-----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, AOL96KHpC6OlSVAuMqm579py/HIiI3gK3lXuwnZoDhtxKyW6f7+3wYZu2EQ3xFQQ FXR3fCmYTUtjqe64eaMDHg== 0001047469-98-037901.txt : 19981023 0001047469-98-037901.hdr.sgml : 19981023 ACCESSION NUMBER: 0001047469-98-037901 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19981022 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEERE JOHN CAPITAL CORP CENTRAL INDEX KEY: 0000027673 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 362386361 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 424B5 SEC ACT: SEC FILE NUMBER: 333-23623 FILM NUMBER: 98728932 BUSINESS ADDRESS: STREET 1: FIRST INTERSTATE BANK BLDG STREET 2: 1 E FIRST ST STE 600 CITY: RENO STATE: NV ZIP: 89501 BUSINESS PHONE: 7027865527 MAIL ADDRESS: STREET 1: JOHN DEERE RD CITY: MOLINE STATE: IL ZIP: 61265 FORMER COMPANY: FORMER CONFORMED NAME: DEERE JOHN CREDIT CO DATE OF NAME CHANGE: 19890130 424B5 1 424B5 Prospectus Supplement (To Prospectus dated October 20, 1998) [LOGO] John Deere Capital Corporation $200,000,000 5.35% NOTES DUE OCTOBER 23, 2001 Issue Price: 99.959% INTEREST PAYABLE APRIL 23 AND OCTOBER 23 The Notes will mature on October 23, 2001. Interest will accrue from October 23, 1998. The Capital Corporation will not have the right to redeem the Notes before their scheduled maturity. The Capital Corporation will issue the Notes in minimum denominations of $1,000 increased in multiples of $1,000. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Proceeds to Price to Discounts and Capital Public Commission Corporation Per Note 99.959% .350% 99.609% Total $199,918,000 $700,000 $199,218,000
The Capital Corporation does not intend to apply for listing of the Notes on any national securities exchange. Currently, there is no public market for the Notes. The Capital Corporation expects that delivery of the Notes will be made to investors on or about October 23, 1998. J.P. Morgan & Co. ABN AMRO Incorporated Chase Securities Inc. Credit Suisse First Boston NationsBanc Montgomery Securities LLC October 20, 1998 NO PERSON IS 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, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE NOTES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE NOTES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS 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 JOHN DEERE CAPITAL CORPORATION SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION. TABLE OF CONTENTS
PAGE ----- PROSPECTUS SUPPLEMENT Use of Proceeds............................................................................................ S-3 Description of the Notes................................................................................... S-3 Underwriting............................................................................................... S-4 PROSPECTUS Where You Can Find More Information........................................................................ 2 The Company................................................................................................ 3 Use of Proceeds............................................................................................ 5 Prospectus Supplement...................................................................................... 5 Description of Debt Securities............................................................................. 6 Description of Debt Warrants............................................................................... 21 Description of Preferred Stock............................................................................. 23 Plan of Distribution....................................................................................... 26 Legal Opinions............................................................................................. 27 Experts.................................................................................................... 27
S-2 USE OF PROCEEDS The Capital Corporation expects to use the net proceeds from the sale of the Notes to reduce the amount of U.S. commercial paper it has issued. Before then, the Capital Corporation may invest proceeds in short-term securities. On September 30, 1998, the Capital Corporation had outstanding $2,571 million of U.S. commercial paper. This commercial paper bore interest at discount rates ranging from 4.98% to 5.53% per annum. The Capital Corporation will continue to incur short-term debt, primarily by issuing commercial paper, to finance its current operations. See "Use of Proceeds" in the prospectus. DESCRIPTION OF THE NOTES The Notes will be senior debt issued under the Indenture dated as of March 15, 1997 (the "Senior Indenture") between the Capital Corporation and The Chase Manhattan Bank, Senior Trustee. Information about the Senior Indenture and the general terms and provisions of the Notes is in the prospectus under "Description of Debt Securities." The Capital Corporation may, without the consent of the Note holders, issue additional Notes having the same ranking and the same interest rate, maturity and other terms as the Notes. Any additional Notes and the Notes will constitute a single series under the Senior Indenture. No additional Notes may be issued if an Event of Default has occurred with respect to the Notes. In the prospectus, there is a section called "Description of Debt Securities--Satisfaction and Discharge; Defeasance and Covenant Defeasance." This section has provisions on the defeasance and covenant defeasance of securities issued under the Senior Indenture. These provisions will apply to the Notes. The Notes will be issued in book-entry form, as a single Note registered in the name of the nominee of The Depository Trust Company ("DTC"), which will act as a depository. Beneficial interests in book-entry Notes will be shown on, and transfers of the Notes will be made only through, records maintained by DTC and its participants. The provisions set forth under "Description of Debt Securities--Book-Entry Debt Securities" in the prospectus will apply to the Notes. PAYMENT OF PRINCIPAL AND INTEREST The Notes will mature on October 23, 2001. The interest rate on the Notes will be 5.35% per annum. The Capital Corporation will pay interest in arrears on April 23 and October 23, beginning April 23, 1999. Interest will accrue from October 23, 1998 or from the most recent interest payment date to which the Capital Corporation has paid or provided for the payment of interest to the next interest payment date or the scheduled maturity date, as the case may be. The Capital Corporation will pay interest computed on the basis of a 360-day year of twelve 30-day months. The Capital Corporation will pay interest on the Notes in immediately available funds to the persons in whose names the Notes are registered at the close of business on the April 8 or October 8 preceding the respective interest payment date. At maturity, the Capital Corporation will pay the principal of the Notes in immediately available funds upon delivery of the Notes to the Senior Trustee. If an interest payment date or the maturity date is not a "Business Day," the Capital Corporation will pay interest or principal, as the case may be, on the next succeeding Business Day, but will not pay additional interest. The term "Business Day" means any day other than a Saturday or Sunday or a day on which applicable law authorizes or requires banking institutions in The City of New York to close. S-3 SAME-DAY SETTLEMENT AND PAYMENT The Notes will trade in DTC's same-day funds settlement system until maturity or until the Capital Corporation issues the Notes in definitive form. DTC will therefore require trades in the secondary market to settle in immediately available funds. REDEMPTION The Capital Corporation will not have the right to redeem the Notes before their scheduled maturity, and the Note holders will not have the right to require the Capital Corporation to redeem the Notes before their scheduled maturity. The Capital Corporation will not make any sinking fund payments. GOVERNING LAW The Notes will be governed by and construed in accordance with the laws of the State of New York. UNDERWRITING The Capital Corporation is selling the Notes to the Underwriters named below under a Terms Agreement dated October 20, 1998. The Underwriters, and the amount of the Notes each of them has agreed to purchase from the Capital Corporation, are as follows:
PRINCIPAL UNDERWRITERS AMOUNT OF NOTES - ----------------------------------------------------------------------------- --------------- J.P. Morgan Securities Inc................................................... $ 100,000,000 ABN AMRO Incorporated........................................................ 25,000,000 Chase Securities Inc......................................................... 25,000,000 Credit Suisse First Boston Corporation....................................... 25,000,000 NationsBanc Montgomery Securities LLC........................................ 25,000,000 --------------- Total........................................................................ $ 200,000,000 --------------- ---------------
Under the terms and conditions of the Terms Agreement, if the Underwriters take any of the Notes, then they are obligated to take and pay for all of the Notes. The Notes are a new issue of securities with no established trading market. The Capital Corporation does not intend to apply for listing of the Notes on any national securities exchange. The Underwriters have advised the Capital Corporation that they intend to make a market for the Notes, but they have no obligation to do so. They also may discontinue market making at any time without providing any notice. The Capital Corporation cannot give any assurance as to the liquidity of any trading market for the Notes. The Underwriters initially propose to offer part of the Notes directly to the public at the public offering price set forth on the cover page (plus accrued interest, if any, from October 23, 1998) and part to certain dealers at a price that represents a concession not in excess of .20% of the principal amount of the Notes. Any Underwriter may allow, and any such dealer may reallow, a concession not in excess of .15% of the principal amount of the Notes to certain other dealers. After the initial offering of the Notes, the Underwriters may, from time to time, vary the offering price and other selling terms. The Capital Corporation has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute payments that the Underwriters may be required to make in respect of such liabilities. S-4 In connection with this offering, the Underwriters may engage in transactions that stabilize, maintain or otherwise affect the prices of the Notes. Specifically, the Underwriters may overallot in connection with the offering of the Notes, creating a short position in the Notes for their own account. In addition, the Underwriters may bid for, and purchase, Notes in the open market to cover short positions or to stabilize the price of the Notes. Finally, the Underwriters may reclaim selling concessions allowed for distributing the Notes in the offering, if the Underwriters repurchase previously distributed Notes in transactions to cover short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market prices of the Notes above independent market levels. The Underwriters are not required to engage in any of these activities and may end any of these activities at any time. The Capital Corporation estimates that it will spend approximately $200,000 for printing, ratings agency, trustee and legal fees, and other expenses related to this offering. Hans W. Becherer, Chairman of the Capital Corporation and Deere & Company, and John R. Stafford, a director of Deere & Company, are directors of The Chase Manhattan Corporation and The Chase Manhattan Bank (the Trustee under the Senior Indenture), which are affiliates of Chase Securities Inc. Antonio Madero B., a director of Deere & Company, is a member of the International Advisory Council of The Chase Manhattan Corporation. In the ordinary course of their respective businesses, the Underwriters and their affiliates have engaged, and may in the future engage, in commercial banking and/or investment banking transactions with the Capital Corporation and its affiliates. S-5 JOHN DEERE CAPITAL CORPORATION - ---------------------------------- By this prospectus, we offer up to $750,000,000 of-- DEBT SECURITIES WARRANTS TO PURCHASE DEBT SECURITIES PREFERRED STOCK -------------------------------------------- We will provide the specific terms of these securities in supplements to this prospectus. You should read this prospectus and the supplements carefully before you invest. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. ----------------------------------------------------------------- [LOGO] The date of this Prospectus is October 20, 1998. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from the SEC's web site at http://www.sec.gov. Certain of our debt securities are listed on the New York Stock Exchange and information about us is also available there. The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents that are considered part of this prospectus. Later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below, as well as Deere & Company's Current Report on Form 8-K dated September 14, 1998, and any future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 by the Capital Corporation until our offering of securities has been completed. This prospectus is part of a registration statement filed with the SEC. - Annual Report on Form 10-K for the year ended October 31, 1997. - Quarterly Reports on Form 10-Q for the quarters ended January 31, 1998, April 30, 1998 and July 31, 1998. - Current Reports on Form 8-K dated November 25, 1997, February 17, 1998, May 19, 1998, July 17, 1998, August 18, 1998 and August 28, 1998. You may obtain a copy of these filings at no cost, by writing or telephoning us at the following address: John Deere Capital Corporation 1 East First Street, Suite 600 Reno, Nevada 89501 Attn: Manager (702) 786-5527 You should rely only on the information incorporated by reference or provided in this prospectus or any supplement. We have not authorized anyone else to provide you with different information. This prospectus is an offer to sell or to buy only the securities referred to herein, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of the date hereof. 2 THE COMPANY The principal business of John Deere Capital Corporation (the "Capital Corporation") and its subsidiaries (collectively called the "Company") is providing and administering financing for retail purchases of new and used equipment manufactured by Deere & Company's agricultural, construction and commercial and consumer equipment divisions. The Company purchases retail installment sales and loan contracts (retail notes) from Deere & Company and its wholly-owned subsidiaries (collectively called "John Deere"). These retail notes are acquired by John Deere through independent John Deere retail dealers. The Company also purchases and finances certain agricultural, construction and lawn and grounds care retail notes unrelated to John Deere. In addition, the Company purchases and finances recreational product retail notes acquired from independent dealers and marine product mortgage service companies (recreational product retail notes). The Company also leases equipment to retail customers, finances and services revolving charge accounts acquired from and offered through merchants in the agricultural, construction, and lawn and grounds care and yacht retail markets (revolving charge accounts), and provides wholesale financing for inventories of recreational vehicles, manufactured housing units, yachts, John Deere engines, and John Deere agricultural and John Deere construction equipment owned by dealers of those products (wholesale notes). The Company's operations are categorized into four primary divisions: The AGRICULTURAL DIVISION provides agricultural market financing through products such as agricultural equipment retail notes and leases, Farm Plan-TM- (a revolving charge product) and producer operating loans. In addition, the division provides wholesale financing to dealers for equipment to be used as rental equipment. The COMMERCIAL DIVISION provides construction equipment financing through products such as retail notes and leases. The division also provides wholesale financing of construction equipment, recreational vehicles, manufactured housing units and other commercial equipment. The CONSUMER DIVISION provides consumer and recreational product equipment financing through products such as retail notes, John Deere Credit Revolving Plan (a revolving charge product), Preferred Resource-TM- (an unsecured lending product), Yacht Line-TM- (a revolving charge product marketed to yacht customers) and leases on lawn and grounds care equipment. In addition, the Consumer Division provides wholesale financing for yachts. The INTERNATIONAL DIVISION provides certain financing products in the Company's international markets, including Mexico, the United Kingdom, Germany and Australia. John Deere Credit Company, a wholly-owned finance holding subsidiary of Deere & Company, is the parent of the Capital Corporation. John Deere's operations are categorized into six business segments: John Deere's worldwide AGRICULTURAL EQUIPMENT segment manufactures and distributes a full line of farm equipment--including tractors; combine and cotton harvesters; tillage, seeding and soil preparation machinery; sprayers; hay and forage equipment; materials handling equipment; and integrated precision farming technology. John Deere's worldwide CONSTRUCTION EQUIPMENT segment, formerly the worldwide industrial equipment segment, manufactures and distributes a broad range of machines used in construction, earthmoving and forestry--including backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; scrapers; motor graders; log skidders; and forestry harvesters. This segment also includes the manufacture and distribution of engines and drivetrain components for the original equipment manufacturer (OEM) market. 3 John Deere's worldwide COMMERCIAL AND CONSUMER EQUIPMENT segment manufactures and distributes equipment for commercial and residential uses--including small tractors for lawn, garden, commercial and utility purposes; riding and walk-behind mowers; golf course equipment; snowblowers; hand-held products such as chain saws, string trimmers and leaf blowers; skid-steer loaders; utility vehicles; and other outdoor power products. The products produced by the equipment segments are marketed primarily through independent retail dealer networks and major retail outlets. The CREDIT segment includes the operations of the Company, John Deere Credit Company and John Deere Credit Inc., which primarily purchases and finances retail notes and leases from John Deere's equipment sales branches in Canada, as well as recreational products and construction and transportation equipment notes from independent dealers. The INSURANCE segment issues policies in the United States primarily for: general and specialized lines of commercial property and casualty insurance; group accident and health insurance for employees of participating John Deere dealers; and disability insurance for employees of John Deere. The HEALTH CARE segment provides health management programs and related administrative services in the United States to John Deere and commercial clients. The Capital Corporation's corporate offices are located at 1 East First Street, Suite 600, Reno, Nevada 89501. Its telephone number is 702/786-5527. 4 USE OF PROCEEDS Except as may be described otherwise in a prospectus supplement, the net proceeds from the sale of the Securities under this prospectus will be added to the general funds of the Company and will be used for working capital and other general corporate purposes, and will be available for, among other things, the purchase of receivables. Such proceeds may be applied initially to the reduction of short-term indebtedness. PROSPECTUS SUPPLEMENT The Capital Corporation may offer from time to time under this prospectus, together or separately, (i) its unsecured debt securities ("Debt Securities") which may be either senior (the "Senior Securities") or subordinated (the "Subordinated Securities"), (ii) warrants to purchase Debt Securities ("Debt Warrants") or (iii) shares of preferred stock (the "Preferred Stock"), all on terms to be determined at the time of offering. The Debt Securities, Debt Warrants and Preferred Stock, or a combination thereof, proposed to be sold pursuant to this prospectus and an accompanying prospectus supplement are referred to as the "Offered Securities", and the Offered Securities, together with any Debt Securities and Preferred Stock issuable upon exercise of Debt Warrants or conversion or exchange of other Offered Securities, are referred to as the "Securities". Securities with an aggregate initial public offering price of up to $750,000,000 (or the equivalent thereof if any of the Securities are denominated in a currency, currency unit or composite currency ("Currency") other than the U.S. dollar) may be issued under this prospectus. Information about the Securities is disclosed in this prospectus and a prospectus supplement that provides more detail on the specific terms of the Securities. Since the specific terms of the Securities are made at the time of pricing, you should rely on the information in the prospectus supplement over different information in this prospectus. The prospectus supplement accompanying this prospectus sets forth, with respect to each series or issue of Securities for which this prospectus and the prospectus supplement are being delivered: (i) the terms of any Debt Securities offered, including, where applicable, their title, ranking, aggregate principal amount, maturity, rate of any interest (or manner of calculation) and time of payment thereof, any redemption or repayment terms, the Currency or Currencies in which such Debt Securities will be denominated or payable, any index, formula or other method pursuant to which principal, premium, if any, or interest, if any, may be determined, any terms for the conversion or exchange thereof and the form of such Debt Securities (which may be registered or bearer or global or certificated); (ii) the terms of any Debt Warrants offered, including, where applicable, the exercise price, detachability, expiration date and other terms; (iii) the terms of any Preferred Stock offered, including, where applicable, the specific designations and dividend, redemption, liquidation, voting and other rights not described in this prospectus and any terms for the conversion or exchange thereof; and (iv) any initial public offering price, the purchase price and net proceeds to the Capital Corporation and the other specific terms related to the offering of such Securities. 5 DESCRIPTION OF DEBT SECURITIES The Capital Corporation may issue (either separately or together with other Offered Securities) its Debt Securities from time to time. The Senior Securities will be issued under an Indenture dated as of March 15, 1997, as supplemented from time to time (the "Senior Indenture"), between the Capital Corporation and The Chase Manhattan Bank, Trustee (the "Senior Trustee"), and the Subordinated Securities will be issued under an indenture dated as of March 15, 1997, as supplemented from time to time (the "Subordinated Indenture"), between the Capital Corporation and The First National Bank of Chicago, Trustee (the "Subordinated Trustee"). The term "Trustee" as used herein refers to either the Senior Trustee or the Subordinated Trustee, as appropriate. The forms of the Senior Indenture and the Subordinated Indenture (being sometimes referred to herein collectively as the "Indentures" and individually as an "Indenture") are exhibits to the registration statement. The Indentures are subject to and governed by the Trust Indenture Act of 1939, as amended (the "TIA"). The following summary of certain provisions of the Indentures does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Indentures, including the definitions of certain terms therein. Parenthetical references below are to the Indentures or to the TIA, as applicable. PROVISIONS APPLICABLE TO BOTH THE SENIOR AND SUBORDINATED INDENTURES GENERAL The Debt Securities will be unsecured obligations of the Capital Corporation. The Senior Securities will rank equally with all other unsecured and unsubordinated indebtedness of the Capital Corporation. The Subordinated Securities will be subordinated in right of payment to the prior payment in full of the Senior Indebtedness of the Capital Corporation as described under "-- Subordinated Indenture Provisions--Subordination". Each Indenture provides that any Debt Securities proposed to be sold pursuant to this prospectus and the accompanying prospectus supplement ("Offered Debt Securities") and any Debt Securities issuable upon the exercise of Debt Warrants or upon conversion or exchange of other Offered Securities ("Underlying Debt Securities"), as well as other unsecured debt securities of the Capital Corporation, may be issued under such Indenture in one or more series, in each case as authorized from time to time by the Capital Corporation. The particular terms of the Offered Debt Securities and any Underlying Debt Securities and any modifications of or additions to the general terms of the Debt Securities as described herein that may be applicable in the case of the Offered Debt Securities or Underlying Debt Securities are described in the prospectus supplement. Accordingly, for a description of the terms of any Offered Debt Securities and Underlying Debt Securities, reference must be made to both the prospectus supplement relating thereto and the description of Debt Securities set forth in this prospectus. With respect to the Offered Debt Securities and any Underlying Debt Securities, reference is made to the prospectus supplement for the following terms: (1) The title of such Debt Securities and whether such Debt Securities will be Senior Securities or Subordinated Securities. (2) The aggregate principal amount of such Debt Securities and any limit on the aggregate principal amount of Debt Securities of such series. (3) If other than the principal amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the maturity thereof or the method by which such portion will be determined. 6 (4) The date or dates, or the method by which such date or dates will be determined or extended, on which the principal of such Debt Securities will be payable. (5) The rate or rates at which such Debt Securities will bear interest, if any, or the method by which such rate or rates shall be determined, the date or dates from which such interest will accrue or the method by which such date or dates will be determined, the date or dates on which such interest, if any, will be payable and the Regular Record Date or Dates, if any, for the interest payable on any Registered Security on any Interest Payment Date, or the method by which any such date will be determined, and the basis upon which interest will be calculated if other than that of a 360-day year of twelve 30-day months. (6) The date or dates on which or the period or periods within which, the price or prices at which, the Currency or Currencies in which, and the other terms and conditions upon which, such Debt Securities may be redeemed, in whole or in part, at the option of the Capital Corporation and whether the Capital Corporation is to have that option. (7) The obligation, if any, of the Capital Corporation to redeem, repay or purchase such Debt Securities, in whole or in part, pursuant to any sinking fund or analogous provision or at the option of a holder thereof and the period or periods within which or the date or dates on which, the price or prices at which, the Currency or Currencies in which, and the other terms and conditions upon which, such Debt Securities shall be so redeemed, repaid or purchased. (8) Whether such Debt Securities are to be issuable as Registered Securities, Bearer Securities or both, any restrictions applicable to the offer, sale or delivery of Bearer Securities and the terms, if any, upon which Bearer Securities of the series may be exchanged for Registered Securities of the series and VICE VERSA (if permitted by applicable laws and regulations), whether such Debt Securities will be issuable initially in temporary global form, whether any such Debt Securities will be issuable in permanent global form with or without coupons and, if so, whether beneficial owners of interests in any such permanent global security may exchange such interests for Debt Securities of such series in certificated form and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in the applicable Indenture, and, if Registered Securities are to be issuable as a global security, the identity of the depository for such Debt Securities. (9) If other than U.S. dollars, the Currency or Currencies in which payments of the principal of (or premium, if any) or interest, if any, on such Debt Securities will be payable or in which such Debt Securities will be denominated. (10) Whether the amount of payments of principal of (or premium, if any) or interest, if any, on such Debt Securities may be determined with reference to an index, formula or other method (which index, formula or method may be based on one or more Currencies, commodities, equity indices or other indices) and the manner in which such amounts will be determined. (11) Whether the Capital Corporation or a holder may elect payment of the principal of (or premium, if any) or interest, if any, on such Debt Securities in one or more Currencies, other than that in which such Debt Securities are denominated or stated to be payable, the date or dates on which or the period or periods within which, and the terms and conditions upon which, such election may be made, and the time and manner of determining the exchange rate between the Currency or Currencies in which such Debt Securities are denominated or stated to be payable and the Currency or Currencies in which such Debt Securities are to be so paid. (12) The place or places, if any, other than or in addition to The City of New York, where the principal of (and premium, if any) and interest, if any, on such Debt Securities will be payable, where any Registered Securities may be surrendered for registration of transfer, where 7 such Debt Securities may be surrendered for exchange, where Debt Securities of a series that are convertible or exchangeable may be surrendered for conversion or exchange and where notices or demands to or upon the Capital Corporation in respect of such Debt Securities and the applicable Indenture may be served. (13) The denomination or denominations in which such Debt Securities will be issuable, if other than $1,000 or any integral multiple thereof in the case of Registered Securities and $5,000 in the case of Bearer Securities. (14) If other than the applicable Trustee, the identity of each Security Registrar and/or Paying Agent. (15) The date as of which any Bearer Securities of the series and any temporary Debt Security issued in global form representing Outstanding Securities of the series will be dated if other than the date of original issuance of the first Debt Security of the series to be issued. (16) The applicability, if at all, to such Debt Securities of the provisions of Article Fourteen of the applicable Indenture described under "Defeasance and Covenant Defeasance" and any provisions in modification of, in addition to or in lieu of any of the provisions of such Article. (17) The Person to whom any interest on any Registered Security of the series will be payable, if other than the Person in whose name such Registered Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, the manner in which, or the Person to whom, any interest on any Bearer Security of the series shall be payable, if otherwise than upon presentation and surrender of the coupons appertaining thereto as they severally mature, and the extent to which, or the manner in which, any interest payable on a temporary Debt Security issued in global form will be paid if other than in the manner provided in the applicable Indenture. (18) If such Debt Securities are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Debt Security of such series) only upon receipt of certain certificates or other documents or satisfaction of other conditions, the form and/or terms of such certificates, documents or conditions. (19) Whether and under what circumstances the Capital Corporation will pay Additional Amounts, as contemplated by Section 1004 of the applicable Indenture, on such Debt Securities to any holder who is not a United States person (including any modification to the definition of such term as contained in the applicable Indenture as originally executed) in respect of any tax, assessment or governmental charge and, if so, whether the Capital Corporation will have the option to redeem such Debt Securities rather than pay such Additional Amounts (and the terms of any such option). (20) The provisions, if any, granting special rights to the holders of such Debt Securities upon the occurrence of such events as may be specified. (21) Any deletions from, modifications of or additions to the Events of Default or covenants of the Capital Corporation with respect to such Debt Securities (which Events of Default or covenants are consistent with the Events of Default or covenants set forth in the general provisions of the applicable Indenture). (22) The designation of the initial Exchange Rate Agent, if any. (23) Whether such Debt Securities will be convertible into or exchangeable for any other securities and, if so, the terms and conditions upon which such Debt Securities will be so convertible or exchangeable. (24) Any other terms of such Debt Securities. 8 If applicable, the prospectus supplement will also set forth information concerning any other Securities offered thereby and a discussion of federal income tax considerations relevant to the Securities being offered. For purposes of this prospectus, any reference to the payment of principal of (or premium, if any) or interest, if any, on such Debt Securities will be deemed to include mention of the payment of any Additional Amounts required by the terms of such Debt Securities. Debt Securities may provide for less than the entire principal amount thereof to be payable upon declaration of acceleration of the maturity thereof ("Original Issue Discount Securities"). Federal income tax and other considerations pertaining to any such Original Issue Discount Securities will be discussed in the applicable prospectus supplement. Each Indenture provides that the Debt Securities which are the subject of this prospectus and additional unsecured debt securities of the Capital Corporation unlimited as to aggregate principal amount may be issued in one or more series thereunder, in each case as authorized from time to time by or pursuant to authority granted by the Board of Directors of the Capital Corporation. (Section 301 of each Indenture) Securities so issued under an Indenture are herein collectively referred to, when a single Trustee is acting for all debt securities issued under such Indenture, as the "Indenture Securities". Each Indenture also provides that there may be more than one Trustee thereunder, each with respect to one or more different series of Indenture Securities. See also "Resignation of Trustee" herein. At a time when two or more Trustees are acting under either Indenture, each with respect to only certain series, the term "Indenture Securities", as used herein, shall mean the one or more series with respect to which each respective Trustee is acting. In the event that there is more than one Trustee under either Indenture, the powers and trust obligations of each Trustee as described herein shall extend only to the one or more series of Indenture Securities for which it is Trustee. If two or more Trustees are acting under either Indenture, then the Indenture Securities for which each Trustee is acting would in effect be treated as if issued under separate indentures. The general provisions of the Indentures do not contain any provisions that would limit the ability of the Capital Corporation to incur indebtedness or that would afford holders of Debt Securities protection in the event of a highly leveraged or similar transaction involving the Company. However, the general provisions of each Indenture do provide that neither the Capital Corporation nor any Subsidiary will pledge or subject to any lien any of its property or assets unless the Indenture Securities issued under such Indenture are secured by such pledge or lien equally and ratably with other indebtedness thereby secured. See "--Senior Indenture Provisions--Limitation on Liens". Reference is made to the prospectus supplement for information with respect to any deletions from, modifications of or additions to the Events of Default or covenants of the Capital Corporation that are described below, including any addition of a covenant or other provision providing event risk or similar protection. The Capital Corporation has the ability to issue Indenture Securities with terms different from those of Indenture Securities previously issued and, without the consent of the holders thereof, to reopen a previous issue of a series of Indenture Securities and issue additional Indenture Securities of such series (unless such reopening was restricted when such series was created). CONVERSION AND EXCHANGE If any Debt Securities will, by their terms, be convertible into or exchangeable for other Securities, the prospectus supplement relating thereto will set forth the terms and conditions of such conversion or exchange, including the conversion price or exchange ratio (or the method of calculating the same), the conversion or exchange period (or the method of determining the same), whether conversion or exchange will be mandatory or at the option of the holder or the Capital 9 Corporation, provisions for adjustment of the conversion price or the exchange ratio and provisions affecting conversion or exchange in the event of the redemption of such Debt Securities. Such terms may also include provisions under which the number or amount of other Securities to be received by the holders of such Debt Securities upon such conversion or exchange would be calculated according to the market price of such other Securities as of a time stated in the prospectus supplement. DENOMINATIONS, REGISTRATION AND TRANSFER Debt Securities of a series may be issuable solely as Registered Securities, solely as Bearer Securities or as both Registered Securities and Bearer Securities. The Indentures also provide that Debt Securities of a series may be issuable in global form. See "--Book-Entry Debt Securities". Unless otherwise provided in the prospectus supplement, Debt Securities denominated in U.S. dollars (other than Global Securities, which may be of any denomination) are issuable in denominations of $1,000 or any integral multiples of $1,000 (in the case of Registered Securities) and in the denomination of $5,000 (in the case of Bearer Securities). Unless otherwise indicated in the prospectus supplement, Bearer Securities will have interest coupons attached. (Section 201 of each Indenture) Registered Securities will be exchangeable for other Registered Securities of the same series. If (but only if) provided in the prospectus supplement, Bearer Securities (with all unmatured coupons, except as provided below, and all matured coupons which are in default) of any series may be similarly exchanged for Registered Securities of the same series of any authorized denominations and of a like aggregate principal amount and tenor. If so provided, Bearer Securities surrendered in exchange for Registered Securities between a Regular Record Date or a Special Record Date and the relevant date for payment of interest will be surrendered without the coupon relating to such date for payment of interest, and interest will not be payable in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the holder of such coupon when due in accordance with the terms of the applicable Indenture. Unless otherwise specified in the prospectus supplement, Bearer Securities will not be issued in exchange for Registered Securities. (Section 305 of each Indenture) Registered Securities of a series may be presented for registration of transfer and Debt Securities of a series may be presented for exchange (i) at each office or agency required to be maintained by the Capital Corporation for payment of such series as described in "Payment and Paying Agents", and (ii) at each other office or agency that the Capital Corporation may designate from time to time for such purposes. No service charge will be made for any transfer or exchange of Debt Securities, but the Capital Corporation may require payment of any tax or other governmental charge payable in connection therewith. (Section 305 of each Indenture) The Capital Corporation will not be required to (i) issue, register the transfer of or exchange Debt Securities during a period beginning at the opening of business 15 days before any selection of Debt Securities of that series to be redeemed and ending at the close of business on (A) if Debt Securities of the series are issuable only as Registered Securities, the day of mailing of the relevant notice of redemption and (B) if Debt Securities of the series are issuable as Bearer Securities, the day of the first publication of the relevant notice of redemption, or, if Debt Securities of the series are also issuable as Registered Securities and there is no publication, the day of mailing of the relevant notice of redemption; (ii) register the transfer of or exchange any Registered Security, or portion thereof, called for redemption, except the unredeemed portion of any Registered Security being redeemed in part; (iii) exchange any Bearer Security called for redemption, except to exchange such Bearer Security for a Registered Security of that series and like tenor that is simultaneously surrendered for redemption; or (iv) issue, register the transfer of or exchange any Debt 10 Security which has been surrendered for repayment at the option of the holder, except the portion, if any, of such Debt Security not to be so repaid. (Section 305 of each Indenture) PAYMENT AND PAYING AGENTS Unless otherwise provided in the prospectus supplement, principal, premium, if any, and interest, if any, and Additional Amounts, if any, on Registered Securities will be payable at any office or agency to be maintained by the Capital Corporation, in the case of the Senior Securities, in New York, New York and, in the case of the Subordinated Securities, in Chicago, Illinois and New York, New York, except that at the option of the Capital Corporation interest (including Additional Amounts, if any) may be paid (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer to an account maintained by the Person entitled thereto as specified in the Security Register. (Sections 301, 1001 and 1002 of each Indenture) Unless otherwise provided in the prospectus supplement, payment of any installment of interest on Registered Securities will be made to the Person in whose name such Registered Security is registered at the close of business on the Regular Record Date for such interest. (Section 307 of each Indenture) If Debt Securities of a series are issuable solely as Bearer Securities or as both Registered Securities and Bearer Securities, unless otherwise provided in the prospectus supplement, the Capital Corporation will be required to maintain an office or agency (i) outside the United States at which, subject to any applicable laws and regulations, the principal of (and premium, if any) and interest, if any, on such series will be payable and (ii) in The City of New York for payments with respect to any Registered Securities of such series (and for payments with respect to Bearer Securities of such series in the limited circumstances described below, but not otherwise); provided that, if required in connection with any listing of such Debt Securities on the Luxembourg Stock Exchange or any other stock exchange located outside the United States, the Capital Corporation will maintain an office or agency for such Debt Securities in any city located outside the United States required by such stock exchange. (Section 1002 of each Indenture) The initial locations of such offices and agencies will be specified in the prospectus supplement. Unless otherwise provided in the prospectus supplement, principal of (and premium, if any) and interest, if any, on Bearer Securities may be paid by wire transfer to an account maintained by the Person entitled thereto with a bank located outside the United States. (Sections 307 and 1002 of each Indenture) Unless otherwise provided in the prospectus supplement, payment of installments of interest on any Bearer Securities on or before Maturity will be made only against surrender of coupons for such interest installments as they severally mature. (Section 1001 of each Indenture) Unless otherwise provided in the prospectus supplement, no payment with respect to any Bearer Security will be made at any office or agency of the Capital Corporation 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, payments of principal of (and premium, if any) and interest, if any, on Bearer Securities payable in U.S. dollars will be made at the office of the Capital Corporation's Paying Agent in The City of New York if (but 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. (Section 1002 of each Indenture) The Capital Corporation may from time to time designate additional offices or agencies, approve a change in the location of any office or agency and, except as provided above, rescind the designation of any office or agency. 11 All payments of principal of (and premium, if any) and interest, if any, on any Debt Security that is payable in a Currency other than U.S. dollars will be made in U.S. dollars in the event that such Currency ceases to be used by both the government of the country that issued the currency and by a central bank or other public institution of or within the international banking community for the settlement of transactions, or is any currency unit (or composite currency) that ceases to be used for the purposes for which it was established (a "Conversion Event"). (Section 312 of each Indenture) Any payment made under such circumstances in U.S. dollars will not constitute a default under the relevant Indenture. EVENTS OF DEFAULT The following will constitute Events of Default under each Indenture: (i) failure to pay any interest upon or any Additional Amounts payable in respect of any Debt Security of that series, or of any coupon appertaining thereto, when the same becomes due and payable, continued for 30 days; (ii) default in the payment of the principal of (or premium, if any, on) any Debt Security of that series when the same becomes due and payable, whether at its maturity, earlier redemption or repayment or otherwise; (iii) default in the deposit of any sinking fund payment when due by the terms of any Debt Security of that series; (iv) default in the performance, or breach, of any covenant or agreement of the Capital Corporation in the applicable Indenture with respect to any Debt Security of that series, continued for 60 days after written notice to the Capital Corporation; (v) certain events in bankruptcy, insolvency or reorganization affecting the Capital Corporation; and (vi) any other Event of Default provided with respect to Debt Securities of that series. (Section 501 of each Indenture) The Capital Corporation is required to file with the applicable Trustee, annually, an officer's certificate as to the Capital Corporation's compliance with all conditions and covenants under the applicable Indenture. (Section 1005 of each Indenture) Each Indenture provides that the applicable Trustee may withhold notice to the holders of Debt Securities of a series of any default (except payment defaults on such Debt Securities of that series) if it considers it in the interest of the holders of Debt Securities of such series to do so. (Section 601 of each Indenture) If an Event of Default with respect to Debt Securities of a series has occurred and is continuing, the applicable Trustee or the holders of not less than 25% in principal amount of Outstanding Debt Securities of that series may declare the principal amount (or, if the Debt Securities of that series are Original Issue Discount Securities or Indexed Securities, such portion of the principal amount as may be specified in the terms thereof) of all of the Debt Securities of that series due and payable immediately. (Section 502 of each Indenture) Subject to the provisions of the applicable Indenture relating to the duties of the Trustee thereunder, in case an Event of Default with respect to Debt Securities of a series has occurred and is continuing, such Trustee is under no obligation to exercise any of its rights or powers under such Indenture at the request, order or direction of the holders of Debt Securities of that series, unless such holders have offered such Trustee reasonable indemnity against the expenses and liabilities which might be incurred by it in compliance with such request. (Section 507 of each Indenture and TIA Section 315) Subject to such provisions for the indemnification of the applicable Trustee, the holders of a majority in principal amount of the Outstanding Debt Securities of a series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to such Trustee, or exercising any trust or power conferred on such Trustee with respect to the Debt Securities of that series. (Section 512 of each Indenture) The holders of a majority in principal amount of the Outstanding Debt Securities of a series may, on behalf of the holders of all the Debt Securities of such series and any related coupons, waive any past default under the applicable Indenture with respect to such series and its consequences, except a default (i) in the payment of the principal of (or premium, if any) or interest, if any, on or Additional Amounts payable in respect of any Debt Security of such series or any related 12 coupons, or (ii) in respect of a covenant or provision that cannot be modified or amended without the consent of the holder of each Outstanding Debt Security of such series affected thereby. (Section 513 of each Indenture) MERGER OR CONSOLIDATION Each Indenture provides that the Capital Corporation may not consolidate with or merge with or into any other corporation or convey or transfer its properties and assets as an entirety or substantially as an entirety to any Person, unless either the Capital Corporation is the continuing corporation or such corporation or Person assumes by supplemental indenture all the obligations of the Capital Corporation under such Indenture and the Indenture Securities issued thereunder and immediately after the transaction no default shall exist. In addition, under the Senior Indenture, no such consolidation, merger or transfer may be made if as a result thereof any property or assets of the Capital Corporation or a Subsidiary would become subject to any mortgage, lien or other encumbrance unless either (i) such mortgage, lien or other encumbrance could be created pursuant to Section 1006 of such Indenture (see "--Senior Indenture Provisions--Limitation on Liens" below) without equally and ratably securing the Indenture Securities issued under such Indenture or (ii) such Indenture Securities are secured equally and ratably with or prior to the debt secured by such mortgage, lien or other encumbrance. (Section 801 of each Indenture) MODIFICATION OR WAIVER Modification and amendment of an Indenture may be made by the Capital Corporation and the Trustee thereunder with the consent of the holders of a majority in principal amount of all Outstanding Indenture Securities issued thereunder that are affected by such modification or amendment; provided that no such modification or amendment may, without the consent of the holder of each Outstanding Indenture Security affected thereby, among other things: (i) change the Stated Maturity of the principal of (or premium, if any, on) or any installment of principal of or interest on any such Indenture Security; (ii) reduce the principal amount of or the rate of interest (or manner of calculation thereof) on or any Additional Amounts payable in respect of, or any premium payable upon the redemption of, any such Indenture Security; (iii) change any obligation of the Capital Corporation to pay Additional Amounts in respect of any such Indenture Security; (iv) reduce the portion of the principal of an Original Issue Discount Security or Indexed Security that would be due and payable upon a declaration of acceleration of the Maturity thereof or provable in bankruptcy; (v) adversely affect any right of repayment at the option of the holder of any such Indenture Security; (vi) change the place or Currency of payment of principal of, or any premium or interest on, any such Indenture Security; (vii) impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof or on or after any Redemption Date or Repayment Date therefor; (viii) adversely affect any right to convert or exchange of any Indenture Security; (ix) reduce the percentage in principal amount of such Outstanding Indenture Securities, the consent of whose holders is required to amend or waive compliance with certain provisions of such Indenture or to waive certain defaults thereunder; (x) reduce the requirements for voting or quorum described below; or (xi) modify any of the foregoing requirements or any of the provisions relating to waiving past defaults or compliance with certain restrictive provisions, except to increase the percentage of holders required to effect any such waiver or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the holder of each Indenture Security affected thereby. (Section 902 of each Indenture) In addition, under the Subordinated Indenture, no modification or amendment thereof may, without the consent of the holder of each Outstanding Subordinated Security affected thereby, modify any of the provisions of such Indenture relating to the subordination of the Subordinated Securities in a manner adverse to the holders thereof and no such modification or amendment may 13 adversely affect the rights of any holder of Senior Indebtedness under Article Sixteen of the Subordinated Indenture (described under the caption "--Subordinated Indenture Provisions--Subordination") without the consent of such holder of Senior Indebtedness. (Sections 902 and 907 of the Subordinated Indenture) The holders of a majority in aggregate principal amount of Outstanding Indenture Securities have the right to waive compliance by the Capital Corporation with certain covenants in the applicable Indenture. (Section 1007 of the Senior Indenture; Section 1006 of the Subordinated Indenture) Modification and amendment of an Indenture may be made by the Capital Corporation and the applicable Trustee thereunder, without the consent of any holder, for any of the following purposes: (i) to evidence the succession of another Person to the Capital Corporation as obligor under such Indenture; (ii) to add to the covenants of the Capital Corporation for the benefit of the holders of all or any series of Indenture Securities issued under such Indenture and any related coupons or to surrender any right or power conferred upon the Capital Corporation by such Indenture; (iii) to add Events of Default for the benefit of the holders of all or any series of Indenture Securities; (iv) to add to or change any provisions of such Indenture to facilitate the issuance of, or to liberalize the terms of, Bearer Securities, or to permit or facilitate the issuance of Indenture Securities in uncertificated form, provided that any such actions do not adversely affect the holders of such Indenture Securities or any related coupons; (v) to change or eliminate any provisions of such Indenture, provided that any such change or elimination will become effective only when there are no such Indenture Securities Outstanding of any series created prior thereto which are entitled to the benefit of such provisions; (vi) in the case of the Senior Securities, to secure the Indenture Securities under the Senior Indenture pursuant to the requirements of Section 801 or Section 1006 of the Senior Indenture, or otherwise; (vii) to establish the form or terms of such Indenture Securities of any series and any related coupons; (viii) to provide for the acceptance of appointment by a successor Trustee or facilitate the administration of the trusts under such Indenture by more than one Trustee; (ix) to cure any ambiguity, defect or inconsistency in such Indenture, provided such action does not adversely affect the interests of holders of Indenture Securities of a series issued thereunder or any related coupons in any material respect; or (x) to supplement any of the provisions of such Indenture to the extent necessary to permit or facilitate defeasance and discharge of any series of Indenture Securities thereunder, provided that such action shall not adversely affect the interests of the holders of any such Indenture Securities and any related coupons in any material respect. (Section 901 of each Indenture) In determining whether the holders of the requisite principal amount of Outstanding Indenture Securities have given any request, demand, authorization, direction, notice, consent or waiver under the applicable Indenture or whether a quorum is present at a meeting of holders of Indenture Securities thereunder, (i) the principal amount of an Original Issue Discount Security that will be deemed to be outstanding will be the amount of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof, (ii) the principal amount of an Indenture Security denominated in a foreign Currency or Currencies will be the U.S. dollar equivalent, determined on the trade date for such Indenture Security, of the principal amount thereof (or, in the case of an Original Issue Discount Security or Indexed Security, the U.S. dollar equivalent on the trade date of such Indenture Security of the amount determined as provided in (i) above or (iii) below), (iii) the principal amount of an Indexed Security that may be counted in making such determination or calculation and that will be deemed outstanding for such purpose will be equal to the principal face amount of such Indexed Security at original issuance, unless otherwise provided with respect to such Indexed Security pursuant to Section 301 of such Indenture, and (iv) Indenture Securities owned by the Capital Corporation or any other obligor upon the Indenture Securities or any Affiliate of the Capital Corporation or of such other obligor shall be disregarded. (Section 101 of each Indenture) 14 Each Indenture contains provisions for convening meetings of the holders of Indenture Securities of a series if Indenture Securities of that series are issuable as Bearer Securities. (Section 1501 of each Indenture) A meeting may be called at any time by the applicable Trustee, and also, upon request, by the Capital Corporation or the holders of at least 10% in principal amount of the Outstanding Indenture Securities of that series, in any such case upon notice given as provided in the applicable Indenture. (Section 1502 of each Indenture) Except for any consent that must be given by the holder of each Indenture Security affected thereby, as described above, any resolution presented at a meeting (or an adjourned meeting duly reconvened) at which a quorum is present may be adopted by the affirmative vote of the holders of a majority in principal amount of the Outstanding Indenture Securities of that series; provided, however, that any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other action that may be made, given or taken by the holders of a specified percentage which is less than a majority in principal amount of the Outstanding Indenture Securities of a series may be adopted at a meeting (or an adjourned meeting duly reconvened) at which a quorum is present by the affirmative vote of the holders of such specified percentage in principal amount of the Outstanding Indenture Securities of that series. Any resolution passed or decision taken at any meeting of holders of Indenture Securities of a series duly held in accordance with the applicable Indenture will be binding on all holders of Indenture Securities of that series and any related coupons. The quorum at any meeting called to adopt a resolution will be persons holding or representing a majority in principal amount of the Outstanding Indenture Securities of a series; provided, however, that if any action is to be taken at such meeting with respect to a consent or waiver which may be given by the holders of not less than a specified percentage in principal amount of the Outstanding Indenture Securities of a series, the persons holding or representing such specified percentage in principal amount of the Outstanding Indenture Securities of that series will constitute a quorum. (Section 1504 of each Indenture) Notwithstanding the foregoing provisions, if any action is to be taken at a meeting of holders of Indenture Securities of a series with respect to any request, demand, authorization, direction, notice, consent, waiver or other action that the applicable Indenture expressly provides may be made, given or taken by the holders of a specified percentage in principal amount of all Outstanding Indenture Securities affected thereby or of the holders of such series and one or more additional series: (i) there shall be no minimum quorum requirement for such meeting and (ii) the principal amount of the Outstanding Indenture Securities of such series that vote in favor of such request, demand, authorization, direction, notice, consent, waiver or other action will be taken into account in determining whether such request, demand, authorization, direction, notice, consent, waiver or other action has been made, given or taken under such Indenture. (Section 1504 of each Indenture) SATISFACTION AND DISCHARGE; DEFEASANCE AND COVENANT DEFEASANCE The Capital Corporation may discharge certain obligations to holders of Debt Securities of a series that have not already been delivered to the applicable Trustee for cancellation and that either have 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 applicable Trustee, in trust, funds in an amount sufficient to pay the entire indebtedness on such Debt Securities for principal (and premium, if any) and interest, if any, and any Additional Amounts with respect thereto, to the date of such deposit (if such Debt Securities have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be. (Section 401 of each Indenture) Each Indenture provides that, if the provisions of Article Fourteen are made applicable to the Debt Securities of or within any series and any related coupons pursuant to Section 301 thereunder, 15 the Capital Corporation may elect either (a) to defease and be discharged from any and all obligations with respect to such Debt Securities and any related coupons (except for the obligations to pay Additional Amounts, if any, upon the occurrence of certain events of tax, assessment or governmental charge with respect to payments on such Debt Securities and the obligations to register the transfer or exchange of such Debt Securities and any related coupons, to replace temporary or mutilated, destroyed, lost or stolen Debt Securities and any related coupons, to maintain an office or agency in respect of such Debt Securities and any related coupons, and to hold moneys for payment in trust) ("defeasance") (Section 1402 of each Indenture) or (b) to be released from its obligations with respect to such Debt Securities and any related coupons under Section 1006 of such Indenture (being the restrictions described under "--Senior Indenture Provisions--Limitation on Liens") or, if so provided pursuant to Section 301 of such Indenture, its obligations with respect to any other covenant, and any omission to comply with such obligations shall not constitute a default or an Event of Default with respect to such Debt Securities and any related coupons ("covenant defeasance") (Section 1403 of each Indenture), in either case upon the irrevocable deposit by the Capital Corporation with the applicable Trustee (or other qualifying trustee), in trust, of (i) an amount, in the Currency or Currencies in which such Debt Securities and any related coupons are then specified as payable at Stated Maturity, (ii) Government Obligations (as defined below) applicable to such Debt Securities and any related coupons (with such applicability being determined on the basis of the Currency in which such Debt Securities are then specified as payable at Stated Maturity) that through the payment of principal and interest in accordance with their terms will provide money in an amount, or (iii) a combination thereof in an amount, sufficient to pay the principal of (and premium, if any) and interest, if any, on such Debt Securities and any related coupons, and any mandatory sinking fund or analogous payments thereon, on the scheduled due dates therefor. Such a trust may only be established if, among other things, the Capital Corporation has delivered to the applicable Trustee an Opinion of Counsel (as specified in the applicable Indenture) to the effect that the holders of such Debt Securities and any related coupons 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 amounts, in the same manner and at the same times as would have been the case if such defeasance or covenant defeasance had not occurred, and such Opinion of Counsel, in the case of defeasance under clause (a) above, must refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable United States federal income tax law occurring after the date of the Indenture. (Section 1404 of each Indenture) "Government Obligations" means securities which are (i) direct obligations of the United States or the government which issued the foreign Currency in which the Debt Securities of that series are payable, for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States or the government which issued the foreign Currency in which the Debt Securities of such series are payable, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States or such other government, which, in either case, are not callable or redeemable at the option of the issuer thereof. "Government Obligations" also include a depository receipt issued by a bank or trust company as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of any such Government Obligation held by such custodian for the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from the amount received by the custodian in respect of the Government Obligation or the specific payment of interest on or principal of the Government Obligation evidenced by such depository receipt. (Section 101 of each Indenture) 16 Unless otherwise provided in the prospectus supplement, if, after the Capital Corporation has deposited funds, Government Obligations or both to effect defeasance or covenant defeasance with respect to Debt Securities of a series, (i) the holder of a Debt Security of such series is entitled to, and does, elect pursuant to the terms of such Debt Security to receive payment in a Currency other than that in which such deposit has been made in respect of such Debt Security, or (ii) a Conversion Event occurs, then the indebtedness represented by such Debt Security will be deemed to have been, and will be, fully discharged and satisfied through the payment of the principal of (and premium, if any) and interest, if any, on such Debt Security as they become due out of the proceeds yielded by converting the amount so deposited in respect of such Debt Security into the Currency in which such Debt Security becomes payable as a result of such election or such Conversion Event based on the applicable Market Exchange Rate. (Section 1405 of each Indenture) Unless otherwise provided in the prospectus supplement, all payments of principal of (and premium, if any) and interest, if any, and Additional Amounts, if any, on any Debt Security that is payable in a foreign Currency with respect to which a Conversion Event occurs shall be made in U.S. dollars. (Section 312 of each Indenture) In the event the Capital Corporation effects covenant defeasance with respect to any Debt Securities and any related coupons and such Debt Securities and any related coupons are declared due and payable because of the occurrence of any Event of Default other than the Event of Default described in clause (iv) under "Events of Default" (Section 501 of the Senior Indenture) with respect to Section 1006 of the Senior Indenture (which Section would no longer be applicable to such Debt Securities or any related coupons) or described in clause (iv) or (vi) under "Events of Default" (Section 501 of each Indenture) with respect to any other covenant to which there has been defeasance, the amount of Government Obligations and funds on deposit with the applicable Trustee will be sufficient to pay amounts due on such Debt Securities and any related coupons at the time of their Stated Maturity but may not be sufficient to pay amounts due on such Debt Securities and any related coupons at the time of the acceleration resulting from such Event of Default. In such case, the Capital Corporation would remain liable to make payment of such amounts due at the time of acceleration. (Section 501 of each Indenture) If the applicable Trustee or any Paying Agent is unable to apply any money in accordance with the applicable Indenture by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Capital Corporation's obligations under such Indenture and such Debt Securities and any related coupons shall be revived and reinstated as though no deposit had occurred pursuant to such Indenture, until such time as such Trustee or Paying Agent is permitted to apply all such money in accordance with such Indenture; provided, however, that if the Capital Corporation makes any payment of principal of (or premium, if any) or interest, if any, on any such Debt Security or any related coupon following the reinstatement of its obligations, the Capital Corporation shall be subrogated to the rights of the holders of such Debt Securities and any related coupons to receive such payment from the money held by such Trustee or Paying Agent. The prospectus supplement may further describe the provisions, if any, permitting such defeasance or covenant defeasance, including any modifications to the provisions described above, with respect to the Debt Securities of or within a particular series and any related coupons. 17 BOOK-ENTRY DEBT SECURITIES Debt Securities of a series may be issued in whole or in part in global form that will be deposited with, or on behalf of, a depository identified in the prospectus supplement. Global securities may be issued in either registered or bearer form and in either temporary or permanent form (each, a "Global Security"). Unless otherwise provided in the prospectus supplement, Debt Securities that are represented by a Global Security will be issued in denominations of $1,000 and any integral multiple thereof, and will be issued in registered form only, without coupons. Payments of principal of (and premium, if any) and interest, if any, on Debt Securities represented by a Global Security will be made by the Capital Corporation to the applicable Trustee, and then by such Trustee to the depository. The Capital Corporation anticipates that any Global Securities will be deposited with, or on behalf of, The Depository Trust Company ("DTC"), New York, New York, that such Global Securities will be registered in the name of DTC's nominee, and that the following provisions will apply to the depository arrangements with respect to any such Global Securities. Additional or differing terms of the depository arrangement will be described in the prospectus supplement. So long as DTC or its nominee is the registered owner of a Global Security, DTC or its nominee, as the case may be, will be considered the sole holder of the Debt Securities represented by such Global Security for all purposes under the applicable Indenture. Except as provided below, owners of beneficial interests in a Global Security will not be entitled to have Debt Securities represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of Debt Securities in certificated form and will not be considered the owners or holders thereof under the applicable Indenture. The laws of some states require that certain purchasers of securities take physical delivery of such securities in certificated form; such laws may limit the transferability of beneficial interests in a Global Security. DTC has advised as follows: It is a limited-purpose trust company which holds securities for its participating organizations (the "Participants") and facilitates the settlement among Participants of securities transactions in such securities through electronic book-entry changes in its Participants' accounts. Participants include securities brokers and dealers (including certain of the underwriters or agents), banks and trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly ("indirect participants"). Persons who are not Participants may beneficially own securities held by DTC only through Participants or indirect participants. DTC advises that its established procedures provide that (i) upon issuance of the Debt Securities by the Capital Corporation, DTC will credit the accounts of Participants designated by the underwriters or agents with the principal amounts of the Debt Securities purchased by the underwriters or through the agents, and (ii) ownership of interests in the Global Notes will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC, the Participants and the indirect participants. The laws of some states may require that certain persons take physical delivery in definitive form of securities which they own. Consequently, the ability to transfer beneficial interests in the Global Notes is limited to such extent. So long as a nominee of DTC is the registered owner of the Global Notes, such nominee for all purposes will be considered the sole owner or holder of such Debt Securities under the Indenture. Except as provided below or in the prospectus supplement, owners of beneficial interests in the Global Notes will not be entitled to have Debt Securities registered in their names, will not receive or be entitled to receive physical delivery of Debt Securities in definitive form, and will not be considered the owners or holders thereof under the Indenture. 18 Principal and Interest payments on the Debt Securities registered in the name of DTC's nominee will be made by the Trustee to DTC. Under the terms of the Indenture, the Capital Corporation and the Trustee will treat the persons in whose names the Debt Securities are registered as the owners of such Debt Securities for the purpose of receiving payment of principal and interest on the Debt Securities and for all other purposes whatsoever. Therefore, neither the Capital Corporation, the Trustee nor any Paying Agent has any direct responsibility or liability for the payment of principal or interest on the Debt Securities to owners of beneficial interests in the Global Notes. DTC has advised the Capital Corporation and the Trustee that its present practice is to credit the accounts of the Participants on the appropriate payment date in accordance with their respective holdings in principal amount of beneficial interests in the Global Notes as shown on the records of DTC, unless DTC has reason to believe that it will not receive payment on such payment date. Payments by Participants and indirect participants to owners of beneficial interests in the Global Notes 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 the Participants or indirect participants. If (i) DTC is at any time unwilling, unable or ineligible to continue as depository and a successor depository is not appointed by the Capital Corporation within 90 days following notice to the Capital Corporation; (ii) the Capital Corporation determines, in its sole discretion, not to have any Debt Securities represented by one or more Global Securities, or (iii) an Event of Default under the applicable Indenture has occurred and is continuing, then the Capital Corporation will issue individual Debt Securities in certificated form in exchange for the Global Securities. In any such instance, an owner of a beneficial interest in a Global Security will be entitled to physical delivery of individual Debt Securities in certificated form of like tenor and rank, equal in principal amount to such beneficial interest and to have such Debt Securities in certificated form registered in its name. Unless otherwise provided in the prospectus supplement, Debt Securities so issued in certificated form will be issued in denominations of $1,000 or any integral multiple thereof and will be issued in registered form only, without coupons. None of the Capital Corporation, any underwriter or agent, the applicable Trustee or any applicable Paying Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in a Global Security, or for maintaining, supervising or reviewing any records relating to such beneficial interests. RESIGNATION OF TRUSTEE Each Trustee may resign or be removed with respect to one or more series of Indenture Securities and a successor Trustee may be appointed to act with respect to such series. (Section 608 of each Indenture) In the event that two or more persons are acting as Trustee with respect to different series of Indenture Securities under one of the Indentures, each such Trustee shall be a Trustee of a trust thereunder separate and apart from the trust administered by any other such Trustee (Section 609 of each Indenture), and any action described herein to be taken by the "Trustee" may then be taken by each such Trustee with respect to, and only with respect to, the one or more series of Indenture Securities for which it is Trustee. SENIOR INDENTURE PROVISIONS LIMITATION ON LIENS The Capital Corporation covenants in the Senior Indenture that neither it nor any Subsidiary will pledge or subject to any lien any of its property or assets unless the Indenture Securities issued under such Indenture are secured by such pledge or lien equally and ratably with other indebtedness thereby secured. There are excluded from this covenant, liens created to secure obligations 19 for the purchase price of physical property, liens of a Subsidiary securing indebtedness owed to the Capital Corporation, liens existing on property acquired upon exercise of rights arising out of defaults on receivables acquired in the ordinary course of business, sales of receivables accounted for as secured indebtedness in accordance with generally accepted accounting principles, certain liens not related to the borrowing of money and other liens not securing borrowed money aggregating less than $500,000. (Section 1006 of the Senior Indenture) SUBORDINATED INDENTURE PROVISIONS SUBORDINATION Upon any distribution of assets of the Capital Corporation upon any dissolution, winding up, liquidation or reorganization, the payment of the principal of (and premium, if any) and interest, if any, on Subordinated Securities is to be subordinated to the extent provided in the Subordinated Indenture in right of payment to the prior payment in full of all Senior Indebtedness (Sections 1601 and 1602 of the Subordinated Indenture), but the obligation of the Capital Corporation to make payment of the principal of (and premium, if any) and interest, if any, on the Subordinated Securities will not otherwise be affected. (Section 1604 of the Subordinated Indenture) In addition, no payment on account of principal (or premium, if any), sinking fund or interest, if any, may be made on the Subordinated Securities at any time unless full payment of all amounts due in respect of the principal (and premium, if any), sinking fund and interest on Senior Indebtedness has been made or duly provided for in money or money's worth. (Section 1603 of the Subordinated Indenture) In the event that, notwithstanding the foregoing, any such payment by the Capital Corporation is received by the Subordinated Trustee or the holders of any of the Subordinated Securities before all Senior Indebtedness is paid in full, such payment or distribution shall be paid over to the holders of such Senior Indebtedness or on their behalf for application to the payment of all such Senior Indebtedness remaining unpaid until all such Senior Indebtedness has been paid in full, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness. Subject to the payment in full of all Senior Indebtedness upon such distribution of the Capital Corporation, the holders of the Subordinated Securities will be subrogated to the rights of the holders of the Senior Indebtedness to the extent of payments made to the holders of such Senior Indebtedness out of the distributive share of the Subordinated Securities. (Section 1602 of the Subordinated Indenture) By reason of such subordination, in the event of a distribution of assets upon insolvency, certain general creditors of the Capital Corporation may recover more, ratably, than holders of the Subordinated Securities. The Subordinated Indenture provides that the subordination provisions thereof will not apply to money and securities held in trust pursuant to the defeasance provisions of the Subordinated Indenture. (Section 1402 of the Subordinated Indenture) Senior Indebtedness is defined in the Subordinated Indenture as the principal of (and premium, if any) and unpaid interest on (i) indebtedness of the Capital Corporation (including indebtedness of others guaranteed by the Capital Corporation), whether outstanding on the date of the Subordinated Indenture or thereafter created, incurred, assumed or guaranteed, for money borrowed (other than the Indenture Securities issued under the Subordinated Indenture, the 9 5/8% Subordinated Notes due 1998 and the 8 5/8% Subordinated Debentures due 2019 of the Capital Corporation), unless in the instrument creating or evidencing the same or pursuant to which the same is outstanding it is provided that such indebtedness is not senior or prior in right of payment to the Subordinated Securities and (ii) renewals, extensions, modifications and refundings of any such indebtedness. (Section 101 of the Subordinated Indenture) If this prospectus is being delivered in connection with a series of Subordinated Securities, the accompanying prospectus supplement or the information incorporated by reference will set forth the approximate amount of Senior Indebtedness outstanding as of a recent date. 20 THE TRUSTEES UNDER THE INDENTURES The Chase Manhattan Bank and The First National Bank of Chicago are two of a number of banks with which the Capital Corporation and Deere & Company maintain ordinary banking relationships and from which the Capital Corporation and Deere & Company have obtained credit facilities and lines of credit. The Chase Manhattan Bank also serves as trustee under other indentures under which the Capital Corporation or Deere & Company is the obligor. Hans W. Becherer, Chairman of the Capital Corporation and Deere & Company and John R. Stafford, a director of Deere & Company, are directors of the Trustee and its parent, The Chase Manhattan Bank Corporation. The First National Bank of Chicago also serves as trustee under another indenture under which the Capital Corporation is an obligor. CERTAIN CONSIDERATIONS RELATING TO FOREIGN CURRENCIES Debt Securities denominated or payable in foreign Currencies may entail significant risks. These risks include, without limitation, the possibility of significant fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary depending upon the Currency or Currencies involved and will be more fully described in the applicable prospectus supplement. DESCRIPTION OF DEBT WARRANTS The Capital Corporation may issue (either together with other Offered Securities or separately) Debt Warrants to purchase Underlying Debt Securities ("Offered Debt Warrants"). Such Debt Warrants will be issued under warrant agreements (each a "Debt Warrant Agreement") to be entered into between the Capital Corporation and a bank or trust company, as warrant agent (the "Debt Warrant Agent"), all as shall be set forth in the prospectus supplement. A copy of the form of Debt Warrant Agreement has been filed as an exhibit to the registration statement. The following summary of certain provisions of the Debt Warrant Agreement does not purport to be complete and is subject to, and are qualified in its entirety by reference to, all the provisions of the Debt Warrant Agreement and the accompanying Debt Warrant certificates, including the definitions therein of certain terms. GENERAL Reference is made to the prospectus supplement for the terms of the Offered Debt Warrants, including the following: (1) The title and aggregate number of such Debt Warrants. (2) The title, rank, aggregate principal amount and terms of the Underlying Debt Securities purchasable upon exercise of such Debt Warrants. (3) The principal amount of Underlying Debt Securities that may be purchased upon exercise of each such Debt Warrant, and the price or the manner of determining the price at which such principal amount may be purchased upon such exercise. (4) The time or times at which, or period or periods, in which, such Debt Warrants may be exercised and the expiration date of such Debt Warrants. (5) The terms of any right of the Capital Corporation to redeem such Debt Warrants. (6) Whether certificates evidencing such Debt Warrants ("Debt Warrant Certificates") will be issued in registered or bearer form, and, if registered, where they may be transferred and exchanged. 21 (7) Whether such Debt Warrants are to be issued with any Debt Securities or any other Securities. (8) The date, if any, on and after which such Debt Warrants and Underlying Debt Securities will be separately transferable. (9) Any other terms of such Debt Warrants. If applicable, the prospectus supplement will also set forth information concerning other securities offered thereby and a discussion of federal income tax considerations relevant thereto. Debt Warrant Certificates will be exchangeable for new Debt Warrant Certificates of different denominations. No service charge will be made for any permitted transfer or exchange of Debt Warrant Certificates, but the Capital Corporation may require payment of any tax or other governmental charge payable in connection therewith. Debt Warrants may be exercised and exchanged and Debt Warrants in registered form may be presented for registration of transfer at the corporate trust office of the Debt Warrant Agent or any other office indicated in the prospectus supplement. EXERCISE OF DEBT WARRANTS Each Offered Debt Warrant will entitle the holder thereof to purchase such amount of Underlying Debt Securities at the exercise price set forth in, or calculable from, the prospectus supplement relating to such Offered Debt Warrants. After the close of business on the expiration date, unexercised Debt Warrants will become void. Debt Warrants may be exercised by payment to the Debt Warrant Agent of the applicable exercise price and by delivery to the Debt Warrant Agent of the related Debt Warrant Certificate, with the reverse side thereof properly completed. Debt Warrants will be deemed to have been exercised upon receipt of the exercise price, subject to the receipt by the Debt Warrant Agent, within five business days thereafter, of the Debt Warrant Certificate or Certificates evidencing such Debt Warrants. Upon receipt of such payment and the properly completed Debt Warrant Certificates at the corporate trust office of the Debt Warrant Agent or any other office indicated in the prospectus supplement, the Capital Corporation will, as soon as practicable, deliver the amount of Underlying Debt Securities purchased upon such exercise. If fewer than all of the Debt Warrants represented by any Debt Warrant Certificate are exercised, a new Debt Warrant Certificate will be issued for the unexercised Debt Warrants. The holder of a Debt Warrant will be required to pay any tax or other governmental charge that may be imposed in connection with any transfer involved in the issuance of Underlying Debt Securities purchased upon such exercise. MODIFICATIONS The Debt Warrant Agreement and the terms of the Offered Debt Warrants may be modified or amended by the Capital Corporation and the Debt Warrant Agent, without the consent of any holder, 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 that the Capital Corporation deems necessary or desirable and that will not materially and adversely affect the interests of the holders of the Offered Debt Warrants. The Capital Corporation and the Debt Warrant Agent may also modify or amend the Debt Warrant Agreement and the terms of the Offered Debt Warrants with the consent of the holders of a majority in number of the then outstanding unexercised Debt Warrants affected thereby; provided that no such modification or amendment that accelerates the expiration date, increases the exercise price, reduces the number of outstanding Debt Warrants the consent of the holders of which is required for any such modification or amendment, or otherwise materially and adversely affects the 22 rights of the holders of the Debt Warrants, may be made without the consent of each holder affected thereby. NO RIGHTS AS HOLDERS OF UNDERLYING DEBT SECURITIES Holders of Debt Warrants are not entitled, by virtue of being such holders, to payments of principal of (or premium, if any) or interest, if any, on the related Underlying Debt Securities or to exercise any other rights whatsoever as holders of the Underlying Debt Securities. DESCRIPTION OF PREFERRED STOCK Under its Certificate of Incorporation (the "Certificate of Incorporation"), the Capital Corporation is authorized to adopt resolutions providing for the issuance, in one or more series, of up to 10,000 shares of its preferred stock, $1.00 par value, with such powers, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as shall be adopted by the Board of Directors or a duly authorized committee thereof. The following summary of certain provisions of the Preferred Stock does not purport to be complete and is subject to, and are qualified in its entirety by reference to, the Certificate of Incorporation and the Certificate of Designations relating to such Preferred Stock. The specific terms of any Preferred Stock proposed to be sold pursuant to this prospectus and an accompanying prospectus supplement will be described in such prospectus supplement. If so indicated in the prospectus supplement, the terms of the offered Preferred Stock may differ from the terms set forth below. GENERAL Unless otherwise specified in the prospectus supplement relating to the offered Preferred Stock, each series of Preferred Stock will rank on a parity as to dividends and distribution of assets upon liquidation and in all other respects with all other Preferred Stock. The Preferred Stock will, when issued, be fully paid and nonassessable and holders thereof will have no preemptive rights. Reference is made to the prospectus supplement relating to the Preferred Stock offered thereby for specific terms, including: (1) The title and stated value of such Preferred Stock. (2) The number of shares of such Preferred Stock offered, the liquidation preference per share and the offering price of such Preferred Stock. (3) The dividend rate(s), period(s) and/or payment date(s) or method(s) of calculation thereof applicable to such Preferred Stock. (4) The date from which dividends on such Preferred Stock shall accumulate, if applicable. (5) The liquidation rights of such Preferred Stock. (6) The procedures for any auction and remarketing, if any, of such Preferred Stock. (7) The sinking fund provisions, if any, for such Preferred Stock. (8) The redemption provisions, if applicable, of such Preferred Stock. (9) Whether such Preferred Stock will be convertible into or exchangeable for other Securities and, if so, the terms and conditions of conversion or exchange, including the conversion price or exchange ratio and the conversion or exchange period (or the method of determining the same). 23 (10) Whether such Preferred Stock will have voting rights and the terms thereof, if any. (11) Whether such Preferred Stock will be listed on any securities exchange. (12) Whether such Preferred Stock will be issued with any other Securities. (13) Any other specific terms, preferences or rights of, or limitations or restrictions on, such Preferred Stock. Subject to the Certificate of Incorporation and to any limitations contained in outstanding Preferred Stock, the Capital Corporation may issue additional series of Preferred Stock, at any time or from time to time, with such powers, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof, as the Board of Directors or any duly authorized committee thereof may determine, all without further action of the stockholders, including holders of then outstanding Preferred Stock, of the Capital Corporation. If applicable, the prospectus supplement will also set forth information concerning any other Securities offered thereby and a discussion of federal income tax considerations relevant thereto. DIVIDENDS Holders of Preferred Stock will be entitled to receive cash dividends, when, as and if declared by the Board of Directors, out of assets of the Capital Corporation legally available for payment, at such rate and on such dates as will be set forth in the applicable prospectus supplement. Each dividend will be payable to holders of record as they appear on the stock books of the Capital Corporation on the record date fixed by the Board of Directors. Dividends, if cumulative, will be cumulative from and after the date set forth in the applicable prospectus supplement. The Capital Corporation may not (i) declare or pay dividends (except in stock of the Capital Corporation junior as to dividends and liquidation rights to the Preferred Stock (the "Junior Stock")) or make any other distributions on any Junior Stock, or (ii) purchase, redeem or otherwise acquire Junior Stock or set aside funds for such purpose (except (A) in a reclassification or exchange of Junior Stock through the issuance of other Junior Stock or (B) with the proceeds of a reasonably contemporaneous sale of Junior Stock), if there are arrearages in dividends or failure in the payment of the Capital Corporation's sinking fund or redemption obligations on any of its Preferred Stock and, in the case of (i) above, if dividends in full for the current quarterly dividend period have not been paid or declared on any of its Preferred Stock. Dividends in full may not be declared or paid or set apart for payment on any series of Preferred Stock unless (i) there shall be no arrearages in dividends for any past dividend periods on any series of Preferred Stock and (ii) to the extent that such dividends are cumulative, dividends in full for the current dividend period have been declared or paid on all Preferred Stock. Any dividends declared or paid when dividends are not so declared, paid or set apart in full will be shared ratably by the holders of all series of Preferred Stock in proportion to such respective arrearages and undeclared and unpaid current cumulative dividends. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments which may be in arrears. LIQUIDATION RIGHTS In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Capital Corporation, the holders of each series of the Preferred Stock will be entitled to receive out of assets of the Capital Corporation available for distribution to stockholders, before any distribution of assets is made to holders of any Junior Stock, liquidating distributions in the amount set forth in the applicable prospectus supplement plus all accrued and unpaid dividends. If, upon any voluntary or 24 involuntary liquidation, dissolution or winding up of the Capital Corporation, the amounts payable with respect to the Preferred Stock are not paid in full, the holders of Preferred Stock of each series will share ratably in such distribution of assets of the Capital Corporation in proportion to the full respective preferential amounts to which they are entitled. After payment of the full amount of the liquidating distribution to which they are entitled, the holders of the Preferred Stock will not be entitled to any further participation in any distribution of assets by the Capital Corporation. A consolidation or merger of the Capital Corporation with or into any other corporation or corporations or a sale of all or substantially all of the assets of the Capital Corporation shall not be deemed to be a liquidation, dissolution or winding up of the Capital Corporation. REDEMPTION If so provided in the prospectus supplement, the offered Preferred Stock will be redeemable in whole or in part at the option of the Capital Corporation, at the times and at the redemption prices set forth therein. If dividends on any series of Preferred Stock are in arrears or the Capital Corporation has failed to fulfill its sinking fund or redemption obligations with respect to any series of Preferred Stock, the Capital Corporation may not purchase or redeem shares of Preferred Stock or any other capital stock ranking on a parity with the Preferred Stock as to dividends or upon liquidation, nor permit any subsidiary to do so, without in either case the consent of the holders of at least two-thirds of each series of Preferred Stock then outstanding; provided, however, that (1) to meet its purchase, retirement or sinking fund obligations with respect to any series of Preferred Stock, the Capital Corporation may use shares of such Preferred Stock acquired prior to such arrearages or failure of payment and then held as treasury stock and (2) the Capital Corporation may complete the purchase or redemption of shares of Preferred Stock for which a contract was entered into for any puchase, retirement or sinking fund purposes prior to such arrearages or failure of payment. VOTING RIGHTS Except as indicated below or in the prospectus supplement, or except as expressly required by applicable law, the holders of the Preferred Stock will not be entitled to vote. As used herein, the term "Applicable Preferred Stock" means those series of Preferred Stock to which the provisions described herein are expressly made applicable by resolutions of the Board of Directors of the Capital Corporation. If the equivalent of six quarterly dividends payable on any share of any series of Applicable Preferred Stock are in default (whether or not such dividends have been declared or such defaulted dividends are consecutive), the number of directors of the Capital Corporation will be increased by two and the holders of all outstanding series of Applicable Preferred Stock (whether or not dividends thereon are in default), voting as a single class without regard to series, will be entitled to elect the two additional directors until four consecutive quarterly dividends are paid or declared and set apart for payment, if such share is non-cumulative, or until all arrearages in dividends and dividends in full for the current quarterly period are paid or declared and set apart for payment, if such share is cumulative, whereupon all voting rights described herein shall be divested from the Applicable Preferred Stock. The holders of Applicable Preferred Stock may exercise their special class voting rights at meetings of the stockholders for the election of directors or at special meetings for the purpose of electing such directors, in either case at which the holders of not less than one-third of the aggregate number of shares of Applicable Preferred Stock are present in person or by proxy. The affirmative vote of the holders of at least two-thirds of the outstanding shares of any series of Preferred Stock will be required (i) for any amendment of the Certificate of Incorporation that will 25 adversely affect the powers, preferences or rights of the holders of such Preferred Stock or (ii) to create any class of stock (or increase the authorized number of shares of any class of stock) that will have preference as to dividends or upon liquidation over such Preferred Stock or create any stock or other security convertible into or exchangeable for or evidencing the right to purchase any such stock. PLAN OF DISTRIBUTION The Capital Corporation may sell the Offered Securities to or through underwriters or dealers, and also may sell the Offered Securities directly to one or more other purchasers or through agents. The prospectus supplement sets forth the terms of the offering of the particular series or issue of Offered Securities to which such prospectus supplement relates, including, as applicable, (i) the name or names of any underwriters or agents with whom the Capital Corporation has entered into arrangements with respect to the sale of such Offered Securities, (ii) the initial public offering or purchase price of such Offered Securities, (iii) any underwriting discounts, commissions and other items constituting underwriters' compensation from the Capital Corporation and any other discounts, concessions or commissions allowed or reallowed or paid by any underwriters to other dealers, (iv) any commissions paid to any agents, (v) the net proceeds to the Capital Corporation and (vi) the securities exchanges, if any, on which such Offered Securities will be listed. Unless otherwise set forth in the prospectus supplement relating to a particular series or issue of Offered Securities, the obligations of the underwriters to purchase such Offered Securities will be subject to certain conditions precedent and each of the underwriters with respect to such Offered Securities will be obligated to purchase all of the Offered Securities of such series or issue allocated to it if any such Offered Securities are purchased. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. The Offered Securities may be offered and sold by the Capital Corporation directly or through agents designated by the Capital Corporation from time to time. Any agent involved in the offer or sale of the Offered Securities in respect of which this prospectus is delivered will be named in, and any commissions payable by the Capital Corporation to such agent will be set forth in, the applicable prospectus supplement. Unless otherwise indicated in the applicable prospectus supplement, each such agent will be acting on a best efforts basis for the period of its appointment. Any underwriters, dealers or agents participating in the distribution of the Offered Securities may be deemed to be underwriters, and any discounts or commissions received by them on the sale or resale of Offered Securities may be deemed to be underwriting discounts and commissions, under the Securities Act of 1933, as amended (the "Securities Act"). Underwriters, dealers and agents may be entitled, under agreements entered into with the Capital Corporation, to indemnification by the Capital Corporation against certain civil liabilities, including liabilities under the Securities Act. If so indicated in the prospectus supplement relating to a particular series or issue of Offered Securities, the Capital Corporation will authorize underwriters, dealers or agents to solicit offers by certain institutions to purchase such Offered Securities from the Capital Corporation pursuant to delayed delivery contracts providing for payment and delivery at a future date. Such contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth the commission payable for solicitation of such contracts. 26 LEGAL OPINIONS The validity of the Securities will be passed upon for the Capital Corporation by Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, and for any underwriters, dealers or agents by Brown & Wood LLP, One World Trade Center, New York, New York 10048. EXPERTS The financial statements incorporated in this prospectus by reference from the Capital Corporation's Annual Report on Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 27 -----END PRIVACY-ENHANCED MESSAGE-----