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date). A U.S. Holder’s adjusted tax basis in a Note (unless described otherwise in this section) generally will be the amount
paid for the Note less any principal payments previously received by the U.S. Holder. In the case of a Euro Note, the amount
paid for a Euro Note will be the U.S. dollar value of the euro used to purchase it at the spot exchange rate on the purchase
date (or, if the Euro Notes are traded on an established securities exchange and the holder is a cash basis or an electing
accrual basis U.S. Holder, the settlement date).
Gain or loss on disposition of a Note will be U.S. source capital gain or loss except, in the case of a Euro Note to the
extent of any foreign currency exchange gain or loss. Any capital gain or loss will be long-term capital gain or loss if the U.S.
Holder has held the Note for more than one year at the time of disposition. A non-corporate U.S. Holder may be eligible for
reduced rates of taxation on any long-term capital gain recognized. Deductions for capital losses are subject to limitations.
Currency Gain or Loss
In the case of a Euro Note, a U.S. Holder generally will recognize foreign currency gain or loss on disposition of a
Euro Note equal to the difference between the U.S. dollar value of the principal amount of the Euro Note on the date of
acquisition and the date of disposition (or, if the Notes are traded on an established securities exchange and the holder is a
cash basis or an electing accrual basis U.S. Holder, the settlement date). Foreign currency gain or loss cannot exceed overall
gain or loss on the Euro Note. Foreign currency gain or loss generally will be ordinary income or loss from sources within the
United States.
A U.S. Holder will have a tax basis in euro received as interest on the Notes equal to the U.S. dollar value of the euro
received translated at the spot exchange rate on the date of receipt. A U.S. Holder will have a tax basis in euro received on the
disposition of a Note equal to the U.S. dollar amount realized. Any gain or loss realized by a U.S. Holder on a sale or other
disposition of the euro generally will be U.S. source ordinary income or loss.
Reportable Transactions
Recent Treasury Regulations on tax shelter transactions could be interpreted to require a U.S. Holder of Euro Notes to
disclose with its tax return a loss from certain transactions involving a sale, exchange, retirement or other taxable disposition
of a Euro Note in excess of certain thresholds. U.S. Holders are urged to consult their tax advisors about these and all other
specific reporting requirements.
Information Reporting and Backup Withholding
Payments of interest and proceeds from the sale, redemption or other disposition of a Note may be reported to the U.S.
Internal Revenue Service unless the holder is a corporation or otherwise establishes a basis for exemption. Backup
withholding tax may apply to amounts subject to reporting if the holder fails to provide an accurate taxpayer identification
number. Backup withholding is not an additional tax. A holder can claim a credit against its U.S. federal income tax liability
for the amount of any backup withholding tax and a refund of any excess.
THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS
THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE INVESTOR IS
URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN
INVESTMENT IN THE NOTES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.
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