conveyance, the Company will be released and discharged from all obligations and covenants under the Warrant Agreements and the Warrants. In the event of any Asset Drop-Down after the date of any Warrant Agreement, any subsequent sale or conveyance of assets by the Drop-Down Subsidiary will be deemed to be a sale or conveyance of assets by the Company for purposes of the covenant described in this paragraph. The term 'substantially all', which appears in the foregoing covenant, is not defined in the Warrant Agreements and a precise explanation of such term is not feasible. The Company will interpret such term in any particular situation in light of all then existing facts and circumstances. ENFORCEABILITY OF RIGHTS BY BENEFICIAL OWNER; GOVERNING LAW. Each Warrant Agent will act solely as an agent of the Company in connection with the issuance and exercise of the applicable Warrants and will not assume any obligation or relationship of agency or trust for or with any owner of a beneficial interest in any Warrant or with the registered holder thereof (Sections 5.2). A Warrant Agent shall have no duty or responsibility in the case of any default by the Company in the performance of its covenants or agreements under the applicable Warrant Agreement or Warrant Certificate including, without limitation, any duty or responsibility to initiate any proceedings at law or 25 otherwise or except as provided in the applicable Debt Warrant Agreement, to make any demand upon the Company (Section 5.2). Beneficial owners may, without the consent of the applicable Warrant Agent, enforce by appropriate legal action, on their own behalf, their right to exercise their Warrants, to receive Debt Securities, in the case of Debt Warrants, and to receive payment, if any, for their Warrants, in the case of Currency Warrants, Index Warrants or Interest Rate Warrants (Section 3.3 of the Debt Warrant Agreement and Section 3.1 of each other Warrant Agreement). Except as may otherwise be provided in the Prospectus Supplement relating thereto, each issue of Warrants and the applicable Warrant Agreement will be governed by and construed in accordance with the law of the State of New York (Section 6.7 of the Debt Warrant Agreement and Section 6.5 of each other Warrant Agreement). CERTAIN ITEMS APPLICABLE TO CURRENCY WARRANTS, INDEX WARRANTS AND INTEREST RATE WARRANTS EXERCISE OF WARRANTS. Except as may otherwise be provided in the applicable Prospectus Supplement relating thereto, (a) each Currency Warrant, Index Warrant and Interest Rate Warrant will entitle the owner, upon payment of the exercise price, if any, to the applicable Cash Settlement Value of such Warrant, on the applicable Exercise Date, in each case as such terms will further be defined in the applicable Prospectus Supplement relating thereto (Sections 1.1 and 2.2) and (b) if not exercised prior to 1:30 p.m., New York City time, on the Business Day preceding the applicable Warrant Expiration Date, the Warrants will be deemed automatically exercised on such Warrant Expiration Date (Section 2.3). As described below, Currency Warrants, Index Warrants and Interest Rate Warrants may also be deemed to be automatically exercised if they are delisted. Procedures for exercise of the Currency Warrants, Index Warrants and Interest Rate Warrants will be set forth in the applicable Prospectus Supplement. MARKET DISRUPTION AND FORCE MAJEURE EVENTS. If so specified in the applicable Prospectus Supplement, following the occurrence of a Market Disruption Event or Force Majeure Event (as each term shall be defined therein), the Cash Settlement Value of a Currency Warrant, an Index Warrant or an Interest Rate Warrant may be determined on a different basis than under normal exercise of a Warrant or the determination of the applicable Cash Settlement Value. In addition, if so specified in the applicable Prospectus Supplement, Currency Warrants, Index Warrants and Interest Rate Warrants may, in certain circumstances, be cancelled by the Company prior to the expiration date and the holders thereof will be entitled to receive only the applicable Cancellation Amount. The Cancellation Amount may be either a fixed amount or an amount that varies during the term of the Warrants in accordance with a schedule or formula. SETTLEMENT CURRENCY. Currency Warrants, Index Warrants and Interest Rate Warrants will be settled only in U.S. dollars (unless settlement in a foreign currency is specified in the applicable Prospectus Supplement and is permissible under securities exchange rules approved by the Commission) and accordingly will not require or entitle an owner to sell, deliver, purchase, or take delivery of the currency, security or other instrument underlying such Warrants. If any of the Currency Warrants, Index Warrants or Interest Rate Warrants are sold for, or if the exercise price, if any, is payable in, foreign currencies or foreign currency units or if the amount payable by the Company in respect of any series of Currency Warrants, Index Warrants or Interest Rate Warrants is payable in foreign currencies or foreign currency units, the restrictions, elections, tax consequences, specific terms and other information with respect to such issue of Warrants and such currencies or currency units will be set forth in the Prospectus Supplement relating thereto. LISTING. Unless otherwise provided in the Prospectus Supplement, each issue of Currency Warrants, Index Warrants and Interest Warrants will be listed on a national securities exchange, as specified in the applicable Prospectus Supplement, subject only to official notice of issuance, as a pre-condition to the sale of any such Warrants. It may be necessary in certain circumstances for such national securities exchange to obtain the approval of the Commission in connection with any such listing. In the event that such Warrants are delisted from, or permanently suspended from trading on, such exchange, and at or prior to such delisting or suspension, such Warrants shall not have been listed on another national securities exchange, any such Warrants not previously exercised will be deemed automatically exercised on the date such delisting or permanent trading suspension becomes effective 26 (Sections 2.3). The applicable Cash Settlement Value to be paid in such event will be as set forth in the applicable Prospectus Supplement. The Company will notify holders of such Warrants as soon as practicable of such delisting or permanent trading suspension. The applicable Warrant Agreement will contain a covenant of the Company not to seek delisting of such Warrants from or permanent suspension of their trading on, such exchange (Section 2.4 of the Currency Warrant Agreement and the Interest Rate Warrant Agreement and Section 2.5 of the Index Warrant Agreement). DESCRIPTION OF THE GUARANTEE Newcourt will provide an irrevocable unconditional guarantee of payment of principal, premium, if any, and interest on the Notes. Such guarantee will be an unsecured obligation of Newcourt and will rank pari passu (equal in right of payment) with all other unsecured and unsubordinated indebtedness of Newcourt. At December 31, 1997, Newcourt's consolidated indebtedness was approximately $2.0 billion (C$2.8 billion). Such guarantee will, however, be effectively subordinate (with respect to the assets of Newcourt's Subsidiaries) to the indebtedness and other liabilities of such subsidiaries. At December 31, 1997, such indebtedness and other liabilities aggregated approximately $0.7 billion (C$1.0 billion). Newcourt has no current intention or plan to increase the amount of such indebtedness in the future, other than in connection with the growth of Newcourt's business. GLOBAL SECURITIES The Securities of a series may be issued in whole or in part in the form of one or more global Securities that will be deposited with or on behalf of a depositary (a 'Depositary') identified in the Prospectus Supplement relating to such series. Global Securities representing Debt Securities or Debt Warrants may be issued in either registered or bearer form. Global Securities representing Currency Warrants, Index Warrants or Interest Rate Warrants will be issued in registered form only. Global Securities may be issued in either temporary or permanent form. The specific terms of the depositary arrangement with respect to any Securities of a series will be described in the Prospectus Supplement relating to such series. The Company anticipates that the following provisions will apply to all depositary arrangements. Unless otherwise specified in the Prospectus Supplement, Securities which are to be represented by a global Security in registered form to be deposited with or on behalf of a Depositary will be registered in the name of such Depositary or its nominee. Upon the issuance of a global Security in registered form, the Depositary for such global Security will credit the respective principal amounts, in the case of Debt Securities, and the respective number of warrants, in the case of Warrants represented by such global Security, to the accounts of institutions that have accounts with such Depositary or its nominee ('participants'). The accounts to be credited shall be designated by the underwriters or agents of such Securities, or by the Company if such Securities are offered and sold directly by the Company. Ownership of beneficial interests in such global Securities will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests by participants in such global Securities will be shown on, and the transfer of that ownership interest will be effected only through, records maintained by the Depositary or its nominee for such global Security. Ownership of beneficial interests in global Securities by persons that hold through participants will be shown on, and the transfer of that ownership interest within such participant will be effected only through, records maintained by such participant. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in a global Security. So long as the Depositary for a global Security in registered form, or its nominee, is the registered owner of such global Security, such Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Securities represented by such global Security for all purposes under the Indenture, in the case of Debt Securities, or under the applicable Warrant Agreement, in the case of Warrants, governing such Securities. Except as set forth below or as the Company may otherwise agree in its sole discretion, owners of beneficial interests in such global Security will not be entitled to have 27 Securities of the series represented by such global Security registered in their names, will not receive or be entitled to receive physical delivery of Securities of such series in definitive form and will not be considered the owners or holders thereof under the Indenture, in the case of Debt Securities, or under the applicable Warrant Agreement, in the case of Warrants. Payments in respect of Securities registered in the name of or held by a Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner or the holder of the global Security. None of the Company, the Trustee or applicable Warrant Agent, any Paying Agent or any Security Registrar (the 'Security Registrar') for such Securities will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest. The Company expects that the Depositary for a permanent global Security in registered form, upon receipt of any payment in respect of a permanent global Security, will credit immediately participants' accounts with payments in amounts proportionate to their respective beneficial interests in such global Security as shown on the records of such Depositary. The Company also expects that payments by participants to owners of beneficial interests in such global Security held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in 'street name', and will be the responsibility of such participants. A global Security in registered form may not be transferred except as a whole by the Depositary for such global Security to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor of such Depositary or nominee or a nominee of such successor. If a Depositary for a permanent global Security in registered form is at any time unwilling or unable to continue as Depositary and a successor Depositary is not appointed by the Company within 90 days, the Company will issue Securities in definitive registered form in exchange for the global Security representing such Securities. In addition, the Company may at any time and in its sole discretion determine not to have any Securities of a series in registered form represented by one or more global Securities and, in such event, will issue Securities of such series in definitive form in exchange for all the global Securities representing such Series. Further, if the Company so specifies with respect to the Securities of a series or otherwise consents in its sole discretion, an owner of a beneficial interest in a global Security representing Securities of such series may, on terms acceptable to the Company and the Depositary for such global Security, receive Securities of such series in definitive form. In any such instance, an owner of a beneficial interest in a global Security will be entitled to physical delivery in definitive form of Securities of the series represented by such global Security equal in principal amount, in the case of Debt Securities, or number, in the case of Warrants, to such beneficial interest and to have such Securities registered in its name (if the Securities of such series are issuable as registered securities). Unless otherwise specified by the Company, Securities of such series so issued in definitive form will be issued either as registered or bearer securities (if the Securities of such series are issuable in such form) and in authorized denominations, in the case of Debt Securities, or in authorized numbers, in the case of Warrants, as specified in the applicable Prospectus Supplement. See, however, 'Description of the Debt Securities -- Limitations on Issuance of Bearer Debt Securities' for a description of certain restrictions on the issuance of a bearer Debt Security in definitive form in exchange for an interest in a global Security. BEARER DEBT SECURITIES If so specified in the Prospectus Supplement, pending the availability of a permanent global Security, all or any portion of the Debt Securities of a series which may be issuable as bearer Debt Securities will initially be represented by one or more temporary global Securities, without interest coupons, to be deposited with a common depositary in London for Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the Euroclear System ('Euroclear') and Cedel Bank, societe anonyme ('Cedel Bank') for credit to the designated accounts. The interests of the beneficial owner or owners in such a temporary global Security in bearer form will be exchangeable for definitive bearer 28 Debt Securities (including interests in a permanent global Security in bearer form), representing Debt Securities having the same interest rate and stated maturity, but only upon written certification in the form and to the effect described under 'Description of the Debt Securities -- General' unless such certification has been provided on an earlier interest payment date. The beneficial owner of a Debt Security represented by a temporary global Security in bearer form or a permanent global Security in bearer form may, on or after the applicable exchange date and upon 30 days' notice to the Trustee given through Euroclear or Cedel Bank, exchange its interest for definitive bearer Debt Securities or, if specified in the Prospectus Supplement, definitive registered Debt Securities of any authorized denomination. No bearer Debt Security delivered in exchange for a temporary global Security or a permanent global Security shall be mailed or otherwise delivered to any location in the United States in connection with such exchange. Unless otherwise specified in the Prospectus Supplement, interest in respect of any portion of such a temporary global Security in bearer form payable in respect of an Interest Payment Date occurring prior to the issuance of a permanent global Security in bearer form will be paid to each of Euroclear and Cedel Bank with respect to the portion of the temporary global Security in bearer form held for its account. Each of Euroclear and Cedel Bank will undertake in such circumstances to credit such interest received by it in respect of a temporary global Security in bearer form to the respective accounts for which it holds such temporary global Security in bearer form as of the relevant Interest Payment Date, but only upon receipt in each case of written certification, in the form and to the effect described under 'Description of Debt Securities -- General'. MATERIAL FEDERAL INCOME TAX CONSEQUENCES A summary of the material United States federal income tax consequences to persons investing in Securities will be set forth in the Prospectus Supplement. This summary in the Prospectus Supplement will be presented for information purposes only, however, and will not be intended as legal or tax advice to prospective purchasers. Prospective purchasers of Securities are urged to consult their own tax advisors prior to any acquisition of Securities. PLAN OF DISTRIBUTION The Company may sell any of the Securities in four ways: (i) directly to purchasers, (ii) through agents, (iii) through dealers or (iv) through underwriters. Any or all of the foregoing may be customers of, engage in other transactions with or perform other services for the Company in the ordinary course of business. Offers to purchase the Securities may be solicited directly by the Company or by agents designated by the Company from time to time. Any such agent, who may be deemed to be an underwriter as that term is defined in the Securities Act, involved in the offer or sale of the Securities in respect of which this Prospectus is delivered will be named, and any commissions payable by the Company to such agent set forth, in the Prospectus Supplement. Unless otherwise indicated in the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment. Agents may be entitled under agreements, which may be entered into with the Company, to indemnification by the Company against certain civil liabilities, including liabilities under the Securities Act. If a dealer is utilized in the sale of the Securities in respect of which this Prospectus is delivered, the Company will sell such Securities to the dealer, as principal. The dealer may then resell such Securities to the public at varying prices to be determined by such dealer at the time of resale. Dealers may be entitled to indemnification by the Company against certain liabilities, including liabilities under the Securities Act. If the sale is accomplished through an underwriter or underwriters, the Company will enter into an underwriting agreement with such underwriters at the time of sale to them, and the names of the underwriters and the terms of the transaction will be set forth in the Prospectus Supplement, which, together with this Prospectus, will be used by the underwriters to make resales of the Securities in respect of which the Prospectus Supplement and this Prospectus are delivered to the public. The 29 underwriters may be entitled, under the relevant underwriting agreement, to indemnification by the Company against certain liabilities, including liabilities under the Securities Act. If so indicated in the Prospectus Supplement, the Company will authorize agents and underwriters to solicit offers by certain institutions to purchase Securities from the Company at the public offering price set forth in the Prospectus Supplement pursuant to Delayed Delivery Contracts ('Contracts') providing for payment and delivery on a specified future date. Institutions with which Contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, educational and charitable institutions, and other institutions, but shall in all cases be subject to the approval of the Company. Except as otherwise provided in the Prospectus Supplement, Contracts will not be subject to any conditions except that the purchase by an institution of the Securities covered by its Contract shall not at the time of delivery be prohibited under the laws of any jurisdiction in the United States to which such institution is subject. A commission indicated in the Prospectus Supplement will be paid to agents and underwriters soliciting purchases of the Securities pursuant to Contracts accepted by the Company. The place and time of delivery for the Securities in respect of which this Prospectus is delivered are set forth in the Prospectus Supplement. VALIDITY OF SECURITIES The validity of the Securities will be passed upon for the Company by Scott J. Moore, Senior Vice President, General Counsel and Secretary, and for any agent, dealer or underwriter by Winston & Strawn, New York, New York. The opinions of Scott J. Moore and Winston & Strawn will be conditioned upon, and subject to certain assumptions regarding, future action required to be taken by the Company and the Trustee in connection with the issuance and sale of any particular Security, the specific terms of Securities and other matters which may affect the validity of Securities but which cannot be ascertained on the date of such opinions. EXPERTS The consolidated financial statements for the Company as of December 31, 1997 and for the year then ended incorporated by reference in the Prospectus and elsewhere in the Registration Statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto and is incorporated by reference in reliance upon the authority of said firm as experts in giving said report. The Company's consolidated balance sheet as of December 31, 1996 and the consolidated statements of income, changes in shareowners' equity, and cash flows for each of the two years in the period ended December 31, 1996, incorporated by reference in this Prospectus, have been incorporated by reference in reliance on the report of Coopers & Lybrand L.L.P., independent auditors, given on the authority of that firm as experts in accounting and auditing. The financial statements for Newcourt incorporated by reference in the Prospectus and elsewhere in the Registration Statement, to the extent and for the periods indicated in their report, have been audited by Ernst & Young, Chartered Accountants, and are included herein in reliance on their reports given on the authority of that firm as experts in accounting and auditing. 30 AT&T CAPITAL CORPORATION AND SUBSIDIARIES AND NEWCOURT CREDIT GROUP INC. UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS F-1 AT&T CAPITAL CORPORATION AND SUBSIDIARIES AND NEWCOURT CREDIT GROUP INC. UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION The following unaudited pro forma consolidated balance sheet and statement of income of AT&T Capital Corporation and Subsidiaries ('AT&T Capital' or the 'Company') are based on the historical Consolidated Financial Statements of AT&T Capital and Newcourt Credit Group Inc. ('Newcourt') at December 31, 1997 and for the year then ended. The unaudited pro forma consolidated balance sheet has been prepared assuming the Newcourt Acquisition, as defined herein, had occurred on December 31, 1997 and the unaudited pro forma consolidated income statement has been prepared assuming the Newcourt Acquisition had occurred on January 1, 1997. On January 12, 1998, Newcourt, an Ontario corporation, consummated the purchase (the 'Newcourt Acquisition') of all of the outstanding shares of common stock of AT&T Capital, pursuant to a Stock Purchase Agreement dated as of November 17, 1997 (the 'Stock Purchase Agreement') among the Company, Newcourt, Hercules Holdings (Cayman) Ltd. ('Hercules'), the former direct owner of 97.4% of the Company's common stock, and by 21 members and one former member of the senior management of the Company. In connection with the Newcourt Acquisition, all of the outstanding shares of common stock of the Company were transferred to Newcourt Holdings USA, Inc., a newly-formed Delaware corporation which is a wholly-owned subsidiary of Newcourt. As a result of the Newcourt Acquisition, all of the outstanding shares of common stock of the Company are owned indirectly by Newcourt. The aggregate purchase price pursuant to such Stock Purchase Agreement paid by Newcourt to the stockholders of AT&T Capital was approximately $1.6 billion comprised of approximately $1.0 billion in cash and the remainder comprising approximately 17.6 million of Newcourt common shares. Such shares were issued entirely to Hercules and generally may not be transferred for periods ranging from 6 to 18 months following the date of the Newcourt Acquisition. The cash portion of the purchase price paid by Newcourt was raised through the issuance by Newcourt of 38.5 million shares of Newcourt common stock at approximately $32.50 per share to employees of Newcourt and the public in Canada and the United States. See the Company's Current Report on Form 8-K dated February 9, 1998, as amended by the Company's Current Report on Form 8-K/A dated February 18, 1998, both incorporated by reference in this Registration Statement, for the prospectus filed by Newcourt in connection with its registration of fully paid subscription rights to receive one common share of Newcourt. The pro forma consolidated financial statements reflect the historical cost of the Company's assets and liabilities. Adjustments to the Company's assets and liabilities to reflect their respective fair values as a result of the Newcourt Acquisition have not been made. The excess of purchase price over net book value has been allocated to goodwill. The following pro forma financial information is unaudited and should be read in conjunction with the accompanying notes thereto and with the Company's 1997 audited consolidated financial statements, incorporated by reference in this Registration Statement, and with the consolidated financial statements included in Newcourt's Form 6-K for the year ended December 31, 1997, incorporated by reference in this Registration Statement. The pro forma financial information is not necessarily indicative of either the financial position or the results of operations that would have been achieved had the Newcourt Acquisition and the related transactions actually occurred on the dates referred to above, nor is it necessarily indicative of the results of future operations, because such unaudited pro forma financial information is based on estimates of financial effects that may prove to be inaccurate over time. F-2 AT&T CAPITAL CORPORATION AND SUBSIDIARIES AND NEWCOURT CREDIT GROUP INC. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1997
U.S. GAAP/$ AT&T PRO FORMA PRO FORMA NEWCOURT CAPITAL ADJUSTMENTS NOTE CONSOLIDATED ---------- ---------- ----------- ----- ------------ NOTE 2 NOTE 1 (DOLLARS IN THOUSANDS) ASSETS Cash........................................... $1,245,228 $ 8,317 $(1,101,900) 4a $ 120,545 (31,100) 4b Investment in finance assets................... 1,061,223 2,564,933 3,626,156 Investment in capital leases................... 559,529 3,288,141 3,847,670 Investment in operating leases................. 192,513 1,593,582 1,786,095 Assets held for securitization and syndication.................................. 761,724 478,213 1,239,937 Investment in affiliated companies............. 121,383 121,383 Accounts receivable and other.................. 236,956 525,963 45,700 4a 808,619 Goodwill, net.................................. 299,010 85,600 871,121 4a 1,296,631 40,900 4b Deferred income taxes.......................... 0 231,146 231,146 ---------- ---------- ----------- ------------ TOTAL ASSETS......................... $4,477,566 $8,775,895 $ (175,279) $ 13,078,182 ---------- ---------- ----------- ------------ ---------- ---------- ----------- ------------ LIABILITIES, PREFERRED SECURITIES AND SHAREHOLDERS' EQUITY LIABILITIES Accounts payable and accrued liabilities............................. $ 202,283 $ 709,997 $ 8,700 4a $ 967,880 46,900 4b Debt...................................... 2,063,579 7,117,994 9,181,573 Future income tax liability............... 28,980 4,125 33,105 ---------- ---------- ----------- ------------ TOTAL LIABILITIES.................... 2,294,842 7,832,116 55,600 10,182,558 ---------- ---------- ----------- ------------ PREFERRED SECURITIES........................... 200,000 200,000 SHAREHOLDERS' EQUITY Share capital............................. 2,048,718 903 549,097 4a 2,561,618 (37,100) 4b Additional paid-in capital................ 651,552 (651,552) 4a Recourse loans to senior executives....... (15,471) 15,471 4a Foreign currency translation adjustments............................. (4,032) 4,032 4a Retained earnings......................... 134,006 110,827 (110,827) 4a 134,006 ---------- ---------- ----------- ------------ TOTAL SHAREHOLDERS' EQUITY........... 2,182,724 743,779 (230,879) 2,695,624 ---------- ---------- ----------- ------------ TOTAL LIABILITIES, PREFERRED SECURITIES AND SHAREHOLDERS' EQUITY............................. $4,477,566 $8,775,895 $ (175,279) $ 13,078,182 ---------- ---------- ----------- ------------ ---------- ---------- ----------- ------------
See accompanying explanatory notes to the Unaudited Pro Forma Consolidated Balance Sheet. F-3 AT&T CAPITAL CORPORATION AND SUBSIDIARIES AND NEWCOURT CREDIT GROUP INC. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1997
U.S. GAAP/$ AT&T PRO FORMA PRO FORMA NEWCOURT CAPITAL ADJUSTMENTS NOTE CONSOLIDATED ---------- ---------- ----------- ----- ------------ NOTE 2 NOTE 1 (DOLLARS IN THOUSANDS) FEE AND AFFILIATE INCOME: Securitization and syndication fees............ $ 143,570 $ 82,663 $226,233 Net income from affiliated companies........... 6,902 6,902 Management fees................................ 25,794 261,701 287,495 ----------- -------- ------------ TOTAL FEE BASED INCOME.................... 176,266 344,364 520,630 Net rental revenue from operating leases....... 279,968 279,968 Net finance income............................. 51,027 25,208 76,235 ----------- -------- ------------ TOTAL ASSET FINANCE INCOME................ 227,293 649,540 876,833 Selling, general and other operating expenses..................................... 130,092 525,383 655,475 Depreciation and amortization.................. 14,760 20,345 $ 45,600 4c 80,705 Distributions on Preferred Securities.......... 18,120 18,120 ----------- -------- ----------- ------------ Income before loss on sale of businesses, net, restructuring charges and taxes................... 82,441 85,692 $ (45,600) 122,533 Loss on sales of businesses, net............... 18,563 18,563 Restructuring charges.......................... 49,377 35,093 84,470 ----------- -------- ----------- ------------ Income before taxes................................. 33,064 32,036 $ (45,600) 19,500 Provision for (benefit of) income taxes........ (4,742) 11,029 6,287 ----------- -------- ----------- ------------ NET INCOME................................ $ 37,806 $ 21,007 $ (45,600) $ 13,213 ----------- -------- ----------- ------------ ----------- -------- ----------- ------------ Basic and diluted earnings per common share......... $.10 ------------ ------------
See accompanying explanatory notes to the unaudited Pro Forma Consolidated Statement of Income. F-4 AT&T CAPITAL CORPORATION AND SUBSIDIARIES AND NEWCOURT CREDIT GROUP INC. EXPLANATORY NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AND THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1997 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1. BASIS OF PRESENTATION The unaudited pro forma consolidated balance sheet and unaudited pro forma consolidated statement of income have been prepared using the following information: (a) Audited consolidated financial statements of Newcourt Credit Group Inc. ('Newcourt') as of and for the year ended December 31, 1997, which are incorporated by reference in this Registration Statement (See Note 2); (b) Audited consolidated financial statements of AT&T Capital Corporation ('AT&T Capital' or the 'Company') as of and for the year ended December 31, 1997, which are incorporated by reference in this Registration Statement. Certain financial statement items have been reclassified from the audited consolidated financial statements of AT&T Capital in order to conform to the presentation used by Newcourt. These reclassifications are as follows:
PER AT&T CAPITAL PRO FORMA NEWCOURT BALANCE SHEET CATEGORY* PRESENTATION RECLASSIFICATION NOTE PRESENTATION - --------------------------------------------- ---------------- ---------------- ----------- ------------ Net investment in finance receivables........ 2,343,604 221,329 (1) 2,564,933 Deferred charges and other assets............ 832,892 (221,329) (1) 525,963 (85,600) (2) Goodwill, net................................ -- 85,600 (2) 85,600 Short-term notes, less unamortized discounts.................................. 1,868,585 (1,868,585) (3) -- Medium and long-term debt.................... 5,249,409 1,868,585 (3) 7,117,994 Income taxes and other payables.............. 714,122 (4,125) (4) 709,997 Future income tax liability.................. -- 4,125 (4) 4,125 INCOME STATEMENT CATEGORY* Finance revenue.............................. 229,855 (229,855) (5) -- Capital lease revenue........................ 361,124 (361,124) (5) -- Rental revenue on operating leases........... 834,027 (834,027) (6) -- Equipment sales.............................. 49,349 (49,349) (7) -- Other revenue, net........................... 257,121 (257,121) (7) -- Interest expense............................. 451,470 (451,470) (5) -- Operating and administrative................. 545,728 (20,345) (8) 525,383 Depreciation on operating leases............. 554,059 (554,059) (6) -- Cost of equipment sales...................... 44,769 (44,769) (7) -- Provision for credit losses.................. 114,301 (114,301) (5) -- Net finance income........................... -- 25,208 sum of (5) 25,208 Net rental revenue from operating leases..... -- 279,968 sum of (6) 279,968 Management fees.............................. -- 261,701 sum of (7) 261,701 Depreciation and amortization................ -- 20,345 (8) 20,345
- ------------ (1) Net investment in securitized assets have been reclassified from Deferred charges and other assets to the caption Investment in finance assets. (2) Goodwill has been reclassified from Deferred charges and other assets to the caption Goodwill, net. F-5 (3) Short-term notes, less unamortized discounts and Medium and long-term debt have been reclassified to the caption Debt. (4) The current liability for operating income taxes has been reclassified from Income taxes and other payables to Future income tax liability. (5) Finance revenue, Capital lease revenue, Interest expense and Provision for credit losses have been reclassified to the caption Net finance income. (6) Rental revenue on operating leases and Depreciation on operating leases have been reclassified to the caption Net rental revenue from operating leases. (7) Other revenue, net, Equipment sales and Cost of equipment sales have been reclassified to the caption Management fees. (8) Depreciation on property, plant and equipment and goodwill amortization have been reclassified from Operating and administrative to the caption Depreciation and amortization. * Descriptions may differ slightly in the Newcourt presentation. See AT&T Capital Corporation and Subsidiaries and Newcourt Credit Group Inc. -- Unaudited Pro Forma Consolidated Balance Sheet and Income Statement. (c) Such other supplementary information as was considered necessary to reflect the acquisition of the Company by Newcourt (the 'Newcourt Acquisition') in these unaudited pro forma consolidated financial statements. 2. NEWCOURT CREDIT GROUP INC. The financial statements of Newcourt as of and for the year ended December 31, 1997, incorporated by reference in this Registration Statement, were prepared in accordance with accounting principles generally accepted in Canada and are expressed in Canadian dollars. For the purposes of these unaudited pro forma consolidated financial statements, the following adjustments have been made to the balance sheet and income statement of Newcourt to conform them to U.S. generally accepted accounting principles in U.S. dollars. (a) Differences between Generally Accepted Accounting Principles ('GAAP') in Canada and the United States. (i) For Canadian GAAP purposes, unrealized translation gains and losses on long term monetary items are deferred and amortized over the remaining terms of those items. For U.S. GAAP purposes, such gains and losses are recorded in income immediately. (ii) For Canadian GAAP purposes, amounts paid to employees to retire issued stock options without issuing common stock are recorded as capital transactions. For U.S. GAAP purposes, such amounts paid are recorded as compensation expense. (iii) For Canadian GAAP purposes, finance assets sold to securitization vehicles are not consolidated. Under U.S. GAAP, certain of these securitization vehicles are required to be accounted for under the equity method of accounting while others are required to be consolidated. Accordingly, for U.S. GAAP purposes, gains relating to these asset sales have been deferred, and, in the case of consolidated vehicles, the assets and liabilities have been recorded on the balance sheet. The deferred gains will be recognized in income as the related finance assets are collected. (iv) The restructuring charge was reduced for costs that would have been accrued as an adjustment to the liabilities assumed relating to a recent acquisition and the rationalization of certain Newcourt businesses in Canada and the United States under U.S. GAAP, rather than expensed as permitted by Canadian GAAP. F-6 The following tables summarizes the differences between what was reported by Newcourt in its financial statements under Canadian GAAP and what has been reflected herein for U.S. GAAP purposes as of and for the year ended December 31, 1997: Income Statement: Net income for the year ended December 31, 1997 as reported under Canadian GAAP.... $26,318 Difference in accounting for foreign exchange gains (losses) (net of income tax recovery of $4,466).............................................................. (5,458) Difference in accounting for options retired....................................... (796) Difference in accounting for securitization transactions (net of income taxes of $3,153).......................................................................... 3,964 Difference in accounting for restructuring charge (net of income taxes of $11,272)......................................................................... 13,778 ------- Net income for the year ended December 31, 1997 reported under U.S. GAAP........... $37,806 ------- -------
Balance Sheet: Increase in investment in finance assets........................................... $95,370 Increase in accounts receivable and other.......................................... 53,132 Increase in goodwill, net.......................................................... 13,726 Decrease in accounts payable and accrued liabilities............................... 9,867 Increase in debt................................................................... 94,540 Increase in subordinated debt...................................................... 21,930 Increase in future income tax liability............................................ 9,620
(b) Currency The audited consolidated financial statements of Newcourt are expressed in Canadian dollars. For the purposes of these unaudited pro forma consolidated financial statements, the consolidated balance sheet of Newcourt has been translated into U.S. dollars using the December 31, 1997 exchange rate of 1.4328 and the consolidated statement of income of Newcourt has been translated into U.S. dollars using the weighted average exchange rate for the year ended December 31, 1997 of 1.3839. 3. PRO FORMA ASSUMPTIONS (a) The acquisition, pursuant to an agreement dated November 17, 1997, whereby Newcourt agreed to purchase all of the issued and outstanding common shares of AT&T Capital, subject to satisfaction of certain closing conditions, for approximately $1.6 billion payable as follows: (i) approximately $1.0 billion by means of cash payment at closing; and (ii) the remainder by the issuance of approximately 17.6 million of Newcourt common shares at closing. (b) The acquisition of AT&T Capital has been accounted for using the purchase method. The difference between the purchase price and estimated fair value of the net assets acquired has been allocated to goodwill. Goodwill has not yet been adjusted to revalue the assets and liabilities of AT&T Capital to their fair values. The amount assigned to goodwill will be amortized as a reduction to income over a twenty year period. (c) The issuance of 38.5 million Newcourt common shares, pursuant to a prospectus filed with the Securities and Exchange Commission on November 24, 1997, which resulted in Newcourt receiving net proceeds (after the underwriters' fees and the expenses of issue) of approximately $1.2 billion. 4. PRO FORMA ADJUSTMENTS The pro forma adjustments contained in these pro forma consolidated financial statements are based on estimates and assumptions by management of AT&T Capital and Newcourt based on available information. The adjustments for the actual acquisition may differ as a result of changes arising from F-7 evaluation of the fair value of AT&T Capital's net assets by Newcourt after the effective date of acquisition. The following adjustments have been made to reflect the Newcourt Acquisition: (a) Issuance of approximately $1.2 billion of Newcourt common shares, a portion of which, was used to satisfy the cash portion of the purchase price (See Note 3), the issuance of approximately 17.6 million treasury shares by Newcourt in the amount of approximately $.6 billion to satisfy the remaining portion of the purchase price and to reflect the purchase of all the issued and outstanding common stock of AT&T Capital. (b) To reflect the costs of issuing Newcourt common shares as well as other transaction related costs. (c) Amortization of goodwill over a twenty year period. 5. EARNINGS PER SHARE Earnings per share reflects the issuance by Newcourt of approximately 56.1 million common shares arising from the acquisition of the Company combined with the average number of Newcourt common shares outstanding (subsequent to the subdivision of the common shares) during the period. F-8 ________________________________ ________________________________ No person has been authorized to give any information or to make any representations other than those contained or incorporated by reference in this Prospectus Supplement or the Prospectus in connection with the offer made by this Prospectus Supplement and the Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized. Neither the delivery of this Prospectus Supplement and the Prospectus nor any sale made hereunder and thereunder shall under any circumstances create an implication that there has been no change in the affairs of the Company since the date hereof. This Prospectus Supplement and the Prospectus do not constitute an offer or solicitation by anyone in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. --------------------------- TABLE OF CONTENTS
Page ---- Prospectus Supplement Important Currency Exchange Information...................................................................................... S-2 Description of Medium-Term Notes, Series F................................................................................... S-2 Foreign Currency and Indexed Note Risks...................................................................................... S-16 Material Federal Income Tax Consequences..................................................................................... S-17 Plan of Distribution......................................................................................................... S-29 Prospectus Available Information........................................................................................................ 2 Incorporation of Documents by Reference...................................................................................... 3 Risk Factors................................................................................................................. 3 The Company.................................................................................................................. 7 Use of Proceeds.............................................................................................................. 10 Ratio of Earnings to Fixed Charges........................................................................................... 11 Description of the Debt Securities........................................................................................... 12 Description of the Warrants.................................................................................................. 20 Description of the Guarantee................................................................................................. 27 Global Securities............................................................................................................ 27 Material Federal Income Tax Consequences..................................................................................... 29 Plan of Distribution......................................................................................................... 29 Validity of Securities....................................................................................................... 30 Experts...................................................................................................................... 30
U.S. $5,000,000,000 [LOGO] MEDIUM-TERM NOTES, SERIES F DUE NINE MONTHS OR MORE FROM DATE OF ISSUE GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY [LOGO] ------------------------------------------ PROSPECTUS SUPPLEMENT DATED MAY , 1998 ------------------------------------------ ________________________________ ________________________________ PART II TO FORM F-9 INFORMATION NOT REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS INDEMNIFICATION Under the Business Corporations Act (Ontario) (the 'OBCA'), the Registrant may indemnify a present or former director or officer of the Registrant or person who acts or acted at the Registrant's request as a director or officer of another body corporate of which the Registrant is or was a shareholder or creditor, and his or her heirs and legal representatives: (a) against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been a director or officer of the Registrant; (b) with court approval, against all costs, charges and expenses reasonably incurred by him or her in connection with an action brought by or on behalf of the Registrant or body corporate to procure a judgment in its favour, to which he or she is made a party by reason of being or having been a director or officer of the Registrant or body corporate; and (c) in respect of all costs, charges and expenses reasonably incurred by him or her in connection with the defence of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of having been a director or officer of the Registrant or body corporate, if he or she was substantially successful on the merits or his or her defence of the action or proceeding. provided, in all cases, such director or officer (i) acted honestly and in good faith with a view to the best interests of the Registrant, and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, such director or officer had reasonable grounds for believing that his or her conduct was lawful. Subject to the limitations contained in the OBCA, the By-laws of the Registrant provide that every director or officer of the Registrant, every former director or officer of the Registrant or a person who acts or acted at the Registrant's request as a director or officer of a body corporate of which the Registrant is or was a shareholder or creditor, and his heirs and legal representatives shall, from time to time, be indemnified and saved harmless by the Registrant from and against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the Registrant or body corporate if: (1) he acted honestly and in good faith with a view to the best interests of the Registrant; and (2) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful. The Registrant maintains directors' and officers' liability insurance with an aggregate annual limit of liability of U.S.$40,000,000. Under this insurance coverage, the Registrant is reimbursed for payments made to directors or officers of the Registrant, as required or permitted by law or under provisions of the By-laws of the Registrant, as indemnity for loss, including legal costs, arising from acts, errors or omissions done or committed by officers or directors of the Registrant in the course of their duties. Any agents, dealers of underwriters, who execute any of the agreements filed as Exhibits 1A or 1B to the registration statement on Form S-3 filed concurrently herewith, will agree to indemnify the registrant and registrant's directors and its officers who signed the registration statement against certain liabilities which might arise under the Securities Act of 1933 from information furnished to the registrant by or on behalf of any such indemnifying party. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is therefore unenforceable. II-1 PART II TO FORM S-3 INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. Securities and Exchange Commission Filing Fee....................................................... $1,475,000 Rating Agency Fees.................................................................................. 580,000* Fees and Expenses of Trustee........................................................................ 20,000 Printing and Distributing Registration Statement, Prospectus, Indenture and Miscellaneous Material.......................................................................................... 40,000* Accountants' Fee.................................................................................... 150,000* Legal Fees and Expenses............................................................................. 50,000* Blue Sky Fees and Expenses.......................................................................... 6,500* Miscellaneous Expenses.............................................................................. 9,500* ---------- Total.......................................................................................... $2,331,000 ---------- ----------
- ------------ * Estimated. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the General Corporation Law of Delaware and the registrant's Restated Certificate of Incorporation and By-Laws provide for the indemnification of directors and officers under certain circumstances, and on a case by case basis, against expenses reasonably incurred in connection with a civil or criminal action to which he or she was a party, or threatened to be made a party, by reason of being a director or officer. The registrant's Restated Certificate of Incorporation and By-Laws provide for indemnity of directors and officers to the fullest extent permitted by law. The directors and officers of the registrant are covered by an insurance policy indemnifying them against certain liabilities, including certain liabilities arising under the Securities Act of 1933, which might be incurred by them in such capacities and against which they cannot be indemnified by the registrant. Any agents, dealers or underwriters, who execute any of the agreements filed as Exhibits 1A or 1B to this registration statement, will agree to indemnify the registrant and registrant's directors and its officers who signed the registration statement against certain liabilities which might arise under the Securities Act of 1933 from information furnished to the registrant by or on behalf of any such indemnifying party. ITEM 16. EXHIBITS. The exhibits marked with an asterisk below, on file with the Commission, are incorporated by reference as exhibits hereto.
EXHIBIT NUMBER - ------- 1A -- Form of Underwriting Agreement 1B -- Form of Distribution Agreement 4A -- Form of Indenture dated as of April 1, 1998 (the 'Indenture'), between the Registrant and The Chase Manhattan Bank, as Trustee*** 4B -- Form of Medium-Term Global Fixed Rate Note* 4C -- Form of Medium-Term Certificated Fixed Rate Note* 4D -- Form of Medium-Term Global Floating Rate Note* 4E -- Form of Medium-Term Certificated Floating Rate Note* 4F -- Form of Debt Warrant Agreement* 4G -- Form of Currency Warrant Agreement** 4H -- Form of Index Warrant Agreement** 4I -- Form of Interest Rate Warrant Agreement** 4J -- Form of Guarantee relating to the Notes
II-2
EXHIBIT NUMBER - ------- 4K -- Form of Guarantee relating to the Warrants 5 -- Opinion of Glen J. DuMont, Assistant General Counsel of the Registrant, as to the legality of the securities being registered 12 -- Computation of Ratio of Earnings to Fixed Charges* 23A -- Consent of Coopers & Lybrand L.L.P.* 23B -- Consent of Glen J. DuMont, Assistant General Counsel of the Registrant (contained in the opinion filed as Exhibit 5) 23C -- Consent of Arthur Andersen LLP* 23D -- Consent of Ernst & Young* 24 -- Powers of Attorney executed by the directors and officers who signed the registration statement* 25 -- Statement of Eligibility of the Trustee on Form T-1***
- ------------ * Previously filed as an exhibit to this Registration Statement ** Previously filed as the corresponding exhibit to Registration Statement No. 33-54359 *** Amends the corresponding exhibit filed with the initial filing of this Registration Statement ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; Provided, however, that the undertakings set forth in paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with the Securities and Exchange Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions referred to in the first paragraph of Item 15 above or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification by it is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such II-3 liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of a registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective. For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-4 PART III UNDERTAKING AND CONSENT TO SERVICE OF PROCESS ITEM 1. UNDERTAKING The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquires made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to the securities registered pursuant to this Form F-9 or to transactions in said securities. ITEM 2. CONSENT TO SERVICE OF PROCESS Concurrently with the filing of this Registration Statement, the Registrant is filing with the Commission a written irrevocable consent and power of attorney on Form F-X. III-1 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-9 and has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Toronto, Province of Ontario, Country of Canada, on April 28, 1998. NEWCOURT CREDIT GROUP INC. By: /s/ BORDEN D. ROSIAK ................................... NAME: BORDEN D. ROSIAK TITLE: EXECUTIVE VICE PRESIDENT III-2 Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - ------------------------------------------ -------------------------------------------- ------------------- ** Chief Executive Officer and Director April 28, 1998 ......................................... STEVEN K. HUDSON /s/ BORDEN D. ROSIAK Executive Vice-President April 28, 1998 ......................................... BORDEN D. ROSIAK ** Chief Financial Officer April 28, 1998 ......................................... DANIEL A. JAUERNIG ** Chairman of the Board and Director April 28, 1998 ......................................... DAVID F. BANKS ** Director April 28, 1998 ......................................... GERALD E. BEASLEY ** Director April 28, 1998 ......................................... DAVID A. MACINTOSH ** Director April 28, 1998 ......................................... RONALD A. MCKINLAY ** Director April 28, 1998 ......................................... BRADLEY D. NULLMEYER ** Director April 28, 1998 ......................................... DAVID D. MCKERROLL ** Director April 28, 1998 ......................................... PAUL G. MORTON ** Director April 28, 1998 ......................................... ROBERT F. KILIMNIK ** Director April 28, 1998 ......................................... BRUCE I. ROBERTSON ** Director April 28, 1998 ......................................... RICHARD C. VERN AT&T CAPITAL Authorized Representative in the United April 28, 1998 CORPORATION States By: ** ......................................... SCOTT J. MOORE **By: /s/ BORDEN D. ROSIAK ......................................... BORDEN D. ROSIAK Attorney-in-Fact
III-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Morristown, State of New Jersey, on the 28th day of April, 1998. AT&T CAPITAL CORPORATION By /s/ SCOTT J. MOORE ................................... SCOTT J. MOORE SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
SIGNATURE CAPACITY DATE - ------------------------------------------ -------------------------------------------- ------------------- ** Principal Executive Officer -- Chief April 28, 1998 ......................................... Executive Officer and Director STEVEN K. HUDSON ** Principal Financial Officer -- Chief April 28, 1998 ......................................... Financial Officer DANIEL A. JAUERNIG ** Principal Accounting Officer -- Vice April 28, 1998 ......................................... President and Controller THOMAS G. ADAMS ** Director April 28, 1998 ......................................... DAVID F. BANKS **By /s/ SCOTT J. MOORE ......................................... SCOTT J. MOORE, AS ATTORNEY-IN-FACT
EXHIBIT INDEX The exhibits marked with an asterisk below, on file with the Commission, are incorporated by reference as exhibits hereto.
EXHIBIT NUMBER - ------- 1A -- Form of Underwriting Agreement 1B -- Form of Distribution Agreement 4A -- Form of Indenture dated as of April 1, 1998 (the 'Indenture'), between the Registrant and The Chase Manhattan Bank, as Trustee*** 4B -- Form of Medium-Term Global Fixed Rate Note* 4C -- Form of Medium-Term Certificated Fixed Rate Note* 4D -- Form of Medium-Term Global Floating Rate Note* 4E -- Form of Medium-Term Certificated Floating Rate Note* 4F -- Form of Debt Warrant Agreement* 4G -- Form of Currency Warrant Agreement** 4H -- Form of Index Warrant Agreement** 4I -- Form of Interest Rate Warrant Agreement** 4J -- Form of Guarantee relating to the Notes 4K -- Form of Guarantee relating to the Warrants 5 -- Opinion of Glen J. DuMont, Assistant General Counsel of the Registrant, as to the legality of the securities being registered 12 -- Computation of Ratio of Earnings to Fixed Charges* 23A -- Consent of Coopers & Lybrand L.L.P.* 23B -- Consent of Glen J. DuMont, Assistant General Counsel of the Registrant (contained in the opinion filed as Exhibit 5) 23C -- Consent of Arthur Andersen LLP* 23D -- Consent of Ernst & Young* 24 -- Powers of Attorney executed by the directors and officers who signed the registration statement* 25 -- Statement of Eligibility of the Trustee on Form T-1***
- ------------ * Previously filed as an exhibit to this Registration Statement ** Previously filed as the corresponding exhibit to Registration Statement No. 33-54359 *** Amends the corresponding exhibit filed with the initial filing of this Registration Statement EX-1 2 EXHIBIT 1A EXHIBIT 1A AT&T CAPITAL CORPORATION FORM OF NOTE UNDERWRITING AGREEMENT , 1998 J.P. Morgan Securities Inc. As Representative of the Several Underwriters c/o J.P. Morgan Securities Inc. 60 Wall Street New York, New York 10260 Ladies and Gentlemen: Each of the undersigned, AT&T Capital Corporation (the "Company") and Newcourt Credit Group Inc. ("Newcourt"), hereby confirms its agreement with the several Underwriters named in Schedule I hereof, as follows: 1. Underwriters and Representatives. The term "Underwriters" as used herein shall mean the several persons, firms and corporations named in Schedule I hereof, and the term "Underwriter" shall mean any one of such persons, firms or corporations. The terms "Underwriters," "persons," "firms" and "corporations" as used herein shall include the singular of such terms as well as the plural. The term "Representative" shall mean the representative to whom this Agreement is addressed, who, by signing this Agreement, represents that it has been authorized by each Underwriter to execute this Agreement on behalf of such Underwriter and to act for such Underwriter in the manner herein provided. All obligations of the Underwriters hereunder are several and not joint. 2. Description of Notes. The Company proposes to issue $750,000,000 principal amount of its Medium-Term Notes, Series F (the "Notes") under an Indenture dated as of April 1, 1998, (as amended, restated or supplemented from time to time, the "Indenture"), between the Company, Newcourt and The Chase Manhattan Bank, Trustee (the "Trustee"). The Notes will be guaranteed as to payment of principal, premium, if any, and interest pursuant to the guarantee dated as of April 1, 1998 made by Newcourt to the Trustee (the "Guarantee"). The Notes and the Guarantee are more fully described in the Registration Statement. The term "Registration Statement" means the joint registration statement on Form S-3/Form F-9 (File No. 333-48415) relating to the Notes and the Guarantee (including a prospectus and prospectus supplement, each as amended to the date hereof, relating to the Notes and the Guarantee) which has become effective under the Securities Act of 1933 (the "Act"). The term "Basic Prospectus" means the prospectus included in the Registration Statement. The term "Prospectus" means the Basic Prospectus together with the prospectus supplement specifically relating to the Notes and Guarantee, as filed with, or delivered for filing to, the Commission pursuant to Rule 424 under the Act. The term "preliminary prospectus" means any preliminary prospectus supplement specifically relating to the Notes and Guarantee together with the Basic Prospectus. As used herein, Registration Statement, Basic Prospectus, Prospectus, and preliminary prospectus shall include in each case the material, if any, incorporated by reference therein. 3. Representations and Warranties of the Company. The Company and Newcourt jointly and severally represent and warrant to the several Underwriters that: (a) The Company and Newcourt have filed with the Commission the Registration Statement, which has become effective under the Act, and the Company and Newcourt have filed or will file with, or has delivered or will deliver for filing to, the Commission a prospectus supplement specifically relating to the Notes and Guarantee pursuant to Rule 424 under the Act. (b)(i) Each part of the Registration Statement (including the material incorporated by reference therein) when such part became effective, did not contain any 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, (ii) each preliminary prospectus, if any, relating to the Notes and the Guarantee, filed pursuant to Rule 424 under the Act, complied when so filed in all material respects with the Act and the Trust Indenture Act of 1939 (the "Trust Indenture Act") and the applicable rules and regulations of the Commission thereunder, (iii) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Act and the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder and (iv) the Registration Statement and the Prospectus do not and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement, any preliminary prospectus or the Prospectus in reliance upon information furnished in writing to the Company by an Underwriter through J.P. Morgan Securities Inc. specifically for inclusion therein or as to any statements in or omissions from the Statement of Eligibility and Qualification of the Trustee under the Indenture. (c) Each document or portion thereof incorporated by reference in the Prospectus complied when filed with the Commission in all material respects with the provisions of the Securities Exchange Act of 1934 (the "Exchange Act"), together with the applicable instructions, rules and regulations of the 2 Commission thereunder, and each document, if any, hereafter filed under the Exchange Act and so incorporated by reference in the Prospectus will comply when so filed in all material respects with the requirements of such Exchange Act and such applicable instructions, rules and regulations. (d) The accountants who have certified or shall certify the financial statements filed and to be filed with the Commission as parts of the Registration Statement and the Prospectus are public or certified accountants, independent with respect to the Company and Newcourt, as required by the Act and the rules and regulations of the Commission thereunder. (e) The financial statements, and the related notes thereto, included or incorporated by reference in the Registration Statement and the Prospectus present fairly the consolidated financial position of the Company and Newcourt and their respective consolidated subsidiaries as of the dates indicated and the results of their operations and the changes in their consolidated cash flows for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis, and the supporting schedules included or incorporated by reference in the Registration Statement present fairly the information required to be stated therein; and the pro forma financial information and the related notes thereto, included or incorporated by reference in the Registration Statement and the Prospectus, have been prepared in accordance with the applicable requirements of the Act and Exchange Act, as applicable, and is based upon good faith estimates and assumptions believed by the Company and Newcourt to be reasonable. (f) Since the respective dates as of which information is given in the Registration Statement and Prospectus, there has not been any change in the capital stock or long-term debt of the Company or Newcourt or any of their respective subsidiaries, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, business, prospects, management, financial position, stockholders' equity or results of operations of the Company or Newcourt and their respective subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Prospectus; and except as set forth or contemplated in the Prospectus neither the Company, Newcourt nor any of their respective subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of business) material to the Company and its subsidiaries and Newcourt and its subsidiaries, each taken as a whole. (g) The Indenture has been duly authorized, executed and delivered by the Company and constitutes the valid and binding agreement of the Company, 3 enforceable in accordance with its terms (except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equity principles); (ii) the Notes have been validly authorized and, when duly executed, authenticated and delivered as provided in the Indenture, will be validly issued and outstanding, and will constitute valid and binding agreements of the Company entitled to the benefits of the Indenture and enforceable in accordance with their terms (except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equity principles); and (iii) the Notes and the Indenture conform to the descriptions thereof contained in the Prospectus. (h) The Guarantee has been duly authorized, executed and delivered by the Company and constitutes the valid and binding agreement of Newcourt, enforceable in accordance with its terms (except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equity principles); and (ii) the Guarantee conforms to the descriptions thereof contained in the Prospectus. (i) Each of the Company, Newcourt and their respective subsidiaries have been duly incorporated, is validly existing and in good standing under the laws of its respective jurisdiction of incorporation, is duly qualified to do business and in good standing as a foreign corporation in each jurisdiction in which its respective ownership of properties or the conduct of its respective businesses requires such qualification (except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company, Newcourt and their respective subsidiaries taken as a whole), and has the power and authority necessary to own or hold its respective properties and to conduct the businesses in which it is engaged, as described in the Prospectus. (j) Neither the Company, Newcourt nor any of their respective subsidiaries is in violation of its corporate charter or by-laws or in default under any agreement, indenture or instrument, the effect of which violation or default would be material to the Company, Newcourt and their respective subsidiaries taken as a whole. (k) The execution, delivery and performance of this Agreement by the Company and Newcourt and the execution, delivery and performance by Newcourt of the Guarantee and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach or violation of any of 4 the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company, Newcourt or any of their respective subsidiaries is a party or by which the Company, Newcourt or any of their respective subsidiaries is bound or to which any of the property or assets of the Company, Newcourt or any of their respective subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company, Newcourt or any of their respective subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, Newcourt or any of their respective subsidiaries or any of their properties or assets, the effect of which breach, violation or default would be material to the Company, Newcourt and their respective subsidiaries taken as a whole; and except for the registration of the Notes and the Guarantee under the Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state securities laws in connection with the purchase and distribution of the Notes and the Guarantee by the Underwriters, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental agency or body is required for the execution and delivery by the Company and Newcourt of, compliance by the Company and Newcourt with the provisions of, or consummation of the transactions contemplated by, this Agreement, except to the extent that the effect of the failure to obtain such consent, approval, authorization or order or to make such filing or registration would not be material to the Company, Newcourt and their respective subsidiaries taken as a whole. (l) The Company is in compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-128, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA. 4. Purchase And Sale of Notes. On the basis of the representations and warranties and on the terms and subject to the conditions herein set forth, each of the Underwriters agrees to purchase from the Company, severally and not jointly, and on the terms and subject to the conditions herein set forth the Company agrees to sell to each of the Underwriters, severally and not jointly, the principal amount of Notes set forth opposite its name in Schedule I, at % of the principal amount thereof, together with accrued interest, if any, thereon from , 199 to the date of payment and delivery. The terms of the public offering of the Notes are as set forth in the Prospectus. 5. Closing. Delivery of, and payment of the purchase price for, the Notes which the Underwriters severally agree to purchase shall be made at the office of Winston & Strawn, New 5 York, New York, at 10:00 a.m.(1) on , 1998 or at other such other place or time on the same or such other day as shall be agreed upon by the Company and the Representative. The time and date for such payment and delivery are herein referred to as the "time of closing". At the time of closing, the Company will deliver the Notes, registered in such names and in such authorized denominations as the Representative shall have specified not less than two business days prior to the day of closing, against payment therefor as provided in Section 6 hereof, to the Representative for the respective accounts of the Underwriters. The Company agrees to make the Notes available to the Representative for examination on behalf of the Underwriters at the office of Winston & Strawn, New York, New York, not later than 2:00 p.m. on the business day next preceding the day of closing. If, for any reason (other than termination of this Agreement in accordance with the provisions of Section 8, 9 or 10 hereof), one or more of the Underwriters shall fail or refuse to pay for the Notes it has or they have agreed to purchase (any such Underwriter being hereinafter referred to as a "defaulting Underwriter"), and the aggregate principal amount of the Notes which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of the Notes, the remaining Underwriters shall be obligated severally in the proportion which the amounts of Notes set forth opposite their names in Schedule I of this Agreement bear to the aggregate principal amount of the Notes set forth opposite the names of all such non-defaulting Underwriters (or in such other proportion as the Representative shall specify) to purchase the Notes which the defaulting Underwriter or Underwriters agreed but failed or refused to purchase; provided that in no event shall the principal amount of Notes that any Underwriter has agreed to purchase pursuant to Section 5 be increased pursuant to this Section 5 by an amount in excess of one-tenth of such principal amount of such Notes without the written consent of such Underwriter. In the event that any Underwriter or Underwriters shall fail or refuse to purchase the Notes and the aggregate principal amount of the Notes with respect to which such default occurs is more than one-tenth of the aggregate principal amount of the Notes, and arrangements satisfactory to the Representative and the Company for the purchase of all such Notes are not made within [ ] hours after such default, this Agreement will terminate without liability on the part of any of the non-defaulting Underwriters or of the Company. In any such case either the Representative or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Except to the extent provided in subparagraphs (d) and (g) of Section 7 hereof, termination of this Agreement pursuant to this Section 5 shall be without any liability on the part of the Company or any Underwriter other than a defaulting Underwriter. Any action taken under this Section shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. - -------- (1) Times mentioned herein are New York time. 6 6. Payment. At the time of closing, the Company will cause the Notes to be delivered to the Representative for the account of each Underwriter against payment of the purchase price of such Notes by wire transfer of next-day funds to an account specified by the Company at least two business days prior to the time of closing or by certified or official bank check or checks payable to the order of the Company in New York Clearing House or other next-day funds. 7. Covenants of The Company and Newcourt. The Company and Newcourt jointly and severally agree as follows: (a) Prior to the end of the period specified in Section 7(h), neither the Company nor Newcourt will file any amendment or supplement to the Registration Statement or the Prospectus of which the Representative shall not previously have been advised or which shall be disapproved by Winston & Strawn, which firm is acting as counsel for the Underwriters, and will not file any document pursuant to the Exchange Act which is deemed to be incorporated by reference in the Prospectus of which Winston & Strawn shall not previously have been advised. (b) The Company or Newcourt will deliver to the Representative a reasonable number of copies of the Registration Statement as originally filed (including documents incorporated by reference therein) and of all amendments thereto up to the time of closing. Promptly upon the filing with the Commission of any amendment to the Registration Statement or of any supplement to or amendment of the Prospectus, the Company or Newcourt will deliver to the Representative a reasonable number of copies thereof. The terms "supplement" and "amendment" or "amend", as used in this Agreement, shall include all documents filed by the Company or Newcourt with the Commission subsequent to the date of the Basic Prospectus, pursuant to the Exchange Act, which are deemed to be incorporated by reference in the Prospectus. (c) The Company or Newcourt will advise the Representative promptly (confirming such advice in writing) of any official request made by the Commission for an amendment to the Registration Statement or Prospectus or for additional information with respect thereto and of any official notice of the institution of proceedings for, or of the entry of, a stop order suspending the effectiveness of the Registration Statement. Each of the Company and Newcourt will use its best efforts to prevent the issuance of any such stop order and, if such a stop order should be entered, the Company and Newcourt will make every reasonable effort to obtain the lifting or removal thereof as soon as possible. 7 (d) The Company or Newcourt will pay all expenses in connection with the preparation and filing of the Registration Statement, the preparation of the Indenture and Guarantee, the rating of the Notes, the issuance and delivery of the Notes and the printing of the copies of any preliminary prospectus and of the Prospectus to be furnished as provided in the first sentence of subparagraph (h) below; and will pay any taxes on the issuance of the Notes, but will not pay any transfer taxes. The Company and Newcourt will not be required to pay any amount for any expenses of the Representative or any of the Underwriters, except the cost of mailing to Underwriters copies of the Registration Statement and all amendments thereto (including documents incorporated by reference), the preliminary prospectuses and the Prospectus, and except as provided by subparagraph (g) below, and provided that if no Notes are delivered to and purchased by the Underwriters hereunder for any reason other than a default by one or more of the Underwriters or the occurrence of any of the events referred to in Section 10 hereof, the Company, in addition to any payment provided for by subparagraph (g) of this Section 7, will reimburse the Representative for the reasonable out-of-pocket expenses of the Underwriters, not exceeding [$50,000], and for the fees and disbursements of Winston & Strawn, the Underwriters agreeing to pay such expenses, fees and disbursements in any other event. Neither the Company nor Newcourt will not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits. (e) The Company and Newcourt will apply the proceeds from the sale of the Notes as set forth under the heading "Use of Proceeds" appearing in the Prospectus. (f) So long as any of the Notes shall remain outstanding, the Company or Newcourt will furnish to the Representative, upon request and in reasonable quantities for distribution to the Underwriters, copies of such documents, reports and other information as may be required to be furnished to noteholders under the Indenture. (g) The Company and Newcourt will use its best efforts to qualify the Notes, or to assist in the qualification of the Notes by or on behalf of the Representative, for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representative may designate, and will pay or reimburse the Representative for counsel fees, filing fees and out-of-pocket expenses in connection with such qualification; provided that neither the Company nor Newcourt shall be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction or to pay, or to incur, or to reimburse the Representative for, any such expenses if no Notes are delivered to and purchased by the Underwriters hereunder because 8 of a default by one or more of the Underwriters or the termination of this Agreement pursuant to Section 10 hereof. (h) The Company will furnish to the Representative, upon request and in reasonable quantities for distribution to the Underwriters, as many copies of the Prospectus as the Representative may reasonably request for the purposes contemplated by the Act. If, during such period after the first date of the public offering of the Notes as, in the opinion of the counsel for the Underwriters, the Prospectus is required by law to be delivered, any event shall occur which should be set forth in a supplement to or an amendment of the Prospectus in order to make the Prospectus not misleading, the Company or Newcourt, as applicable, will, upon the occurrence of each such event, forthwith at its expense, either (i) prepare and furnish to the Representative, upon request and in reasonable quantities for distribution to the Underwriters, as many copies as the Representative may reasonably request for the purposes contemplated by the Act of a Supplement to or amendment of the Prospectus which will supplement or amend the Prospectus or (ii) file with the Commission documents deemed incorporated by reference in the Prospectus, in either case so that as supplemented or amended, it will not at the date of such supplement or amendment contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statement therein not misleading. For the purpose of this subparagraph (h), the Company and Newcourt will furnish such reasonable information with respect to itself as the Representative may from time to time request. Notwithstanding any of the other provisions of this subparagraph (h), neither the Company nor Newcourt shall be under any obligation to furnish any supplement to or amendment of the Prospectus on account of any change in, or to include in any amended prospectus any change in, the information furnished to the Company or Newcourt by any Underwriter or Underwriters or by the Representative on its or their behalf for use in the Prospectus, unless the Representative has advised the Company and Newcourt in writing of such change and has requested the Company or Newcourt at the expense of such Underwriter or Underwriters to prepare a supplement to or amendment of the Prospectus to reflect such change or to include such change in an amended prospectus. (i) The Company and Newcourt will cause to be made generally available to its security holders as soon as practicable an earnings statement which shall meet the requirements of Section 11(a) of the Act and Rule 158 promulgated thereunder. (j) Until the business day following the Closing Date, the Company will not, without the consent of the Representative offer, sell or contract to sell, or 9 announce the offering of, any debt securities covered by the Registration Statement or any other registration statement filed under the Act. 8. Conditions of the Obligations of the Underwriters. The obligations of the Underwriters to purchase and pay for the Notes shall be subject to the following additional conditions: (a) At the time of closing, the Indenture [and the Guarantee] shall be qualified under the Trust Indenture Act, the Prospectus shall have been filed or delivered for filing to the Commission not later than 5:00 p.m. on the second business day following the date hereof, no stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall be in effect and no proceedings for that purpose shall be pending before or threatened by the Commission, and the Representative shall have received a certificate dated the day of the closing and signed by the President, a Vice President or the Treasurer of each of the Company and Newcourt to the effect that no such stop order is in effect and, to the knowledge of the Company and Newcourt, no proceedings for such purpose are pending before, or threatened by, the Commission. (b) At or prior to the time of closing, the Representative shall have received from counsel for the Company, an opinion, satisfactory to Winston & Strawn, to the effect that -- (i) The Company has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware and Newcourt has been duly incorporated and is validly existing and in good standing under the laws of the Province of Ontario, Canada; each of the Company and Newcourt is duly qualified to do business and in good standing as a foreign corporation in all jurisdictions in which its ownership or leasing of properties or the conduct of its businesses requires such qualification (except where the failure to so qualify or be in good standing would not have a material adverse effect upon it and its subsidiaries taken as a whole), and has all power and authority necessary to own its respective properties and conduct the businesses in which it is engaged, as described in the Prospectus; (ii) The issue and sale of the Notes by the Company and the compliance by the Company with all the provisions of this Agreement, and the Indenture, and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other 10 agreement or instrument known to such counsel to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or any of its subsidiaries or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets (except for such conflicts, breaches, violations and defaults as would not have a material adverse effect on the Company and its subsidiaries taken as a whole); and, except for the registration of the Notes under the Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state securities laws in connection with the purchase and distribution of the Notes by the Underwriters, no consent, approval, authorization, qualification or order of, or filing or registration with, any such court or governmental agency or body is required for the execution and delivery by the Company of, compliance by the Company with the provisions of, or the consummation of the transactions contemplated by this Agreement and any Delayed Delivery Contract, except to the extent that the effect of the failure to obtain such consent, approval, authorization, qualification or order or to make such filing or registration would not be material to the Company and its subsidiaries taken as a whole; (iii) The issue of the Guarantee by Newcourt and the compliance by Newcourt with all the provisions of this Agreement, the Guarantee, and the Indenture, and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which Newcourt or any of its subsidiaries is a party or by which Newcourt or any of its subsidiaries is bound or to which any of the property or assets of Newcourt or any of its subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of Newcourt or any of its subsidiaries or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over Newcourt or any of its subsidiaries or any of their properties or assets (except for such conflicts, breaches, violations and defaults as would not have a material adverse effect on Newcourt and its subsidiaries 11 taken as a whole); and, except for the registration of the Notes and the Guarantee under the Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state securities laws in connection with the purchase and distribution of the Notes by the Underwriters, no consent, approval, authorization, qualification or order of, or filing or registration with, any such court or governmental agency or body is required for the execution and delivery by Newcourt of, compliance by Newcourt with the provisions of, or the consummation of the transactions contemplated by this Agreement, except to the extent that the effect of the failure to obtain such consent, approval, authorization, qualification or order or to make such filing or registration would not be material to the Newcourt and its subsidiaries taken as a whole; (iv) The Indenture has been duly authorized, executed and delivered by the Company, Newcourt and the Trustee and duly qualified under the Trust Indenture Act and is a valid and binding agreement of the Company and Newcourt enforceable in accordance with its terms (except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equity principles); (v) The Notes have been duly authorized by the Company and, when duly executed and authenticated as provided in the Indenture and delivered against payment therefor in accordance with this Agreement and each Delayed Delivery Contract, will be duly and validly issued and outstanding, and will constitute valid and binding agreements of the Company enforceable in accordance with their terms (except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and subject to general equitable principles), and entitled to the benefits of the Indenture; (vi) The Guarantee has been duly authorized, executed and delivered by Newcourt and is a valid and binding agreement of Newcourt enforceable in accordance with its terms (except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and subject to general equitable principles); (vii) The Registration Statement has become effective under the Act and, to the knowledge of such counsel, no stop order suspending the 12 effectiveness of the Registration Statement has been issued and no proceeding for that purpose is pending or threatened by the Commission; (viii) The statements made in the Prospectus under the captions "Description of the Debt Securities" and "Plan of Distribution", insofar as such statements constitute summaries of the legal matters, documents or proceedings specifically referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings and fairly summarize the matters referred to therein; (ix) This Agreement has been duly authorized, executed and delivered on behalf of the Company and Newcourt and is valid and binding on the Company and Newcourt, except as rights to indemnity and contribution hereunder may be limited under applicable law; (x) The opinions of counsel, if, any, expressed or referred to under the caption "Material Federal Income Tax Consequences" in the Prospectus are confirmed as correct in all material respects; (xi) Except as to financial statements and schedules contained therein, as to which such opinion is not called upon to express any opinion or belief, (A) each document or portion thereof incorporated by reference in the Registration Statement and the Prospectus complied when filed with the Commission as to form in all material respects with the requirements of the Exchange Act, together with the applicable instructions, rules and regulations of the Commission thereunder, (B) each part of the Registration Statement when it became effective complied as to form in all material respects with the requirements of the Act and the applicable instructions, rules and regulations of the Commission thereunder, (C) the Registration Statement and the Prospectus, as amended or supplemented, if applicable, comply, and at the date hereof complied, as to form in all material respects with the requirements of the Act and the applicable instructions, rules and regulations of the Commission thereunder, (D) the Registration Statement, as of its effective date, did not contain any 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 (E) the Prospectus does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements 13 therein, in the light of the circumstances under which they were made, not misleading. (c) At or prior to the time of closing, the Representative shall have received from Winston & Strawn an opinion to the effect specified in clauses (iv), (v), (vii), (viii), (ix) (solely with respect to the Company), (x), and (xi) (B), (C) and (E), specifically. (d) At each of the dates hereof and at or prior to the time of closing, the Representative shall have received an executed copy of a letter from each of Coopers & Lybrand L.L.P., Arthur Andersen LLP and Ernst & Young, addressed to the Company or Newcourt, as applicable, and to the Representative, to the effect that (i) they are independent public accountants as required by the Act and the applicable published rules and regulations of the Commission thereunder; (ii) the audited financial statements contained or incorporated by reference in the Registration Statement, as amended or supplemented from time to time, comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the applicable published rules and regulations of the Commission thereunder; and (iii) nothing has come to their attention as the result of specified procedure not constituting an audit that caused them to believe (A) that the unaudited financial statements, if any, contained in or incorporated by reference as aforesaid, do not so comply and are not fairly presented in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements contained as aforesaid, (B) that there was any change in the capital stock or long or intermediate term debt of the Company, or any decrease in net assets, from the date of the latest balance sheet which is contained in or incorporated by reference as aforesaid, to a date not more than five days prior to the date of such letter or (C) that there were any decreases, as compared with the corresponding period in the preceding year, in total revenues, income before interest deductions or net income from the date of the latest figures for such items contained in the Registration Statement to the date of the latest available financial statements of the Company; provided that, with respect to any of the items specified in clause (iii), such letter may contain an exception for matters which the Registration Statement discloses have occurred or may occur; and provided, further, that the letter may vary from the requirements specified in this subparagraph in such manner as the Representative in its sole discretion may determine to be immaterial or in such manner as may be acceptable to the Representative. (e) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been, at the time of 14 closing, any material adverse change in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Registration Statement and the Prospectus; the representations and warranties of the Company herein shall be true at the time of closing; the Company shall not have failed, at or prior to the time of closing, to have performed all agreements herein contained which should have been performed by it at or prior to such time; and the Representative shall have received, at the time of closing, a certificate to the foregoing effect dated the day of the closing and signed by the President, a Vice President or the Treasurer of the Company. (f) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes of rule 436(g) (2) under the Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities. (g) Prior to the Closing Date, the Company shall have furnished to the Representative such further information, certificates and documents as the Representative may reasonably request. In case any of the conditions specified above in this Section 8 shall not have been fulfilled, this Agreement may be terminated by the Representative by delivering written notice of termination to the Company. Any such termination shall be without liability of any party to any other party except to the extent provided in subparagraphs (d) and (g) of Section 7 hereof. 9. Conditions of Company's Obligation. The obligation of the Company to deliver the Notes upon payment therefor shall be subject to the following conditions: At the time of closing, the Indenture [and the Guarantee] shall be qualified under the Trust Indenture Act, the Prospectus shall have been filed or delivered for filing to the Commission not later than 5:00 p.m. on the second business day following the date hereof and no stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall be in effect and no proceedings for that purpose shall then be pending before, or threatened by, the Commission. In case any of the conditions specified above in this Section shall not have been fulfilled, this Agreement may be terminated by the Company by delivering written notice of termination to the Representative. Any such termination shall be without liability of any party to any other party except to the extent provided in subparagraphs (d) and (g) of Section 7 hereof. 15 10. Termination of Agreement. This Agreement may be terminated by delivering written notice of termination to the Company at any time prior to the time of closing, by the Representative with the consent of Underwriters which, together with the Representative, have agreed to purchase 50% or more of the aggregate principal amount of the Notes, if after the signing of this Agreement (i) trading in securities generally on the New York Stock Exchange or the American Stock Exchange or in the over-the-counter market, or trading in any securities of the Companies on any exchange or in the over-the-counter market, shall have been suspended or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by Federal or New York State authorities, or (iii) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States as to make it, in the judgment of the Representative, impracticable or inadvisable to proceed with the offering or delivery of the Notes on the terms and in the manner contemplated in the Prospectus. A termination of this Agreement pursuant to this Section shall be without liability of any party to any other party. 11. Indemnification And Contribution. (a) The Company and Newcourt shall, jointly and severally, indemnify and hold each Underwriter harmless from and against any and all losses, claims, damages, and liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages, liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigated or defending any such action or claim as such expenses are incurred; provided, however, that the Company and Newcourt shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Provided Information in the Registration Statement or the Prospectus or any such amendment or supplement. (b) Each Underwriter will indemnify and hold harmless the Company and Newcourt against any losses, claims, damages or liabilities to which the Company or Newcourt may become subject, under the Act or otherwise, insofar as such losses, claims, damages, liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Provided Information in the Registration Statement or Prospectus or any such amendment or supplement; and will reimburse the 16 Company and Newcourt for any legal or other expenses reasonably incurred by the Company and Newcourt in connection with investigating or defending any such action or claim as such expenses are incurred. (c) The Company, Newcourt and each Underwriter agree that upon the commencement of any action against it, its directors, its officers who sign the Registration Statement, or any person controlling it as aforesaid in respect of which indemnity may be sought on account of any indemnity agreement contained herein, it will promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought, but the omission so to notify such indemnifying party or parties of any such action shall not relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party or parties otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given, such indemnifying party or parties shall be entitled to participate at its or their own expense in the defense of such action, or, if it or they so elect, to assume the defense of such action, and in the latter event such defense shall be conducted by counsel chosen by such indemnifying party or parties and satisfactory to the indemnified party or parties who shall be defendant or defendants in such action, and such defendant or defendants shall bear the fees and expenses of any additional counsel retained by them; but if the indemnifying party or parties shall not elect to assume the defense of such action, such indemnifying party or parties will reimburse such indemnified party or parties for the reasonable fees and expenses of any counsel retained by them. In the event that the parties to any such action (including impleaded parties) include the Company, Newcourt and one or more Underwriters and either (i) the indemnifying party or parties and indemnified party or parties mutually agree or (ii) representation of both the indemnifying party or parties and the indemnified party or parties by the same counsel is inappropriate under applicable standards of professional conduct due to actual or potential differing interests between them, then the indemnifying party or parties shall not have the right to assume the defense of such action on behalf of such indemnified party or parties and will reimburse such indemnified party or parties for the reasonable fees and expenses of any counsel retained by them and satisfactory to the indemnifying party or parties, it being understood that the indemnifying party or parties shall not, in connection with any one action or separate but similar or related actions arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to local counsel) for all such indemnified parties, which shall be designated in writing by the Representative in the case of an action in which one or more Underwriters or controlling persons are indemnified parties and by the Company or Newcourt in the case of an action in which the Company or Newcourt or any of their respective directors, officers or controlling persons are indemnified parties. The indemnifying party or parties shall not be liable under this Agreement with respect to any settlement made by any indemnified party or parties without prior written consent by the indemnifying party or parties to such settlement. (d) If the indemnification provided for in subparagraph (a) or (b) of this Section 11 is unavailable to an indemnified party in respect of any losses, claims, damages, or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party under such paragraph, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, 17 claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and Newcourt on the one hand and the Underwriters on the other from the offering of the Notes. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subparagraph (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and Newcourt on one hand the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company and Newcourt on one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Notes purchased under this Agreement (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters with respect to the Notes purchased under this Agreement, in each case as set forth the in table on the cover page of the Prospectus. The relative fault of the Company and Newcourt and of the Underwriters 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 Newcourt on one hand or by the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, Newcourt and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subparagraph (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subparagraph (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities referred to in this subparagraph (d) shall be deemed to include, subject to the limitations set forth above in this Section 11, any legal or other expenses reasonably incurred by such indemnified party in connection with defending any such action or claim. Notwithstanding the provisions of this subparagraph (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which Underwriter has been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subparagraph (d) to contribute are several in proportion to their respective underwriting obligations as set forth in Schedule I hereto (including an increase pursuant to Section 6) and not joint. (e) The obligations of the Company and Newcourt under this Section 11 shall be in addition to any liability which the Company and Newcourt may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the underwriters under this Section 11 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the 18 same terms and conditions, to each officer and director of the Company or Newcourt and to each person, if any, who controls the Company or Newcourt within the meaning of the Act. 12. Miscellaneous. This Agreement shall inure to the benefit of the Company and Newcourt, their respective directors and officers who sign the registration statement, the several Underwriters and each controlling person referred to in Section 11 hereof and their respective successors. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. The term "successor" as used in this Agreement shall not include any purchaser, as such purchaser, of any of the Notes from any of the several Underwriters. 13. Notices. All communications hereunder shall be in writing, and if to the Underwriters, unless otherwise provided, shall be mailed or delivered to the Representative at [ ] and if to the Company, unless otherwise provided, shall be mailed or delivered to the Company at 44 Whippany Road, Morristown, New Jersey 07962-1983. 14. Governing Law. The validity and interpretation of this Agreement shall be governed by the laws of the State of New York. 15. Survival Clause. Except with respect to any Underwriter who is in default within the meaning of Section 5 hereof, the indemnity and contribution agreement contained in Section 11 hereof and the representations and warranties of the Company and Newcourt set forth in this Agreement or in any certificate furnished pursuant hereto 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 Underwriter or any person controlling any Underwriter, or (iii) acceptance of and payment for the Notes. 19 Please sign and return to us the enclosed duplicate of this letter, whereupon this letter will become a binding agreement between the Company, Newcourt and the several Underwriters, in accordance with its terms. Very truly yours, AT&T CAPITAL CORPORATION By: ------------------------------- Printed Name: ---------------- Title: ------------------------ By: ------------------------------- Printed Name: ---------------- Title: ------------------------ NEWCOURT CREDIT GROUP INC. By: ------------------------------- Printed Name: ---------------- Title: ----------------------- By: ------------------------------- Printed Name: ---------------- Title: ----------------------- The foregoing Agreement is hereby confirmed and accepted as of the date first above written (Representative of the Several Underwriters) By: ------------------------------- Printed Name: --------------- Title: ---------------------- By: ------------------------------- Printed Name: --------------- Title: ---------------------- Acting severally on behalf of itself and the several Underwriters named herein 20 SCHEDULE I NAME PRINCIPAL AMOUNT 22 EX-1 3 EXHIBIT 1B EXHIBIT 1B AT&T CAPITAL CORPORATION Medium-Term Notes, Series F DISTRIBUTION AGREEMENT April ___, 1998 [Initial Purchasers] Ladies and Gentlemen: AT&T Capital Corporation, a Delaware corporation (the "Company"), proposes to issue and sell from time to time up to U.S. $5,000,000,000 (or the equivalent thereof in other currencies or currency units) aggregate principal amount of its Medium-Term Notes, Series F (the "Notes"), as such amount shall be reduced by the aggregate principal amount of any other debt securities and the aggregate purchase price of any warrants issued by the Company, whether within or without the United States (the "Other Securities"), pursuant to the Registration Statement discussed in Section II hereof, or otherwise. The Notes are to be issued under an Indenture dated as of April 1, 1998, as amended (the "Indenture") between the Company and The Chase Manhattan Bank, as Trustee (the "Trustee"). The Notes will be represented by either a global security registered in the name of a nominee of The Depository Trust Company (the "Depositary"), as Depositary (a "Book-Entry Note"), or a certificate issued in definitive form (a "Certificated Note"), as selected by the purchaser and agreed to by the Company and specified in the applicable pricing supplement. Beneficial interests in Book-Entry Notes will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary and its participants. Book-Entry Notes will not be issuable in definitive form, except under the circumstances described in the applicable prospectus supplement. The Notes shall be issued in the currency or currency unit (the "Specified Currency") and shall have the maturity ranges, annual interest rate (whether fixed or floating), redemption provisions, repayment provisions and other terms set forth in the Prospectus referred to below as it may be supplemented from time to time, including any applicable pricing supplement (the "Pricing Supplement"). I. Subject to the terms and conditions stated herein and subject to the reservation by the Company of the right to sell Notes (a) directly to investors on its own behalf or (b) through other agents, dealers or underwriters, the Company hereby (i) appoints [Initial Purchasers] (each, an "Agent", and collectively, the "Agents") to act as its agents to solicit orders for, and to sell, all or part of the Notes during a period beginning on the date hereof and ending when the Notes have been sold, or such other time as the Company may specify to you in writing, and (ii) agrees that whenever the Company determines to sell Notes directly to any of the Agents as principal for resale to others it will enter into a Terms Agreement relating to such sale in accordance with the provisions of Section I(b) hereof. (a) Solicitations as Agent. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, each Agent, severally and not jointly, will use its reasonable best efforts to solicit offers to purchase the Notes upon the terms and conditions set forth in the Prospectus as then amended or supplemented. The Company reserves the right, in its sole discretion, to instruct the Agents to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase the Notes. As soon as practicable, but in any event not later than one business day after receipt of notice from the Company, the Agents will suspend solicitation of offers to purchase Notes from the Company until such time as the Company has advised them that such solicitation may be resumed. Unless otherwise agreed between the Company and the Agents, the Company agrees to pay each Agent, as consideration for soliciting the sale of any Notes, a commission in the form of a discount equal to the following percentage of the principal amount of each Note sold by such Agent:
Term Commission Rate ---- --------------- From 9 months to 13 months .050% More than 13 months to 2 years .200% More than 2 years to 3 years .250% More than 3 years to 4 years .350% More than 4 years to 5 years .450% More than 5 years to 6 years .500% More than 6 years to 7 years .550% More than 7 years to 10 years .600% More than 10 years to 15 years .625% More than 15 years to 20 years .700% More than 20 years to 30 years .750%
The commission payable by the Company to the Agents with respect to notes with maturities greater than 30 years will be negotiated at the time the Company issues such Notes. Each Agent is authorized to solicit offers to purchase Notes only in principal amounts that are integral multiples of U.S. $1,000 or, if denominated in a Specified Currency other than U.S. dollars, then in principal amounts that are integral multiples of 1,000 units of such Specified Currency. Each Agent shall communicate to the Company, orally or in writing, each reasonable offer received by it to purchase Notes. The Company shall have the sole right to accept offers to purchase Notes and may reject any such offer in whole or in part. Each Agent shall have the right to reject, in its -2- discretion reasonably exercised, any offer received by it to purchase the Notes in whole or in part, and any such rejection shall not be deemed a breach of its agreements contained herein. (b) Purchases as Principal. Each sale of Notes to an Agent, as principal, shall be made in accordance with the terms of this Agreement and a separate agreement which will provide for the sale of such Notes to, and the purchase and reoffering thereof by, such Agent. Each such separate agreement (which shall be either (i) substantially in the form of Exhibit A hereto and may take the form of an exchange of any standard form of written telecommunication between such Agent and the Company or (ii) an oral agreement) is herein referred to as a "Terms Agreement." Any oral agreement entered into pursuant to the preceding sentence shall be confirmed promptly in writing. Any written confirmation containing the terms of such an oral agreement delivered or transmitted by the Agent to the Company shall constitute an agreement between such Agent and the Company unless the Company objects thereto in writing within one business day. An Agent's commitment to purchase Notes pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Terms Agreement shall specify the principal amount of Notes to be purchased by such Agent pursuant thereto, the price to be paid to the Company for such Notes, the Specified Currency in which such Notes shall be denominated, on which interest is to be paid and in which the redemption or repayment price, if any, is to be paid, the rate at which interest will be paid on the Notes, whether such rate of interest shall be fixed or floating and the time and place of delivery of any payment for such Notes (the "Settlement Date"). Such Terms Agreement shall also specify any requirements for opinions of counsel and letters from the Company's independent accountants pursuant to Section III hereof and may also contain additional provisions relating to defaults by underwriters and other provisions relating to termination as may be agreed at the time between the Company and the applicable Agent. The Company agrees that if an Agent purchases Notes as principal for resale, such Agent shall receive such compensation, in the form of a discount or otherwise, as shall be indicated in the applicable Terms Agreement or, if no compensation is indicated therein, a commission in accordance with the schedule set forth in subsection (a) of this Section I. (c) Procedures. Each Agent and the Company agree to perform the respective duties and obligations specifically provided to be performed by them in the Medium-Term Notes, Series F, Administrative Procedures (attached hereto as Exhibit B) (the "Procedures"), as amended from time to time. The Procedures may be amended only by written agreement of the Company and the Agents. (d) Delivery. The documents required to be delivered by Section III of this Agreement shall be delivered on the date hereof or at such other time as you and the Company may agree upon in writing (each a "time of closing"). (e) Other Securities. The Company agrees to notify each Agent of sales by the Company of the Other Securities. -3- II. The Company represents and warrants to each Agent that: (a) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement including a prospectus relating to debt securities and warrants of the Company, including the Notes, which has become effective under the Securities Act of 1933 (the "Act"), and has filed or will file with, or has delivered or will deliver for filing to, the Commission a prospectus supplement specifically relating to the Notes pursuant to Rule 424 under the Act. The term "Registration Statement" means such registration statement as amended to the date hereof, together with such prospectus supplement as amended to the date hereof. The term "Basic Prospectus" means the prospectus, as amended, included in the Registration Statement. The term "Prospectus" means the Basic Prospectus together with the prospectus supplement or supplements specifically relating to the Notes, as filed with, or delivered for filing to, the Commission pursuant to Rule 424. The term "preliminary prospectus" means any preliminary prospectus supplement specifically relating to the Notes together with the Basic Prospectus. As used herein, Registration Statement, Basic Prospectus, Prospectus, and preliminary prospectus shall include in each case the material, if any, incorporated by reference therein. (b) (i) Each part of the Registration Statement relating to the Notes, filed with the Commission pursuant to the Act, when such part became effective, did not contain any 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, (ii) each Prospectus, if any, relating to any Notes, filed pursuant to Rule 424 under the Act, complied when so filed in all material respects with the Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the applicable rules and regulations of the Commission thereunder, (iii) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Act and the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder and (iv) the Registration Statement and the Prospectus do not and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement, any preliminary prospectus or the Prospectus in reliance upon written information furnished to the Company by or on behalf of any Agent specifically for inclusion therein or as to any statements in or omissions from the Statement of Eligibility and Qualification of the Trustee under the Indenture. (c) Each document or portion thereof incorporated by reference in the Prospectus complied when filed with the Commission in all material respects with the provisions of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), together with the applicable instructions, rules and regulations of the Commission thereunder, and each document, if any, hereafter filed under the Exchange Act and so incorporated by reference in the Prospectus -4- will comply when so filed in all material respects with the requirements of such Exchange Act, instructions, rules and regulations. (d) The accountants who have certified or shall certify the financial statements filed and to be filed with the Commission as parts of the Registration Statement and the Prospectus are public or certified accountants, independent with respect to the Company, as required by the Act and the rules and regulations of the Commission thereunder. (e) This Agreement and any applicable Terms Agreement have been duly authorized, executed and delivered by the Company and constitute the valid and binding agreements of the Company except as rights to indemnification and contribution hereunder may be limited by applicable law. (f) (i) The Indenture has been duly authorized, executed and delivered by the Company and constitutes the valid and binding agreement of the Company, enforceable in accordance with its terms (except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equity principles); (ii) the Notes have been validly authorized for issuance and sale pursuant to this Agreement and, when the terms of a particular Note and of its issuance and sale have been duly established in accordance with the Indenture and this Agreement, and when such Note has been duly executed, authenticated, delivered and paid therefor as provided in this Agreement and the Indenture, such Note will be validly issued and outstanding, and will constitute the valid and binding agreement of the Company entitled to the benefits of the Indenture and enforceable in accordance with its terms (except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equity principles); (iii) each of the Operating Agreement, the Intercompany Agreement, the Tax Agreements and the License Agreement (each between the Company and AT&T Corp. and dated as of June 25, 1993) have been duly authorized, executed and delivered by the Company and constitutes the valid and legally binding agreement of the Company; and (iv) the Notes and the Indenture conform to the descriptions thereof contained in the Prospectus. (g) Each of the Company and each of its subsidiaries has been duly incorporated, is validly existing and in good standing under the laws of its respective jurisdiction of incorporation, is duly qualified to do business and in good standing as a foreign corporation in each jurisdiction in which its respective ownership of properties or the conduct of its respective businesses requires such qualification (except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole), and has the power and authority necessary to own or hold its respective properties and to conduct the businesses in which it is engaged, as described in the Prospectus. (h) Neither the Company nor any of its subsidiaries is in violation of its corporate charter or bylaws or in default under any agreement, indenture or instrument, the effect -5- of which violation or default would be material to the Company and its subsidiaries taken as a whole. (i) The execution, delivery and performance of this Agreement and any applicable Terms Agreement by the Company and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any if its subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or any of its subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets, the effect of which breach, violation or default would be material to the Company and its subsidiaries taken as a whole; and except for the registration of the Notes under the Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state securities laws in connection with the purchase or distribution of the Notes by the Agents, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental agency or body is required for the execution and delivery by the Company of, compliance by the Company with the provisions of, or consummation of the transactions contemplated by, this Agreement and any Terms Agreement, except to the extent that the effect of the failure to obtain such consent, approval, authorization or order or to make such filing or registration would not be material to the Company and its subsidiaries taken as a whole. (j) The Company is not and, after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as described in the Prospectus, will not be an "investment company" as defined in the Investment Company Act of 1940, as amended. III. The obligations of each Agent hereunder and under any Terms Agreement are subject to the following conditions: (a) At the time of closing and at each Settlement Date with respect to any Terms Agreement, the Indenture shall be qualified under the Trust Indenture Act and no stop order suspending the effectiveness of the Registration Statement as amended from time to time, shall be in effect, no proceedings for that purpose shall be pending before, or threatened by, the Commission, and at the time of closing each Agent shall have received, and at each Settlement Date with respect to any Terms Agreement, if called for by such Terms Agreement, the Agent which is a party thereto shall have received, a certificate, dated the time of closing or such applicable Settlement Date and signed by the President, a Vice President or the Treasurer of the Company to the effect that no such stop order is in effect and, to the knowledge of the Company, no proceedings for such purpose are pending before, or threatened by, the Commission. -6- (b) At or prior to the time of closing each Agent shall have received, and at each Settlement Date with respect to any Terms Agreement, if called for by such Terms Agreement, the Agent which is a party thereto shall have received, from counsel for the Company, to the effect that (i) The Company has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware, is duly qualified to do business and in good standing as a foreign corporation in all jurisdictions in which its ownership or leasing of properties or the conduct of its businesses requires such qualification (except where the failure to so qualify or be in good standing would not have a material adverse effect upon the Company and its subsidiaries taken as a whole), and has all power and authority necessary to own its respective properties and conduct the businesses in which it is engaged, as described in the Prospectus; (ii) The issue and sale of the Notes by the Company and the compliance by the Company with all the provisions of this Agreement, (and, if the opinion is being given on account of the Company having entered into a Terms Agreement, the applicable Terms Agreement) and the Indenture, and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or any of its subsidiaries or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets (except for such conflicts, breaches, violations and defaults as would not have a material adverse effect on the Company and its subsidiaries taken as a whole); and, except for the registrations or qualifications as may be required under the Exchange Act and applicable state securities laws in connection with the purchase or distribution of the Notes by the Agents, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental agency or body is required for the execution and delivery by the Company of, compliance by the Company with the provisions of, or the consummation of the transactions contemplated by this Agreement and any applicable Terms Agreement, except to the extent that the effect of the failure to obtain such consent, approval, authorization, qualification or order or to make such filing or registration would not be material to the Company and its subsidiaries taken as a whole; (iii) The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act and is a valid and binding agreement of the Company enforceable in accordance with its terms (except as enforcement thereof -7- may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equity principles); (iv) The Notes are in a form contemplated by the Indenture and have been duly authorized by all necessary corporate action and (other than in the case of an opinion delivered at a Settlement Date) when the terms of a particular Note and of its issuance and sale have been duly established in accordance with the Indenture and this Agreement so as not to violate any applicable law or agreement or instrument then binding on the Company, and when such Note has been duly executed and authenticated as specified in the Indenture and delivered against payment therefor in accordance with this Agreement, such Note will be a valid and binding agreement of the Company enforceable in accordance with its terms (except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general equity principles), and entitled to the benefits of the Indenture; (v) The Registration Statement has become effective under the Act and, to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose is pending or threatened by the Commission; (vi) The statements made in the Prospectus under the captions "Description of the Debt Securities", "Description of Medium-Term Notes, Series F" and "Plan of Distribution", insofar as such statements constitute summaries of the legal matters, documents or proceedings specifically referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings and fairly summarize the matters referred to therein; (vii) This Agreement (and, if the opinion is being given on account of the Company having entered into a Terms Agreement, the applicable Terms Agreement) has been duly authorized, executed and delivered on behalf of the Company and is valid and binding on the Company, except as rights to indemnification and contribution hereunder may be limited under applicable law; and (viii) Except as to financial statements and schedules contained therein, as to which such counsel is not called upon to express any opinion or belief, (A) each document or portion thereof incorporated by reference in the Registration Statement and the Prospectus complied when filed with the Commission as to form in all material respects with the requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, (B) each part of the Registration Statement filed with the Commission, when it became effective, complied as to form in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder, (C) the Registration Statement and the Prospectus, as amended or supplemented, if applicable, comply, and at the date of this Agreement complied, as to -8- form in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder, (D) the Registration Statement, as of its effective date, did not contain any 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 (E) the Prospectus does not contain any 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, in the light of the circumstances under which they were made, not misleading. (c) At or prior to the time of closing each Agent shall have received, and at each Settlement Date with respect to any Terms Agreement, if called for by such Terms Agreement, the Agent which is a party thereto shall have received, from Sidley & Austin, special tax counsel to the Company, an opinion confirming as correct in all material respects the opinion of such counsel expressed or referred to under "Material Federal Income Tax Consequences" in the Prospectus. (d) At or prior to the time of closing each Agent shall have received, and at each Settlement Date with respect to any Terms Agreement, if called for by such Terms Agreement, the Agent which is a party thereto shall have received, from Sullivan & Cromwell, an opinion or opinions with respect to the incorporation of the Company, the validity of the Notes, the Registration Statement, the Prospectus and other related matters as the Agents or such Agent may require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling such counsel to pass upon such matters. (e) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, as amended and supplemented to the time of closing, date of acceptance by the Company of an offer to purchase Notes or date of a Terms Agreement, as the case may be, there shall not have been (i) any material adverse change in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Registration Statement and the Prospectus, as amended and supplemented to such time of closing, date of acceptance by the Company or date of such Terms Agreement, or (ii) any downgrading in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act or any public announcement that any such organization has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities; the representations and warranties of the Company herein shall be true at the time of closing, each date of acceptance by the Company of an offer to purchase Notes and at each Settlement Date with respect to any Terms Agreement; the Company shall not have failed, at or prior to the time of closing, such date of acceptance by the Company of an offer to purchase Notes or such applicable Settlement Date, to have performed all agreements herein contained which should have been performed by it at or prior to such time; and each Agent shall have received at the time of closing, and the Agent which is a party to any Terms Agreement shall have received at each Settlement Date with respect to any such Terms Agreement, a certificate to the foregoing -9- effect dated the day of the closing and signed by the President, a Vice President or the Treasurer of the Company. (f) At or prior to the time of closing each Agent shall have received, and at each Settlement Date with respect to any Terms Agreement, if called for by such Terms Agreement the Agent which is party thereto shall have received, executed copies of a letter from the Company's independent accountants addressed to the Company and to each Agent, if delivered at the time of closing, or to the Company and the applicable Agent if delivered in connection with any Terms Agreement, dated as of the closing date or the Settlement Date, as appropriate, to the effect that (i) they are independent public accountants as required by the Act and the applicable published rules and regulations of the Commission thereunder; (ii) the audited financial statements contained in or incorporated by reference in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the applicable published rules and regulations of the Commission thereunder; and (iii) nothing has come to their attention as the result of specified procedures not constituting an audit that caused them to believe (A) that the unaudited financial statements, if any, contained in or incorporated by reference as aforesaid, do not so comply and are not fairly presented in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements contained as aforesaid, (B) that there was any change in the capital stock or long or intermediate term debt of the Company, or any decrease in net assets, from the date of the latest balance sheet which is contained in or incorporated by reference in the Registration Statement as aforesaid to a date not more than five days prior to the date of such letter or (C) that there were any decreases, as compared with the corresponding period in the preceding year, in total revenues, income before interest deductions or net income from the date of the latest figures for such items contained in the Registration Statement to the date of the latest available financial statements of the Company; provided, that with respect to any of the items specified in clause (iii), such letter may contain an exception for matters which the Registration Statement discloses have occurred or may occur; and provided further, that the letter may vary from the requirements specified in this subparagraph in such manner as may be acceptable to each Agent if delivered at the time of closing or the applicable Agent if delivered in connection with a Terms Agreement. In case, at the time of closing, and at each Settlement Date with respect to any Terms Agreement, any of the conditions specified above in this Article III shall not have been fulfilled, this Distribution Agreement may be terminated by the Agents, if such failure occurs at the time of closing, or such Terms Agreement may be terminated by the applicable Agent, if such failure occurs at a Settlement Date with respect to such Terms Agreement, in each case by delivering written notice of termination to the Company. Any such termination shall be without liability of any party to any other party. -10- IV. The obligation of the Company to deliver the Notes upon payment therefor shall be subject to the following conditions: at the time of closing, and at each Settlement Date with respect to any Terms Agreement, the Indenture shall be qualified under the Trust Indenture Act and no stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall be in effect and no proceedings for this purpose shall then be pending before, or threatened by, the Commission. In case the conditions specified above in this Article IV shall not have been fulfilled, this Agreement may be terminated by the Company by delivering written notice of termination to the Agents, if such failure occurs at the time of closing, or such Terms Agreement may be terminated by the Company by delivering written notice of termination to the applicable Agent, if such failure occurs at a Settlement Date with respect to such Terms Agreement; Any such termination shall be without liability of any party to any other party. V. In further consideration of your agreements herein contained with respect to any Notes, the Company covenants and agrees as follows: (a) To furnish each of you, without charge, a copy of the Registration Statement, including exhibits and materials, if any, incorporated by reference therein and, during the period mentioned in paragraph (d) below, as many copies of the Prospectus, relating to such Notes, any documents incorporated by reference therein and any supplements and amendments thereto as you may reasonably request. The terms "supplement," and "amendment" or "amend" as used in this Agreement shall include all documents filed by the Company with the Commission subsequent to the date of the Basic Prospectus pursuant to the Exchange Act which are deemed to be incorporated by reference in the Prospectus. (b) To advise each of you promptly (confirming such advice in writing) of any official request made by the Commission for an amendment to the Registration Statement or Prospectus or for additional information with respect thereto and of any official notice of the institution of proceedings for, or of the entry of, a stop order suspending the effectiveness of the Registration Statement. The Company will use its best efforts to prevent the issuance of any such stop order, and, if such a stop order should be entered, the Company will make every reasonable effort to obtain the lifting or removal thereof as soon as possible. (c) Not to file any amendment or supplement to the Registration Statement or the Prospectus with respect to the Notes of which you shall not previously have been advised or which shall be disapproved by Sullivan & Cromwell, your counsel, and not to file any document pursuant to the Exchange Act which is deemed to be incorporated by reference in the Prospectus of which Sullivan & Cromwell shall not previously have been advised. -11- (d) If, during such period after the first date of the public offering of such Notes as in the opinion of Sullivan & Cromwell, your counsel, the Prospectus relating to such Notes is required by law to be delivered, any event shall occur as a result of which it is necessary to amend or supplement such Prospectus in order to make the statements therein, in the light of the circumstances when such Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement such Prospectus to comply with law, forthwith to prepare and furnish, at its own expense, to each of you, either amendments or supplements to such Prospectus so that the statements in such Prospectus as so amended or supplemented will not, in the light of the circumstances when such Prospectus is delivered to a purchaser, be misleading or so that such Prospectus will comply with law. (e) To use its best efforts to qualify the Notes, or to assist in the qualification of the Notes by or on behalf of each of you, for offer and sale under the securities or Blue Sky laws of such jurisdictions as each of you may reasonably request, and to pay all expenses with respect thereto (including counsel fees), provided that the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction, or to incur or to pay any such expenses if no Notes are delivered to and purchased by any Agent by reason of an Agent's default in making payment for the Notes. (f) To cause to be made generally available to its security holders as soon as practicable an earning statement or statements which shall meet the requirements of Section II(a) of the Act and Rule 158 promulgated thereunder covering a period of twelve months which shall begin not later than the closing date of the Company's fiscal quarter next following the "effective date" (as defined in Rule 158 under the Act) of the Registration Statement with respect to each sale of Notes. (g) To apply the proceeds from the sale of the Notes as set forth under the heading "Use of Proceeds" appearing in the Prospectus. (h) Each acceptance by the Company of an offer for the purchase of Notes, and each sale of Notes to the applicable Agent pursuant to a Terms Agreement, shall be deemed to be an affirmation that the representations and warranties of the Company contained in this Agreement and in any certificate theretofore delivered to you pursuant hereto are true and correct at the time of such acceptance or sale, as the case may be, and an undertaking that such representations and warranties will be true and correct at the time of delivery to the purchaser or his agent, or the applicable Agent, of the Notes relating to such acceptance or sale, as the case may be, as though made at and as of each such time (and it is understood that such representations and warranties shall relate to the Registration Statement and the Prospectus as amended and supplemented to each such time). (i) Each time the Registration Statement or the Prospectus is amended or supplemented (other than by an amendment or supplement providing solely for a change in the interest rates (excluding any change in the formula by which such interest rate may be determined) or maturities offered on the Notes or for a change deemed immaterial in the -12- reasonable opinion of the Agents), or if the Company sells Notes to an Agent pursuant to a Terms Agreement, and if so indicated in the applicable Terms Agreement, the Company will deliver or cause to be delivered forthwith to each Agent or, in the case of a sale of Notes pursuant to a Terms Agreement, to the applicable Agent, a certificate of the Company signed by the President, a Vice President or the Treasurer of the Company, dated the date of the effectiveness of such amendment or filing or supplement or sale, as the case may be, in form reasonably satisfactory to such Agent, to the effect that the statements contained in the certificates referred to in Sections III(a) and (e) that was last furnished to the Agent (either pursuant to Sections III(a) and (e) or pursuant to this Section V(i)) are true and correct 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 certificates, certificates of the same tenor as the certificates referred to in Sections III(a) and (e) relating to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificates. (j) Each time the Registration Statement or the Prospectus is amended or supplemented, or if so indicated in the applicable Terms Agreement, the Company sells Notes to an Agent pursuant to a Terms Agreement the Company shall furnish or cause to be furnished forthwith to each Agent, or, in the case of a sale of Notes pursuant to a Terms Agreement, to the applicable Agent, written opinions of counsel and special tax counsel to the Company satisfactory to such Agent; provided, however, that such opinions need not be furnished with respect to an amendment or supplement (i) providing solely for a change in the interest rates offered on the Notes (other than a change in the formula by which such interest rate may be determined) or for a change deemed immaterial in the reasonable opinion of such Agent, or (ii) setting forth or incorporating by reference financial statements or other information as of and for a fiscal quarter, unless, in the case of clause (ii) above, in the reasonable judgment of such Agent, such financial statements or other information are of such a nature that an opinion of counsel should be furnished; provided, further that such counsel need not provide opinions regarding the content of such financial statements. Any such opinion shall be dated the date of such amendment or supplement, in form satisfactory to the Agent to whom such opinions will be delivered, and shall be of the same tenor as the opinion referred to in Sections III(b) and (c) but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion. In lieu of such opinion, counsel last furnishing such an opinion to such Agent may furnish to such Agent a letter to the effect that such Agent may rely on such last opinion to the same extent as though it were dated the date of such letter authorizing reliance on such last opinion (except that statements in such last opinion will be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance). (k) Each time that the Registration Statement or the Prospectus is amended or supplemented to set forth amended or supplemental financial information or such amended or supplemental information is incorporated by reference in the Registration Statement or the Prospectus, or if so indicated in the applicable Terms Agreement, the Company sells Notes to an Agent pursuant to a Terms Agreement, the Company shall cause the Company's independent -13- accountants forthwith to furnish each Agent or, in the case of a sale of Notes pursuant to a Terms Agreement, to the applicable Agent, a letter, dated the date of the effectiveness of such amendment or the date of filing of such supplement, 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 III(f) with regard to the amended or supplemental financial information included or incorporated by reference in the Registration Statement and the Prospectus, as amended or supplemented to the date of such letter. (l) Between the date of any Terms Agreement and the Settlement Date with respect to such Terms Agreement, the Company will not, without your prior consent, offer or sell, or enter into any agreement to sell, any debt securities of the Company substantially similar to the Notes (other than the Notes that are to be sold pursuant to such Terms Agreement and commercial paper in the ordinary course of business), except as may otherwise be provided in any such Terms Agreement. (m) The Company will pay all expenses incident to the performance of its obligations under this Agreement and any applicable Terms Agreement, including: (i) the preparation and filing of the Registration Statement and all amendments thereto, (ii) the preparation, issuance and delivery of the Notes, (iii) the fees and disbursements of the Company's accountants and of the Trustee and its counsel, (iv) the qualification of the Notes under securities laws in accordance with the provisions of Sections V(e), including filing fees and the reasonable fees and disbursements of your counsel in connection therewith and in connection with the preparation of any Blue Sky Memorandum and any Legal Investment Memorandum, (v) the printing and delivery to you in quantities as herein above stated of copies of the Registration Statement and all amendments thereto, and of the Prospectus and any amendments or supplements thereto, (vi) the printing and delivery to you of copies of the Indenture and any Blue Sky Memorandum and any Legal Investment Memorandum, (vii) any fees charged by rating agencies for the rating of the Notes, (viii) any advertising and other out-of-pocket expenses incurred with the approval of the Company, provided, however, that the expenses of any tombstone advertisement shall be paid by the Agents, and (ix) the fees and expenses, if any, incurred with respect to any filing with the National Association of Securities Dealers, Inc. The Company shall also reimburse each Agent promptly upon receipt of an invoice from such Agent for the reasonable fees of counsel for such Agent incurred in connection with the offering and sale of the Notes (including the reasonable fees and expenses of special counsel in any state in the event it should become necessary to obtain opinions of such counsel as to usury or other matters of local law in order to obtain or maintain the qualifications referred to in Section V(e) hereof). -14- VI. (a) The Company agrees to indemnify and hold each Agent, and each person, if any, who controls such Agent within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, harmless from and against any and all losses, claims, damages and liabilities with respect to the Notes or any other securities of the Company or its subsidiaries arising because the Registration Statement or any Preliminary Prospectus used in connection with the offering of the Notes (if used within the period set forth in paragraph (d) of Article V hereof and if used as amended or supplemented by all amendments or supplements thereto which have been furnished to you) contained or is alleged to have contained any untrue statement of a material fact or omitted or is alleged to have omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except as to losses, claims, damages or liabilities caused by any such untrue statement or omission or alleged untrue statement or omission made in reliance upon information furnished to the Company herein or otherwise in writing by or on behalf of such Agent for use in connection with the preparation of any Preliminary Prospectus, the Registration Statement or any amendment or supplement thereto, or caused by any statement in or omission from the Statement of Eligibility and Qualification of the Trustee under the Indenture, provided that the indemnity agreement with respect to any Preliminary Prospectus shall not inure to the benefit of an Agent (or to the benefit of any person controlling such Agent) on account of any losses, claims, damages or liabilities arising from the sale of Notes to any person if a copy of the Prospectus (as amended or supplemented by all amendments or supplements thereto which have been furnished to such Agent, but without documents incorporated by reference therein or exhibits) shall not have been sent, mailed or given by or on behalf of such Agent to such person, if required by the Act, at or prior to the written confirmation of the sale of such Notes to such person. (b) Each Agent agrees severally and not jointly to indemnify and hold the Company, each of its directors, each of its officers who sign the Registration Statement, and each person who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, harmless from and against any and all losses, claims, damages and liabilities, joint or several, or any action in respect thereof arising because the Registration Statement or any preliminary prospectus relating to the Notes or any amendment or supplement thereto contained or is alleged to have contained any untrue statement of a material fact or omitted or is alleged to have omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, which untrue statement or omission or alleged untrue statement or omission was made in the Registration Statement or any such Preliminary Prospectus or any amendment or supplement thereto in reliance upon information furnished to the Company herein or otherwise in writing by or on behalf of such Agent for use in connection with the preparation thereof. (c) The Company and each Agent agree that upon the commencement of any action against it, its directors, its officers who sign the Registration Statement, or any person controlling it as aforesaid in respect of which indemnity may be sought on account of any indemnity agreement contained herein, it will promptly give written notice of the -15- commencement thereof to the party or parties against whom indemnity shall be sought, but the omission so to notify such indemnifying party or parties of any such action shall not relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party or parties otherwise than on account of such indemnity agreement. In case of such notice of any such action, the indemnifying party or parties shall be entitled to participate at its or their own expense in the defense of such action, or, if it or they so elect, to assume the defense of such action, and in the latter event such defense shall be conducted by counsel chosen by such indemnifying party or parties and satisfactory to the indemnified party or parties who shall be defendant or defendants in such action, and such defendant or defendants shall bear the fees and expenses of any additional counsel retained by them; but if the indemnifying party or parties shall not elect to assume the defense of such action, such indemnifying party or parties will reimburse such indemnified party or parties for the reasonable fees and expenses of any counsel retained by them. In the event that the parties to any such action (including impleaded parties) include both the indemnifying party and the indemnified party and either (i) the indemnifying party or parties and indemnified party or parties mutually agree or (ii) representation of both the indemnifying party or parties and the indemnified party or parties by the same counsel is inappropriate under applicable standards of professional conduct due to actual or potential differing interests between them, then the indemnifying party or parties shall not have the right to assume the defense of such action on behalf of such indemnified party or parties and will reimburse such indemnified party or parties for the reasonable fees and expenses of any counsel retained by them and satisfactory to the indemnifying party or parties, it being understood that the indemnifying party or parties shall not, in connection with any one action or separate but similar or related actions arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to local counsel) for all such indemnified parties, which firm shall be designated in writing by the Agent who is a party to the proceeding or, if more than one Agent is party to the proceedings, by mutual agreement of the Agents, or controlling persons are indemnified parties and by the Company in the case of an action in which the Company or any of its directors, officers or controlling persons are indemnified parties. The indemnifying party or parties shall not be liable under this Agreement with respect to any settlement made by an indemnified party or parties without prior written consent by the indemnifying party or parties to such settlement. (d) If the indemnification provided for in paragraph (a) or (b) above is unavailable to an indemnified party 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 in such proportion as is appropriate to reflect primarily the relative benefits received by the Company on the one hand and each Agent on the other from the offering of the Notes and also to reflect where appropriate the relative fault of the Company on the one hand and of each Agent on the other in connection with the statements or omissions or alleged statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and of each Agent shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or -16- alleged omission to state a material fact relates to information supplied by the Company or by each Agent and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and each Agent agree that it would not be just and equitable if contribution pursuant to this paragraph (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this paragraph (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities referred to in this paragraph (d) shall be deemed to include, subject to the limitation set forth above in this Article VI, any legal or other expenses reasonably incurred by such indemnified party in connection with defending any such action or claim. Notwithstanding the provisions of this paragraph (d), no Agent shall be required to contribute any amount in excess of the amount by which the total price at which the Notes distributed by it were offered to the public exceeds the amount of any damages which such Agent has been required to pay, otherwise than pursuant to this paragraph (d), by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Article VI and the representations and warranties of the Company in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement or of any Terms Agreement hereunder, (ii) any investigation made by any Agent or on its behalf 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. This Agreement and any Terms Agreement hereunder shall inure to the benefit of the Company, its directors, its officers who sign the registration statement, each Agent, or in the case of any such Terms Agreement, the applicable Agent and each controlling person referred to in Article VI hereof and their respective successors. Nothing in this Agreement or in any Terms Agreement hereunder is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any Terms Agreement hereunder or any provision herein or therein contained. The term "successor" as used in this Agreement or any Terms Agreement hereunder shall not include any purchaser, as such purchaser, of any of the Notes from an Agent. The provisions of this Agreement relating to the solicitation of offers to purchase Notes from the Company may be suspended or terminated at any time by the Company as to any Agent or by any Agent insofar as this Agreement relates to such Agent upon the giving of written notice of such suspension or termination to such Agent or the Company, as the case may be. In the event of such suspension or termination with respect to any Agent, (x) this Agreement shall remain in full force and effect with respect to any Agent as to which such suspension or termination has not occurred, (y) this Agreement shall remain in full force and effect with respect to the rights and obligations of any party which have previously accrued or which relate to Notes already issued, agreed to be issued or the subject of a pending offer at the time of such -17- suspension or termination and (z) in any event, this Agreement shall remain in full force and effect insofar as the third paragraph of Article I(a), Article V(f), Article V(m) and Article VI are concerned. -18- This Agreement and any Terms Agreement may be executed in any number of counterparts each of which shall be an original, with the same effect as of the signatures thereto and hereto were upon the same instrument. This Agreement and any Terms Agreement hereunder shall be governed by and construed in accordance with the laws of the State of New York. Very truly yours, AT&T Capital Corporation By -------------------------------------------- Title: Treasurer Accepted: Lehman Brothers Inc. By -------------------------- Title: Goldman, Sachs & Co. By -------------------------- Title: Merrill Lynch, Pierce, Fenner & Smith Incorporated By -------------------------- Title: Morgan Stanley & Co. Incorporated By -------------------------- Title: -19- This Agreement and any Terms Agreement may be executed in any number of counterparts each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement and any Terms Agreement hereunder shall be governed by and construed in accordance with the laws of the State of New York. Very truly yours, AT&T Capital Corporation By ------------------------------------------- Title: Treasurer Accepted: Lehman Brothers Inc. By -------------------------- Title: Goldman, Sachs & Co. By -------------------------- Title: Merrill Lynch, Pierce, Fenner & Smith Incorporated By -------------------------- Title: Morgan Stanley & Co. Incorporated By -------------------------- Title: -20- EXHIBIT A AT&T CAPITAL CORPORATION Medium-Term Notes, Series F TERMS AGREEMENT _________, 199__ AT&T Capital Corporation Attention: Re: Distribution Agreement dated April ___, 1998 The undersigned agrees to purchase the following principal amount of your Medium-Term Notes, Series F: Specified Currency as to: Principal: Interest: Aggregate Principal Amount: [U.S. $] [other] Price to Public: [Provisions relating to redemption, if any:] [Provisions relating to repayment, if any:] If Fixed Rate Notes: Interest Rate: Maturity: Amortization Schedule: If Floating Rate Notes:* Base Rate: Initial Interest Date: Interest Determination Date: Interest Reset Date: Interest Reset Period: Record Date: Interest Payment Dates: Index Maturity: - ---------------------- * See Prospectus Supplement dated April __, 1998 for explanation of terms. Maturity: Maximum Interest Rate: Minimum Interest Rate: Spread: Spread Multiplier: Indexed Currency or Currencies (if any): Settlement Date and Time: Place of Delivery: Calculation Agent: Form of Note (Book-Entry or Certificated) Purchase Price Method of and Specified Funds for Payment of Purchase Price: [By certified or official bank check or checks, payable to the order of the Company, in [New York] Clearing House] [immediately available) funds [By wire transfer to a bank account specified by the Company in [next day][immediately available] funds] Provisions relating to underwriter default, if any: Other termination provisions, if any: [The certificates referred to in Section V(i) of the Distribution Agreement, the opinions referred to in Section V(j) of the Distribution Agreement and the accountants letter referred to in Section V(k) of the Distribution Agreement will be required.] [ ] By: ------------------------------------- Accepted: AT&T CAPITAL CORPORATION By: --------------------- -2- EXHIBIT B AT&T CAPITAL CORPORATION Medium-Term Notes, Series 4, Administrative Procedures Medium-Term Notes, Series 4 (the "Notes") are to be offered on a continuous basis by AT&T Capital Corporation (the "Company"). Lehman Brothers Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Morgan Stanley & Co. Incorporated (each, an "Agent", and collectively, the "Agents"), have agreed to solicit purchases of the Notes. The Agents will not be obligated to purchase Notes for their own accounts. The Notes are being sold pursuant to a Distribution Agreement among the Company and each Agent dated January 10, 1997 (the "Distribution Agreement"). The Notes will rank equally with all other unsecured and unsubordinated debt of the Company and have been registered with the Securities and Exchange Commission (the "Commission"). The Chase Manhattan Bank ("CMB") is the trustee (the "Trustee") under the Indenture covering the Notes (the "Indenture"). Notes will bear interest at either fixed rates ("Fixed Rate Notes") or floating rates ("Floating Rate Notes"). Fixed Rate Notes may pay a level amount in respect of both interest and principal amortized over the life of the Notes ("Amortizing Notes"). Each Note will be represented by either a Global Security (as defined hereinafter) delivered to CMB as agent for The Depository Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry Note") or a certificate delivered to the Holder thereof or a Person designated by such Holder (a "Certificated Note"). Except in certain limited circumstances or unless otherwise determined by the Company, an owner of a Book-Entry Note will not be entitled to receive a certificate representing such a Note. CMB will act as paying agent ("Paying Agent") for the payment of principal of and premium, if any, and interest on the Notes and will perform, as Paying Agent, unless otherwise specified, the other duties specified herein. Book-Entry Notes will be issued in accordance with the administrative procedures set forth in Parts I and II hereof, and Certificated Notes will be issued in accordance with the administrative procedures set forth in Parts I and III hereof. Unless otherwise defined herein, terms defined in the Indenture shall be used herein as therein defined. Administrative procedures and specific terms of the offerings are explained below. -3- PART VII.: Administrative Procedures for all Notes Maturities: Each Note will have a maturity from date of issue of not less than nine months. Price to Public: Each Note will be issued at 100% of principal amount unless otherwise specified in the applicable pricing supplement. Acceptance of Orders: The Company will have the sole right to accept offers to purchase Notes. Each Agent will promptly advise the Company of each reasonable offer to purchase Notes received by it, and, if the Company has not posted rates, the proposed rate of interest on such Notes. The Company may reject an offer in whole or in part. Each Agent may reject, in its discretion reasonably exercised, any offer received by it in whole or in part. If the Company accepts an offer to purchase a Note it will prepare a pricing supplement reflecting the terms of such Note and will, so long as it is a participant in the Commission's EDGAR program, electronically submit a version of such pricing supplement complying with the rules of the Commission relating to such program, or, if the Company is no longer a participant in such program, arrange to have ten copies of such pricing supplement filed with, or mailed for filing to, the Commission, in each case no later than the second business day following the date such offer is accepted. One copy of such filed document will be sent by telecopy, overnight, (express or special delivery (for delivery as soon as practicable following the trade, but in no event later than 11:00 a.m. on the Business Day following the applicable trade date) to the selling Agent and the Trustee at the following applicable address: if to Lehman Brothers Inc., by telecopy to: Lehman Brothers Inc., c/o ADP, Prospectus Services, 536 Broadhollow Road,
-4- Melville, New York 11747, Attention: Mike Ward, (516) 249-7942, telecopier: (516) 254-7106, and by hand to: Lehman Brothers Inc., 3 World Financial Center, 9th Floor, New York, New York 10285-0900, Attention: Brunnie Vazquez, (212) 526-8400; if to Goldman Sachs & Co, to Karen Robertson, Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, (212),902-8401, telecopier: (212) 902-3000; if to Merrill Lynch, Pierce, Fenner & Smith Incorporated via overnight, express or special delivery packages only to: Tritech Services, 40 Colonial Drive, Piscataway, New Jersey 08854, Attention: Prospectus Operations/Nachman Kimerling, (908) 885-2768, telecopier: (908) 885-2774/75/76; if to Merrill Lynch, Pierce, Fenner & Smith Incorporated via all other types of deliveries, to: Tritech Services, #4 Corporate Place, Corporate Park 287, Piscataway, New Jersey 08854, Attention: Prospectus Operations/Nachman Kimerling, (908) 885-2768, telecopier: (908) 885-2774/75/76; if to Morgan Stanley Co. Incorporated, to: Morgan Stanley & Co. Incorporated, 1585 Broadway, 2nd Floor, New York, New York 10036, Attention: Carlos Cabrera, MTN Trading Desk, telecopier: (212) 761-8846; and if to the Trustee, to: The Chase Manhattan Bank, Corporate Trust Administration, 450 West 33rd Street, New York, New York 10001, Attention: Greg McFarland, (212) 946-8567, telecopier: (212) 946-8567. For record keeping purposes, one copy of each Pricing Supplement, as so filed, shall also be mailed or telecopied to: Goldman, Sachs & Co., Registration Department, 85 Broad Street, New York, New York 10004, Attention: Don Hansen, (212) 902-6685, telecopier: (212) 375-5505; and to Merrill Lynch, Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower, 10th Floor, New York, New York
-5- 10281-1310, Attention: MTN Product Management, telecopier: (212) 449-2234. Outdated Pricing Supplements, and the supplemented Prospectuses to which they are attached (other than those retained for files) will be destroyed. Procedure for Rate Changes: The Company and the Agent will discuss from time to time the aggregate principal amount of, the issuance price of, and the interest rates to be borne by, Notes that may be sold as a result of the solicitation of orders by the Agents. When a decision has been reached to change the interest rates of Notes being sold by the Company, the Company will promptly inform each Agent. Each Agent will advise the Company with respect to the changed rates. See "Acceptance of Orders," above. Suspension of Solicitation; Amendment or Supplement: The Company may instruct the Agents to suspend solicitation of purchases at any time. Upon receipt of such instructions, the Agents will forthwith suspend solicitation until such time as the Company has advised them that solicitation of purchases may be resumed. If the Company decides to amend or supplement the Registration Statement or the Prospectus relating to the Notes, it will promptly advise the Agents and the Trustee, and will furnish the Agents and the Trustee with the proposed amendment or supplement in accordance with the terms of the Distribution Agreement. The Company will file with the Commission any supplement to the Prospectus relating to the Notes including any supplement which provides solely for a change in the interest rates offered on the Notes, provide the Agents with sufficient quantities of copies of any supplement within a reasonable time prior to the earlier of the delivery of written confirmation of the sale of
-6- Notes or the delivery of Notes to any purchaser thereof, and confirm to the Agents that such supplement has been filed with the Commission. In the event that at the time the Company suspends solicitation of purchases there shall be any orders outstanding for settlement, the Company will promptly advise the Agents and the Trustee whether such orders may be settled and whether copies of the Prospectus as in effect at the time of the suspension may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decisions and for any arrangements which may be made in the event that the company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered. Delivery of Prospectus: Each Agent shall, for each Note order received by it, deliver a copy of the Prospectus as most recently amended or supplemented (including the pricing supplement relating to such Note) with the earlier of the delivery or the confirmation of sale of the Note to a purchaser or such purchaser's agent. Payment of Selling Commission and Expenses: The selling commission on each sale of Notes will be calculated by the applicable Agent and the applicable Agent will deduct, for its own account, the selling commission from the proceeds of each such sale of Notes. Each Agent will forward, from time to time at its discretion, an itemized statement setting forth the aggregate amount of out-of-pocket expenses incurred by it in connection with the offering and sale of the Notes, which are reimbursable to it pursuant to the terms of the Distribution Agreement. The Company will promptly remit payment to such Agent. Advertising: The Company will determine with each Agent the form, substance and amount of advertising
-7- that may be appropriate in offering the Notes. Advertising expenses will be paid by the Company or reimbursed to the Agents by the Company; provided, however, that the expenses of any tombstone advertisement shall be paid by the Agents.
PART VIII.: Administrative Procedures For Book-Entry Notes In connection with the qualification of the Book-Entry Notes for eligibility in the book-entry system maintained by DTC, CMB will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under a Letter of Representations from the Company and CMB to DTC dated as of the date hereof, and a Medium Term Note Certificate Agreement between CMB and DTC, dated as of December 2, 1988, and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). Issuance: On any date of Settlement (as defined under "Settlement" below) for one or more Book-Entry Notes, the Company will issue a global security in fully registered form without coupons (a "Global Security") representing up to $200,000,000 principal amount of all such Notes that have the same stated maturity, redemption or repayment provisions, interest payment dates, interest payment period and original issue date, and, in the case of Fixed Rate Notes, interest rate and amortization schedule (if any), or in the case of Floating Rate Notes, initial interest rate, base rate, interest payment dates, index maturity, interest reset period, interest reset dates, spread or spread multiplier, minimum interest rate (if any), and maximum interest rate (if any) (collectively "Terms"). Each Global Security will be dated and issued as of the date of its authentication by the Trustee, acting as Authenticating Agent. No Global security will represent (i) both Fixed Rate and Floating Rate Book-Entry Notes or (ii) any Certificated Note. Identification Numbers: The Company has arranged with the CUSIP Service Bureau of Standard Poor's
-8- Corporation (the "CUSIP Service Bureau") for the reservation of a series of CUSIP numbers (including tranche numbers), which series consists of approximately 900 CUSIP numbers and relates to Global Securities representing the Book-Entry Notes. The Company has obtained from the CUSIP Service Bureau a written list of such series of reserved CUSIP numbers and has delivered to CMB and DTC a written list of such reserved CUSIP numbers of such series. The Company will assign CUSIP numbers to Global Securities as described below under Settlement Procedure "B". DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the Company has assigned to Global Securities. At any time when fewer than 100 of the reserved CUSIP numbers of the series remain unassigned to Global Securities, and if it deems necessary, the Company will reserve additional CUSIP numbers for assignment to Global Securities. upon obtaining such additional CUSIP numbers, the Company shall deliver a list of such additional CUSIP numbers to CMB and DTC. Registration: Global Securities will be issued only in fully registered form without coupons. Each Global Security will be registered in the name of CEDE & Co., as nominee for DTC, on the security register maintained under the Indenture by CMB as Registrar. The beneficial owner of a Book-Entry Note (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in IDTC (with respect to such Note, the "Participants") to act as agent or agents for such owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such beneficial owner in such Note
-9- in the account of such Participants. The ownership interest of such beneficial owner in such Note will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC. Transfers: Transfers of a Book-Entry Note will be accompanied by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such Note. Exchanges: CMB may deliver to DTC and the CUSIP Service Bureau at any time a written notice of consolidation specifying (i) the CUSIP numbers of two or more Outstanding Global Securities that represent (A) Fixed Rate Book-Entry Notes having the same terms and for which interest has been paid to the same date, or (B) Floating Rate Book-Entry Notes having the same terms and for which interest has been paid to the same date, (ii) a date, occurring at least thirty days after such written notice is delivered and at least thirty days before the next interest payment date for such Book-Entry Notes, on which such Global Securities shall be exchanged for a single replacement Global Security and (iii) a new CUSIP number, obtained from the Company, to be assigned to such replacement Global Security. Upon receipt of such a notice, DTC will send to its participants (including CMB) a written reorganization notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, CMB will deliver to the CUSIP Service Bureau a written notice setting forth such exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Securities to be exchanged will no longer be valid. On the specified exchange
-10- date, CMB will exchange such Global Securities for a single Global Security bearing the new CUSIP number and the CUSIP numbers of the exchanged Global Securities will, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. Notwithstanding the foregoing, if the Global Securities to be exchanged exceed $200,000,000 in aggregate principal amount, one Global Security will be authenticated and issued to represent each $200,000,000 of principal amount of the exchanged Global Security and an additional Global Security will be authenticated and issued to represent any remaining principal amount of such Global Securities (see "Denominations" below). Denominations: Book-Entry Notes will be issued in principal amounts that are integral multiples of $1,000. Global Securities will be denominated in principal amounts not in excess of $200,000,000. If one or more Book-Entry Notes having an aggregate principal amount in excess of $200,000,000 would, but for the preceding sentence, be represented by a single Global Security, then one Global Security will be issued to represent each $200,000,000 principal amount of such Book-Entry Note or Notes and an additional Global Security will be issued to represent any remaining principal amount of such Book-Entry Note or Notes. In such a case, each of the Global Securities representing such Book-Entry Note or Notes shall be assigned the same CUSIP number. Interest: General. Interest on each Book-Entry Note will accrue from the original issue date or the last date to which interest has been paid, if any, on the Global Security representing such Note. Unless otherwise specified therein, each payment of interest on a Book-Entry Note will include interest accrued to but excluding the interest payment date (provided
-11- that in the case of Floating Rate Notes which reset daily or weekly, interest payments will include interest accrued to and including the record date immediately preceding the interest payment date) or maturity date. Interest payable at the maturity of a Book-Entry Note will be payable to the person to whom the principal of such Note is payable. Standard & Poor's Corporation will use the information received in the pending deposit message described under Settlement Procedure "C" below in order to include the amount of any interest payable and certain other information regarding the related Global Security in the appropriate weekly bond report published by Standard & Poor's Corporation. Record. The Record Date with respect to any interest payment date shall be the date fifteen calendar days prior to such interest payment date, whether or not such date shall be a Business Day. Fixed Rate Book-Entry Notes. Unless otherwise specified in the applicable Pricing Supplement, interest payments on Fixed Rate Book-Entry Notes (other than Amortizing Notes) will be made semiannually on February 15 and August 15 of each year and at maturity, and, unless otherwise specified in the applicable Pricing Supplement, principal and interest payments on Book-Entry Amortizing Notes will be made semiannually on February 15 and August 15 of each year, or quarterly on February 15, May 15, August 15 and November 15 of each year and at maturity; provided, however, that in the case of a Fixed Rate Book-Entry Note issued between a Record Date and an interest payment date or on an interest payment date, the first interest payment will be made on the interest payment date following the next succeeding Record Date to the registered holder on such next succeeding Record Date
-12- of such Fixed Rate Book-Entry Note; provided further, that if any interest payment date falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be made on the next succeeding Business Day as if made on the date such payment was due, and no interest will accrue on such payment for the period from and after such interest payment date to the date of such payment on the next succeeding Business Day. Floating Rate Book-Entry Notes. Unless otherwise specified in the applicable Pricing Supplement, interest payments will be made on Floating Rate Book-Entry Notes monthly, quarterly, semi-annually, or annually. Unless otherwise agreed upon, interest will be payable, in the case of Floating Rate Book-Entry Notes with a monthly interest payment period, on the third Wednesday of each month; with a quarterly interest payment period, on the third Wednesday of February, May, August and November of each year; with a semi-annual interest payment period on the third Wednesday of the two months specified pursuant to Settlement Procedure "A", below; and with an annual interest payment period, on the third Wednesday of the month specified pursuant to Settlement Procedure "A" below; provided, however, that if an interest payment date for Floating Rate Book-Entry Notes (other than the maturity date) would otherwise be a day that is not a Business Day such interest payment date will be postponed to the next succeeding day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day falls in the next succeeding calendar month, such interest payment date will be the immediately preceding Business Day. If the maturity date of a Floating Rate Book-Entry Notes falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or
-13- interest will be made on the next succeeding Business Day as if made on the date such payment was due, and no interest shall accrue on such payment for the period from and after the Maturity Date to the date of such payment on the next succeeding Business Day. In the case of a Floating Rate Book-Entry Note issued between a Record Date and an interest payment date, the first interest payment will be made on the interest payment date following the next succeeding Record Date to the registered holder on such next succeeding Record Date of such Floating Rate Book-Entry Note. Notice of Interest Payment and Record Dates. On the first Business Day of March, June, September and December of each year, CMB will deliver to the Company, the Trustee and DTC a written list of Record Dates and interest payment dates that will occur with respect to Book-Entry Notes during the six-month period beginning on such first Business Day. Calculation of Interest: Fixed Rate Book-Entry Notes. Interest on Fixed Rate Book-Entry Notes (including interest for partial periods) will be calculated on the basis of a year of twelve thirty-day months. (Examples of interest calculations are as follows: The period from August 15, 1991, to February 15, 1992, equals 6 months and 0 days, or 180 days; the interest payable equals 180/360 times the annual rate of interest times the principal amount of the Note. The period from September 17, 1991, to February 15, 1992, equals 4 months and 28 days, or 148 days; the interest payable equals 148/360 times the annual rate of interest times the principal amount of the Note.) Floating Rate Book-Entry Notes. Interest rates on Floating Rate Book-Entry Notes will be determined as set forth in the form of
-14- Notes. Interest on Floating Rate Book-Entry Notes will be calculated on the basis of actual days elapsed and a year of 360 days except that in the-case of Treasury Rate Notes, interest will be calculated on the basis of the actual number of days in the year. Payments of Principal and Interest: Payment of Interest Only. Promptly after each Record Date, CMB will deliver to the Company, the Trustee and DTC a written notice specifying by CUSIP number the amount of interest to be paid on each Global Security (other than an Amortizing 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 Global Security on such Interest Payment Date by reference to the appropriate (daily or weekly) bond reports published by Standard & Poor's Corporation. In the case of Amortizing Notes, CMB will provide separate written notice to the Company and to DTC of the principal and interest due on such security prior to each Interest Payment Date at the time and in the manner set forth in the Letter of Representations. The Company will pay to the Paying Agent, the total amount of interest due on such Interest Payment Date (and, in the case of an Amortizing Note, principal and interest) (other than at maturity), and the Paying Agent will pay such amount to DTC at the times and in the manner set forth below under "Manner of Payment". Payments at Maturity and on Redemption or Repayment. On or about the first Business Day of each month, the Paying Agent will deliver to the Company, the Trustee and DTC a written list of principal and interest to be paid on each Global Security (other than an Amortizing Note) maturing either at stated maturity or on a redemption or repayment date in the following month. The Paying
-15- Agent, the Company and DTC will confirm the amounts of such principal and interest payments with respect to each such Global Security on or about the fifth Business Day preceding the maturity of such Global Security. In the case of Amortizing Notes, the Paying Agent will provide separate written notice of the principal and interest due on such date to the Company and to DTC prior to the date of maturity and any redemption or repayment date, as the case may be, at the times and in the manner set forth in the Letter of Representations. The Company will pay to the Paying Agent, the principal amount of such Global Security, together with interest due at such maturity. The Paying Agent will pay such amounts to DTC at the times and in the manner set forth below under "Manner of Payment". if any stated maturity of a Global Security representing Book-Entry Notes is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from-and after such maturity. Promptly after payment to DTC of the principal and interest due at the maturity of such Global Security, the Paying Agent shall deliver such Global Security to the Trustee which shall cancel such Global Security in accordance with the terms of the Indenture and so advise the Company. On the first Business Day of each month, the Paying Agent will deliver to the Trustee a written statement indicating the total principal amount of outstanding Global Securities as of the preceding Business Day. Manner of Payment. The total amount of any principal and interest due on Global Securities on any interest payment date or at maturity shall be paid by the Company to the Paying Agent in immediately available funds as of 9:30 A.M. (New York City time) on such
-16- date. The Company will make such payment on such Global Securities by wire transfer to the Paying Agent or by instructing the Paying Agent to withdraw funds from an account maintained by the Company as Paying Agent. The Company will confirm such instructions in writing to Paying Agent. Prior to 10 A.M. (New York City time) on each maturity date, redemption or repayment, or as soon as possible thereafter, following receipt of such funds from the Company, the Paying Agent will pay by separate wire transfer (using Fed-wire message entry instructions in a form previously specified by DTC) to an account at the Federal Reserve Bank of New York previously specified by DTC, in funds available for immediate use by DTC, each payment of principal (together with interest thereon) due on a Global Security on such date. On each interest payment date (other than at maturity), interest payments and, in the case of Amortizing Notes, interest and principal payments shall be made to DTC in funds available for immediate use by DTC, in accordance with existing arrangements between the Paying Agent and DTC. On each such date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names the Book-Entry Notes represented by such Global Securities are recorded in the book-entry system maintained by DTC. Neither the Company (as issuer or as Paying Agent), nor the Paying Agent shall have any direct responsibility or liability for the payment by DTC to such Participants of the principal or interest on the Book-Entry Notes. Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Book-Entry Note will be determined and withheld by the
-17- Participant, indirect participant in DTC or other person responsible for forwarding payments and materials directly to the beneficial owner of such Note. Settlement: The receipt by the Company of immediately available funds in payment for a Book-Entry Note and the authentication and issuance of the Global Security representing such Note shall constitute "Settlement" with respect to such Note. All orders accepted by the Company will be settled on the third Business Day pursuant to the timetable for Settlement set forth below unless the Company and the purchaser agree to Settlement on another day which shall be no earlier than the next Business Day following the date of sale. Settlement Procedures: Settlement Procedures with regard to each Book-Entry Note sold by the Company through an Agent, as agent, shall be as follows: (a) Such Agent will advise the Company by telephone (and will confirm in writing on the same date) of the following settlement information: (i) Principal amount. (ii) Stated maturity. (iii) In the case of a Fixed Rate Book-Entry Note, the interest rate and if such Note is an Amortizing Note, the interest rate and Amortization Schedule, or in the case of Floating Rate Book-Entry Note, the initial interest rate (if known at such time), base rate, index maturity, interest reset period, interest reset dates, spread or spread multiplier (if any); minimum interest rate (if any) and maximum interest rate (if any), interest payment
-18- period and interest payment dates and any other information necessary to complete such Note. (iv) Redemption provisions, if any. (v) Repayment provisions, if any. (vi) Settlement date. (vii) Sale Date. (viii) Price. (ix) Agent's Commission, determined as provided in Section I(a) of the Distribution Agreement between the Company and such Agent. (x) Whether the Note is an original issue discount note, and if it is an original issue discount note, the total amount of original issue discount ("OID"), the yield to maturity and the initial accrual period OID. (xi) Net Proceeds to the Company. (b) The Company will assign a CUSIP number to the Global Security representing such Note and then advise CMB by telephone or electronic transmission (confirmed in writing at any time on the same date) of the information set forth in settlement Procedure "A" above, such CUSIP number and the name of such Agent. The Company will also notify the Agent of such CUSIP number by telephone as soon as practicable. Each such communication by the Company shall constitute a representation and warranty by the Company to CMB and each Agent that (i) such Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and sale by the Company, (ii) such
-19- Note, and the Global Security representing such Note, will conform with the terms of the Indenture pursuant to which such Note and Global Security are issued and (iii) upon authentication and delivery of such Global Security, the aggregate initial offering price of all securities sold pursuant to the Registration Statement (as defined in the Distribution Agreement) (including the Notes) will not exceed $4 billion or the equivalent thereof in one or more currencies (except for securities represented by, authenticated and delivered in exchange for or in lieu of securities pursuant to Sections 2.08 and 2.09 of the Indenture). (c) CMB will enter a pending deposit message through DTC's Participant Terminal System, providing the following settlement information to DTC, such Agent and Standard & Poor's Corporation: (i) The information set forth in Settlement Procedure "A". (ii) Identification as a Fixed Rate Book-Entry Note and whether such Note is an Amortizing Note (by an appropriate notation in the comments field of DTC's Participant Terminal System) or a Floating Rate Book-Entry Note. (iii) Initial interest payment date for such Note, number of days by which such date succeeds the related Record Date (which, in the case of Floating Rate Notes which reset daily or weekly, shall for DTC purposes be the date five calendar days immediately preceding the applicable Interest Payment Date and, in the case of all other Notes, shall he the Record Date as defined in the Note), and, if known,
-20- the amount of interest payable on such Interest Payment Date. (iv) The interest payment period. (v) CUSIP number of the Global Security representing such Note. (vi) The Participant account numbers maintained by DTC on behalf of the Agents and CMB. (d) CMB will complete such Note, stamp the appropriate legend as instructed by the Company in accordance with DTC procedures, if not already set forth thereon, and authenticate the Global Security representing such Note. (e) DTC will credit such Note to CMB's participant account at DTC. (f) CMB will enter an SDFS deliver order through DTC's ParticipantTerminal System instructing DTC to (i) debit such Note to CMB's participant account and credit such Note to such Agent's participant account and (ii) debit such Agent's settlement account and credit CMB's settlement account for an amount equal to the price of such Note less such Agent's commission. The entry of such a deliver order shall constitute a representation and warranty by CMB to DTC that (a) the Global Security representing such Book-Entry Note has been issued and authenticated and (b) CMB is holding such Global Security pursuant to the Medium Term Note Certificate Agreement between CMB and DTC. (g) Such Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to such Agent's participant account and credit such
-21- Note to the participant accounts of the Participants with respect to such Note and (ii) to debit the settlement account of such Participant and credit the settlement account of such Agent for an amount equal to the 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) CMB, upon confirming receipt of such funds, will credit or wire transfer to the account of the Company maintained at The Chase Manhattan Bank, New York, New York, in funds available for immediate use in the amount transferred to CMB in accordance with Settlement Procedure (j) The Agent will confirm the purchase of such Note to the purchaser either by transmitting to the Participants with respect to such Note a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser. Settlement For orders of Book-Entry Notes Procedures solicited by an Agent, as agent, Timetable: and accepted by the Company for Settlement on the first Business Day after the sale date, Settlement Procedures "A" through "J" set forth above shall be completed as soon as possible but no later than the respective times (New York City time) set forth below: Settlement Procedure: Time A 11:00 A.M. on the sale date B 12:00 Noon on the sale date c 2:00 P.M. on the sale date D 9:00 A.M. on settlement date
-22- E 10:00 A.M. on settlement date F-G 2:00 P.M. on settlement date H 4:45 P.M. on settlement date I-J 5:00 P.M. on settlement date If a sale is to be settled more than one Business Day after the sale date, Settlement Procedures "A", "B" and "C" shall be completed as soon as practicable but no later than 11:00 A.M., 12 Noon and 2:00 P.M., respectively on the first Business Day after the sale date. If the initial interest rate for a Floating Rate Book-Entry Note has not been determined at the time that Settlement Procedure "A" is completed, Settlement Procedures "B" and "C" shall be completed as soon as such rate has been determined but no later than 12 Noon and 2:00 P.M., respectively, on the second Business day following the 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 Book-Entry Note is rescheduled or cancelled, by no later than 2:00 P.M. on the Business Day preceding the settlement date, the Company will instruct CMB to deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect. (CMB will enter such message by no later than 4:00 P.M. on such Business Day.) Failure to Settle: If CMB fails to enter an SDFS deliver order with respect to a Book-Entry Note pursuant to Settlement Procedure "F", CMB may deliver to DTC, through DTC's Participant Terminal System, as soon as practicable a withdrawal message instructing DTC to debit such Note to CMB's participant account. DTC will process the withdrawal message, provided that CMB's participant account contains a principal amount of the Global Security representing such Note that is at least equal to the principal amount to be debited. If a withdrawal message is processed with respect to all the Book-Entry Notes represented by a Global Security, the Trustee will mark such Global
-23- Security "cancelled" and make appropriate entries in the Trustee's records. The CUSIP number assigned to such Global Security shall, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. If a withdrawal message is processed with respect to less than the entire principal amount of a Global Security, CMB will exchange such Global Security for two Global Securities, one of which shall represent the principal amount of such Global Security to which the withdrawal message relates and shall be cancelled immediately after issuance and the other of which shall represent the remaining principal amount previously represented by the surrendered Global Security and shall bear the CUSIP number of the surrendered Global Security. If the purchase price for any Book-Entry Note is not timely paid to the Participants with respect to such Note by the beneficial purchaser thereof (or a person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participants and, in turn, the Agent for such Note may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures "F" and "G", respectively. Thereafter, the Company will return to CMB the funds transferred in accordance with Settlement Procedure "I" and will instruct CMB to deliver the withdrawal message and take the related actions described in the preceding paragraph. Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to less than the entire principal amount of a Global Security, the Trustee will provide, in accordance with Settlement Procedures "D", for the authentication and issuance of a Global Security representing the remaining principal amount to have been represented by such
-24- Global Security and will make appropriate entries in its records. PART IX.: Administrative Procedures For Certificated Notes Currencies: Certificated Notes will be denominated in U.S. dollars or in such other currency or currency unit as specified in the Prospectus (the "Specified Currency"). Denominations: The denomination of any Certificated Note will be an integral a multiple of $1,000 or 1,000 units of any Specified Currency other than U.S. dollars. Registration: Certificated Notes will be issued in fully registered form. Interest Payments: Each Certificated Note which is a Fixed Rate Note, will bear interest or, in the case of Certificated Amortizing Notes, principal and interest, from the date of issue at the annual rate stated on the face thereof, payable unless otherwise specified in the applicable Pricing Supplement semi-annually on February 15 and August 15 of each year, and at maturity or, in the case of Certificated Amortizing Notes, unless otherwise specified in the applicable Pricing Supplement, semi-annually on February 15 and August 15 of each year, or quarterly on February 15, May 15, August 15 and November 15 of each year and at maturity subject to certain exceptions, and each Certificated Note which is a Floating Rate Note will bear interest as determined in the manner set forth on the face thereof, payable on the date or dates set forth on the face thereof and will have the record dates as set forth in the Note. Interest or, in the case of a Certificated Amortizing Note, principal and interest, will be payable to the person in whose name the Certificated Note is registered at the close of business on the record date next preceding the interest payment date; provided, however, that (i) interest payable at maturity (whether or not the maturity date is an interest
-25- payment date) will be payable to the person to whom principal shall be payable, and (ii) the first payment of interest on any Certificated Note originally issued between a record date and an interest payment date will be made on the interest payment date following the next succeeding Record Date to the registered holder on such next succeeding Record Date of such Certificated Note. The date of issue of each Certificated Note will be the date of its authentication, as provided in the Indenture. The date of authentication of each Certificated Note will be the settlement date. Unless otherwise specified in the applicable Pricing Supplement, interest (including payments for partial periods) on Fixed Rate Certificated Notes will be calculated on the basis of a 360-day year of twelve 30-day months and interest on Floating Rate Certificated Notes will be determined by the Company and the Purchaser thereof in accordance with the provisions of the Prospectus. Except as otherwise set forth in the Prospectus, all interest payments and in the case of a Certificated Amortizing Note, principal and interest payments (excluding interest payments made on a date of maturity) will be made by check and mailed to the person entitled thereto as provided above. On the fifth business day immediately preceding each interest payment date, the Paying Agent will advise the Company of the aggregate amount of interest to be paid on the Certificated Notes (other than Certificated Amortizing Notes) theretofore issued on such interest payment date and the currency or currency units in which such interest payments are to be made. The Paying Agent will provide separate written notice to the Company specifying the aggregate amount of principal and interest to be paid on the Certificated Amortizing Notes on the following interest payment date (other than at maturity or earlier redemption or repayment). The Paying Agent will provide monthly to the Company's Treasury Department a list of the principal and interest to the extent ascertainable to be paid on the
-26- Notes (including Amortizing Notes) maturing in the next succeeding month. Settlement: The receipt of immediately available funds by the Company in payment for a Certificated Note and the authentication and issuance of such Certificated Note shall, with respect to such Certificated Note, constitute "Settlement". All orders accepted by the Company will be settled on the next business day pursuant to the timetable for Settlement set forth below unless the Company and the purchaser agree to Settlement on a later date; provided, however, that in the case of a delayed Settlement the Company will notify CMB at least 24 hours prior to the time of Settlement. Settlement Procedures: Settlement Procedures with regard to each Certificated Note sold by an Agent as agent shall be as follows: (a) Such Agent will advise the Company by telephone or facsimile of the following settlement information: (i) Exact name in which Certificated Note is to be registered. (ii) Exact address of the registered owner and address for payment of principal and interest. (iii) Taxpayer identification number of the registered owner. (iv) Principal amount of the Certificated Note. (v) Currency or currency unit. (vi) Interest rate and, in the case of a Fixed Rate Certificated Note, whether such Note is an Amortizing Note, and if so, the Amortization Schedule. (vii) Base Rate. (viii) Index maturity. (ix) Initial interest rate. (x) Interest Reset Period. (xi) Interest Reset Dates. (xii) Interest Payment Periods.
-27- (xiii) Interest Payment Dates. (xiv) Redemption Provisions, if any. (xv) Repayment Provisions, if any. (xvi) Whether the Note is an original issue discount note and if it is an original issue note, the total amount of original issue discount ("OID"), the yield to maturity and the initial accrual period OID. (xvii) Maximum interest rate. (xviii) Minimum interest rate. (xix) Spread or spread multiplier. (xx) Date of Certificated Note. (xxi) Settlement date. (xxii) Maturity date. (xxiii) Agent's commission. (xxiv) Net proceeds to the Company. (xxv) Minimum denominations including the U.S. dollar equivalent thereof if denominated in other than U.S. dollars. (xxvi) Calculation Agent. (xxvii) All other items to be specified in any Note. (b) The Company will provide CMB with the information listed in A (which, if provided orally, will be promptly confirmed in writing). (c) CMB will complete and distribute the preprinted 4-ply Certificated Note packet containing the following documents in forms approved by the Company, the Agents and the Trustee: (i) Note with customer confirmation. (ii) Stub 1 - For Agent. (iii) Stub 2 - For Company. (iv) Stub 3 - For CMB. (d) CMB will deliver the Certificated Note (with the confirmation) and stub 1 to the Agent or the Agent's agent.
-28- (e) The Agent will make payment to the Company in immediately available funds equal to the principal amount of the Certificated Note less any applicable commission or discount. (f) The Agent or the Agent's agent will deliver the Certificated Note (with confirmation) to the customer against payment in immediately available funds. (g) The Agent or the Agent's agent will obtain the acknowledgment of receipt of the Certificated Note by the customer through completion of stub 1. (h) CMB will send by first class mail stub 2 to the Company. Periodically, CMB will also send to the Company and the Trustee a statement setting forth the principal amount of the Certificated Notes outstanding as of that date after giving effect to such transaction and all other orders of which the Company has advised CMB but which have not yet been settled. Settlement For offers accepted by the Company, Procedures Settlement Procedures "A" through "H" Timetable: set forth above shall be completed on or before the respective times to the extent possible (New York City time) set forth below: Settlement Procedures: Time A (1-3) 11:00 A.M. on day prior to settlement. 5:00 P.M. on day of order A (4-20) 1:00 P.M. on day prior to settlement. B 12:00 P.M. on day of settlement C-D 3:00 P.M. on day of settlement E-F 4:30 P.M. on day of settlement G-H Fails: For orders received by an Agent, in the event that a purchaser shall fail to accept delivery of and make
-29- payment for a Certificated Note, such Agent will notify CMB, and the Company, by telephone, confirmed in writing, and return the Certificated Note to CMB. Upon receipt of the Certificated Note by CMB, the Company will immediately credit an account designated by such Agent in an amount of immediately available funds equal to the amount previously credited in respect of the 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. The Agent shall deliver such Certificated Note to CMB as soon as practicable. If such fail shall have occurred for any reason other than the failure of the Agent to provide the necessary information to the Company as described above for Settlement or to provide a confirmation to the purchaser within a reasonable period of time as described above, the Company will reimburse the Agent on an equitable basis for its loss of the use of funds during the period when such funds were credited to the account of the Company. Immediately upon receipt of the Certificated Note in respect of which the fail occurred, CMB will make appropriate entries in their records and CMB will deliver such certificated notes to the Trustee for cancellation in accordance with the Indenture. Maturity: At maturity, the principal amount of each Certificated Note together with any accrued, but unpaid, interest will be payable in immediately available funds provided that the Paying Agent receives the Certificated Note, and appropriate information in time to make payments in such funds in accordance with its normal procedures. Certificated Notes presented to the Paying Agent or the Trustee will be cancelled and disposed of by the Trustee. Manner of Payment: The total amount of any principal and interest due on Certificated Notes on any interest payment date or at maturity shall be paid by the Company to the Paying Agent in immediately available funds as of 9:30 A.M. (New York City time) on such date. The Company will make such payment on such
-30- Certificated Notes by wire transfer to the Paying Agent or by instructing the Paying Agent to withdraw funds from an account maintained by the Company at the Paying Agent. The Company will confirm such instructions in writing to the Paying Agent. Authenticity of Signatures: The Agents will have no obligation or liability to the Company or the Trustee in respect of the authenticity of the signature of any officer, employee or agent of the Company or the Trustee on any Certificated Note. Calculation of Interest: The provisions set forth under "Calculation of Interest" in Part II of these Administrative Procedures shall apply mutatis mutandi with respect to Certificated Notes.
-31- EX-4 4 EXHIBIT 4A EXHIBIT 4A AT&T CAPITAL CORPORATION, NEWCOURT CREDIT GROUP INC. AND THE CHASE MANHATTAN BANK, AS TRUSTEE ---------------- INDENTURE Dated as of April 1, 1998 ---------------- Securities TABLE OF CONTENTS*
PAGE PARTIES...........................................................................................................1 RECITALS OF THE COMPANY:..........................................................................................1 Purpose of Indenture.....................................................................................1 Compliance with Legal Requirements.......................................................................1 Purpose of and Consideration for Indenture...............................................................1 ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE. SECTION 1.01. Definitions.........................................................................................1 Accounts Receivable......................................................................................1 Affiliate................................................................................................1 Agent....................................................................................................1 Authenticated............................................................................................2 Authorized Newspaper.....................................................................................2 Board of Directors.......................................................................................2 Board Resolution.........................................................................................2 Certificated Security....................................................................................2 Company..................................................................................................2 Company Order............................................................................................2 Consolidated Net Tangible Assets.........................................................................2 Default..................................................................................................3 Depositary...............................................................................................3 Global Security..........................................................................................3 Guarantee................................................................................................3 Guarantor................................................................................................3 Holder or Securityholder.................................................................................3 Indenture................................................................................................3 Internal Procedures......................................................................................3 Newcourt.................................................................................................4 Non-Recourse Debt........................................................................................4 Officer..................................................................................................4 Officers' Certificate....................................................................................4 Opinion of Counsel.......................................................................................4 Original Issue Discount Security.........................................................................4 Principal................................................................................................4
- -------- *The Table of Contents is not part of the Indenture. i Registered Security......................................................................................4 Responsible Officer......................................................................................4 Restricted Subsidiary....................................................................................5 SEC......................................................................................................5 Series...................................................................................................5 Securities...............................................................................................5 Statement of Account.....................................................................................5 Subsidiary...............................................................................................5 TIA......................................................................................................5 Trust Indenture Act of 1939..............................................................................5 Trustee..................................................................................................5 Uncertificated Security or Uncertificated Securities.....................................................5 Unregistered Security....................................................................................5 U.S. Government Obligations..............................................................................6 U.S. Person..............................................................................................6 Yield to Maturity........................................................................................6 SECTION 1.02. Other Definitions......................................................................6 SECTION 1.03. Incorporation by Reference of Trust Indenture Act......................................6 SECTION 1.04. Rules of Construction..................................................................7 ARTICLE 2 THE SECURITIES. SECTION 2.01. Issuable in Series.....................................................................7 SECTION 2.02. Establishment of Terms and Form of Series of Securities................................8 SECTION 2.03. Execution, Authentication and Delivery................................................11 SECTION 2.04. Registrar and Paying Agent............................................................13 SECTION 2.05. Payment on Securities.................................................................14 SECTION 2.06. Paying Agent to Hold Money in Trust...................................................15 SECTION 2.07. Securityholder Lists; Ownership of Securities.........................................15 SECTION 2.08. Transfer and Exchange.................................................................16 SECTION 2.09. Replacement Securities................................................................17 SECTION 2.10. Outstanding Securities................................................................17 SECTION 2.11. Temporary Securities; Global Securities...............................................18 SECTION 2.12. Cancellation..........................................................................20 SECTION 2.13. Defaulted Interest....................................................................20 ARTICLE 3 REDEMPTION. SECTION 3.01. Notice to Trustee.....................................................................21 SECTION 3.02. Selection of Securities to be Redeemed................................................21 SECTION 3.03. Notice of Redemption..................................................................21 SECTION 3.04. Effect of Notice of Redemption........................................................22 SECTION 3.05. Deposit of Redemption Price...........................................................23
ii SECTION 3.06. Mandatory and Optional Sinking Funds..................................................23 ARTICLE 4 COVENANTS SECTION 4.01. Payment of Securities.................................................................25 SECTION 4.02. Reports by the Company and the Guarantor..............................................26 SECTION 4.03. Limitations on Incurrence of Secured Debt.............................................27 SECTION 4.04. Statement as to Compliance; Notice of Certain Events of Default.......................29 ARTICLE 5 CONSOLIDATION, MERGER, SALE OR CONVEYANCE. SECTION 5.01. Consolidation or Merger, etc., on Certain Terms.......................................29 SECTION 5.02. Successor Corporation Substituted.....................................................30 SECTION 5.03. Opinion of Counsel to Trustee.........................................................30 ARTICLE 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT. SECTION 6.01. Events of Default; Acceleration of Maturity; Waiver of Default........................31 SECTION 6.02. Collection of Indebtedness by Trustee; Trustee May Prove Debt.........................33 SECTION 6.03. Application of Proceeds...............................................................35 SECTION 6.04. Limitation on Suits by Securityholders................................................36 SECTION 6.05. Powers and Remedies Cumulative; Delay or Omission, Not Waiver of Default...............................................................................37 SECTION 6.06. Control by Securityholders; Waiver of Defaults........................................37 SECTION 6.07. Right of Court to Require Filing of Undertaking to Pay Costs..........................38 ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee.....................................................................38 SECTION 7.02. Rights of Trustee.....................................................................39 SECTION 7.03. Individual Rights of Trustee..........................................................40 SECTION 7.04. Trustee Disclaimer....................................................................40 SECTION 7.05. Notice of Default.....................................................................40 SECTION 7.06. Reports by Trustee to Holders.........................................................41 SECTION 7.07. Compensation and Indemnity............................................................41 SECTION 7.08. Replacement of Trustee................................................................42 SECTION 7.09. Successor Trustee, Agents by Merger, etc..............................................43 SECTION 7.10. Eligibility; Disqualification.........................................................43 SECTION 7.11. Preferential Collection of Claims Against Company.....................................44 SECTION 7.12. Authenticating Agent..................................................................44
iii ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONIES. SECTION 8.01. Satisfaction and Discharge of Indenture...............................................47 SECTION 8.02. Defeasance upon Deposit of Moneys or U.S. Government Obligations......................48 SECTION 8.03. Application of Moneys Deposited.......................................................49 SECTION 8.04. Repayment of Moneys Held..............................................................50 SECTION 8.05. Return of Moneys Unclaimed for Two Years; Return of Additional Moneys and U.S. Government Obligations................................................50 SECTION 8.06. Indemnity for Government Obligations..................................................51 ARTICLE 9 AMENDMENTS AND WAIVERS. SECTION 9.01. Without Consent of Holders............................................................51 SECTION 9.02. With Consent of Holders...............................................................51 SECTION 9.03. Compliance with Trust Indenture Act...................................................53 SECTION 9.04. Revocation and Effect of Consents.....................................................53 SECTION 9.05. Notation on or Exchange of Securities.................................................53 SECTION 9.06. Trustee Protected.....................................................................53 ARTICLE 10 MISCELLANEOUS. SECTION 10.01. Trust Indenture Act Controls..........................................................53 SECTION 10.02. Notices...............................................................................54 SECTION 10.03. Communication by Holders with Other Holders...........................................55 SECTION 10.04. Certificate and Opinion as to Conditions Precedent....................................55 SECTION 10.05. Statements Required in Certificate or Opinion.........................................55 SECTION 10.06. Legal Holidays........................................................................56 SECTION 10.07. Governing Law.........................................................................56 SECTION 10.08. No Adverse Interpretation of Other Agreements.........................................56 SECTION 10.09. No Recourse Against Others............................................................56 SECTION 10.10. When Treasury Securities Disregarded..................................................57 SECTION 10.11. Rules by Trustee, Paying Agent, Registrar, Record Dates...............................57 SECTION 10.12. Execution in Counterparts.............................................................57 SECTION 10.13. Securities in a Foreign Currency......................................................57 SECTION 10.14. Judgment Currency.....................................................................58 SIGNATURES AND SEALS ACKNOWLEDGEMENTS
iv CROSS-REFERENCE TABLE** Trust Indenture Act of 1939 Indenture Section Section - ------- ------- 310(a).................................................................7.10 310(b).................................................................7.10 310(c)..................................................................N/A 311(a).................................................................7.11 311(b).................................................................7.11 311(c)..................................................................N/A 312(a).................................................................2.07 312(b)................................................................10.03 312(c)................................................................10.03 313(a).................................................................7.06 313(b).................................................................7.06 313(c).................................................................4.02 314(a)...........................................................4.02, 4.04 314(b)..................................................................N/A 314(c)................................................................10.04 314(d)..................................................................N/A 314(e)................................................................10.05 314(f)..................................................................N/A 315(a).................................................................7.01 315(b).................................................................7.05 315(c).................................................................7.01 315(d).................................................................7.01 315(e).................................................................6.07 316(a)...........................................................6.06, 9.02 316(b).................................................................9.02 316(c)................................................................10.11 317(a).................................................................6.02 317(b).................................................................2.06 318(a)................................................................10.01 - ---------------- **The Cross-Reference Table is not part of the Indenture. v THIS INDENTURE, dated as of April 1, 1998, is entered into by and among AT&T Capital Corporation, a corporation duly organized and validly existing under the laws of the State of Delaware (together with its successors and assigns, the "Company"), Newcourt Credit Group Inc., a corporation duly organized and validly existing under the laws of Ontario, Canada (together with its successors and assigns, the "Guarantor") and The Chase Manhattan Bank, a corporation duly organized and validly existing under the laws of the State of New York (together with its successors and assigns, the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness ("Securities") as herein provided. The Guarantor has duly authorized the execution and delivery of this Indenture to provide for its Guarantee relating the Securities. All things necessary to make this Indenture a valid agreement of the Company and the Guarantor, in accordance with its terms, have been done. For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the Holders of the Securities: ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE. SECTION 1.01. Definitions. "Accounts Receivable" mean (i) any accounts receivable (whether or not earned by performance), chattel paper, instruments, documents, general intangibles, trade acceptances, any other rights to receive installment, rental or other payments for, or relating to amounts due or to become due on account of equipment or goods sold or leased or to be sold or leased or services rendered or to be rendered or funds advanced or loaned or to be advanced or loaned and other rights to payment of any kind, (ii) any proceeds of any of the foregoing and (iii) any interest in any property or asset of any kind (whether of the obligor under such Accounts Receivable or any other person) securing the payment of any item listed in clause (i) hereof. "Affiliate" means any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Company. "Agent" means any Paying Agent or Registrar. 1 "Authenticated" means (a) with respect to a Certificated Security, one which has been duly authenticated by manual signature of an authorized officer of the Trustee or an authenticating agent; and (b) with respect to an Uncertificated Security, one in respect of which the Trustee or authenticating agent has completed all Internal Procedures. "Authenticate," "Authenticating," and "Authentication" have the appropriate correlative meanings. "Authorized Newspaper" means a newspaper of general circulation, in the official language of the country of publication or in the English language, customarily published on each business day. Whenever successive weekly publications in an Authorized Newspaper are required hereunder they may be made (unless otherwise expressly provided herein) on the same or different days of the week and in the same or different Authorized Newspapers. "Board of Directors" means the Board of Directors of the Company or any duly authorized committee thereof. "Board Resolution" means a copy of a resolution of the Board of Directors, certified by the Secretary or an Assistant Secretary of the Company to have been adopted by the Board of Directors and to be in full force and effect on the date of the certificate, and delivered to the Trustee. "Certificated Security" or "Certificated Securities" means a Registered Security, Registered Securities, Unregistered Security or Unregistered Securities of any series evidenced by a writing or writings substantially in the form established as provided in Section 2.02(a) hereof. "Company" means AT&T Capital Corporation until a successor replaces it subject to the provisions of Article 5 and thereafter means the successor. "Company Order" means an order signed by two Officers or by any Officer and an Assistant Treasurer or an Assistant Secretary of the Company. "Consolidated Net Tangible Assets" means, at the date of any determination, the total assets appearing on the consolidated balance sheet of the Guarantor as at the end of the most recent fiscal quarter of the Guarantor for which such balance sheet is available, prepared in accordance with generally accepted accounting principles, less (a) all current liabilities (obligations whose liquidity is reasonably expected to occur within twelve months), (b) investments in and advances to Subsidiaries other than Restricted Subsidiaries or other entities accounted for on the equity method of accounting, and (c) Intangible Assets. "Intangible Assets" means the value (net of any applicable reserves), as shown on or reflected in Newcourt's consolidated balance sheet, of : (i) all trade names, trademarks, licenses, patents, copyrights and goodwill; (ii) organization and development costs; (iii) deferred charges (other than prepaid items such as insurance, taxes, interest, commissions, rents and similar items and tangible assets being amortized); and (iv) unamortized debt discount and expense, less unamortized premium. 2 "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Depositary" means, (i) with respect to Global Securities of any Series which are offered for sale solely outside of the United States, a common depositary for Morgan Guaranty Trust Company of New York, Brussels office, operator of the Euroclear System, and Centrale de Livraison de Valeurs Mobilieres, S.A., and (ii) with respect to Global Securities of any Series which are offered for sale in the United States, a clearing agency registered under the Securities Exchange Act of 1934, or any successor thereto, which shall in either case be designated by the Company pursuant to either Section 2.02 or 2.11. "Global Security" means, with respect to any Series of Securities issued hereunder, a Security, which may be a Registered or an Unregistered Security, executed by the Company and authenticated and delivered by the Trustee to the Depositary or pursuant to the Depositary's instruction, all in accordance with this Indenture including Section 2.11 and pursuant to a Company Order, and which shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the outstanding Securities of such Series or a portion thereof, in either case having the same terms, including, without limitation, the same issue date, date or dates on which principal is due, interest rate or method of determining interest, and, in the case of Original Issue Discount Securities, which have the same issue price. "Global Security" shall include any temporary global Security and any permanent global Security. "Guarantee" means the agreement of the Guarantor in the form attached hereto as Exhibit A. "Guarantor" means Newcourt or any permitted successor or assign. "Holder" or "Securityholder" means a bearer of an Unregistered Security or of a coupon appertaining thereto or a person in whose name a Registered Security is registered on the Registrar's books. "Indenture" means this Indenture as amended or supplemented from time to time and shall include the forms and terms of particular Series of Securities established as contemplated hereunder. "Internal Procedures" means in respect of the making of any one or more changes in or deletions of any one or more entries in the books or records kept for the purpose of indicating the registered Holder of a Security at any time (including without limitation, original issuance or registration of any transfer of ownership) the minimum number of the Trustee's or authenticating agent's internal procedures customary at such time for the action taken to be complete under the operating procedures followed at the time by the Trustee or authenticating agent, as the case may be, it being understood that neither preparation nor issuance, nor delivery 3 to nor receipt by holders of Statements of Account shall constitute part of such procedures for any purpose of this definition. "Newcourt" means Newcourt Credit Group Inc., a corporation organized under the laws of Ontario, Canada. "Non-Recourse Debt" of the Company or any Restricted Subsidiary means any indebtedness for borrowed money of the Company or such Restricted Subsidiary, as the case may be, which is secured by any lien (as such term is used in Section 4.03) on, or payable solely from the income and proceeds of, any property (including, without limiting the generality of such term, any intangible assets), shares of stock, other equity interests or debt of the Company or such Restricted Subsidiary, as the case may be, and which is not a general obligation of the Company or such Restricted Subsidiary, as the case may be. "Officer" means the Chairman of the Board of Directors, any Vice-Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice-President (whether or not designated by a number or numbers, or a word or words added before or after the title Vice-President), the Chief Financial Officer, the Treasurer, the Secretary or the Controller of the Company or the Guarantor, as the case may be. "Officers' Certificate" means a certificate signed by two officers or by any officer and an Assistant Treasurer or an Assistant Secretary of the Company or the Guarantor, as the case may be. "Opinion of Counsel" means a written opinion of legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Guarantor, the Company or the Trustee. "Original Issue Discount Security" means any Security which provides for an amount less than the stated principal amount thereof to be due and payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01. "Person" means an individual, partnership, corporation, trust, joint venture, joint stock company, association, unincorporated organization or other entity. "Principal" whenever used with reference to the Securities or any portion thereof, shall be deemed to include "any premium, if any." "Registered Security" means any Security issued hereunder and registered as to principal and interest by the Registrar. "Responsible Officer" when used with respect to the Trustee, shall mean the chairman or any vice-chairman of the board of directors, the executive committee of the board of directors or trust committee, the president, any vice-president, the cashier, the secretary, the treasurer, any trust officer, any second or assistant vice-president or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with a particular subject. 4 "Restricted Subsidiary" means each Subsidiary of the Company organized under the laws of any State of the United States or the District of Columbia, no substantial portion of the business of which is carried on outside of the United States; provided that each Drop-Down Subsidiary (as defined in Section 5.01) shall be a Restricted Subsidiary. "SEC" means the Securities and Exchange Commission. "Series" or "Series of Securities" means a series of Securities. "Securities" means the debentures, notes or other obligations of the Company that have been Authenticated under this Indenture. "Statement of Account" means a statement containing the information required by law, and such other information as the Company or the Trustee or the authenticating agent may provide, to be sent to Holders of Uncertificated Securities at the intervals and other times required law or otherwise determined to be appropriate by the Company or the Trustee or the authenticating agent. "Subsidiary" means any corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by any Person and/or by one or more other Subsidiaries (including the Company). For purposes of such definition, "voting stock" means stock ordinarily having voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "TIA" means the Trust Indenture Act of 1939. "Trust Indenture Act of 1939" means (except as herein otherwise expressly provided) the Trust Indenture Act of 1939 (15 U.S.C. 'SS' 'SS' 7aaa-7bbbb) as amended, as in force at the date of this Indenture as originally executed. "Trustee" means the party named as such in this Indenture until a successor replaces it and thereafter means the successor and if, at any time, there is more than one Trustee, "Trustee" as used with respect to the Securities of any Series shall mean the Trustee with respect to that Series. "Uncertificated Security" or "Uncertificated Securities" means any Security or Securities which is or are not a Certificated Security or Securities. "Unregistered Security" means any Security issued hereunder which is not a Registered Security. 5 "U.S. Government Obligations" means: (i) direct obligations of the United States of America for the payment of which the full faith and credit of the United States of America is pledged; or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States or America. "U.S. Person" means a citizen, national or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, or an estate or trust whose income from sources without the United States is includible in gross income for United States federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States. "Yield to Maturity" means the yield to maturity, calculated by the Company at the time of issuance of a Series of Securities or at the time of issuance of the Securities of a Series or portion thereof, or, if applicable, at the most recent determination of interest on such Series or Securities in accordance with accepted financial practice. SECTION 1.02. Other Definitions. Term Section ---- ------- "Asset Drop-Down" 5.01 "Drop-Down Subsidiary" 5.01 "Event of Default" 6.01 "Legal Holiday" 10.06 "Paying Agent" 2.04 "Registrar" 2.04 SECTION 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC. 6 "indenture securities" means the Securities. "indenture security holder" means a Holder or a Securityholder. "indenture to be so qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Company and the Guarantor or any other obligor on the indenture securities. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under TIA have the meanings assigned to them therein. SECTION 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles, and, except as may otherwise be herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; (3) "or" is not exclusive; and (4) words in the singular include the plural, and words in the plural include the singular. ARTICLE 2 THE SECURITIES. SECTION 2.01. Issuable in Series. The aggregate principal amount of Securities which may be Authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more Series. 7 There may be Registered Securities and Unregistered Securities within a Series and the Unregistered Securities may be subject to such restrictions, and contain such legends, as may be required by United States laws and regulations. Securities of a Series need not be identical but may differ with respect to maturity date, interest rate, redemption price, denominations, original issue date, issue price, and as to other terms. Securities of different Series may differ in any respect; provided that all Series of Securities shall be equally and ratably entitled to the benefits of this Indenture. SECTION 2.02. Establishment of Terms and Form of Series of Securities. (a) At or prior to the issuance of any Series of Securities, the following shall be established either by or pursuant to a Board Resolution or by an indenture supplemental hereto: (1) the title of the Securities of the Series (which title shall distinguish the Securities of the Series from the Securities of any other Series and from any other securities issued by the Company); (2) any limit upon the aggregate principal amount of the Securities of the Series which may be Authenticated and delivered under this Indenture (which limit shall not pertain to Securities Authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the Series pursuant to Section 2.08, 2.09, 2.11, 3.05 or 9.05); (3) the date or dates on which the principal of the Securities of the Series is payable, or whether the Securities of the Series are due upon demand by the Holder; (4) the rate or rates at which the Securities of the Series shall bear interest, if any, or the method of calculating such rate or rates of interest, the date or dates from which such interest shall accrue, the dates on which such interest shall be payable and, with respect to Registered Securities, the record date for the interest payable on any interest payment date; (5) the place or places where the principal of and interest on Registered and Unregistered, if any, Securities of the Series shall be payable; (6) the period or periods within which, the price or prices at which, and the terms and conditions upon which, Securities of the Series 8 may be redeemed, in whole or in part, at the option of the Company; (7) the obligation, if any, of the Company to redeem or purchase Securities of the Series pursuant to any sinking fund or analogous provisions or upon the happening of a specified event or at the option of a Holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which, Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (8) if in other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the Series shall be issuable; (9) if other than the principal amount thereof, the portion of the principal amount of Securities of the Series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01; (10) whether Securities of the Series shall be issuable as Registered Securities or Unregistered Securities (with or without interest coupons), or both, whether if such Security is a Registered Security such Security shall be a Certificated Security of an Uncertificated Security, and any restrictions applicable to the payment, offering, sale or delivery of Unregistered Securities and whether, and the terms upon which, Unregistered Securities of a Series may be exchanged for Registered Securities of the same Series and vice versa; (11) whether and under what circumstances the Company will pay additional amounts on the Securities of that Series held by a person who is not a U.S. Person in respect of taxes or similar charges withheld or deducted and, if so, whether the Company will have the option to redeem such Securities rather than pay such additional amounts; (12) the form of the Securities (or forms thereof if Unregistered and Registered Securities shall be issuable in such Series, including such legends as may be required by United States laws or regulations, the form of any coupons or temporary global Security which may be issued and the forms of any certificates which may be required hereunder or under United States laws or regulations in 9 connection with the offering, sale, delivery or exchange of Unregistered Securities); (13) the coin or currency in which the Securities of the Series are denominated, including multiple currency units; (14) if other than the coin or currency in which the Securities of the Series are denominated, the coin or currency in which payment of the principal of, premium, if any, or interest on the Securities of the Series shall be payable; (15) if the amount of payments of principal of, premium, if any, or interest on the Securities of the Series may be determined with reference to one or more indices the manner in which such amounts shall be determined; (16) whether Securities of the Series are issuable as, or exchangeable for, one or more Global Securities and, in such case, the terms upon which interests in such Global Security or Global Securities shall be exchangeable by the Company or the Holder thereof for definitive Securities, and the identity of the Depositary for such Series; and (17) any other terms of the Series (which terms shall not be inconsistent with the provisions of this Indenture) including any terms which may be required by or advisable under United States laws or regulations or advisable in connection with the marketing of Securities of that Series. (b) If the terms and form or forms of any Series of Securities are established by or pursuant to a Board Resolution, the Company shall deliver a copy of such Board Resolution to the Trustee at or prior to the issuance of such Series with (1) the form or forms of Security which have been approved attached thereto, or (2) if such Board Resolution authorizes a specific Officer or Officers to approve the terms and form or forms of the Securities, a certificate of such Officer or Officers approving the terms and form or forms of Security with such form or forms of Securities attached thereto; provided that if such Security is to be an Uncertificated Security, then no such form of Security need be delivered to the Trustee and in lieu thereof of the Company shall deliver to the Trustee a summary statement of the principal terms and conditions of such Uncertificated Securities, to the extent not already set forth pursuant to a Board Resolution establishing such Series of Uncertificated Securities. Such Board Resolution or certificate may provide general terms or parameters for Securities of any Series and may provide that the specific terms of particular Securities of a Series may be determined in accordance with or pursuant to the Company order referred to in Section 2.03(d) hereof. 10 SECTION 2.03. Execution, Authentication and Delivery. (a) Certificated Securities shall be executed on behalf of the Company by its Chairman of the Board of Directors, the Vice-Chairman of the Board of Directors, the Chief Executive Officer, the President, a Vice-President, the Chief Financial Officer, the Treasurer, or an Assistant Treasurer, under its corporate seal reproduced thereon and attested by its Secretary or an Assistant Secretary. Signatures shall be manual or facsimile. The coupons of Unregistered Securities shall bear the facsimile signature of the Treasurer or an Assistant Treasurer of the Company. (b) If an Officer, an Assistant Treasurer or an Assistant Secretary whose signature is on a Certificated Security or coupon no longer holds that office at the time the Certificated Security is Authenticated, the Certificated Security or coupon shall be valid nevertheless. (c) A Security shall not be valid until Authenticated by the manual signature of the Trustee or an authenticating agent and no coupon shall be valid until the Security to which it appertains has been so Authenticated. Such signature shall be conclusive evidence that the Security has been Authenticated under this Indenture. Each Unregistered Security shall be dated the date of its original issuance and each Registered Security shall be dated the date of its Authentication. Notwithstanding the foregoing, an Uncertificated Security shall be valid when Authenticated by the Trustee or authenticating agent. (d) The Trustee shall Authenticate and deliver Securities of any Series for original issue from time to time in the aggregate principal amount established for such Series pursuant to such procedures acceptable to the Trustee and to such recipients as may be specified from time to time by a Company Order; provided that in the case of Uncertificated Securities of any Series there shall be no delivery requirement. The maturity date, original issue date, interest rate and any other terms of the Securities of such Series shall be determined by or pursuant to such Order and procedures. If provided for in such procedures, such Order may authorize Authentication and delivery pursuant to oral instructions from the Company or its duly authorized agent, which instructions shall be promptly confirmed in writing. The Trustee may conclusively rely on the documents and opinion delivered pursuant to Section 2.02 and this Section 2.03, as applicable (unless revoked by superseding comparable documents or opinions) as to the authorization of the Board of Directors of any Securities delivered hereunder, the form thereof and the legality, validity, binding effect and enforceability thereof. If the form and general terms of the Securities of any Series have been established by or pursuant to one or more Board Resolutions as permitted by Section 2.02, in Authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating, 11 (1) the form and general terms of such Securities have been established in conformity with the provisions of this Indenture; (2) that Securities in such form, when completed as to specific terms substantially in accordance with the Board Resolution establishing such form or any actions taken pursuant thereto (the records of which actions shall have been evidenced as provided in such Board Resolution), when Authenticated in accordance with the Indenture, all in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles; and (3) the Guarantee in respect of the Securities constitutes a valid and legally binding obligation of the Guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles. If the terms and form or forms of such Securities have been established by or pursuant to a Board Resolution as permitted by Section 2.02, the Trustee shall not be required to Authenticate such Securities if the issue of such Securities pursuant to this Indenture will adversely affect the Trustee's own rights, duties, or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Notwithstanding the foregoing, until the Company has delivered an Officers' Certificate to the Trustee and the Registrar stating that, as a result of the action described in such notice, the Company would not suffer adverse consequences under the provisions of United States law or regulations in effect at the time of the delivery of Unregistered Securities, (i) delivery of Unregistered Securities will be made only outside the United States and its possessions and (ii) Unregistered Securities will be released in definitive form whether in the form of a Global Security or otherwise to the person entitled to physical delivery thereof only upon presentation of a certificate in the form prescribed by the Company and set forth in or annexed to such Officers' Certificate. (e) The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board Resolution (or certificate of an Officer or Officers) or supplemental indenture pursuant to Section 2.02. (f) The form of the Trustee's Certificate of Authentication to appear on Certificated Securities shall read as follows: 12 "This is one of the Certificated Securities of the Series designated therein referred to in the within-mentioned Indenture. The Chase Manhattan Bank, as Trustee By ---------------------------------- Authorized Officer" (g) The Company and the Guarantor hereby acknowledge that the failure to endorse the Guarantee on Certificated Securities shall not affect or impair validity or enforceability of such Guarantee. SECTION 2.04. Registrar and Paying Agent. The Company shall maintain in the Borough of Manhattan, The City of New York, State of New York, any office or agency where Registered Securities may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where (subject to Sections 2.05 and 2.08) Securities may be presented for payment or for exchange ("Paying Agent"). With respect to any Series of Securities issued in whole or in part as Unregistered Securities, the Company shall maintain one or more Paying Agents located outside the United States and its possessions and shall maintain such Paying Agents for a period of two years after the principal of such Unregistered Securities has become due and payable. During any period thereafter for which it is necessary in order to conform to United States tax law or regulations, the Company will maintain a Paying Agent outside the Untied States and its possession to which the Unregistered Securities or coupons appertaining thereto may be presented for payment and will provide the necessary funds therefor to such Paying Agent with reasonable notice. The Registrar shall keep a register with respect to each Series of Securities issued in whole or in part as Registered Securities and to their transfer and exchange. The Company may appoint one or more co-Registrars and one or more additional Paying Agents for each Series of Securities and the Company may terminated the appointment of any co-Registrar or Paying Agent at any time upon written notice. The term "Registrar" includes any co-Registrar, except that any co-Registrar shall not keep the register. The term "Paying Agent" includes any additional Paying Agent. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such. The Company initially appoints the Trustee as Registrar and Paying Agent. 13 SECTION 2.05. Payment on Securities. (a) Subject to the following provisions, the Company will pay to the Trustee the amounts of principal of and interest on the Securities at the times and for the purposes set forth herein and in the text or provided for in the terms of the Securities for each Series, and the Company hereby authorizes and directs the Trustee from funds so paid to it to make or cause to be made payment of the principal of and interest, if any, on the Securities and coupons of each Series as set forth herein and in the text or provided for in the terms of such Securities and coupons. Except as otherwise provided with respect to any Series of Securities, the Trustee will arrange directly with any Paying Agent for the payment, or the Trustee will may payment, from funds furnished by the Company, of the principal of and interest, if any, on the Securities and coupons of each Series by check in the currency in which the Securities are payable. (b) Except as otherwise provided with respect to a Series of Securities, interest, if any, on Registered Securities of a Series shall be paid on each interest payment date for such Series to the Holder thereof at the close of business on the relevant record dates specified in the Securities of such Series. The Company may pay such interest by check mailed to such Holder's address as it appears on the register for Securities of such Series. Principal of Registered Securities that are Certificated Securities shall be payable only against presentation and surrender thereof at the office of the Paying Agent in New York, unless the Company shall have otherwise instructed the Trustee in writing. Principal of Registered Securities that are Uncertificated Securities shall be paid by check payable to the Holder mailed to its address as shown on the books of the Registrar, unless the Company shall have otherwise instructed the Trustee in writing. If a payment date is a Legal Holiday at a place of payment, payment may be made at such place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period, except in the case of interest (other than interest payable at maturity) payable on any Security that bears interest at a floating rate, in which case interest shall accrue for such intervening period. (c) To the extent provided in the Securities of a Series, (i) payments with respect to which coupons have been issued by the Company shall be paid only against presentation and surrender of the coupons as they mature and (ii) original issue discount (as defined in Section 1273 of the Internal Revenue Code of 1986, as amended), if any, on Unregistered Securities with respect to which coupons have not been issued shall be paid only against presentation and surrender of such Securities; in either case at the office of a Paying Agent located outside of the United States and its possessions, unless the Company shall have otherwise instructed the Trustee in writing. Principal of Unregistered Securities shall be paid only against presentation and surrender thereof as provided in the Securities of a Series. If at the time a payment of principal of or interest, if any, or original issue discount, if any, on an Unregistered Security or coupon shall become due, the payment of the full amount so payable at the office or offices of all the Paying Agents outside the United States and its possessions is illegal or effectively precluded because of the impositions of exchange controls or other similar restrictions on the payment of such amount in the applicable currency, then the Company may instruct the Trustee to make such payments at the office of a Paying Agent located in the United 14 States, provided that provision for such payment in the United States would not cause such Unregistered Security to be treated as a "registration-required obligation" under United States law and regulations. SECTION 2.06. Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust, for the benefit of Securityholders of any or all Series of Securities, or the Trustee, all money held by the Paying Agent for the payment of principal or interest on such Series of Securities, and that the Paying Agent will notify the Trustee of any default by the Company in making any such payment while any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. If the Company or a subsidiary acts as Paying Agent, it shall segregate the money held by it for the payment of principal or interest on any Series of Securities and hold such money as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon so doing the Paying Agent shall have no further liability for the money so paid. SECTION 2.07. Securityholder Lists; Ownership of Securities. (a) The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of each Series of Securities. If the Trustee is not the Registrar, the Company shall furnish to the Trustee semi-annually on or before the last day of June and December in each year, and at such other times as the Trustee may request in writing, a list, in such form and as of such date as the Trustee may reasonably require, containing all the information in the possession or control of the Registrar, the Company or any of its Paying Agents other than the Trustee as to the names and addresses of Holders of each such Series of Securities. If there are Unregistered Securities of any Series outstanding, even if the Trustee is the Registrar, the Company shall furnish to the Trustee such a list containing such information with respect to Holders of such Unregistered Securities only. (b) Ownership of Registered Securities of a Series shall be proved by the register for such Series kept by the Registrar. Ownership of Unregistered Securities may be proved by the production of such Unregistered Securities or by a certificate or affidavit executed by the person holding such Unregistered Securities or by a depository with whom such Unregistered Securities have been deposited, if the certificate or affidavit is satisfactory to the Trustee. The Company, the Trustee and any agent of the Company or the Trustee may treat the bearer of any Unregistered Security or coupon and the person in whose name a Registered Security is registered as the absolute owner thereof for all purposes. 15 SECTION 2.08. Transfer and Exchange. (a) Where Registered Securities of a Series (other than Securities which, pursuant to the Board Resolution or supplemental indenture establishing the terms of the series to which the Securities belong, are not transferable) are presented to the Registrar with a request to register their transfer or to exchange them for an equal principal amount of Registered Securities of the same Series, date of maturity, interest rate, and original issue date of other authorized denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. (b) If both Registered and Unregistered Securities are authorized for a Series of Securities and the terms of such Securities permit, (i) Unregistered Securities may be exchanged for an equal principal amount of Registered or Unregistered Securities of the same Series, date of maturity, interest rate, and original issue date in any authorized denominations upon delivery to the Registrar (or a Paying Agent, if the exchange is for Unregistered Securities) of the Unregistered Security with all unmatured coupons and all matured coupons in default appertaining thereto and if all other requirements of the Registrar (or such Paying Agent) and such Securities for such exchange are met, and (ii) Registered Securities may be exchanged for an equal principal amount of Unregistered Securities of the same Series, date of maturity, interest rate, and original issue date in any authorized denominations (except that any coupons appertaining to such Unregistered Securities which have matured and have been paid shall be detached) upon delivery to the Registrar of the Registered Securities and if all other requirements of the Registrar (or such Paying Agent) and such Securities for such exchange are met. Notwithstanding the foregoing, the exchange of Unregistered Securities for Registered Securities or Registered Securities for Unregistered Securities will be subject to the satisfaction of the provisions of United States law and regulations in effect at the time of such exchange, and no exchange of Registered Securities for Unregistered Securities will be made until the Company has notified the Trustee and the Registrar that, as a result of such exchange, the Company would not suffer adverse consequences under such law or regulations. (c) To permit registrations of transfers and exchanges, the Trustee shall Authenticate Securities upon surrender of Securities for registration of transfer or for exchange as provided in this Section. The Company will not make any charge for any registration of transfer or exchange but may require the payment by the party requesting such registration of transfer or exchange of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. (d) Neither the Company nor the Registrar shall be required (i) to issue, register the transfer of or exchange Securities of any Series for the period of 15 days immediately preceding the selection of any such Securities to be redeemed, or (ii) to register the transfer of or exchange Securities of any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption in part. 16 (e) Unregistered Securities or any coupons appertaining thereto shall be transferable by delivery. SECTION 2.09. Replacement Securities. (a) If a mutilated Security or a Security with a mutilated coupon appertaining to it is surrendered to the Trustee, the Company shall issue and the Trustee shall authenticate a replacement Registered Security, if such surrendered Security was a Registered Security, or a replacement Unregistered Security with coupons corresponding to the coupons appertaining to the surrendered Security, if such surrendered Security was an Unregistered Security, of the same Series, date of maturity, interest rate, and original issue date if the Trustee's requirements are met. (b) If the Holder of a Security claims that the Security or any coupon appertaining thereto has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Registered Security, if such Holder's claim pertains to a Registered Security, or a replacement Unregistered Security with coupons corresponding to the coupons appertaining to the lost, destroyed or wrongfully taken Unregistered Security or the Unregistered Security to which such lost, destroyed or wrongfully taken coupon appertains, if such Holder's claim pertains to an Unregistered Security, of the same Series, date of maturity, interest rate, and original issue date, if the Trustee's requirements are met; provided, however, that the Trustee, the Company or the Guarantor may require any such Holder to provide to the Trustee, the Company or the Guarantor security or indemnity sufficient in the judgment of the Company, the Guarantor and the Trustee to protect the Company, the Guarantor, the Trustee, any Agent or any authenticating agent from any loss which any of them may suffer if a Security is replaced. The Company may charge the party requesting a replacement Security for its expenses in replacing a Security. (c) Every replacement Security is an additional obligation of the Company. SECTION 2.10. Outstanding Securities. (a) Securities outstanding at any time are all Securities Authenticated by the Trustee or an authenticating agent except for those cancelled by it, those Certificated Securities delivered to it for cancellation, those Uncertified Securities for which the Trustee or the Registrar has received valid cancellation instructions and those Securities described in this Section as not outstanding. (b) If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. 17 (c) If the Paying Agent holds on a redemption date or maturity date money sufficient to pay all amounts due on Securities of such Series, they shall cease to be outstanding and interest on them shall cease to accrue. (d) Any acquisition of any Security by the Company or an Affiliate shall not operate as a redemption or satisfaction of the indebtedness represented by such Security unless and until the same is cancelled and delivered to the Trustee or surrendered to the Trustee for cancellation. (e) In determining whether the Holders of the requisite principal amount of outstanding Securities of any Series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, or whether sufficient funds are available for redemption or for any other purpose, the principal amount of an Original Issue Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 6.01. SECTION 2.11. Temporary Securities; Global Securities. (a) Until definitive Registered Securities of any Series are ready for delivery, the Company may prepare and execute and the Trustee shall authenticate temporary Registered Securities of such Series. Temporary Registered Securities of any Series shall be substantially in the form of definitive Registered Securities of such Series but may have variations that the Company considers appropriate for temporary Securities. Every temporary Registered Security shall be executed by the Company and authenticated by the Trustee, and registered by the Registrar, upon the same conditions, and with like effect, as a definitive Registered Security. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Registered Securities of the same Series, date of maturity, interest rate, and original issue date in exchange for temporary Registered Securities. All references herein to "definitive Registered Securities" shall be deemed to apply equally to permanent global Registered Securities. (b) Until definitive or permanent global Unregistered Securities of any series are ready for delivery, the Company may prepare and execute and the Trustee shall authenticate one or more temporary Unregistered Securities, which may have coupons attached or which may be in the form of a single temporary global Unregistered Security of that Series. The temporary Unregistered Security or Securities of any Series shall be substantially in the form approved by or pursuant to a Board Resolution and shall be delivered outside the United States and its possession to such person or persons as the Company shall direct against such certification as the Company may from time to time prescribe by or pursuant to a Board Resolution. The temporary Unregistered Security or Securities of a Series shall be executed by the Company and authenticated by the Trustee upon the same conditions, and with like effect, as a definitive Unregistered Security of such Series, except as provided herein or therein. A temporary 18 Unregistered Security or Securities shall be exchangeable for definitive or permanent global Unregistered Securities at the time and on the conditions, if any, specified in the temporary Security. (c) Upon any exchange of a part of a temporary or permanent global Unregistered Security of a Series for definitive or permanent global Unregistered Securities of such Series, the temporary or permanent global Unregistered Security, as the case may be, shall be endorsed by the Trustee or an authenticating agent for the Trustee to reflect the reduction of its principal amount by an amount equal to the aggregate principal amount of definitive or permanent Unregistered Securities, as the case may be, of such Series so exchanged and endorsed. Upon any exchange of a part of a temporary or permanent global Registered Security of a Series for definitive or permanent global Registered Securities of such Series, the temporary or permanent global Registered Security, as the case may be, shall be endorsed by the Trustee or an authenticating agent for the Trustee to reflect the reduction of its principal amount by an amount equal to the aggregate principal amount of definitive or permanent Registered Securities, as the case may be, of such Series so exchanged and endorsed. (d) If the Company shall establish pursuant to Section 2.02 that the Securities of a particular Series are to be issued as one or more Global Securities, then the Company shall execute and the Trustee shall, in accordance with Section 2.03 and the Company Order delivered to the Trustee thereunder, authenticate and deliver to the Depositary or pursuant to the Depositary's instruction one or more Global Securities. Each Global Security shall bear a legend substantially to the following effect: "Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or to a nominee of such successor Depositary." (e) Notwithstanding any other provision of this Section 2.11 or of Section 2.08, except for exchanges of Global Securities as provided in Section 2.11(c), a Global Security may be transferred, in whole but not in part and in the manner provided in Section 2.08, only to another nominee of the Depositary for such Series, or to a Successor Depositary for such Series selected or approved by the Company or to a nominee of such successor Depositary. (f) If at any time the Depositary for a Series of Securities notifies the Company that it is unwilling or unable to continue as Depositary for such Series or, with respect to a Depositary for such Series or, with respect to a Depositary contemplated by clause (ii) of the definition thereof, if at any time the Depositary for such Series shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and, in any such case, a successor Depositary for such Series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, this Section 2.11 shall no longer be applicable to the Securities of such Series and the Company will execute, and the Trustee will authenticate and deliver in accordance with a Company Order, Securities of such Series in definitive registered form without coupons, or in definitive bearer form with coupons, as applicable, in authorized 19 denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such Series in exchange for such Global Security. (g) With the prior written consent of the Company with respect to a Series of Registered Securities, the Depositary for such Series of Securities may surrender a Global Security for such Series of Securities in exchange in whole or in part for Securities of such Series of like tenor and terms and in definitive form on such terms as are acceptable to the Company and such Depositary. Thereupon the Company shall execute, and the Trustee shall authenticate and deliver, without service charge, (i) to each Person specified by such Depositary (pursuant to instructions from its direct or indirect participants or otherwise) a new Security or Securities of the same Series, of like tenor and terms and of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Global Security; and (ii) in the event the principal amount of the surrendered Global Security exceeds the aggregate principal amount of Securities delivered to Holders pursuant to the preceding clause (i), to such Depositary a new Global Security of like tenor and terms and in an aggregate principal amount equal to such excess. SECTION 2.12. Cancellation. The Company at any time may deliver Certificated Securities and coupons to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Certificated Securities and coupons surrendered to them, for registration of transfer, or for exchange or payment. The Trustee shall cancel all Certificated Securities and coupons surrendered for registration of transfer, or for exchange, payment or cancellation and may dispose of cancelled Certificated Securities and coupons as the Company directs; provided, however, that any Unregistered Certificated Securities of a Series delivered to the Trustee for exchange prior to maturity shall be retained by the Trustee for reissue as provided herein or in the Certificated Securities of such Series. The Company may not issue new Certificated Securities of a Series to replace Certificated Securities of such Series that it has paid or delivered to the Trustee for cancellation. SECTION 2.13. Defaulted Interest. If the Company defaults on a payment of interest on a Series of Securities, the Company or the Guarantor shall pay the defaulted interest as provided in such Securities or in any lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed and acceptable to the Trustee. 20 ARTICLE 3 REDEMPTION. SECTION 3.01. Notice to Trustee. The Company may, with respect to any Series of Securities, reserve the right to redeem and pay the Series of Securities or any part thereof, or may covenant to redeem and pay the Series of Securities or any part thereof, before maturity at such time and on such terms as provided for in such Securities. If a Series of Securities is redeemable and the Company wants or is obligated to redeem all or part of the Series of Securities pursuant to the terms of such Securities, it shall notify the Trustee of the redemption date and the principal amount of the Series of Securities to be redeemed. The Company shall give sixty days advance notice to the Trustee before the redemption date or such lesser notice as shall be satisfactory to the Trustee. SECTION 3.02. Selection of Securities to be Redeemed. Upon notice that less than all the Securities of a Series are to be redeemed, the Trustee shall thereupon select the Securities of the Series to be redeemed in such manner as the Trustee shall deem fair and appropriate, such selection to be made from Securities of the Series that are outstanding and that have not previously been called for redemption. Securities of the Series and portions of them selected by the Trustee shall be in amounts of $1,000 or integral multiples of $1,000 or, with respect to Securities of any Series issuable in other denominations pursuant to Section 2.02(a)(8), in amounts equal to the minimum principal denomination for each such Series and integral multiples thereof. Provisions of the Indenture that apply to Securities of a Series called for redemption also apply to portions of Securities of that Series called for redemption. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. SECTION 3.03. Notice of Redemption (a) At least 30 days but not more than 90 days before a redemption date, the Company shall mail a notice of redemption by first-class mail to each Holder of Registered Securities that are to be redeemed. (b) If Unregistered Securities are to be redeemed, notice of redemption shall be published in an Authorized Newspaper in the City of New York, and if such Securities to be redeemed are listed on the London Stock Exchange, London, and, if such Securities to be redeemed are listed on the Luxembourg Stock Exchange, Luxembourg, once in each of four successive calendar weeks, the first publication to be not less than 30 nor more than 90 days before the redemption date. 21 (c) All notices shall identify the Series of Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) if less then all the outstanding Securities of a Series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the Particular Securities to be redeemed; (4) the name and address of the Paying Agent; (5) the Securities of the Series called for redemption and that all unmatured coupons, if any, appertaining thereto must be surrendered to the Paying Agent to collect the redemption price; (6) that interest on Securities of the Series called for redemption ceases to accrue on and after the redemption date; and (7) if redemption is for a mandatory or optional sinking fund payment. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense. SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed or published, Securities of a Series called for redemption become due and Payable on the redemption date. Upon surrender to the Paying Agent of such Securities together with all unmatured coupons, if any, appertaining thereto, such Securities will be paid at the redemption price plus accrued interest to the redemption date, but regular installments of interest due on or prior to the redemption date will be payable, in the case of Unregistered Securities, to the bearers of the coupons for such interest upon surrender thereof, and, in the case of Registered Securities (except as otherwise provided with respect to the Securities of a Series), to the Holders of such Securities of record at the close of business on the relevant record dates; provided that in the case of Securities that are Uncertificated Securities, no such surrender shall be required and the redemption price shall be paid to the Holders of such Uncertificated Securities of record at the close of business on the redemption date (except as otherwise provided with respect to the Securities of a Series). 22 SECTION 3.05. Deposit of Redemption Price. On or before the redemption date, the Company shall deposit with the Trustee money sufficient to pay the redemption price of and (unless the redemption date shall be an interest payment date) interest accrued to the redemption date on all Securities to be redeemed on that date. Upon surrender of a Certificated Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder of that Security a new Security or Securities of the same Series, the same form and the same date of maturity, interest rate, and original issue date in authorized denominations equal in aggregate principal amount to the unredeemed portion of the Security surrendered. SECTION 3.06. Mandatory and Optional Sinking Funds. The minimum amount of any sinking fund payment provided for by the terms of any Series of Securities is herein referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided for by the terms of any Series of Securities is herein referred to as an "optional sinking fund payment." The date on which a sinking fund payment is to be made is herein referred to as the "sinking fund payment date". In lieu of making all or any part of any mandatory sinking fund payment with respect to any Series of Securities in cash, the Company may at its option (a) deliver to the Trustee Securities of such Series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Company or receive credit for Securities of such Series (not previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Company and delivered to the Trustee for cancellation pursuant to Section 2.12, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive credit for Securities of such Series (not previously so credited) redeemed by the Company through any optional redemption provision contained in the terms of such Series. Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund redemption price specified in such Securities. On or before the sixtieth day next preceding each sinking fund payment date for any Series, the Company will deliver to the Trustee a written statement signed by an authorized officer of the Company (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash and the portion to be satisfied by credit of Securities of such Series, (b) stating that none of the Securities of such Series has theretofore been so credited, (c) stating that no defaults in the payment of interest or Events of Default with respect to such Series have occurred (which have not been waived or cured) and are continuing, (d) stating whether or not the Company intends to exercise its right to make an optional sinking fund payment with respect to such Series and, if so, specifying the amount of such optional sinking fund payment which the 23 Company intends to pay on or before the next succeeding sinking fund payment date, and (e) specifying such sinking fund payment date. Any Securities of such Series to be credited and required to be delivered to the Trustee in order for the Company to be entitled to credit therefor as aforesaid which have not theretofore been delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.12 to the Trustee with such written statement (or reasonably promptly thereafter if acceptable to the Trustee). Such written statement shall be irrevocable and upon its receipt by the Trustee the Company shall become unconditionally obligated to make all the cash payments or payments therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Company, on or before any such sixtieth day, to deliver such written statement and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Company (i) that the mandatory sinking fund payment for such Series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such Series in respect thereof and (ii) that the Company will make no optional sinking fund payment with respect to such Series as provided in this Section. If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or a lesser sum if the Company shall so request) with respect to the Securities of any particular Series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such Series at the sinking fund redemption price together with accrued interest to the date fixed for redemption. If such amount shall be $50,000 or less and the Company makes no such request then it shall be carried over until a sum in excess of $50,000 is available. The Trustee shall select, in the manner provided in Section 3.02, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such Series to absorb said cash, as nearly as may be possible, and shall (if requested in writing by the Company) inform the Company of the serial numbers of the Securities of such Series (or portions thereof) so selected. Securities of any Series which are (a) owned by the Company or an entity known by the Trustee to be directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, as shown by the Security register, and not known to the Trustee to have been pledged or hypothecated by the Company or any such entity or (b) identified in an Officers' Certificate at least 60 days prior to the sinking fund payment date as being beneficially owned by, and not pledged or hypothecated by, the Company or an entity directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be excluded from Securities of such Series eligible for selection for redemption. The Trustee, in the name and at the expense of the Company (or the Company, if it shall so request the Trustee in writing) shall cause notice of redemption of the Securities of such Series to be given in substantially the manner provided in Section 3.03 (and with the effect provided in Section 3.04) for the redemption of Securities of such Series in part at the option of the Company. The amount of any sinking fund payments not so applied or allocated to the redemption of Securities of such Series shall be added to the next cash sinking fund payment for such Series and, together with such payment, shall be applied in accordance with the provisions of this Section. Any and all sinking fund moneys held on the stated maturity date of the Securities of any particular Series (or earlier, 24 if such maturity is accelerated), which are not held for the payment or redemption of particular Securities of such Series shall be applied, together with other moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such Series at maturity. At least one business day before each sinking fund payment date, the Company shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date fixed for redemption on Securities to be redeemed on the next following sinking fund payment date. The Trustee shall not redeem or cause to be redeemed any Securities of a Series with sinking fund moneys or mail any notice of redemption of Securities for such Series by operation of the sinking fund during the continuance of a default in payment of interest on such Securities or of any Event of Default except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Company a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such Series at the time when any such default or Event of Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or Event of Default, be deemed to have been collected under Article Six and held for the payment of all such Securities. In case such Event of Default shall have been waived as provided in Section 6.06 or the default cured on or before the sixtieth day preceding the sinking fund payment date in any year, such moneys shall thereafter be applied on the next succeeding sinking fund payment date in accordance with this Section to the redemption of such Securities. ARTICLE 4 COVENANTS. SECTION 4.01. Payment of Securities. The Company shall pay the principal of and interest on the Securities on the dates and in the manner provided herein and in the Securities. An installment of principal or interest shall be considered paid on the date it is due if the Trustee or Paying Agent holds on that date money designated for and sufficient to pay the installment. If the Securities of a Series provide for the payment of additional amounts as contemplated by Section 2.02(a)(11), at least 10 days prior to the first interest payment date with respect to that Series of Securities (or if the Securities of that Series will not bear interest prior to maturity, the first day on which a payment of principal and any premium is made), and at least 10 days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company will furnish the Trustee and the Company's principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers' Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such 25 payment of principal of and interest on the Securities of that Series shall be made to Holders of Securities of that Series or any related coupons who are not U.S. Persons without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of the Series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities or coupons and the Company will pay to the Trustee or such Paying Agent such additional amounts as may be required pursuant to the terms applicable to such Series. The Company covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section. SECTION 4.02. Reports by the Company and the Guarantor. The Company and the Guarantor covenant: (a) to file with the Trustee, within 15 days after the Company or the Guarantor is required to file the same with the SEC, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may from time to time by rules and regulations prescribe) which the Company or the Guarantor may be required to file with the SEC pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934, as amended; or, if the Company or the Guarantor is not required to file information, documents or reports pursuant to either of such sections, then to file with the Trustee and the SEC, in accordance with rules and regulations prescribed from time to time by the SEC, such of the supplementary and periodic information, documents and reports which may be required pursuant to section 13 of the Securities Exchange Act of 1934, as amended, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; (b) to file with the Trustee and the SEC, in accordance with the rules and regulations prescribed from time to time by the SEC, such additional information, documents, and reports with respect to compliance by the Company and the Guarantor with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations; (c) to transmit by mail to all Holders of Registered Securities, as the names and addresses of such Holders appear on the register for each Series of Securities, and to such Holders of Unregistered Securities as have, within the two years preceding such transmission, filed their names and addresses with the Trustee for that purpose, within 30 days after the filing thereof with the Trustee, and to all Holders whose names appear on the list furnished to the Trustee by the Company under Section 2.07(a), such summaries of any information, documents and reports required to be filed by the Company and the Guarantor pursuant to subsections (a) 26 and (b) of this Section 4.02 as may be required by rules and regulations prescribed from time to time by the SEC; and (d) in the case of Uncertificated Securities for which the Trustee does not act as Registrar, to file with the Trustee at the time it files the annual or quarterly reports required to be filed pursuant to paragraph (a) hereof or at such other times as the Trustee may reasonably request, a statement of the aggregate amount of such Uncertificated Securities issued and outstanding hereunder. SECTION 4.03. Limitations on Incurrence of Secured Debt. (a) The Company will not, nor will it permit any Restricted Subsidiary to, incur, issue, assume or guarantee any indebtedness for money borrowed ("debt") secured by any pledge, mortgage, security interest or lien ("lien") on any property or assets of the Company or any Restricted Subsidiary, or on any shares of stock or debt of any Restricted Subsidiary, without effectively providing that the principal of, premium, if any, and interest, if any, on the Securities of each Series (together with, if the Company so determines, any other debt of the Company or such Restricted Subsidiary, which is not subordinated to the Securities of each Series) shall be secured equally and ratably with (or prior to) such debt, so long as any such debt shall be so secured, unless, after giving effect thereto, the aggregate amount of all such secured debt of the Guarantor would not exceed 10% of Consolidated Net Tangible Assets of the Guarantor; provided, however, that (i) any recourse provided by the Company or any Restricted Subsidiary in connection with any sale, transfer or other disposition by the Company or any Restricted Subsidiary of Accounts Receivable or of any Restricted Subsidiary substantially all the assets of which are Accounts Receivable which constitutes a "sale" under generally accepted accounting principles (as in effect at the time of such sale, transfer or other disposition) shall not, in any event, constitute debt and (ii) no Asset Drop Down (as defined in Section 5.01) shall, in any event, constitute a lien; and provided further that neither the satisfaction and discharge of any debt pursuant to Section 8.01 of this Indenture or pursuant to any similar provision in any other indenture or instrument governing any debt, nor the defeasance of any debt pursuant to Section 8.02 of this Indenture or pursuant to any similar provision in any other indenture or instrument governing any debt, shall be deemed the incurrence, issue, assumption or guarantee of debt secured by a lien for purposes of this Section 4.03(a). Notwithstanding the foregoing, this Section shall neither limit nor be deemed or construed as limiting the right of the Company or any Restricted Subsidiary to incur, issue, assume or guarantee any debt secured by any one or more of the following: (1) liens on property of, or on any shares of stock or debt of, any corporation existing at the time such corporation becomes a Restricted Subsidiary; (2) liens on property, shares of stock, other equity interests, or debt existing at the time of acquisition or repossession thereof by the Company or any Restricted Subsidiary; (3) liens on physical property (or any Accounts Receivable arising in connection with the lease thereof), shares of stock, other equity interests, or debt acquired (or, in the case of physical property, constructed) after the date of this Indenture by the Company or any Restricted Subsidiary, which liens are created prior to, at the time of, or within one year after such acquisition (or, in the case of physical property, the 27 completion of such construction or commencement of commercial operation of such property, whichever is later) to secure any debt issued, incurred, assumed or guaranteed prior to, at the time of, or within one year after such acquisition (or such completion or commencement, whichever is later) or to secure any other debt issued, incurred, assumed or guaranteed at any time thereafter for the purpose of refinancing all or any part of such debt; (4) liens on Accounts Receivable of the Company or any Restricted Subsidiary arising from or in connection with transactions entered into by the Company or such Restricted Subsidiary after the date of this Indenture or on Accounts Receivable acquired by the Company or such Restricted Subsidiary after such date from others which liens are created prior to, at the time of, or within one year after such Accounts Receivable arise or are acquired or, if later, the completion of the delivery or installation of the equipment or goods or the rendering of the services or the advancement or loaning of funds relating thereto (i) as a result of any guarantee, repurchase or other contingent (direct or indirect) or recourse obligation of the Company or such Restricted Subsidiary in connection with the discounting, sale, assignment, transfer or other disposition of such Accounts Receivable or any interest therein, or (ii) to secure or provide for the payment of all or any part of the investment of the Company or such Restricted Subsidiary in any such Accounts Receivable (whether or not such Accounts Receivable are the Accounts Receivable on which such liens are created) or the purchase price thereof or to secure any debt (including, without limitation, Non-Recourse Debt) issued, incurred, assumed or guaranteed for the purpose of financing or refinancing all or any part of such investment or purchase price; (5) liens in favor of the Guarantor or any Guarantor's Subsidiaries; (6) liens in favor of the United States of America or any State thereof or the District of Columbia, or any agency, department or other instrumentality thereof, to secure progress, advance or other payments pursuant to any contract or provision of any statute; (7) liens securing the performance of letters of credit, bids, tenders, sales contracts, purchase agreements, leases, surety and performance bonds, and other similar obligations not incurred in connection with the borrowing of money; (8) liens to secure Non-Recourse Debt in connection with the Company or any Restricted Subsidiary engaging in any leveraged or single-investor or other lease transactions, whether (in the case of liens on or relating to leases or groups of leases or the particular properties subject thereto) such liens be on the particular properties subject to any leases involved in any of such transactions and/or the rental or other payments or rights under such leases or, in the case of any group of related or unrelated leases, on the properties subject to the leases comprising such group and/or on the rental or other payments or rights under such leases, or on any direct or indirect interest therein, and whether (in any case) (i) such liens be created prior to, at the time of, or at any time after the entering into of such lease transactions and/or (ii) such leases be in existence prior to, or be entered into by the Company or such Restricted Subsidiary at the time of or at any time after, the purchase or other acquisition by the Company or such Restricted Subsidiary of the properties subject to such leases; and (9) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any of the foregoing; provided, however, that any such extension, renewal or replacement shall be limited to all or a part of the property or assets which secured the lien so extended, renewed or replaced (plus improvements on such property). (b) The Company may omit in any particular instance to comply with any covenant or condition set forth in Section 4.03(a) with respect to the Securities of any Series if 28 before or after the time for such compliance the holders of a majority in aggregate principal amount of the Securities of such Series at the time outstanding shall, by action of such Securityholders in accordance with this Indenture, either waive such compliance in such instance or generally waive compliance with such covenant or conditions, but no such waiver shall extend to or affect (x) any other Series of Securities or (y) such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect. SECTION 4.04. Statement as to Compliance; Notice of Certain Events of Default. The Company and the Guarantor will, within 120 days after the close of each fiscal year, commencing with the first fiscal year following the issuance of Securities of any Series under this Indenture, file with the Trustee a certificate of the principal executive officer, the principal financial officer or the principal accounting officer of each of the Company and the Guarantor, covering the period from the date of issuance of such Securities to the end of the fiscal year in which such Securities were issued, in the case of the first such certificate, and covering the preceding fiscal year in the case of each subsequent certificate, and stating whether or not, to the knowledge of the signers, the Company and Guarantor, as applicable has complied with all conditions and covenants on its part contained in this Indenture, and, if the signers have obtained knowledge of any default by the Company or Guarantor in the performance, observance or fulfillment of any such condition or covenant, specifying each such default and the nature thereof. For the purpose of this Section 4.04, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the terms of this Indenture. ARTICLE 5 CONSOLIDATION, MERGER, SALE OR CONVEYANCE. SECTION 5.01. Consolidation or Merger, etc., on Certain Terms. The Company and the Guarantor each covenants that it will not merge or consolidate with any other corporation or sell or convey all, or substantially all of its assets to any person (other than such a sale or conveyance to a Subsidiary or any successor thereto (such a sale or conveyance being called an "Asset Drop-Down"), unless (i) either the Company or the Guarantor shall be the continuing corporation or the successor corporation or the person which acquires by sale or conveyance substantially all the assets of the Company or the Guarantor (if other than the Guarantor or the Company) shall be a corporation organized under the laws of the United States of America or any State thereof or of Canada or any province or territory thereof and shall expressly assume the due and punctual payment of the principal of, premium, if any, and interest, if any, on all the Securities, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed by the Company, by supplemental indenture in form satisfactory to the Trustee, executed and 29 delivered to the Trustee by such corporation, and (ii) the Company or such successor corporation, as the case may be, shall not, immediately after such merger or consolidation, or such sale or conveyance, be in default in the performance of any such covenant or condition. In the event of any Asset Drop-Down after the date of this Indenture, any subsequent sale or conveyance of assets by a Subsidiary to which assets were transferred in such Asset Drop-Down (a "Drop-Down Subsidiary") will be deemed to be a sale or conveyance of assets by the Company for purposes of this Section 5.01. SECTION 5.02. Successor Corporation Substituted. In case of any such consolidation, merger, sale or conveyance, and following such an assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Company or the Guarantor, as applicable, with the same effect as if it had been named herein. With respect to any successor to the Company, such successor corporation may cause to be signed, and may issue either in its own name or in the name of the Company prior to such succession any or all of the Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor corporation instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All of the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof. In case of any such consolidation, merger, sale, lease or conveyance such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate. In the event of any such sale or conveyance (other than a conveyance by way of lease) the Company, the Guarantor or any successor corporation which shall theretofore have become such in the manner described in this Article shall be released and discharged from all obligations and covenants under this Indenture. SECTION 5.03. Opinion of Counsel to Trustee. The Trustee, subject to the provisions of Sections 7.01 and 7.02, may receive an Opinion of Counsel, prepared in accordance with Section 10.04, as conclusive evidence that any such consolidation, merger, sale, lease or conveyance, any such assumption, and any such release and discharge complies with the applicable provisions of this Indenture. 30 ARTICLE 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT. SECTION 6.01. Events of Default; Acceleration of Maturity; Waiver of Default. In case one or more of the following events shall have occurred and be continuing with respect to the Securities of any Series ("Events of Default"): (a) default in the payment of any installment of interest upon any of the Securities of that Series as and when the same shall become due and payable, and continuance of such default for a period of 90 days; or (b) default in the payment of the principal of any of the Securities of that Series as and when the same shall become due and payable either at maturity, upon redemption, or otherwise (except as may be otherwise provided in the Board Resolution or supplemental indenture establishing the terms of the Securities of such Series); or (c) failure on the part of the Company or the Guarantor duly to observe or perform any other of the covenants or agreements on the part of the Company or the Guarantor in the Securities of that Series, in this Indenture contained or in any supplemental indenture under which the Securities of that Series have been issued, for a period of 90 days after the date on which written notice of such failure (specified as a "Notice of Default"), requiring the Company or the Guarantor to remedy the same, shall have been given to the Company and the Guarantor by the Trustee or to the Company, the Guarantor and the Trustee by the Holders of at least twenty-five percent in aggregate principal amount of the Securities of that Series at the time outstanding; or (d) a court or governmental agency having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or the Guarantor in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or the Guarantor or for all or substantially all of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days; or (e) the Company or the Guarantor shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in 31 effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or the Guarantor or for all or substantially all of its property or make any general assignment for the benefit of creditors; or the Company or the Guarantor shall admit in writing its inability to pay its debts generally as they become due; or (f) any other Event of Default provided in the applicable resolution of the Board of Directors or in the supplemental indenture under which such Series of Securities is issued, as the case may be, as contemplated by Section 2.02; then and in each and every such case, unless the principal of all the Securities of that Series shall have already become due and payable, either the Trustee or the Holders of not less than twenty-five percent in aggregate principal amount of the Securities of that Series then outstanding hereunder, by notice in writing to the Company and the Guarantor (and to the Trustee if given by Securityholders), may declare the principal (or, if the Securities of that Series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that Series) of all the Securities of that Series to be due and payable immediately, and upon any such declaration the same (or, in the case of Original Issue Discount Securities, such specified amount) shall become and shall be immediately due and payable, anything in this Indenture, in any supplemental indenture under which the Securities of that Series have been issued or in the Securities of that Series contained to the contrary notwithstanding. This provision, however, is subject to the condition that if, at any time after the principal of the Securities of that Series (or, if the Securities of that Series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that Series) shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Company or the Guarantor shall pay, or shall deposit with the Trustee a sum sufficient to pay, all matured installments of interest upon all the Securities of that Series and the principal of any and all Securities of that Series which shall have become due otherwise than by declaration, with interest upon such principal and (to the extent that payment of such interest is enforceable under applicable law) upon any overdue installments of interest at the same rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of that Series, to the date of such payment or deposit, and such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith, and if any and all defaults under this Indenture with respect to the Securities of that Series, other than the nonpayment of the principal of and interest on the Securities of that Series which shall have become due by declaration, shall have been remedied - -- then and in every such case the Holders of a majority in aggregate principal amount of the Securities of that Series then outstanding by written notice to the Company, the Guarantor and to the Trustee may waive all defaults and rescind and annul such declaration and its consequences; but no such waiver or 32 rescission or annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon. For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such waiver or rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the Guarantor, the Trustee and the Holders of the Securities shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company, the Guarantor, the Trustee and the Holders of the Securities shall continue as though no such proceedings had been taken. SECTION 6.02. Collection of Indebtedness by Trustee; Trustee May Prove Debt. The Company and the Guarantor covenants that (1) in the case default shall be made in the payment of any installment of interest on any of the Securities of any Series, as and when the same shall become due and payable, and such default shall have continued for a period of 90 days, or (2) in case default shall be made in the payment of the principal of any of the Securities of any Series when the same shall have become due and payable, whether upon maturity or upon redemption or upon declaration or otherwise -- then, upon demand of the Trustee, the Company or the Guarantor will pay to the Trustee, for the benefit of the Holders of the Securities of such Series, the whole amount that then shall have become due and payable on all Securities of such Series for principal (and premium, if any) and interest, with interest upon any overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon any overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such Series, and, in addition thereto, such further amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith. In case the Company or the Guarantor shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the 33 collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree and may enforce any such judgment or final decree against the Company or the Guarantor or other obligor upon such Securities and collect in the manner provided by law out of the property of the Company or the Guarantor or other obliger upon such Securities wherever situated the moneys adjudged or decreed to be payable. In case there shall be pending proceedings relative to the Company or the Guarantor or any other obligor upon the Securities under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or the Guarantor or its property or such other obligor, or in case of any other judicial proceedings relative to the Company or the Guarantor or other obligor upon the Securities of any Series, or to the creditors or property of the Company, the Guarantor or such other obligor, the Trustee, irrespective of whether the principal of any Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.02, shall be entitled and empowered, by intervention in such proceedings or otherwise, (a) to file and prove a claim or claims for the whole amount of principal (or, if the Securities of any Series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such Series) , premium, if any, and interest paid and unpaid in respect of the Securities of any Series and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee, its agents and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative to the Company, the Guarantor or other obligor upon the Securities of any Series, or to the creditors or property of the Company, the Guarantor or such other obligor, (b) unless prohibited by applicable law and regulations, to vote on behalf of the Holders of the Securities of any Series in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar functions in comparable proceedings, and (c) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Securityholders and of the Trustee on their behalf and any receiver, assignee, liquidator, custodian, trustee or other similar official is hereby authorized by each of the Securityholders to make payments to the Trustee and, in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay the Trustee such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any Series or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any 34 Securityholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person. All rights of action and to assert claims under this Indenture, or under any of the Securities of any Series or coupons appertaining thereto, may be enforced by the Trustee without the possession of any of the Securities of such Series or of any coupons appertaining thereto or the production thereof in any trial or other proceedings relative thereto, and any recovery of judgment shall be for the ratable benefit of the holders of the Securities or coupons appertaining to such Securities in respect of which such action was taken. In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the Holders of the Securities or coupons appertaining to such Securities in respect to which such action was taken, and it shall not be necessary to make any Holders of such Securities or coupons parties to any such proceedings. In the case of an Event of Default hereunder the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture, or in aid of the exercise of any power granted in this Indenture, or otherwise, and the Trustee may enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. SECTION 6.03. Application of Proceeds. Any moneys collected by the Trustee pursuant to Section 6.02 in respect of any Series shall be applied in the order following, at the date or dates fixed by the Trustee and in case of the distribution of such moneys on account of principal (or premium, if any) or interest, upon presentation (except in the case of Uncertificated Securities) of the several Securities and coupons, if any, appertaining to such Securities in respect of which moneys have been collected and stamping thereon the payment if only partially paid, and upon surrender thereof if fully paid: First: The Trustee for amounts due under Section 7.07; Second: In case the principal of the Securities of such Series in respect of which moneys have been collected shall not have become due, to the payment of interest on the Securities of such Series in default, in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such Series, such payments to be made ratably to the persons entitled thereto; 35 Third: In case the principal of the Securities of such Series in respect of which moneys have been collected shall have become due by declaration or otherwise, to the payment of the whole amount then owing and unpaid upon all of the Securities of such Series for principal (and premium, if any) and interest, with interest on the overdue principal (and premium, if any) , and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such Series, and in the case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such Series, then to the payment of such principal (and premium, if any) and interest or Yield to Maturity without preference or priority of principal (and premium, if any) over interest or Yield to Maturity, or of interest over any other installment of interest, or of any Security of such Series over any other Security of such Series, ratably to the aggregate of such principal (and premium, if any) and interest or Yield to Maturity; and Fourth: To the Company. SECTION 6.04. Limitation on Suits by Securityholders. No Holder of any Security of any Series or any coupon appertaining thereto shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official or for any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of an Event of Default and unless also the Holders of not less than twenty-five percent in aggregate principal amount of the Securities of such Series then outstanding shall have made written request upon the Trustee to institute such action or proceedings in its own name as trustee hereunder and shall have offered to the Trustee such reasonable indemnity, as it may require against the costs, expenses, and liabilities to be incurred therein or thereby and the Trustee, for 60 days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action or proceedings and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 6.06; it being understood and intended and being expressly covenanted by the taker and Holder of every Security or coupon with every other taker and Holder and the Trustee that no one or more Holders of Securities of any Series or coupons appertaining thereto shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder of Securities or coupons of such Series, or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities of the applicable Series and coupons, if any, appertaining thereto. For the protection and enforcement of the provisions of this Section 6.04, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. 36 Notwithstanding any other provision in this Indenture or any provision of any Security, the right of any Holder of any Security to receive payment of the principal of, premium, if any and interest on such Security, on or after the respective due dates expressed in such Security, or any redemption date, and the right of any Holder of a coupon to receive payment of interest due as provided in such coupon, or to institute suit for the enforcement of any such payment on or after such respective due dates or redemption dates, shall not be impaired or affected without the consent of such holder. SECTION 6.05. Powers and Remedies Cumulative; Delay or Omission, Not Waiver of Default. All powers and remedies given by this Article Six to the Trustee or to the Securityholders or the Holders of any coupons shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the Securityholders or the Holders of any coupons, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any Holder of the Securities or coupons in exercising any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article 6 or by law to the Trustee or to the Securityholders or the Holders of any coupons may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders or the Holders of any coupons. SECTION 6.06. Control by Securityholders; Waiver of Defaults. The Holders of a majority in aggregate principal amount of the Securities of each Series affected (with each Series voting as a separate class) at the time outstanding shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Securities of such Series by this Indenture; provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and provided further that (subject to the provisions of Section 7.01) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors, the executive committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability or if the Trustee in good faith shall so determine that the actions or forebearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities of all Series so affected not joining in the giving of said direction, it being understood that (subject to Section 7.01) the Trustee shall have no duty to 37 ascertain whether or not such actions or forebearances are unduly prejudicial to such Holders. Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such direction or directions by Securityholders. Prior to the declaration of the maturity of the Securities of any Series as provided in Section 6.01, the Holders of a majority in aggregate principal amount of the Securities of such Series at the time outstanding may on behalf of the Holders of all the Securities of such Series waive any past default hereunder with respect to such Series and its consequences, except a default in the payment of the principal of or interest on any of the Securities of such Series. In the case of any such waiver, the Company, the Guarantor, the Trustee and the holders of the Securities of such Series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 6.07. Right of Court to Require Filing of Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Security or coupon appertaining thereto, by such Holder's acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 6.07 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders of any Series, holding in the aggregate more than ten percent in principal amount of the Securities of such Series outstanding, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security on or after the due date expressed in such Security. ARTICLE 7 TRUSTEE. SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise its rights and powers under this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: 38 (1) The Trustee need perform only those duties that are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee. (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that (1) This paragraph does not limit the effect of paragraph (b) of this Section. (2) The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts. (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.06. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may consult with counsel or require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on a Board Resolution, the 39 written advice of counsel reasonably acceptable to the Trustee, a certificate of an Officer or Officers delivered pursuant to Section 2.02(b), an Officers' Certificate or an Opinion of Counsel. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (e) Unless otherwise specifically provided, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Section 7.10 and 7.11. SECTION 7.04. Trustee Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture, the Securities or the Guarantee. It shall not be accountable for the Company's use of the proceeds from the Securities or for moneys paid over to the Company pursuant to this Indenture, and it shall not be responsible for any statement in the Securities other than its certificate of authentication. SECTION 7.05. Notice of Default. If a Default occurs and is continuing with respect to the Securities of any Series and it is known to the Trustee, the Trustee shall mail to each Holder of a Security of that Series entitled to receive reports pursuant to Section 4.02(c) (and, if Unregistered Securities of that Series are outstanding, shall cause to be published at least once in an Authorized Newspaper in The City of New York, and if such Securities are listed on the London Stock Exchange, London, and, if such Securities are listed on The Luxembourg Stock Exchange, Luxembourg) notice of the Default within 90 days after it occurs. Except in the case of a Default in payment on the Securities of any Series, the Trustee may withhold the notice if and so long as its Corporate Trust Committee or a committee of its Responsible Officers in good faith determines that withholding such notice is in the interests of Securityholders of that Series. 40 SECTION 7.06. Reports by Trustee to Holders. (a) Within 60 days after each anniversary date of the first issue of Securities, the Trustee shall mail to each Securityholder, if any, entitled to receive reports pursuant to Section 4.02(c) a brief report dated as of such date that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has occurred within the twelve months preceding such date, no report need be transmitted). Commencing at such time, the Trustee also shall comply with TIA ss. 313(b). (b) At the time that it mails such a report to Securityholders, the Trustee shall file a copy of that report with the SEC and with each stock exchange on which the Securities are listed. The Company shall provide written notice to the Trustee when the Securities of any Series are listed on any stock exchange. SECTION 7.07. Compensation and Indemnity. (a) The Company shall pay to the Trustee from time to time reasonable compensation for its services. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it in connection with the performance of its duties under this Indenture. Such expenses shall include the reasonable compensation and expenses of the Trustee's agents and counsel. (b) The Company shall indemnify the Trustee against any loss or liability incurred by it arising out of or in connection with its acceptance or administration of the trust or trusts hereunder. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent. (c) The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith. (d) To secure the payment obligations of the Company pursuant to this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Securities of a Series. (e) If the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(d) or (e) occurs, such expenses and the compensation for such services are intended to constitute expenses of administration under any state or federal bankruptcy, insolvency or related law. 41 SECTION 7.08. Replacement of Trustee. (a) The resignation or removal of the Trustee and the appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. (b) The Trustee may resign with respect to the Securities of any Series by so notifying the Company. The Holders of a majority in principal amount of the Securities of any Series may remove the Trustee with respect to that Series by so notifying the Trustee and the Company and may appoint a successor Trustee for such Series with the Company's consent. The Company may remove the Trustee with respect to Securities of any Series if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged a bankrupt or an insolvent; (3) a receiver or public officer takes charge of the Trustee or its property or; (4) the Trustee becomes incapable of acting. (c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, with respect to Securities of any Series, the Company shall promptly appoint a successor Trustee for such Series. (d) If a successor Trustee with respect to the Securities of any Series does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the Securities of the applicable Series may petition any court of competent jurisdiction for the appointment of a successor Trustee. (e) If the Trustee with respect to the Securities of any Series fails to comply with Section 7.10, after request therefor by any Securityholder of the applicable Series who has been a bona fide Holder of a Security of such Series for at least six months, then such Holder may petition any court of competent jurisdiction for the removal of such Trustee and the appointment of a successor Trustee. (f) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee for any Series of Securities shall become effective, and the successor Trustee shall have all the rights, powers and duties of the retiring Trustee with respect to all Series of Securities for which the successor Trustee is to be acting as Trustee under this Indenture. The retiring Trustee shall promptly transfer all property held by it as Trustee with respect to such Series of Securities 42 to the successor Trustee subject to the lien provided for in Section 7.07. The Company shall give notice of each appointment of a successor Trustee for any Series of Securities by publishing notice of such event once in an Authorized Newspaper in The City of New York, and if Securities of that Series are listed on the London Stock Exchange, London, and if Securities of that Series are listed on the Luxembourg Stock Exchange, Luxembourg, and by mailing written notice of such event by first-class mail to the Holders of Securities of such Series entitled to receive reports pursuant to Section 4.02(c). (g) All provisions of this Section 7.08 except subparagraphs (b)(1) and (e) and the words "subject to the lien provided for in Section 7.07" in subparagraph (f) shall apply also to any Paying Agent located outside the U.S. and its possessions as required by Section 2.04. (h) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) Series, the Company, the retiring Trustee and such successor Trustee shall execute and deliver a supplemental indenture wherein such successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, such successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those Series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to the Securities of a Series, shall contain such provisions as shall be deemed necessary ro desirable to confirm that the trusteeship for Securities of that or those Series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees as co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee. SECTION 7.09. Successor Trustee, Agents by Merger, etc. If the Trustee or any Agent consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business assets to, another corporation, the successor corporation, without any further act, shall be the successor Trustee or Agent, as the case may be. SECTION 7.10. Eligibility; Disqualification. This Indenture shall always have a Trustee with respect to each Series of Securities who satisfies the requirement of TIA 'SS' 310(a)(1) and (5). The Trustee shall always have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee is subject to TIA 'SS' 310(b) during the period of 43 time required thereby, except that there shall be excluded from the operation of TIA 'SS' 310(b)(1) all indentures of the Company now or hereafter existing which may be excluded under the proviso of TIA 'SS' 310(b)(1) including the Indenture dated as of April 9, 1990, as amended between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee, and the Indenture dated as of June 1, 1992, as amended between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee and the Indenture dated as of July 1, 1993, as amended, between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank). Nothing herein shall prevent the Trustee from filing with the SEC the application referred to in the penultimate paragraph of TIA 'SS' 310(b). SECTION 7.11. Preferential Collection of Claims Against Company. The Trustee if subject to TIA 'SS' 311(a), excluding any creditor relationship listed in TIA 'SS' 311(b). A Trustee who has resigned or been removed shall be subject to TIA 'SS' 311(a) to the extent indicated. SECTION 7.12. Authenticating Agent. The Trustee may appoint an authenticating agent or agents acceptable to the Company and the Trustee with respect to the Securities of one or more Series which shall be authorized to act on behalf of the Trustee to Authenticate Certificated and Uncertificated Securities of such Series issued upon original issue, exchange, registration of transfer, partial redemption, conversion or payment or substitution of Securities pursuant to any provision contained in this Indenture. Securities so Authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if Authenticated by the Trustee hereunder and every reference herein to the Authentication and delivery of Securities by the Trustee or the Trustee's certificate of Authentication on Certificated Securities or the issuance of Statements of Account by the Trustee shall be deemed to include Authentication and delivery on behalf of the Trustee by an authenticating agent and a certificate of Authentication on Certificated Securities executed on behalf of the Trustee by an authenticating agent and the issuance of Statements of Account on behalf of the Trustee by an authenticating agent. Each authenticating agent shall at all times be a corporation organized and doing business under the laws of the United States of America or any state thereof or the District of Columbia and authorized under such laws to act as an authenticating agent. Any corporation into which an authenticating agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such authenticating agent shall be a party, or any corporation succeeding to the corporate agency or all or substantially all of the business of an authenticating agent, shall continue to be an authenticating agent, provided that such corporation shall be otherwise eligible under this Section 7.12, without the execution or filing of any paper or any further act on the part of the Trustee or the authenticating agent. 44 An authenticating agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an authenticating agent by giving written notice hereof to such authenticating agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such authenticating agent shall cease to be eligible in accordance with the provisions of this Section 7.12, the Trustee may appoint a successor authenticating agent which shall be acceptable to the Company. Any successor authenticating agent upon acceptance of its appointment hereunder shall become vested with all rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an authenticating agent. No successor authenticating agent shall be appointed unless eligible under the provisions of this Section 7.12. The Company agrees to pay to each authenticating agent from time to time reasonable compensation for its services under this Section 7.12. The Trustee shall not incur any liability for the appointment by the Trustee of any authenticating agent or for any misconduct or negligence of any such authenticating agent, including without limitation, its authentication of Securities upon original issuance or otherwise. If the Trustee does incur liability for any such misconduct or negligence of any such authenticating agent, the Company agrees to indemnify the Trustee for, and hold it harmless against, any such liability, including the costs and expenses of defending itself against any liability in connection with such misconduct or negligence of such authenticating agent. 45 If an authenticating agent is appointed with respect to the Securities of one or more Series pursuant to this Section 7.12, the Certificated Securities of such Series may have endorsed thereon, in addition to or in lieu of the Trustee's certificate of Authentication, an alternate certificate of Authentication in the following form: "This is one of the Certificated Securities of the Series designated therein referred to in the within-mentioned Indenture. The Chase Manhattan Bank, as Trustee By -------------------------------------- As Authenticating Agent By -------------------------------------- Authorized Officer" 46 ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONIES. SECTION 8.01. Satisfaction and Discharge of Indenture. If at any time (a) the Company shall have delivered to the Trustee cancelled or for cancellation all Securities of any Series theretofore authenticated and all unmatured coupons, if any, appertaining thereto (other than any Securities of such Series and coupons appertaining thereto which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.09), or (b) in the case of any Series of Securities where the exact amount (including currency of payment) of principal of and interest due on which can be determined at the time of making the deposit referred to in clause (ii) below, (i) all the Securities of such Series and all unmatured coupons appertaining thereto, not theretofore delivered to the Trustee cancelled or for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and (ii) the Company or the Guarantor shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in cash sufficient to pay at maturity or upon redemption all such Securities not theretofore delivered to the Trustee cancelled or for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, or (c) in the case of any Series of Securities which have a floating or variable rate of interest that cannot exceed a specified or determinable maximum rate of interest, (i) all the Securities of such Series and all unmatured coupons appertaining thereto, not theretofore delivered to the Trustee cancelled or for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and (ii) the Company or the Guarantor shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in cash sufficient to pay each installment of interest on such Series of Securities not theretofore delivered to the Trustee for cancellation at the applicable specified or determined maximum rate of interest thereon on the dates such installments of interest are due and sufficient to pay the principal of (and premium, if any, on) the Securities of such Series not theretofore delivered to the Trustee for cancellation at maturity or upon redemption, but excluding, however, in each of the foregoing cases, the amount of any moneys for the payment of principal of (and premium, if any) or interest on the Securities (1) theretofore deposited with the Trustee and repaid by the Trustee to the Company in accordance with the provisions of Section 8.05, or (2) paid to any state or to the District of Columbia pursuant to its unclaimed property or similar laws, and if in either case the Company or the Guarantor shall also pay or cause to be paid all other sums payable hereunder by the Company or the Guarantor, then this Indenture shall cease to be of further effect with respect to the Securities of such Series (except as to the provisions applicable to transfers and exchanges of Securities of such Series and any coupons appertaining thereto) and the Trustee on demand of and at the cost and expense of the Company, shall execute proper instruments acknowledging 47 satisfaction of and discharging this Indenture with respect to the Securities of such Series. The Company agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee in connection with this Indenture or the Securities. SECTION 8.02. Defeasance upon Deposit of Moneys or U.S. Government Obligations. In the case of any Series of Securities, the exact amounts (including the currency of payment) of principal of and interest due on which can be determined at the time of making the deposit referred to in clause (1) below, at the Company's option, either (i) the Company and the Guarantor shall be deemed to have been Discharged (as defined below) from its obligations with respect to the Securities of such Series and coupons, if any, appertaining thereto or (ii) the Company and the Guarantor shall cease to be under any obligation to comply with any term, provision or condition set forth in Sections 4.03 and 5.01 with respect to the Securities of such Series at any time after the applicable conditions set forth below have been satisfied: (1) the Company or the Guarantor shall have deposited or caused to be deposited irrevocably with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the Securities of such Series and coupons appertaining thereto (i) money in an amount, or (ii) in the case of any Series of Securities the payments on which may only be made in U.S. dollars, U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (iii) a combination of (i) and (ii), sufficient in each case in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge each installment of principal of, and interest on, the outstanding Securities of such Series and coupons appertaining thereto on the dates such installments of interest or principal are due; (2) if the Securities of such Series are then listed on the New York Stock Exchange, the Company shall have delivered to the Trustee an opinion of Counsel to the effect that the Company's exercise of its option under this paragraph would not cause such Securities to be delisted; (3) no Event of Default or event (including such deposit) which with notice or lapse of time would become an Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date of such deposit and no Event of Default under Section 6.01(d) or (e) shall have occurred by the 91st day after such deposit in connection with a deposit under Clause (1) of this Section 8.02 to Discharge the Company or 48 the Guarantor from its obligations with respect to the Securities of such Series; and (4) the Company shall have delivered to the Trustee an opinion of independent counsel satisfactory to the Trustee to the effect that Holders of the Securities of such Series and coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of the Company's exercise of its option under this Section 8.02 and will be subject to Federal income tax on the same amount and in the same manner and at the same time as would have been the case if such option had not been exercised, which opinion may, but is not required to, include or be based upon a ruling to that effect received from or published by the Internal Revenue Service. "Discharged" means that the Company and the Guarantor shall be deemed to have paid and discharged the entire indebtedness represented by, and obligations under, the Securities of such Series and coupons appertaining thereto and the Guarantee relating thereto and to have satisfied all the obligations under this Indenture relating to the Securities of such Series and coupons appertaining thereto (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except (A) the rights of holders of the Securities of such Series and coupons appertaining thereto to receive, from the trust fund described in clause (1) above, payment of the principal of and the interest on such Securities of such Series and coupons when such payments are due; (B) the Company's obligations with respect to such Securities of such Series under Sections 2.04, 2.08, 2.09, 2.11 and 8.03; and (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder. This Indenture may be Discharged pursuant to this Section 8.02 with respect to Securities of a Series which have a floating or variable rate of interest that cannot exceed a specified or determinable maximum rate of interest by deposit, in accordance with clause (1) of this Section 8.02, with respect to the interest payments required to be made on the outstanding Securities of such Series of money and/or U.S. Government Obligations sufficient (determined in accordance with clause (1) of this Section 8.02) to pay and discharge each installment of interest on the outstanding Securities of such Series at the applicable specified or determined maximum rate of interest thereon on the dates such installments of interest are due and the satisfaction of all other requirements of this Section 8.02. SECTION 8.03. Application of Moneys Deposited. All moneys deposited with the Trustee pursuant to Section 8.01 or 8.02 shall be held in trust and applied by it to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent), to the Holders of the particular Securities of such Series and of coupons appertaining thereto for the payment or redemption of 49 which such moneys have been deposited with the Trustee, of all sums due, and to become due thereon for principal and interest. SECTION 8.04. Repayment of Moneys Held. In connection with the satisfaction and discharge of this Indenture with respect to the Securities of any Series, all moneys then held by any Paying Agent under the provisions of this Indenture with respect to such Series of Securities shall, upon demand of the Company, be repaid to it or paid to the Trustee and thereupon such Paying Agent shall be released from all further liability with respect to such moneys. SECTION 8.05. Return of Moneys Unclaimed for Two Years; Return of Additional Moneys and U.S. Government Obligations. (a) Any moneys deposited with or paid to the Trustee or any Paying Agent pursuant to any provision of this Indenture for payment of the principal of (and premium, if any) or interest on the Securities of any Series and any coupon appertaining thereto and not applied but remaining unclaimed for two years after the date upon which the principal of (and premium, if any) or interest on such Securities or coupons, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee or such Paying Agent on demand; and the Holder of any of the Securities of such Series or coupons appertaining thereto shall thereafter look only to the Company for any payment which such Holder may be entitled to collect and all liability of the Trustee or any Paying Agent with respect to such moneys shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment with respect to moneys deposited with it for any payment (a) in respect of Registered Securities of any Series, shall at the expense of the Company, mail by first-class mail to Holders of such Securities at their addresses as they shall appear on the Security register, and (b) in respect of Unregistered Securities of any Series, shall at the expense of the Company cause to be published once, in an Authorized Newspaper in the Borough of Manhattan, The City of New York, and if the Securities of such Series are listed on the London Stock Exchange, once in an Authorized Newspaper in London, and if the Securities of such Series are listed on the Luxembourg Stock Exchange, once in an Authorized Newspaper in Luxembourg, notice, that such moneys remain and that, after a date specified therein, which shall not be less than thirty days from the date of such mailing or publication, any unclaimed balance of such money then remaining will be repaid to the Company. (b) Any moneys or U.S. Government Obligations remaining on deposit with the Trustee pursuant to Section 8.01 or 8.02 with respect to Securities of a Series (including Securities of a Series which have a floating or variable rate of interest that cannot exceed a specified or determinable maximum rate of interest) shall, after payment of all amounts of principal of and interest on and other amounts due with respect to the outstanding Securities of such Series, be promptly remitted by the Trustee to the Company. 50 SECTION 8.06. Indemnity for Government Obligations. The Company shall pay and shall indemnify the Trustee and each Securityholder of each Series in respect of which the deposit shall have been made against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such obligations. ARTICLE 9 AMENDMENTS AND WAIVERS. SECTION 9.01. Without Consent of Holders. The Company, the Guarantor and the Trustees may enter into one or more supplemental indentures without consent of any Securityholder for any of the following purposes: (1) to cure any ambiguity, defect or inconsistency herein or in the Securities of any Series or to make any other change, provided no such action shall adversely affect the rights of any Securityholder; or (2) to comply with Article 5; or (3) to secure the Securities pursuant to Section 4.03; or (4) to provide for Uncertificated Securities in addition to or in place of Certificated Securities; or (5) to provide for the issuance of and establish the form and terms and conditions of Securities of any Series as provided in Section 2.02, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any Series of Securities, or to add to the rights of the Holders of any Series of Securities, or to surrender any right or power conferred on the Company. SECTION 9.02. With Consent of Holders. (a) With the written consent of the Holders of a majority in principal amount of the outstanding Securities of each Series affected by such supplemental indenture (with each Series voting as a class), the Company, the Guarantor and the Trustee may enter into a supplemental indenture to add any provisions to or to change or eliminate any provisions of this Indenture or of any supplemental indenture or to modify, in each case in any manner not covered by Section 51 9.01, the rights of the Securityholders of each such Series. The Holders of a majority in principal amount of the outstanding Securities of each Series affected by such waiver (with each Series voting as a class), by notice to the Trustee, may waive compliance by the Company or the Guarantor with any provision of this Indenture, any supplemental indenture or the Securities of any such Series; but no such waiver shall extend to or affect (x) any other Series or Securities or (y) such provision except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the Guarantor and duties of the Trustee in respect to any such provision shall remain in full force and effect, provided, however, without the consent of each Securityholder affected, an amendment or waiver may not: (1) reduce the amount of Securities whose Holders must consent to an amendment or waiver; (2) change the rate of or change the time for payment of interest on any Security; (3) change the principal of or change the fixed maturity of any Security; (4) waive a Default in the payment of the principal of or interest on any Security; (5) make any Security payable in money other than that stated in the Security; or (6) make any changes in Sections 6.04 (last paragraph), 6.06 (third sentence), or the proviso in the last sentence of Section 9.02(a). (b) It is not necessary under this Section 9.02 for the Securityholders to consent to the particular form of any proposed supplemental indenture, but it is sufficient if they consent to the substance thereof. (c) Promptly after the execution by the Company, the Guarantor and the Trustee of any supplemental indenture pursuant to the provisions of this Section 9.02, the Company shall transmit by mail a notice, setting forth in general terms the substance of such supplemental indenture, to all Holders of Registered Securities, as the names and addresses of such holders appear on the register for each Series of Securities, and to such Holders of Unregistered Securities that are entitled to receive reports pursuant to Section 4.02(c). Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. 52 SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to this Indenture or the Securities of one or more Series shall be set forth in a supplemental indenture that complies with the TIA as then in effect. SECTION 9.04. Revocation and Effect of Consents. Until an amendment, direction or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder (or, if no record date has been established for the solicitation of consents, any subsequent Holder) may revoke the consent as to his Security or portion of a Security if the Trustee receives the notice of revocation before the date the amendment, direction or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind ever Securityholder of each Series affected by such amendment or waiver. SECTION 9.05. Notation on or Exchange of Securities. The Trustee may, at the direction of the Company, place an appropriate notation about an amendment or waiver on any Security of any Series thereafter authenticated. The Company in exchange for Securities of that Series may issue and the Trustee shall authenticate new Securities of that Series that reflect the amendment or waiver. SECTION 9.06. Trustee Protected. The Trustee need not sign any supplemental indenture that adversely affects its rights, duties, obligations and standard of care hereunder. ARTICLE 10 MISCELLANEOUS. SECTION 10.01. Trust Indenture Act Controls. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an "incorporated provision") included in this Indenture by operation of, Sections 310 to 318, inclusive of the Trust Indenture Act of 1939, such imposed duties or incorporated provision shall control. 53 SECTION 10.02. Notices. (a) Unless otherwise herein provided, any notice or communication by the Company, the Guarantor or the Trustee to any of the other is duly given if in writing and delivered in person or mailed by first-class mail: if to the Company to : AT&T Capital Corporation 44 Whippany Road Morristown, NJ 07962-1963 if to the Trustee to: The Chase Manhattan Bank 450 West 33rd Street New York, NY 10001 Attention: Corporate Trustee Administration Department if to the Guarantor to: Newcourt Credit Group Inc. BCE Place 181 Bay Street, Suite 3500 Toronto, Ontario Canada M5J2T3 (b) The Company, the Guarantor or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. (c) Any notice or communication to Holders of Securities entitled to received reports pursuant to Section 4.02(c) shall be mailed by first-class mail to the addresses for Holders of Registered Securities shown on the register kept by the Registrar and to addresses filed with the Trustee for other Holders. Failure to so mail a notice or communication or any defect in such notice or communication shall not affect its sufficiency with respect to other Holders of Securities of that or any other Series entitled to receive notice. (d) If a notice or communication is mailed in the manner provided above within the time prescribed, it is conclusively presumed to have been duly given, whether or not the addressee receives it. 54 (e) If the Company mails a notice or communication to Securityholders, it shall mail a copy to the Guarantor, the Trustee and to each Agent at the same time. (f) If it shall be impractical in the opinion of the Trustee, the Guarantor or the Company to make any publication of any notice required hereby in an Authorized Newspaper, any publication or other notice in lieu thereof which is made or given with the approval of the Trustee shall constitute a sufficient publication of such notice. (g) In case, by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice as required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice. SECTION 10.03. Communication by Holders with Other Holders. Securityholders of any Series may communicate pursuant to TIA 'SS' 312(b) with other Securityholders of that Series or of all Series with respect to their rights under this Indenture or under the Securities of that Series or of all Series. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA 'SS' 312(c). SECTION 10.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company or the Guarantor to the Trustee to take any action under this Indenture, the Company or the Guarantor, as the case may be, shall furnish to the Trustee: (1) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 10.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than statements delivered pursuant to Section 4.04) shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; 55 (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. SECTION 10.06. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday, or a day on which banking institutions are not required to be open. SECTION 10.07. Governing Law. This Indenture, each Security and any coupons shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State. SECTION 10.08. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company, the Guarantor or an Affiliate. No such indenture, loan or debt agreement may be used to interpret this Indenture. SECTION 10.09. No Recourse Against Others. No director, officer, employee or stockholder, as such, of the Company or the Guarantor shall have any liability for any obligations of the Company or the Guarantor under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 56 SECTION 10.10. When Treasury Securities Disregarded. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or any Affiliate of the Company shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. Securities so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to the Securities and that the pledgee is not the Company or an affiliate of the Company. SECTION 10.11. Rules by Trustee, Paying Agent, Registrar, Record Dates. The Trustee may make reasonable rules for action by or a meeting of Securityholders. The Paying Agent or Registrar may make reasonable rules for its functions. The Company may set a record date for purposes of determining the identity of Holders entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture, which record date, in the case of a consent or vote pursuant to Section 6.06, shall be the later of 10 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee pursuant to Section 2.07 of this Indenture prior to such solicitation. If a record date is fixed, those persons who were Holders of Securities at such record date (or their duly designated proxies), and only those persons, shall be entitled to take such action by vote or consent or to revoke any vote or consent previously given, whether or not such persons continue to be Holders after such record date. No such vote or consent shall be valid or effective for more than 120 days after such record date. SECTION 10.12. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one instrument. SECTION 10.13. Securities in a Foreign Currency. Unless otherwise specified in a Company Order delivered pursuant to Section 2.03(d) of this Indenture with respect to a Series of Securities, whenever for purposes of this Indenture any action may be taken by the holders of a specified percentage in aggregate principal amount of Securities of all Series or all Series affected at the time outstanding and, at such time, there are outstanding Securities of any Series which are denominated in a coin or currency other than United States dollars, then the principal amount of Securities of such Series which shall be deemed to be outstanding for the purpose of taking such action shall be that amount of United 57 States dollars that could be obtained for such amount at the Market Exchange Rate, as such rate shall be certified to the Trustee by an Officers' Certificate. For purposes of this Section 10.13, Market Exchange Rate shall mean the noon United States dollar buying rate for that currently for cable transfers quoted in New York City as certified for customs purposes by the Federal Reserve Bank of New York; provided, however, in the case of Euros ("Euros"), Market Exchange Rate shall mean the rate of exchange determined by the Commission of the European Communities (or any successor thereof) as published in the Official Journal of the European Communities (such publication or any successor publication, the "Journal"). If such Market Exchange Rate is not available for any reason with respect to such currency, the Company shall use, in its sole discretion and without liability on its part, (i) such quotation of the Federal Reserve Bank of New York, or, in the case of Euros, the rate of exchange as published in the Journal, as the most recent available date or (ii) quotations or, in the case of Euros, rates of exchange from one or more major banks in New York City or in the country of issue of the currency in question, which for purposes of the Euros shall be Brussels, Belgium, or such other quotations or, in the case of Euros, rates of exchange as the Company shall deem appropriate. The provisions of this paragraph shall apply in determining the equivalent number of votes which each Holder or proxy shall be entitled to in respect of Securities of a Series denominated in a currency other than United States dollars. All decisions and determinations of the Company regarding the Market Exchange Rate shall be in its sole discretion and shall, in the absence of manifest error, be conclusive for all purposes and irrevocably binding upon the Company, the Trustee and all Holders. SECTION 10.14. Judgment Currency. Each of the Company and the Guarantor agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert any sum due in respect of the principal of or interest on the Securities of any Series (the "Required Currency") into a currency in which such judgment will be rendered (the "Judgment Currency"), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final judgment is entered, unless such day is not a New York Banking Day then, to the extent permitted by applicable law, the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which final judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so 58 expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due not previously tendered or recovered under this Indenture. For purposes of the foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a legal holiday in The City of New York or a day on which banking institutions in The City of New York are authorized by law or required by executive order to close. 59 IN WITNESS WHEREOF, the undersigned have caused this Indenture to be duly executed as of the date and year first above written. AT&T CAPITAL CORPORATION By ------------------------------- Treasurer Attest: - -------------------------------- Assistant Secretary THE CHASE MANHATTAN BANK By ------------------------------- Vice President Attest: - -------------------------------- Assistant Trust Officer NEWCOURT CREDIT GROUP INC. By ------------------------------- Attest: - -------------------------------- Assistant Secretary 60 STATE OF NEW JERSEY ) ) ss.: Morristown, N.J. COUNTY OF MORRIS ) On the ____ day of March, 1998, before me personally came ______________, to me known, who, being by me duly sworn, did depose and say that he resides at _____________, that he is the Treasurer of AT&T Capital Corporation, one of the corporations described in and which executed the above instrument, and that he signed his name thereto by like authority. ------------------------------- Notary Public 61 STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On the ____ day of March, 1998, before me personally came Gregory K. McFarlane, to me known, who, being by me duly sworn, did depose and say that he resides at _______________, that he is a Vice President of The Chase Manhattan Bank, one of the corporations described in and which executed the above instrument, and that he signed his name thereto by like authority. ------------------------------- Notary Public 62 STATE OF NEW JERSEY ) ) ss.: Morristown, N.J. COUNTY OF MORRIS ) On the ___ day of March, 1998, before me personally came _____________, to me known, who, being by me duly sworn, did depose and say that he resides at __________, that he is the _________ of Newcourt Credit Group Inc., one of the corporations described in and which executed the above instrument, and that he signed his name thereto by like authority. ------------------------------- Notary Public 63 EX-4 5 EXHIBIT 4J EXHIBIT 4J GUARANTEE Guarantee dated as of April 1, 1998, made by Newcourt Credit Group Inc. (the "Guarantor"), a corporation incorporated under the laws of the Province of Ontario, to and in favor of The Chase Manhattan Bank, as Trustee (the "Trustee") under the Indenture (as defined herein), for the benefit of the registered holders of the Securities (as defined herein) (collectively, the "Holders"). WHEREAS the Guarantor is the owner of all the issued and outstanding capital stock of AT&T Capital Corporation (the "Company"); AND WHEREAS the Company will issue from time to time debt securities (the "Securities") pursuant to the Indenture dated as of April 1, 1998 by and among the Guarantor, the Company and the Chase Manhattan Bank, as Trustee (the "Indenture"). NOW THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration given by the Holders and the Company to the Guarantor, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as follows: SECTION 1. GUARANTEE. The Guarantor hereby, irrevocably and unconditionally guarantees (as a guarantor and not as a surety) to the holders of the Securities the due and punctual payment of the principal of, premium, if any, and interest on such Securities when and as the same shall become due and payable, whether at maturity, upon redemption or otherwise, according to the terms of the Indenture; (the obligations set forth in this Section 1 being herein called the "Guaranteed Obligations"). SECTION 2. ABSOLUTE LIABILITY. The Guarantor hereby guarantees that the Guaranteed Obligations will be paid to the Holders strictly in accordance with the terms and conditions hereof, and that the liability of the Guarantor under this Guarantee shall be absolute and unconditional irrespective of: (a) the validity or enforceability of the the Securities or the Indenture; (b) any contest by the Company or any other person as to the amount of the Guaranteed Obligations or the validity or enforceability of the Securities or the Indenture; (c) any defense, counter-claim or right of set-off available to the Company; (d) any extension of the time or times for payment of the Guaranteed Obligations or any other indulgences which the Holders may grant to the Company or any amendment to or alteration of the Indenture or the Securities; and (e) any other circumstances which might otherwise constitute a defense available to, or a discharge of, the Guarantor, the Company or any other person in respect of the Guaranteed Obligations or the Guarantor in respect of the Guarantee. SECTION 3. REMEDIES. The guarantee set forth in Section 1 constitutes a present and continuing guarantee of payment and performance and not of collection. The Guarantor agrees that its obligations hereunder shall be joint and several with any and all other guarantees given in connection with the Guaranteed Obligations from time to time. The Guarantor agrees that the Holders shall not be bound to exhaust their recourse against the Company or any other person or to make demand upon the Company or to realize on any security they may hold in respect of the Guaranteed Obligations before being entitled to payment or performance hereunder. The Guarantor hereby waives the right to require the Holders to join the Company in any action brought hereunder or to commence any action against or obtain any judgment against the Company or to pursue any other remedy or enforce any other right. The Guarantor further agrees that nothing contained herein or otherwise shall prevent the Holders from pursuing concurrently or successively all rights and remedies available to them at law and/or in equity or under the Indenture, and the exercise of any of their rights or the completion of any of their remedies shall not constitute a discharge of any of Guarantor's obligations hereunder. SECTION 4. PAYMENT ON DEMAND. The Guarantor shall make payment of the amount of the Guaranteed Obligations and all other amounts payable by it to the Holders hereunder forthwith after demand therefor is made in writing to it and such demand shall be deemed to have been effectively made when either an envelope containing such demand, addressed to it c/o Newcourt Credit Group, BCE Place, 181 Bay Street, P.O. Box 827, Toronto, Ontario, M5J 2T3 for the attention of President, is personally delivered to such address or a facsimile transmission containing such demand is sent to the Guarantor, for the attention of its President, at the following fax number: (416) 594-5248. SECTION 5. SUBROGATION. Upon receipt by the Holders of any payment or payments on account of liability under this Guarantee, the Guarantor shall not be entitled to claim repayment against the Company until the claims of the Holders against the Company in respect of the Guaranteed Obligations have been repaid in full; and in the case of the liquidation, winding-up or bankruptcy of the Company (whether voluntary or compulsory) or in the event that the Company shall make a bulk sale of any of the Company's assets within the provisions of any bulk sales legislation or makes an assignment for the benefit of creditors or the assets of the Company are distributed to creditors for any other reason, the Holders shall have the right to rank in priority to the Guarantor for their full claims in respect of the Guaranteed Obligations and receive all distributions and other payments in respect thereof until their claims in respect of the Guaranteed Obligations have been paid in full, and the Guarantor shall continue to be liable, less any payments made by or on behalf of the Guarantor, for any balance which may be owing to the Holders by the Company. If any amount shall be paid to the Guarantor on account of any subrogation rights at any time when all the Guaranteed Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Holders and shall forthwith be paid to the Holders. 2 SECTION 6. SUBORDINATION. All obligations, liabilities and indebtedness of the Company to the Guarantor of any nature whatsoever (the "Corporate Indebtedness") be subordinated to the payment in full of all obligations owing by the Company to the Holders, and any payments received by the Guarantor on account of such Corporate Indebtedness at a time when any Default or Event of Default (as defined in the Indenture) exists shall be collected and received by the Guarantor in trust and paid over to the Holders without impairing or releasing any obligations of the Guarantor hereunder. The Guarantor shall not assign the Corporate Indebtedness nor any part thereof to any person other than to a subsidiary of the Company which has provided a guarantee to the Holders in respect of the Guaranteed Obligations in the form and substance of this Guarantee, without the prior written consent of the Holders. SECTION 7. SUSPENSION OF GUARANTOR RIGHTS. The Guarantor agrees that so long as any obligations remain outstanding hereunder, whether present or future, direct or indirect, absolute or contingent, matured or not, the Guarantor shall not exercise any rights which the Guarantor may at any time have by reason of the performance of any of its obligations hereunder: i. to be indemnified by the Company; ii. to claim contribution from any other guarantor of the debts, liabilities or obligations of the Company; or iii. to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Holders under the Indenture. SECTION 8. WAIVERS. The Guarantor hereby waives, to the extent permitted by applicable law, (i) notice of acceptance of this Guarantee by the Holders and any and all notices and demands of every kind which may be required to be given by any statute, rule or law, (ii) any defense, right of set-off or other claim which the Guarantor may have against the Company or which the Guarantor or the Company may have against the Holders, (iii) presentment for payment, demand for payment, notice of nonpayment or dishonor, protest and notice of protest, diligence in collection and any and all formalities which otherwise might be legally required to charge the Guarantor with liability, except for demands or notices expressly provided for herein, (iv) any failure by the Holders or the Trustee to inform the Guarantor of any facts the Holders or the Trustee may now or hereafter know about the Company, the Securities or the transactions contemplated by the Indenture, it being understood and agreed that the Holders or the Trustee have no duty to so inform and that the Guarantor is fully responsible for being and remaining informed by the Company of all circumstances bearing on the existence or creation, or the risk of nonpayment or nonperformance of the Guaranteed Obligations and (v) any and all right to cause a marshalling of assets of the Company or any other action by any court or governmental body with respect thereto. No modification or waiver of any of the provisions of this Guarantee shall be binding upon the Holders except as expressly set forth in a writing duly signed and delivered on behalf of the Holders; provided, however, the Company, the Guarantor and the Trustee may amend this Guarantee to cure any ambiguity, defect or inconsistency herein, provided no such action shall adversely affect the rights of any Holder. 3 SECTION 9. CONTINUING GUARANTEE. The guarantee herein shall be a continuing guarantee and shall extend to all present and future Guaranteed Obligations and shall be binding as a continuing obligation of the Guarantor until the earlier of (i) the date the Guarantor is released from any further obligation hereunder in accordance with Article 8 of the Indenture; and (ii) the date on which the Company or the Guarantor shall have performed and satisfied in full the Guaranteed Obligations. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be refunded by the Holders upon the insolvency, bankruptcy or reorganization of the Company or otherwise, regardless of whether the Holders contested the order requiring the return of such payment, all as though such payment had not been made. SECTION 10. INTEREST ACT (CANADA). The Guarantor acknowledges that, for the purposes of the Interest Act (Canada), (i) whenever any interest or fee applicable to the Guaranteed Obligations is calculated using a rate based on a year of 360 days or 365 days, such rate determined pursuant to such calculation, when expressed as an annual rate, is equivalent to (x) the applicable rate based on a year of 360 days or 365 days, as the case may be, (y) multiplied by the actual number of days in the calendar year in which the period for which such interest or fee is payable (or compounded) ends, and (z) divided by 360 or 365 as the case may be; (ii) the principle of deemed reinvestment of interest does not apply to any interest calculation in respect of the Guaranteed Obligations; and (ii) the rates of interest stipulated in respect of the Guaranteed Obligations are intended to be nominal rates and not effective rates or yields. SECTION 11. SUCCESSORS OF THE COMPANY. Any change or changes in the name of the Company or reorganization (whether by way of reconstruction, consolidation, amalgamation, merger, transfer, sale, lease or otherwise) of the Company or its business shall not affect or in any way limit or lessen the liability of the Guarantor hereunder and this Guarantee shall extend to any person, firm or Company acquiring or from time to time carrying on the business of the Company. SECTION 12. NO RECOURSE. Any right of subrogation acquired by the Guarantor by reason of payment under or pursuant to this Guarantee shall not be exercised until the Guaranteed Obligations and other amounts due to the Holders hereunder have been paid or repaid in full and shall be no greater than the right held by the Holders, and the Guarantor shall have no recourse against the Holders for any irregularity or defect in the manner or procedure by which the Holders make demand or pursue any rights or remedies they may have. SECTION 13. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and warrants that: (a) ORGANIZATION AND QUALIFICATION. It is a corporation duly incorporated and validly existing under the laws of the Province of Ontario. 4 (b) CORPORATE POWER. It has full corporate right, power and authority to own its property and assets and to carry on its business as now conducted and as contemplated to be conducted and to enter into and perform this Guarantee. (c) CONFLICT WITH OTHER INSTRUMENTS. Neither the execution and delivery of this Guarantee nor the consummation of the transactions herein contemplated nor compliance with the terms, conditions and provisions hereof (i) conflicts with or results in a breach of any of the terms, conditions or provisions of (A) its charter documents or by-laws; (B) any law, rule or regulation having the force of law; (C) any material contractual restriction binding on or affecting it or its properties; or (D) any writ, judgment, injunction, determination or award which is binding on it; or (ii) results in, or requires the creation or imposition of any lien upon or security interest in or with respect to the properties now owned or hereafter acquired by it under any contractual provision binding on or affecting it. (d) AUTHORIZATION, GOVERNMENTAL APPROVALS ETC. The execution and delivery of this Guarantee and the consummation by it of the transactions herein contemplated have been duly authorized by all necessary corporate action and no authorization, consent, approval, license or exemption under any applicable law, rule or regulation having the force of law, and no registration, qualification, designation, declaration, recording, or filing with any official body, is or was necessary therefor or to perfect the same or to preserve the benefit thereof to the Holders, except such as are in full force and effect, unamended, at the date hereof. (e) EXECUTION AND BINDING OBLIGATION. This Guarantee has been duly executed and delivered by it, and constitutes the legal, valid and binding obligation of it enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or similar laws affecting creditors' rights general and the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (f) ACTIONS. There is no pending or threatened action or proceeding affecting it before any court, governmental agency or arbitrator, which may materially adversely affect its financial condition or operations. (g) SHARES. The Guarantor is the registered and beneficial holder of 100% of the issued and outstanding shares of the capital stock of the Company. SECTION 14. PAYMENT OF TAXES AND OTHER TAXES. The Guarantor hereby agrees to obtain any necessary exchange control approvals, consents or authorizations which may at 5 any time and from time to time be required by the laws of the Province of Ontario or any state in the United States in connection with the making of payments hereunder. Any and all payments by the Guarantor hereunder shall be made and shall be free and clear of and without set-off or counterclaim and without deduction for or on account of, or withholding for any and all present or future income or other taxes, levies, imposts, dues, charges, fees, deductions, withholdings or restrictions or conditions of any nature whatever now or hereafter imposed, levied, collected or withheld or assessed by any country (or by any political subdivision or taxing authority thereof or therein), and all liabilities with respect thereto (all such taxes, levies, imposts, duties, charges, fees, deductions, withholdings and liabilities being hereinafter referred to as "Taxes") unless such Taxes are required by law or the administration thereof to be deducted or withheld. If the Guarantor shall be required by law to deduct or withhold any Taxes from or in respect of any amount payable hereunder, subject as provided in the next following sentence, (i) the sum payable shall be increased as may be necessary so that after making all required deductions or withholdings (including deduction or withholding applicable to additional amounts paid under this Section), the Holders receive an amount equal to the sum they would have received if no deduction or withholding had been made, (ii) the Guarantor shall make such deductions or withholdings, and (iii) the Guarantor shall pay the full amount deducted or withheld to the relevant taxation or other authority in accordance with applicable law. (a) The Guarantor shall pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (all such taxes, charges and levies being hereinafter referred to as "Other Taxes") which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Guarantee. (b) The Guarantor shall indemnify the Holders for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section) paid by the Holders and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days from the date the Holders make written demand therefor. A certificate as to the amount of such Taxes or Other Taxes submitted to the Guarantor by the Holders and evidence of payment thereof shall, in the absence of manifest error, be prima facie evidence of the amount due by the Guarantor to the Holders. SECTION 15. GOVERNING LAW. (a) This Guarantee shall be governed by and construed in accordance with the laws of the State of New York applicable therein and shall be treated in all respects as a New York contract. (b) The Guarantor hereby (i) irrevocably submits to the jurisdiction of any court sitting in the State of New York over any suit, action or proceeding arising out of or relating to this Guarantee or the Indenture; (ii) irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such court; (iii) irrevocably waives, to the fullest extent permitted by law, any objection which it may have or hereafter have to the laying of the venue of any such suit, action or preceding brought in such a court and any claim that any such suit, action or 6 proceeding brought in such a court has been brought in an inconvenient forum; and (iv) irrevocably appoints Newcourt Credit Group USA, Inc. (the "Process Agent"), with an office at the date hereof at 44 Whippany Road, Morristown, NJ 07960 (Fax No. 973/397-4435), its authorized agent to accept and acknowledge service of any and all process which may be served in any suit, action or proceeding. Such service may be made by delivering a copy of such process to the Guarantor in care of the Process Agent at the Process Agent's above address and the Guarantor hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf. As an alternative method of service, the Guarantor also irrevocably consents to the service of any and all process in any such action or proceeding by the delivery of copies of such process to the Guarantor to: BCE Place, 181 Bay Street, P.O. Box 827, Toronto, Canada M5J2T3 for the attention of President. The Guarantor agrees that a final judgment in any such action or proceeding may be enforced in any other manner provided by law. Nothing in this Section shall affect the right of the Trustee or the Holders to serve process in any manner permitted by law or limit the rights of the Trustee or the Holders to bring proceedings against the Guarantor in the courts of any other jurisdiction. (c) Subject to Section 15(e), the Guarantor hereby consents in respect of any legal action or proceedings arising out of or in connection with this Guarantee for the payment and performance hereof to the giving of any relief or the issue of any process in connection with such action or proceedings, including, without limitation the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such action or proceedings. (d) To the extent that the Guarantor has or hereafter may acquire any immunity from the jurisdiction of any court or from any legal process (whether service of notice, attachment prior to judgment, attachment in the aid of execution, execution or otherwise) with respect to itself or its property, the Guarantor hereby irrevocably waives, to the fullest extent permitted by law, such immunity in respect of its obligations under this Guarantee and any security for the payment and performance hereof. (e). Nothing in this Section shall constitute a waiver by the Guarantor of any right to (i) appeal any order or judgment referred to herein; (ii) seek any stay or reconsideration or review of any such order or judgment, or (iii) seek any stay of execution or levy pending any appeal from, or suit, action or proceeding for reconsideration or review of, any such order or judgment. (f) The Guarantor agrees that the Trustee or the Holders shall have the right to proceed against the Guarantor or its property in a court in any location to enable such person to (i) obtain personal jurisdiction over the Guarantor, or (ii) to enforce a judgment or other court order entered in favor of such person. The Guarantor agrees that it will not assert any permissive counterclaims in any proceeding brought by such person to enforce a judgment or other court order in favor of such person. The Guarantor waives any objection that it may have to the location of the court in which such person has commenced a proceeding described in this subsection. 7 SECTION 16. HEADINGS, ETC. The division of this Guarantee into sections and the insertion of headings are for convenience of reference only and shall not affect the interpretation hereof. SECTION 17. SEVERABILITY. Any provision of this Guarantee which is invalid or not enforceable shall not affect any other provision and shall be deemed to be severable. SECTION 18. SUCCESSORS AND ASSIGNS. This Guarantee shall extend to and inure to the benefit of the Trustee and the Holders and their respective successors and assigns and shall be binding upon the Guarantor and its successors and assigns. This Guarantee is assignable by the Holders to the extent and in the same proportion that any underlying interest in the Securities and applicable Indenture has been assigned and is assignable by the Trustee to any successor Trustee under the Indenture. 8 IN WITNESS WHEREOF, the Guarantor has duly executed this Guarantee and affixed its corporate seal under the hand of its proper officer(s) duly authorized in that behalf as of the day and year first above written. NEWCOURT CREDIT GROUP INC. Attest: By:______________________________ By:______________________________ Glen J. DuMont Glenn A. Votek Assistant Secretary Executive Vice President and Treasurer By:______________________________ DOCUMENT NUMBER: 313608.05 4-27-98/11:49pm 10 EX-4 6 EXHIBIT 4K EXHIBIT 4K GUARANTEE Guarantee dated as of April 1, 1998, made by Newcourt Credit Group Inc. (the "Guarantor"), a corporation incorporated under the laws of the Province of Ontario, to and in favor of _________________________ for the benefit of the holders of the Securities (as defined herein) (collectively, the "Holders"). WHEREAS the Guarantor is the owner of all the issued and outstanding capital stock of AT&T Capital Corporation (the "Company"); AND WHEREAS the Company will issue from time to time (i) warrants to purchase the Debt Securities ("Debt Warrants") pursuant to a Debt Warrant Agreement substantially in the form attached hereto as Exhibit A (the "Debt Warrant Agreement"); (ii) warrants entitling the holder thereof to receive from the Company, upon exercise, an amount in cash equal to the cash value of the right to purchase or to sell a certain amount of one currency for a certain amount of a different currency ("Currency Warrants") pursuant to a Currency Warrant Agreement substantially in the form attached hereto as Exhibit B (the "Currency Warrant Agreement"); (iii) warrants entitling the holders thereof to receive from the Company, upon exercise, an amount in cash determined by reference to decreases or increases in the level of a specified index or determined by reference between two specified indices ("Index Warrants") pursuant to an Index Warrant Agreement substantially in the form attached hereto as Exhibit C (the "Index Warrant Agreement"); and (iv) warrants entitling the holders thereof to receive from the Company, upon exercise, an amount in cash determined by reference to decreases or increases in the yield or closing price of one or more specified debt instruments issued by either the United States government or by a foreign government, in the interest rate or interest swap rate established from time to time by one or more specified financial institutions or in any specified combination thereof ("Interest Rate Warrants" and together with the Debt Warrants, Currency Warrants and the Index Warrants, the "Securities") pursuant to an Interest Rate Warrant Agreement substantially in the form attached hereto as Exhibit D (the "Interest Rate Warrant Agreement" and together with the Debt Warrant Agreement, Currency Warrant Agreement and Index Warrant Agreement, the "Warrant Agreements"). NOW THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration given by the Holders and the Company to the Guarantor, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as follows: SECTION 1. GUARANTEE. The Guarantor hereby, irrevocably and unconditionally guarantees (as a guarantor and not as a surety) (a) to the holders of Currency Warrants, Index Warrants and Interest Rate Warrants the due and punctual payment of all obligations of the Company when and as the same shall become due and payable, whether upon exercise or otherwise, according to the terms of the applicable Warrant Agreements; and (b) to the holders of the Debt Warrants the punctual performance of the obligations of the Company according to the terms of the Debt Warrant Agreement (the obligations set forth in clauses (a)-(b) being herein called the "Guaranteed Obligations"). SECTION 2. ABSOLUTE LIABILITY. The Guarantor hereby guarantees that the Guaranteed Obligations will be paid to the Holders strictly in accordance with the terms and conditions hereof, and that the liability of the Guarantor under this Guarantee shall be absolute and unconditional irrespective of: (a) the validity or enforceability of the Securities or the Warrant Agreements; (b) any contest by the Company or any other person as to the amount of the Guaranteed Obligations or the validity or enforceability of the Securities or the Warrant Agreements; (c) any defense, counter-claim or right of set-off available to the Company; (d) any extension of the time or times for payment of the Guaranteed Obligations or any other indulgences which the Holders may grant to the Company or any amendment to or alteration of the Warrant Agreements or the Securities; and (e) any other circumstances which might otherwise constitute a defense available to, or a discharge of, the Guarantor, the Company or any other person in respect of the Guaranteed Obligations or the Guarantor in respect of the Guarantee. SECTION 3. REMEDIES. The guarantees set forth in Sections 1(a) constitute present and continuing guarantees of payment and performance and not of collection. The guarantee set forth in Section 1(b) constitutes a present and continuing guarantee of performance. The Guarantor agrees that its obligations hereunder shall be joint and several with any and all other guarantees given in connection with the Guaranteed Obligations from time to time. The Guarantor agrees that the Holders shall not be bound to exhaust their recourse against the Company or any other person or to realize on any security they may hold in respect of the Guaranteed Obligations before being entitled to payment or performance hereunder. The Guarantor hereby waives the right to require the Holders to join the Company in any action brought hereunder or to commence any action against or obtain any judgment against the Company or to pursue any other remedy or enforce any other right. The Guarantor further agrees that nothing contained herein or otherwise shall prevent the Holders from pursuing concurrently or successively all rights and remedies available to them at law and/or in equity or under the Warrant Agreements, and the exercise of any of their rights or the completion of any of their remedies shall not constitute a discharge of any of Guarantor's obligations hereunder. SECTION 4. PAYMENT ON DEMAND. The Guarantor shall make payment of the amount of the Guaranteed Obligations and all other amounts payable by it (or performance with respect to the Debt Warrants) to the Holders hereunder forthwith after demand therefor is made in writing to it and such demand shall be deemed to have been effectively made when an envelope containing such demand, addressed to it c/o Newcourt Credit Group, BCE Place, 181 Bay Street, 2 P.O. Box 827, Toronto, Ontario, M5J 2T3 for the attention of President, is personally delivered to such address. SECTION 5. SUBROGATION. Upon receipt by the Holders of any payment or payments (or performance with respect to the Debt Warrants) on account of liability under this Guarantee, the Guarantor shall not be entitled to claim repayment against the Company until the claims of the Holders against the Company in respect of the Guaranteed Obligations have been repaid (or performed with respect to the Debt Warrants) in full; and in the case of the liquidation, winding-up or bankruptcy of the Company (whether voluntary or compulsory) or in the event that the Company shall make a bulk sale of any of the Company's assets within the provisions of any bulk sales legislation or makes an assignment for the benefit of creditors or the assets of the Company are distributed to creditors for any other reason, the Holders shall have the right to rank in priority to the Guarantor for their full claims in respect of the Guaranteed Obligations and receive all distributions and other payments in respect thereof until their claims in respect of the Guaranteed Obligations have been paid in full, and the Guarantor shall continue to be liable, less any payments made by or on behalf of the Guarantor, for any balance which may be owing to the Holders by the Company. If any amount shall be paid to the Guarantor on account of any subrogation rights at any time when all the Guaranteed Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Holders and shall forthwith be paid to the Holders. SECTION 6. SUBORDINATION. All obligations, liabilities and indebtedness of the Company to the Guarantor of any nature whatsoever (the "Corporate Indebtedness") be subordinated to the payment in full of all obligations owing by the Company to the Holders. The Guarantor shall not assign the Corporate Indebtedness nor any part thereof to any person other than to a subsidiary of the Company which has provided a guarantee to the Holders in respect of the Guaranteed Obligations in the form and substance of this Guarantee, without the prior written consent of the Holders. SECTION 7. SUSPENSION OF GUARANTOR RIGHTS. The Guarantor agrees that so long as any obligations remain outstanding hereunder, whether present or future, direct or indirect, absolute or contingent, matured or not, the Guarantor shall not exercise any rights which the Guarantor may at any time have by reason of the performance of any of its obligations hereunder: (i) to be indemnified by the Company; (ii) to claim contribution from any other guarantor of the debts, liabilities or obligations of the Company; or (iii) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Holders under the Warrant Agreements. SECTION 8. WAIVERS. The Guarantor hereby waives, to the extent permitted by applicable law, (i) notice of acceptance of this Guarantee by the Holders and any and all notices and 3 demands of every kind which may be required to be given by any statute, rule or law, (ii) any defense, right of set-off or other claim which the Guarantor may have against the Company or which the Guarantor or the Company may have against the Holders, (iii) presentment for payment, demand for payment, notice of nonpayment or dishonor, protest and notice of protest, diligence in collection and any and all formalities which otherwise might be legally required to charge the Guarantor with liability, except for demands or notices expressly provided for herein, (iv) any failure by the Holders to inform the Guarantor of any facts the Holders may now or hereafter know about the Company, the Securities or the transactions contemplated by the Warrant Agreements, it being understood and agreed that the Holders have no duty to so inform and that the Guarantor is fully responsible for being and remaining informed by the Company of all circumstances bearing on the existence or creation, or the risk of nonpayment or nonperformance of the Guaranteed Obligations and (v) any and all right to cause a marshalling of assets of the Company or any other action by any court or governmental body with respect thereto. No modification or waiver of any of the provisions of this Guarantee shall be binding upon the Holders except as expressly set forth in a writing duly signed and delivered on behalf of the Holders; provided, however, the Company, the Guarantor and [ ] may amend this Guarantee to cure any ambiguity, defect or inconsistency herein, provided no such action shall adversely affect the rights of any Holder. SECTION 9. CONTINUING GUARANTEE. The guarantee herein shall be a continuing guarantee and shall extend to all present and future Guaranteed Obligations and shall be binding as a continuing obligation of the Guarantor until the earlier of (i) the Holders release the Guarantor from any further obligation hereunder; and (ii) the date on which the Company or the Guarantor shall have performed and satisfied in full the Guaranteed Obligations. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment (or performance with respect to the Debt Warrants) of any of the Guaranteed Obligations is rescinded or must otherwise be refunded by the Holders upon the insolvency, bankruptcy or reorganization of the Company or otherwise, regardless of whether the Holders contested the order requiring the return of such payment, all as though such payment had not been made. SECTION 10. INTEREST ACT (CANADA). The Guarantor acknowledges that, for the purposes of the Interest Act (Canada), (i) whenever any interest or fee applicable to the Guaranteed Obligations is calculated using a rate based on a year of 360 days or 365 days, such rate determined pursuant to such calculation, when expressed as an annual rate, is equivalent to (x) the applicable rate based on a year of 360 days or 365 days, as the case may be, (y) multiplied by the actual number of days in the calendar year in which the period for which such interest or fee is payable (or compounded) ends, and (z) divided by 360 or 365 as the case may be; (ii) the principle of deemed reinvestment of interest does not apply to any interest calculation in respect of the Guaranteed Obligations; and (ii) the rates of interest stipulated in respect of the Guaranteed Obligations are intended to be nominal rates and not effective rates or yields. SECTION 11. SUCCESSORS OF THE COMPANY. Any change or changes in the name of the Company or reorganization (whether by way of reconstruction, consolidation, amalgamation, merger, transfer, sale, lease or otherwise) of the Company or its business shall not affect or in any 4 way limit or lessen the liability of the Guarantor hereunder and this Guarantee shall extend to any person, firm or Company acquiring or from time to time carrying on the business of the Company. SECTION 12. NO RECOURSE. Any right of subrogation acquired by the Guarantor by reason of payment under or pursuant to this Guarantee shall not be exercised until the Guaranteed Obligations and other amounts due to the Holders hereunder have been paid or repaid in full and shall be no greater than the right held by the Holders, and the Guarantor shall have no recourse against the Holders for any irregularity or defect in the manner or procedure by which the Holders make demand or pursue any rights or remedies they may have. SECTION 13. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and warrants that: (a) ORGANIZATION AND QUALIFICATION. It is a corporation duly incorporated and validly existing under the laws of the Province of Ontario. (b) CORPORATE POWER. It has full corporate right, power and authority to own its property and assets and to carry on its business as now conducted and as contemplated to be conducted and to enter into and perform this Guarantee. (c) CONFLICT WITH OTHER INSTRUMENTS. Neither the execution and delivery of this Guarantee nor the consummation of the transactions herein contemplated nor compliance with the terms, conditions and provisions hereof (i) conflicts with or results in a breach of any of the terms, conditions or provisions of (A) its charter documents or by-laws; (B) any law, rule or regulation having the force of law; (C) any material contractual restriction binding on or affecting it or its properties; or (D) any writ, judgment, injunction, determination or award which is binding on it; or (ii) results in, or requires the creation or imposition of any lien upon or security interest in or with respect to the properties now owned or hereafter acquired by it under any contractual provision binding on or affecting it. (d) AUTHORIZATION, GOVERNMENTAL APPROVALS ETC. The execution and delivery of this Guarantee and the consummation by it of the transactions herein contemplated have been duly authorized by all necessary corporate action and no authorization, consent, approval, license or exemption under any applicable law, rule or regulation having the force of law, and no registration, qualification, designation, declaration, recording, or filing with any official body, is or was necessary therefor or to perfect the same or to preserve the benefit thereof to the Holders, except such as are in full force and effect, unamended, at the date hereof. 5 (e) EXECUTION AND BINDING OBLIGATION. This Guarantee has been duly executed and delivered by it, and constitutes the legal, valid and binding obligation of it enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or similar laws affecting creditors' rights general and the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (f) ACTIONS. There is no pending or threatened action or proceeding affecting it before any court, governmental agency or arbitrator, which may materially adversely affect its financial condition or operations. (g) SHARES. The Guarantor is the registered and beneficial holder of 100% of the issued and outstanding shares of the capital stock of the Company. SECTION 14. PAYMENT OF TAXES AND OTHER TAXES. (a) The Guarantor hereby agrees to obtain any necessary exchange control approvals, consents or authorizations which may at any time and from time to time be required by the laws of the Province of Ontario or any state in the United States in connection with the making of payments hereunder. Any and all payments by the Guarantor hereunder shall be made and shall be free and clear of and without set-off or counterclaim and without deduction for or on account of, or withholding for any and all present or future income or other taxes, levies, imposts, dues, charges, fees, deductions, withholdings or restrictions or conditions of any nature whatever now or hereafter imposed, levied, collected or withheld or assessed by any country (or by any political subdivision or taxing authority thereof or therein), and all liabilities with respect thereto (all such taxes, levies, imposts, duties, charges, fees, deductions, withholdings and liabilities being hereinafter referred to as "Taxes") unless such Taxes are required by law or the administration thereof to be deducted or withheld. If the Guarantor shall be required by law to deduct or withhold any Taxes from or in respect of any amount payable hereunder, subject as provided in the next following sentence, (i) the sum payable shall be increased as may be necessary so that after making all required deductions or withholdings (including deduction or withholding applicable to additional amounts paid under this Section), the Holders receive an amount equal to the sum they would have received if no deduction or withholding had been made, (ii) the Guarantor shall make such deductions or withholdings, and (iii) the Guarantor shall pay the full amount deducted or withheld to the relevant taxation or other authority in accordance with applicable law. (b) The Guarantor shall pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (all such taxes, charges and levies being hereinafter referred to as "Other Taxes") which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Guarantee. (c) The Guarantor shall indemnify the Holders for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section) paid by the Holders and any liability (including penalties, interest 6 and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days from the date the Holders make written demand therefor. A certificate as to the amount of such Taxes or Other Taxes submitted to the Guarantor by the Holders and evidence of payment thereof shall, in the absence of manifest error, be prima facie evidence of the amount due by the Guarantor to the Holders. SECTION 15. GOVERNING LAW. (a) This Guarantee shall be governed by and construed in accordance with the laws of the State of New York applicable therein and shall be treated in all respects as a New York contract. (b) The Guarantor hereby (i) irrevocably submits to the jurisdiction of any court sitting in the State of New York over any suit, action or proceeding arising out of or relating to this Guarantee or the Warrant Agreements; (ii) irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such court; (iii) irrevocably waives, to the fullest extent permitted by law, any objection which it may have or hereafter have to the laying of the venue of any such suit, action or preceding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum; and (iv) irrevocably appoints Newcourt Credit Group USA, Inc. (the "Process Agent"), with an office at the date hereof at 44 Whippany Road, Morristown, NJ 07960 (Fax No. 973/397-4435), its authorized agent to accept and acknowledge service of any and all process which may be served in any suit, action or proceeding. Such service may be made by delivering a copy of such process to the Guarantor in care of the Process Agent at the Process Agent's above address and the Guarantor hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf. As an alternative method of service, the Guarantor also irrevocably consents to the service of any and all process in any such action or proceeding by the delivery of copies of such process to the Guarantor to: BCE Place, 181 Bay Street, P.O. Box 827, Toronto, Canada M5J2T3 for the attention of President. The Guarantor agrees that a final judgment in any such action or proceeding may be enforced in any other manner provided by law. Nothing in this Section shall affect the right of the Holders to serve process in any manner permitted by law or limit the rights of the Holders to bring proceedings against the Guarantor in the courts of any other jurisdiction. (c) Subject to Section ___, the Guarantor hereby consents in respect of any legal action or proceedings arising out of or in connection with this Guarantee for the payment and performance hereof to the giving of any relief or the issue of any process in connection with such action or proceedings, including, without limitation the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such action or proceedings. (d) To the extent that the Guarantor has or hereafter may acquire any immunity from the jurisdiction of any court or from any legal process (whether service of notice, attachment prior to judgment, attachment in the aid of execution, execution or otherwise) with respect to itself or its property, the Guarantor hereby irrevocably waives, to the fullest extent permitted by law, such 7 immunity in respect of its obligations under this Guarantee and any security for the payment and performance hereof. (e) Nothing in this Section shall constitute a waiver by the Guarantor of any right to (i) appeal any order or judgment referred to herein; (ii) seek any stay or reconsideration or review of any such order or judgment, or (iii) seek any stay of execution or levy pending any appeal from, or suit, action or proceeding for reconsideration or review of, any such order or judgment. (f) The Guarantor agrees that the Holders shall have the right to proceed against the Guarantor or its property in a court in any location to enable such person to (i) obtain personal jurisdiction over the Guarantor, or (ii) to enforce a judgment or other court order entered in favor of such person. The Guarantor agrees that it will not assert any permissive counterclaims in any proceeding brought by such person to enforce a judgment or other court order in favor of such person. The Guarantor waives any objection that it may have to the location of the court in which such person has commenced a proceeding described in this subsection. SECTION 16. HEADINGS, ETC. The division of this Guarantee into sections and the insertion of headings are for convenience of reference only and shall not affect the interpretation hereof. SECTION 17. SEVERABILITY. Any provision of this Guarantee which is invalid or not enforceable shall not affect any other provision and shall be deemed to be severable. SECTION 18. SUCCESSORS AND ASSIGNS. This Guarantee shall extend to and inure to the benefit of [ ] and the Holders and their respective successors and assigns and shall be binding upon the Guarantor and its successors and assigns. This Guarantee is assignable by the Holders to the extent and in the same proportion that any underlying interest in the Securities and applicable Warrant Agreements has been assigned. 8 IN WITNESS WHEREOF, the Guarantor has duly executed this Guarantee and affixed its corporate seal under the hand of its proper officer(s) duly authorized in that behalf as of the day and year first above written. NEWCOURT CREDIT GROUP INC. Attest: By:_______________________________ By:_______________________________ Glen J. DuMont Glenn A. Votek Assistant Secretary Executive Vice President and Treasurer By:_______________________________ DOCUMENT NUMBER: 0318536.02 4-27-98/11:58pm 9 EX-5 7 EXHIBIT 5 EXHIBIT 5 [LOGO] [LETTERHEAD] April 27, 1998 AT&T Capital Corporation 44 Whippany Road Morristown, New Jersey 07962 Newcourt Credit Group Inc. BCE Place, 181 Bay Street, Suite 3500 Toronto, Ontario Canada M5J2T3 Ladies and Gentlemen: I hereby refer to the Registration Statement on Form S-3 (File No. 333-48415) (the "Registration Statement") filed by AT&T Capital Corporation, a Delaware corporation (the "Company"), with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), relating to the registration of one or more series of debt securities (the "Debt Securities") under the Indenture dated as of April 1, 1998 (the "Indenture") between the Company and The Chase Manhattan Bank, as trustee (the "Trustee") and warrants to purchase Debt Securities, currency warrants, index warrants and interest rate warrants (collectively, the "Warrants"). This opinion is being delivered to you pursuant to the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act. I am familiar with the proceedings to date with respect to the proposed issuance and delivery of the Debt Securities and Warrants and have examined such records, documents and questions of law, and satisfied myself as to such matters of fact, as I have considered relevant and necessary as a basis for this opinion. In my examination, I have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. In making my examination of documents executed by parties other than the Company, I have assumed that such parties had the power, corporate or other, to enter into and perform all obligations thereunder and have also April 27, 1998 Page 2 assumed the due authorization by all requisite action, corporate or other, and execution and delivery by such parties of such documents and the validity and binding effect thereof. As to any facts material to the opinions expressed herein which I did not independently establish or verify, I have relied upon oral and written statements and representations of officers and other representatives of the Company and others. In addition, I have also relied upon the accuracy and completeness of all certificates and other statements, representations, documents, records, financial statements and papers reviewed by me, and the accuracy and completeness of all representations, warranties, schedules and exhibits contained in such documents, with respect to the factual matters set forth therein. Additionally, I have assumed that the Registration Statement, as finally amended, has been declared effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Securities and Exchange Commission. Based on the foregoing, and assuming that the terms of each series of Debt Securities and Warrants are otherwise in compliance with applicable law at the time of issuance of such securities, I am of the opinion that: 1. when the Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended and, with respect to each series of Debt Securities, when (a) the amount, price, interest rate and other principal terms of the Debt Securities relating to such series of Debt Securities have been duly approved by the Board of Directors of the Company; (b) such Debt Securities shall have been duly authorized, executed and authenticated as provided in the Indenture and shall have been duly paid for and delivered in accordance with the provisions of the Distribution Agreement or Underwriting Agreement, substantially in the form filed as an exhibit to the Registration Statement, such Debt Securities will constitute legally valid and binding obligations of the Company enforceable in accordance with, and subject to, their terms and entitled to the benefits of the Indenture; and 2. with respect to each issue of Warrants, when (a) the principal terms of the Warrants to be issued shall have been duly approved by the Board of Directors of the Company; (b) the applicable Debt Warrant Agreement, Currency Warrant Agreement, Index Warrant Agreement and/or Interest Rate Warrant Agreement, substantially in the forms filed as exhibits to the Registration Statement (collectively, the "Warrant Agreements") have been duly authorized and executed by the parties thereto; and (c) the Warrants shall have been duly authorized and executed by the Company and countersigned as provided in the Warrant Agreements and shall have been duly paid for and delivered pursuant to a prospectus and a prospectus supplement relating to such sale, such Warrants will constitute legally valid and binding obligations of the Company enforceable in accordance with, and subject to, their terms and the terms of the Warrant Agreements. April 27, 1998 Page 3 The opinions expressed herein are qualified to the extent that the enforceability of the Debt Securities and the Warrants and the obligations of the Company thereunder and the availability of certain rights and remedial provisions provided for in the Indenture and the applicable Warrant Agreements are subject to the effect of bankruptcy, fraudulent conveyance or transfer, insolvency, reorganization, arrangement, liquidation, conservatorship and moratorium laws and subject to the limitations imposed by other laws and judicial decisions relating to or affecting the rights of creditors generally, to general principles of equity, regardless of whether enforcement is considered in proceedings in equity or at law, and to an implied covenant of good faith and fair dealing; I do not find it necessary for the purposes of this opinion to cover, and accordingly I express no opinion as to, the application of the securities or blue sky laws of the various states to the offer and sale of the Debt Securities or the Warrants. This opinion is limited to the laws of the United States of America and the State of New York, and I express no opinion with respect to the laws of any state or other jurisdiction. The opinions set forth in this letter are based on the facts in existence and the laws in effect on the date hereof and I expressly disclaim any obligation to update the opinions herein, regardless of whether changes in such facts or laws come to my attention after the delivery hereof. I hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and to all references to me included in or made a part of the Registration Statement. In giving such consent, I do not concede that I am an expert within the meaning of the Securities Act or the rules and regulations thereunder or that this consent is required by Section 7 of the Securities Act. Very truly yours, Glen J. DuMont EX-25 8 EXHIBIT 25 ___________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ---------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) --------------------------------------------- AT&T CAPITAL CORPORATION (Exact name of obligor as specified in its charter) DELAWARE 22-3211453 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 44 WHIPPANY ROAD MORRISTOWN, NEW JERSEY 07962 (Address of principal executive offices) (Zip Code) NEWCOURT CREDIT GROUP INC. (Exact name of obligor as specified in its charter) ONTARIO NOT APPLICABLE (Province or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) BCE PLACE 181 BAY STREET, SUITE 3500 TORONTO, ONTARIO M5J 2T3, CANADA (Address of principal executive offices) ------------------------------------------- DEBT SECURITIES (Title of the indenture securities) ----------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligors. If the obligors are affiliates of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. (On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 27TH day of APRIL, 1998. THE CHASE MANHATTAN BANK By /s/ G. McFarlane ------------------------ /s/ G. McFarlane Vice President - 3 - Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 1997, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Millions Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ................................................................................. $ 12,428 Interest-bearing balances ......................................................................... 3,428 Securities: Held to maturity securities............................................................................ 2,561 Available for sale securities ......................................................................... 43,058 Federal funds sold and securities purchased under agreements to resell ................................ 29,633 Loans and lease financing receivables: Loans and leases, net of unearned income $129,260 Less: Allowance for loan and lease losses 2,783 Less: Allocated transfer risk reserve..... 0 -------- Loans and leases, net of unearned income, allowance, and reserve ............................................................................ 126,477 Trading Assets......................................................................................... 62,575 Premises and fixed assets (including capitalized leases)............................................... 2,943 Other real estate owned ............................................................................... 295 Investments in unconsolidated subsidiaries and associated companies ................................... 231 Customers' liability to this bank on acceptances outstanding........................................... 1,698 Intangible assets...................................................................................... 1,466 Other assets........................................................................................... 10,268 -------- TOTAL ASSETS........................................................................................... $297,061 ========
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LIABILITIES Deposits In domestic offices ......................................................... $94,524 Noninterest-bearing ................................................ $39,487 Interest-bearing ................................................... 55,037 ------- In foreign offices, Edge and Agreement, subsidiaries and IBF's ...................................................... 71,162 Noninterest-bearing ................................................ 3,205 Interest-bearing ................................................... 67,957 Federal funds purchased and securities sold under agreements to repurchase......................................................... 43,181 Demand notes issued to the U.S. Treasury ........................................ 1,000 Trading liabilities.............................................................. 48,903 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less ............................... 3,599 With a remaining maturity of more than one year through three years .................................................. 253 With a remaining maturity of more than three years .......................... 132 Bank's liability on acceptances executed and outstanding ........................ 1,698 Subordinated notes and debentures ............................................... 5,715 Other liabilities................................................................ 9,896 TOTAL LIABILITIES ............................................................... 280,063 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus 0 Common stock..................................................................... 1,211 Surplus (exclude all surplus related to preferred stock)........................ 10,291 Undivided profits and capital reserves .......................................... 5,502 Net unrealized holding gains (losses) on available-for-sale securities................................................. (22) Cumulative foreign currency translation adjustments ............................. 16 TOTAL EQUITY CAPITAL ............................................................ 16,998 -------- TOTAL LIABILITIES AND EQUITY CAPITAL............................................. $297,061 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WALTER V. SHIPLEY ) THOMAS G. LABRECQUE )DIRECTORS WILLIAM B. HARRISON, JR.) -5- -----END PRIVACY-ENHANCED MESSAGE-----