The Information in this preliminary supplement to official
statement and prospectus is not complete and may be changed.
This preliminary supplement to official statement and prospectus
and the accompanying official statement and prospectus are not an
offer to sell these securities and we are not soliciting offers
to buy these securities in any state where the offer or sale is
not permitted.
PRELIMINARY SUPPLEMENT TO OFFICIAL STATEMENT AND PROSPECTUS DATED
AUGUST 12, 1998
SUBJECT TO COMPLETION, DATED NOVEMBER 6, 1998 NOT A NEW ISSUE
Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Financing Authority
Adjustable Rate Industrial Revenue Bonds, 1983 Series B
(Intel Corporation Project)
Price: 100% of Principal Amount and Accrued Interest, If Any
$
Originally Issued: December 21, 1983 Due: December 1, 2013
---------------
The offered securities are a portion of the $30,000,000
principal amount of the Puerto Rico Industrial, Tourist,
Educational, Medical and Environmental Control Facilities
Financing Authority Adjustable Rate Industrial Revenue Bonds,
1983 Series B issued on December 21, 1983. Intel is electing to
remarket rather than redeem those Series B Bonds tendered for
redemption by certain holders under the trust agreement relating
to the Series B Bonds. Holders of $ principal
amount of the Series B Bonds elected to redeem their Series B
Bonds.
The Underwriter is offering and selling the tendered Series
B Bonds in minimum principal amounts of $100,000.
The Series B Bonds are payable solely from loan payments
made to the Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Financing Authority under a
loan agreement between the Authority and
INTEL CORPORATION [Logo]
The Series B Bonds are not indebtedness of the Commonwealth
of Puerto Rico or any of its political subdivisions, and neither
the Commonwealth of Puerto Rico nor any of such political
subdivisions is liable for payment of principal or interest on
the Series B Bonds.
Certain Terms of the Series B Bonds
- Principal is payable at the corporate trust office of
Bankers Trust Company as Trustee in New York, New York.
- Interest:
- Paid on June 1 and December 1 of each year by check of the
Trustee.
- Interest rate of 3.09% per year from December 1, 1998 to and
including November 30, 2003.
- Interest rate for each of the two five-year periods starting
December 1, 2003 and December 1, 2008 to be adjusted as described
in the accompanying Official Statement and Prospectus.
- Redeemable at the holder's option on December 1, 2003 and
December 1, 2008 at 100% of their principal amount plus interest
accrued to such December 1.
- Subject to optional and mandatory redemption by Intel in
certain circumstances.
<PAGE>
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these
securities or determined if this preliminary supplement to
official statement and prospectus or the accompanying official
statement and prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
<TABLE>
Underwriting Discounts
Price to Public and Commissions Proceed to Company
<S> <C> <C> <C>
Per Unit % % -
Total $ $ -
</TABLE>
NationsBanc Montgomery Securities LLC, as the Underwriter, has
agreed to purchase and remarket the Remarketed Series B Bonds on
a firm commitment basis, subject to satisfaction of certain
conditions. The Underwriter expects to deliver the Remarketed
Series B Bonds on December 1, 1998.
NationsBanc Montgomery Securities LLC
November , 1998
<PAGE>
TABLE OF CONTENTS
Preliminary Supplement to Official Official Statement and Prospectus
Statement and Prospectus
Page Page
RECENT DEVELOPMENTS S-2 AVAILABLE INFORMATION 2
THE SERIES B BONDS S-2 INCORPORATION OF CERTAIN
USE OF PROCEEDS S-2 DOCUMENTS BY REFERENCE 2
UNDERWRITING S-3 INTRODUCTORY STATEMENT 3
LEGAL MATTERS S-3 THE COMPANY 4
EXPERTS S-3 RATIO OF EARNINGS TO FIXED CHARGES 5
USE OF PROCEEDS 5
THE AUTHORITY 6
THE BONDS 8
THE LOAN AGREEMENTS 15
THE TRUST AGREEMENTS 17
TAX MATTERS 19
LEGAL INVESTMENT 20
PLAN OF REMARKETING 20
LEGAL MATTERS 21
EXPERTS 21
You should rely only on the information contained or incorporated
by reference in this Preliminary Supplement to Official Statement
and Prospectus or in the Official Statement and Prospectus. We
have not authorized anyone to provide you with information
different from that contained in this Preliminary Supplement to
Official Statement and Prospectus or in the Official Statement
and Prospectus. We are offering to sell Series B Bonds and
seeking offers to buy Series B Bonds only in jurisdictions where
offers and sales are permitted. The information contained in
this Preliminary Supplement to Official Statement and Prospectus
or the Official Statement and Prospectus is accurate only as of
the date on the front of these documents, regardless of the time
of delivery of these documents or any sale of the Series B Bonds.
The Series B Bonds being remarketed are called the
"Remarketed Series B Bonds" in this Preliminary Supplement to
Official Statement and Prospectus. References to "the Company"
in this Preliminary Supplement to Official Statement and
Prospectus mean Intel Corporation and references to "the
Authority" mean the Puerto Rico Industrial, Tourist,
Educational, Medical and Environmental Control Facilities
Financing Authority.
<PAGE> S-2
RECENT DEVELOPMENTS
Effective September 30, 1998, Mr. Marcos Rodriguez-Ema
resigned from his position as President of the Government
Development Bank for Puerto Rico and membership of the Governing
Board of the Authority. Ms. Lourdes Rovira-Rizek was appointed
as his successor effective October 1, 1998.
THE SERIES B BONDS
The Series B Bonds are a series of the Bonds described in
the accompanying Official Statement and Prospectus. The
following description of the terms of the Series B Bonds
supplements, and to the extent inconsistent with replaces, the
description of the general terms and provisions of the Series B
Bonds in the Official Statement and Prospectus.
The Series B Bonds are limited to $30,000,000 principal
amount and will mature on December 1, 2013. The Series B Bonds
will bear interest at the rate of 3.90% per year from December 1,
1998 to and including November 30, 2003. The rate of interest on
the Series B Bonds for each of the five-year periods commencing
December 1, 2003 and December 1, 2008 shall equal the "Series B
Adjusted Interest Rate" (determined as described in the
accompanying Official Statement and Prospectus). Holders of the
Series B Bonds have the right to elect to have their Series B
Bonds redeemed on December 1, 2003 and December 1, 2008 at 100%
of the principal amount plus interest accrued to such December 1.
The election must be made by delivering such Series B Bonds to
the Trustee between November 1 and November 15 of the year for
which the election is being made. The Series B Bonds are subject
to optional and mandatory redemption by the Company, in the
manner described under "The Bonds--Series B Bonds" in the
accompanying Official Statement and Prospectus.
USE OF PROCEEDS
Intel will not receive any proceeds from the sale of the
Remarketed Series B Bonds. The proceeds will be applied only to
pay the purchase price for the Remarketed Series B Bonds in an
amount equal to the Series B Tender Redemption Price (as
described in the accompanying Official Statement and Prospectus)
for the Remarketed Series B Bonds.
UNDERWRITING
Upon the terms and subject to the conditions of the Bond
Purchase and Remarketing Agreement (the "Bond Purchase and
Remarketing Agreement") between the Company and NationsBanc
Montgomery Securities LLC (the "Underwriter"), the Underwriter
will agree to purchase and sell the Remarketed Series B Bonds
offered hereby.
The Bond Purchase and Remarketing Agreement will provide
that the obligations of the Underwriter are subject to the
approval of certain legal matters by counsel and the satisfaction
of various other conditions. The Bond Purchase and Remarketing
Agreement will also provide that the Underwriter is committed to
purchase all of the Remarketed Series B Bonds if any Remarketed
Series B Bonds are purchased by the Underwriter and that the
Underwriter will offer and sell such purchased Series B Bonds in
minimum principal amounts of $100,000.
The Underwriter proposes to offer the Remarketed Series B
Bonds directly to the public at the public offering price set
forth on the cover page of this Supplement to Official Statement
and Prospectus. After the initial public offering, the offering
price and other terms may be changed.
The table below shows the underwriting discounts on a per
Unit and aggregate basis.
<PAGE> S-3
<TABLE>
Per Unit Total
<S> <C> <C>
Price to Investors $ $
Underwriting Discounts $ $
Proceeds to Company --- ---
</TABLE>
The Underwriter may make a market for the Series B Bonds.
The Underwriter will not be obligated to do so and, if commenced,
such market making may be discontinued at any time.
In connection with the offering, the Underwriter may
purchase and sell the Series B Bonds in the open market. These
transactions may include over-allotment and stabilizing
transactions and purchases to cover short positions created by
the Underwriter in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose
of preventing or retarding a decline in the market price of the
Remarketed Series B Bonds, and short positions created by the
Underwriter involve the sale by the Underwriter of a greater
number of Series B Bonds than they are required to purchase in
the offering. These activities may stabilize, maintain or
otherwise affect the market price of the Remarketed Series B
Bonds, which may be higher than the price that might otherwise
prevail in the open market; and these activities, if commenced,
may be discontinued at any time. These transactions may be
effected in the over-the-counter market or otherwise.
The Underwriter will offer and sell the Remarketed Series B
Bonds to no more than thirty-five persons, each of whom has such
knowledge and experience in financial and business matters that
such purchaser is capable of evaluating the merits and risks of
the Remarketed Series B Bonds and is not purchasing for more than
one account or with a view to distribute the Series B Bonds. The
purchaser of Remarketed Series B Bonds, by its acceptance of
Remarketed Series B Bonds, acknowledges that such purchaser has
such knowledge and experience in financial business matters
referred to in this paragraph and that such purchaser is
purchasing for one account and not with a view to distributing
the Remarketed Series B Bonds.
The Company will agree to indemnify the Underwriter against
certain liabilities, including liabilities under the Securities
Act of 1933, as amended.
LEGAL MATTERS
Certain legal matters related to the sale of the Remarketed
Series B Bonds will be passed upon for the Company by Gibson,
Dunn & Crutcher LLP, San Francisco, California and Chapman and
Cutler, Chicago, Illinois for the Underwriter. Certain legal
matters incident to the tax-exempt status of the Remarketed
Series B Bonds will be passed upon by Brown & Wood LLP, New York,
New York, Bond Counsel.
EXPERTS
The consolidated financial statements of Intel Corporation
incorporated by reference in its Annual Report (Form 10-K) for
the year ended December 27, 1997 have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report
thereon incorporated therein and herein by reference. Such
consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.
<PAGE>
OFFICIAL STATEMENT AND PROSPECTUS
DATED AUGUST 19, 1998 NOT A NEW ISSUE
Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Financing Authority
Adjustable Rate Industrial Revenue Bonds, 1983 Series A and B
(Intel Corporation Project)
Price: 100% of Principal Amount
(Plus accrued interest, if any, from
September 1, 1998 or December 1, 1998, respectively)
---------------
The securities being offered hereby (the "Remarketed Bonds"),
which constitute a portion of the original issue of the above-
described securities, $80,000,000 principal amount of which were
issued on September 27, 1983 (the "Series A Bonds") and
$30,000,000 principal amount of which were issued on December 21,
1983 (the "Series B Bonds," and collectively with the Series A
Bonds, the "Bonds"), are being remarketed following the election
by certain holders of the Bonds to tender all or a portion of
such holders' Bonds for redemption pursuant to the terms of the
trust agreements under which the Bonds were originally issued and
the election by Intel Corporation ("Intel" or the "Company") to
cause the Bonds so tendered to be purchased and remarketed in
lieu of such redemption. See "Introductory Statement" and "Plan
of Remarketing." The Remarketed Bonds are being offered in
amounts, at prices and on terms to be set forth in supplements to
this Official Statement and Prospectus.
The Bonds are payable solely from, and are secured by, a pledge
of loan payments derived by the Puerto Rico Industrial, Tourist,
Educational, Medical and Environmental Control Facilities
Financing Authority (formerly Puerto Rico Industrial, Medical and
Environmental Pollution Control Facilities Financing Authority,
the "Authority") under loan agreements between the Authority and
INTEL CORPORATION [Logo]
The Bonds were originally issued as registered bonds without
coupons in denominations of $5,000 and integral multiples
thereof. Principal of the Bonds is payable at the corporate
trust office of Bankers Trust Company as Trustee in New York, New
York. Interest on the Series A Bonds (due March 1 and September
1) and Series B Bonds (due June 1 and December 1) is paid by
check of the Trustee mailed to the persons in whose name the
Bonds are registered on the Regular Record Date (as described
herein).
The Series A Bonds will bear interest at the "Series A Adjusted
Interest Rate" (determined as described herein) from September 1,
1998 to August 31, 2003, and the Series A Adjusted Interest Rate
will be reset as described herein on September 1, 2003 and
September 1, 2008. The Series B Bonds will bear interest at the
"Series B Adjusted Interest Rate" (determined as described
herein) from December 1, 1998 to November 30, 2003, and the
Series B Adjusted Interest Rate will be reset as described herein
on December 1, 2003 and December 1, 2008. Holders of the Bonds
have the right to elect to have their Bonds redeemed on September
1, 1998 for the Series A Bonds or December 1, 1998 for the Series
B Bonds and on such date of every fifth year thereafter to and
including such date in 2008 (each an "Optional Redemption Date")
at par plus interest accrued to such Optional Redemption Date, in
the manner described herein. Such election must be made by
delivering such Bonds to the Trustee between August 1 and August
15 in the case of the Series A Bonds, or between November 1 and
November 15 in the case of the Series B Bonds, of the year in
which the option is being exercised.
The Bonds are subject to optional and mandatory redemption prior
to maturity as described herein.
The Bonds do not constitute an indebtedness of either the
Commonwealth of Puerto Rico or any of its political subdivisions,
and neither the Commonwealth of Puerto Rico nor any of such
political subdivisions shall be liable thereon.
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS OFFICIAL STATEMENT AND PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Dated: August 19, 1998
<PAGE> 2
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in
accordance therewith, files reports and other information with
the Securities and Exchange Commission (the "Commission").
Reports, proxy and information statements and other information
filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth
Street N.W., Judiciary Plaza, Washington, DC 20549, and at
certain of its Regional Offices located at: Seven World Trade
Center, New York, New York 10048, and 500 West Madison Street,
Chicago. Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission, 450 Fifth
Street N.W., Judiciary Plaza, Washington, DC 20549 at prescribed
rates and its public reference facilities in New York, New York
and Chicago, Illinois on payment of prescribed charges. In
addition, the Company is required to file electronic versions of
these documents with the Commission through the Commission's
Electronic Data Gathering, Analysis and Retrieval ("EDGAR")
system. The Commission maintains a World Wide Web site at
http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file
electronically via EDGAR with the Commission. The Company's
Common Stock is quoted on the Nasdaq National Market, and such
reports, proxy and information statements and other information
concerning the Company can also be inspected at the offices of
The Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington,
DC 20006.
The Company has filed with the Commission a registration
statement on Form S-3 (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"),
relating to the Remarketed Bonds. This Prospectus does not
contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission and the exhibits
relating thereto, which have been filed with the Commission.
Copies of the Registration Statement and the exhibits are on file
at the offices of the Commission and may be obtained upon payment
of the fees prescribed by the Commission, or examined without
charge at the public reference facilities of the Commission
described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended
December 27, 1997, the Company's Quarterly Reports on Form 10-Q
for the quarters ended March 28, 1998 and June 27, 1998 and the
Company's Current Reports on Form 8-K filed with the Commission
on January 1, 1998, March 5, 1998, March 6, 1998, April 15, 1998,
and July 16, 1998 are incorporated in this Prospectus by
reference and made a part hereof.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Registration Statement and prior to the
filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to
be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Official Statement
and Prospectus to the extent that a statement contained herein or
in any subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute
a part of this Official Statement and Prospectus.
The Company will provide without charge to each person, including
any beneficial owner, to whom a copy of the Official Statement
and Prospectus has been delivered, and who makes a written or
oral request, a copy of any and all of the foregoing documents
incorporated by reference in the Registration Statement,
excluding exhibits to such documents unless such exhibits are
specifically incorporated by reference into such documents.
Requests should be directed to: F. Thomas Dunlap, Esq.,
Secretary, Intel Corporation, 2200 Mission College Boulevard.
Santa Clara, California 95052-8119 (telephone number: (408) 765-
8080).
<PAGE> 3
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICES OF THE OFFERED SECURITIES. SPECIFICALLY, THE UNDERWRITERS
MAY BID FOR AND PURCHASE THE OFFERED SECURITIES IN THE OPEN
MARKET.
No dealer, salesman or other person has been authorized to give
any information or to make any representations other than those
contained in this Official Statement and Prospectus (including
the material incorporated herein by reference) and, if given or
made, such information or representations must not be relied upon
as having been authorized by the Authority, Intel or the
Underwriter. This Official Statement and Prospectus relates only
to the Remarketed Bonds offered hereby and may not be used or
relied on in connection with any other offer or sale of
securities of the Company. Neither the delivery of this Official
Statement and Prospectus nor any sale made hereunder shall under
any circumstances create an implication that there has been no
change in the affairs of the Authority or Intel since the date
hereof. This Official Statement and Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy
the securities covered by this Official Statement and Prospectus
by anyone in any state in which such offer or solicitation is not
authorized or in which the person making such offer or
solicitation is not qualified to do so or to anyone to whom it is
unlawful to make such offer or solicitation.
INTRODUCTORY STATEMENT
This Official Statement and Prospectus is being provided to
furnish information in connection with the remarketing of certain
Adjustable Rate Industrial Revenue Bonds, l983 Series A and
Series B (Intel Corporation Project) originally issued by the
Authority on September 27, 1983 and December 21, 1983,
respectively. The Remarketed Bonds being offered hereby
constitute a portion of the $80,000,000 original issue of Series
A Bonds issued by the Authority pursuant to a trust agreement
dated as of September 1, 1983 (the "Series A Trust Agreement") or
the $30,000,000 original issue of Series B Bonds issued by the
Authority pursuant to a trust agreement dated as of December 1,
1983 (the "Series B Trust Agreement" and collectively with the
Series A Trust Agreement, the "Trust Agreements"), both between
the Authority and Bankers Trust Company, as Trustee (the
"Trustee"). The proceeds of the Bonds were loaned to the Company
pursuant to loan agreements between the Company and the Authority
dated as of September 1, 1983 (the "Series A Loan Agreement") and
December 1, 1983 (the "Series B Loan Agreement" and collectively
with the Series A Loan Agreement, the "Loan Agreements"),
respectively. Effective September 1, 1998, as contemplated by
the Series A Trust Agreement, the interest rate on the Series A
Bonds will be adjusted, and effective December 1, 1998, as
contemplated by the Series B Trust Agreement, the interest rate
on the Series B Bonds will be adjusted.
<PAGE> 4
THE COMPANY
Intel Corporation (together with its subsidiaries, unless the
context otherwise requires, "Intel" or the "Company") designs,
develops, manufactures and markets computer components and
related products at various levels of integration. Intel's
principal components consist of silicon-based semiconductors
etched with complex patterns of transistors. Many of these
integrated circuits can perform the functions of millions of
individual transistors, diodes, capacitors and resistors.
The Company's major products include microprocessors, chipsets,
graphics products, embedded processors and microcontrollers,
flash memory products, network and communications products,
conferencing products and digital imaging products. Intel sells
its products to original equipment manufacturers (OEMs) of
computer systems and peripherals; PC users, who buy Intel's PC
enhancements, business communications products and networking
products through reseller, retail and OEM channels; and other
manufacturers, including makers of a wide range of industrial and
telecommunications equipment.
A microprocessor is the central processing unit (CPU) of a
computer system. It processes system data and controls other
devices in the system, acting as the brains of a computer.
Intel's developments in the area of semiconductor design and
manufacturing have made it possible to decrease the feature size
of circuits etched into silicon. This permits a greater number of
transistors to be used on each microprocessor die, and a greater
number of microprocessors to be placed on each silicon wafer. The
result is smaller, faster microprocessors that consume less power
and cost less to manufacture. Intel's flagship microprocessors
include: the Pentium(R) II processor, a high performance
processor for desktop, mobile, server and workstation systems;
the Intel(R) Celeron(TM) processor, a processor providing a base
level of functionality for entry-level desktop computing
requirements, the recently introduced Pentium(R) II Xeon(TM)
processor and the Pentium(R) Pro processor, high performance
processors designed for server and workstation systems; and the
Pentium(R) processor with MMX(TM) technology, the first processor
to incorporate Intel's media enhancement technology for improved
performance on media-rich applications.
Chipsets perform essential logic functions surrounding the CPU
and support and extend the graphic, video and other capabilities
of Intel(R) processor-based computer systems. The Company's core-
logic chipsets support incremental performance, ease-of-use and
new capabilities for systems based on the Company's
microprocessors. Intel's graphics products are designed to
enhance visual computing, providing higher-performance three
dimensional graphics, two dimensional graphics and video
capabilities. Embedded products such as microprocessors,
microcontrollers and memory components are used in products such
as industrial PCs, point-of-sales terminals, telecommunications
equipment, automobile engine and braking systems, hard disk
drives, laser printers, input/output control modules, home
appliances, factory automation control products and medical
instrumentation. Flash memory products retain information when
the power is off, and provide easily reprogrammable memory for
computers, mobile phones and many other products. Intel's
networking and communication products are designed to help reduce
the total cost of networked business computing by providing high-
bandwidth communications to PC desktop and server systems, and
making it easier for local area network (LAN) administrators to
install and manage their systems. Intel's conferencing and
digital imaging products include video and data conferencing
products for the desktop and meeting rooms, and products such as
the Intel Create & Share(TM) camera pack, a PC communications,
photo and video editing package.
The Company conducts worldwide operations principally in the
United States, Israel, Western Europe, the Asia Pacific region
and Japan. At June 27, 1998, the Company employed approximately
66,700 people worldwide, of which approximately 2,500 people were
employed in Puerto Rico. In August 1998, the Company informed
employees in Puerto Rico that the Company expects to reduce
headcount in Puerto Rico by approximately 500 to 700 people over
the next year, as part of its overall efforts to make its
manufacturing facilities more cost competitive. The actual size
of the reduction will be affected by a variety of factors,
including employee retirements and attrition, employee transfers,
and business conditions. The Company's principal executive
offices are located at 2200 Mission College Boulevard, Santa
Clara, California 95052, and its telephone number there is (408)
765-8080.
<PAGE> 5
<TABLE>
RATIOS OF EARNINGS TO FIXED CHARGES
Six
Years Ended Months
Ended
- -------- -------- -------- -------- -------- --------
Dec. 25, Dec. 31, Dec. 30, Dec. 28, Dec. 27, June 27,
1993 1994 1995 1996 1997 1998
- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
54x 39x 68x 108x 206x 139x
</TABLE>
USE OF PROCEEDS
Intel will not receive any proceeds from the sale of the
Remarketed Bonds. Such proceeds will be applied solely to pay
the purchase prices for the Remarketed Bonds in an amount equal
to the Series A Tender Redemption Price (as described under "The
Bonds--Series A Bonds--Redemption at the Option of the Holder")
or the Series B Tender Redemption Price (as described under "The
Bonds--Series B Bonds--Redemption at the Option of the Holder"),
respectively.
The Authority loaned the proceeds of the initial sale of the
Bonds to the Company. The Company used approximately $70,000,000
of the Bond proceeds to pay a portion of the costs (including
financing costs) of the acquisition, construction and equipping
of manufacturing and support facilities in Las Piedras, Puerto
Rico, by wholly owned subsidiaries of the Company (the
"Project"). The Company used approximately $40,000,000 of the
Bond proceeds to refund principal and accrued interest on a prior
bond issuance of 9-1/2% Industrial Revenue Bonds, 1982 Series A
(Intel Corporation Project), in the principal amount of
$40,000,000 due March 1, 1987 (the "1982 Bonds"). The 1982 Bonds
were issued to provide initial financing for a portion of the
costs of the Project.
<PAGE> 6
THE AUTHORITY
The Authority
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority (formerly
Puerto Rico Industrial, Medical and Environmental Pollution
Control Facilities Financing Authority, the "Authority") is a
body corporate and politic constituting a public corporation and
governmental instrumentality of Puerto Rico. The Legislature of
Puerto Rico determined that the development and expansion of
commerce, industry, health services and education within Puerto
Rico are essential to the economic growth of Puerto Rico and to
attain full employment and preserve the health, welfare, safety
and prosperity of all its citizens. The Legislature also
determined that adequate higher educational facilities were
needed for the academic training and improvement of the citizens
of Puerto Rico. The Authority was created under Act No. 121 of
the Legislature of Puerto Rico, approved June 27, 1977, as
amended (the "Act"), for the purpose of promoting the economic
development, health, welfare and safety of the citizens of Puerto
Rico. The Authority is authorized to borrow money through the
issuance of revenue bonds and to loan the proceeds thereof to
finance the acquisition, construction and equipping of
industrial, tourist, medical, educational, pollution control and
solid waste disposal facilities. Any such bonds, other than the
Bonds, would be issued pursuant to trust agreements or
resolutions separate from and unrelated to the Trust Agreements
and would be payable from sources other than payments under the
Loan Agreements. The Authority has no taxing power.
The offices of the Authority are located at Government
Development Bank for Puerto Rico, Minillas Government Center,
Santurce, Puerto Rico 00940. The Authority's telephone number is
(787) 722-4060.
Governing Board
The Act provides that the governing board of the Authority (the
"Governing Board") shall consist of seven members. The President
of Government Development Bank for Puerto Rico (the "Bank"), the
Executive Director of the Puerto Rico Industrial Development
Company, the Executive Director of Puerto Rico Aqueduct and Sewer
Authority, the President of the Puerto Rico Environmental Quality
Board and the Executive Director of the Puerto Rico Tourism
Company are each ex officio members of the Governing Board. The
remaining two members of the Governing Board are appointed by the
Governor of the Commonwealth of Puerto Rico (the "Commonwealth")
for terms of four years. The following individuals are the
current members of the Governing Board:
<TABLE>
Name Position Term Occupation
- ---- -------- ---- ----------
<S> <C> <C> <C>
Marcos Rodriguez- Chairman Indefinite President,
Ema Government
Development Bank
for Puerto Rico
Jaime Morgan Member Indefinite Executive
Stubbe Director, Puerto
Rico Industrial
Development
Company
Perfecto Ocasio Member Indefinite Executive
Director, Puerto
Rico Aqueduct and
Sewer Authority
Hector Russe- Member Indefinite President, Puerto
Martinez Rico
Environmental
Quality Board
Jorge Davila Member Indefinite Executive
Torres Director, Puerto
Rico Tourism
Company
Jose Salas Soler Member October 22, 2001 Attorney-at-Law
James Thordsen Member June 27, 2002 President, James
Thordsen, Inc.
</TABLE>
The Act provides that the affirmative vote of four members is
sufficient for any action taken by the Governing Board.
<PAGE> 7
The following individuals are currently officers of the
Authority:
Lourdes Rovira Rizek, Executive Director of the Authority, is
also Executive Vice President of the Bank. Ms. Rovira Rizek has
been associated with the Bank since 1996. She received a
bachelor's degree in Business Administration from the University
of Puerto Rico in 1972. Prior to her appointment at the Bank,
she was the chief financial officer of the University of Puerto
Rico system.
Velmarie Berlingeri, Assistant Executive Director of the
Authority, is also a Vice President of the Bank. Ms. Berlingeri
has been associated with the Bank since 1993. She received a
Bachelor of Science in Business Administration degree from the
University of Puerto Rico in 1982. Prior to her appointment, she
worked in the investment area of a major private sector
corporation in Puerto Rico.
Delfina Betancourt-Capo, Secretary and General Counsel of the
Authority, is also Senior Vice President and General Counsel of
the Bank. Ms. Betancourt has been associated with the Bank since
1987. She received a law degree from Cornell University in 1982.
Outstanding Revenue Bonds and Notes of the Authority
As of December 31, 1997, the Authority had revenue bonds and
notes issued and outstanding in the principal amount of
approximately $2.2 billion. All such bond and note issues, other
than the Bonds, have been authorized and issued pursuant to trust
agreements or resolutions separate from and unrelated to the
Trust Agreements and are payable from sources other than the
payments under the Loan Agreements.
Under the Act, the Authority may issue additional bonds and notes
from time to time to finance industrial, tourist, educational,
medical, environmental control or solid waste facilities.
However, any such bonds and notes would be authorized and issued
pursuant to other trust agreements or resolutions separate from
and unrelated to the Trust Agreements and would be payable from
sources other than the payments under the Loan Agreements.
Government Development Bank for Puerto Rico
As required by Act No. 272 of the Legislature of Puerto Rico,
approved May 15, 1945, as amended, the Government Development
Bank for Puerto Rico (the "Bank") has acted as a financial
advisor to the Authority in connection with the issuance and sale
of the Bonds. Certain underwriters have been selected by the
Bank to serve from time to time as underwriters of its
obligations and the obligations of the Commonwealth, its
instrumentalities and public corporations or participate in other
financial transactions with the Bank. See "Underwriting" in the
applicable Supplement to this Official Statement and Prospectus.
The Bank is a public corporation with varied governmental
financial functions. Its principal functions are to act as
financial advisor to and fiscal agent for the Commonwealth, its
municipalities and its public corporations in connection with the
issuance of bonds and notes and to make advances to public
corporations.
<PAGE> 8
The descriptions and summaries under the captions "The Bonds",
"The Loan Agreements" and "The Trust Agreements" do not purport
to be complete and are subject to and qualified by reference to
the provisions of the Loan Agreements and Trust Agreements,
copies of which have been filed with the Commission and are
incorporated by reference as exhibits to the Registration
Statement of which this Official Statement and Prospectus is a
part. Capitalized terms used in these summaries and not defined
herein have the same meanings as in such documents.
THE BONDS
SERIES A BONDS
The Series A Bonds were issued in an aggregate principal amount
of $80,000,000. The Series A Bonds are dated September 1, 1983
and will mature on September 1, 2013. Interest on the Series A
Bonds is payable semiannually on March 1 and September 1 of each
year, by check mailed to the persons who are registered holders
thereof at the close of business on the preceding February 15 or
August 15 (each a "Regular Record Date"), as the case may be.
The Series A Bonds bear interest at the rate per annum set forth
on the cover page of the applicable Supplement to this Official
Statement and Prospectus through August 31, 2003, and thereafter
as described below under "Adjustment of Interest Rate." The
principal of the Series A Bonds will be payable at the corporate
trust office of the Trustee in New York, New York.
The Series A Bonds were issued as registered bonds without
coupons in denominations of $5,000 or any integral multiple
thereof. The transfer of any Series A Bond may be registered at
the corporate trust office of the Trustee in New York, New York.
The Authority or the Trustee may make a reasonable charge for
such registration of transfer sufficient to reimburse it for the
preparation of each new Series A Bond and for any tax, fee or
other governmental charge required to be paid by the holder
requesting the transfer as a condition precedent to the exercise
of the privilege. Neither the Authority nor the Trustee is
required to make an exchange or register a transfer (other than a
registration of transfer to the Company or its assignees in
connection with a purchase in lieu of a redemption at the option
of a holder as described herein) of any Series A Bond during the
15 days prior to the date the Trustee first gives notice of
redemption or after such Series A Bond or portion thereof has
been selected for redemption.
Adjustment of Interest Rate
The adjusted interest rate (the "Series A Adjusted Interest
Rate") for each five-year period commencing on September 1, 1998,
September 1, 2003 and September 1, 2008 will be a rate
established by the Company on the August 1 or, if such August 1
is not a business day, on the next succeeding business day (the
"Series A Determination Date") preceding each such September 1
which, in the judgment of the Company, such judgment to be
exercised in its sole discretion, would have resulted in the sale
of the Series A Bonds at par on the Series A Determination Date;
provided, however, that the Series A Adjusted Interest Rate shall
not be less than the interest rate established by Standard &
Poor's J.J. Kenny through its index for prime five-year municipal
obligations as of a date not more than 30 days prior to the
Series A Determination Date. If such index is unavailable, then
the Company and the Authority shall by written agreement
establish an alternative method for determining the minimum
Series A Adjusted Interest Rate, which alternative method may be
changed from time to time by written agreement between the
Company and the Authority if the chosen alternative becomes
unavailable. In no event shall the Series A Adjusted Interest
Rate exceed the maximum rate permitted by law, even if such
maximum rate is less than the minimum Series A Adjusted Interest
Rate determined as described above.
On or before the August 2 or, if such August 2 is not a business
day, on the next succeeding business day following each Series A
Determination Date, the Company will notify the Trustee of the
Series A Adjusted Interest Rate for the five-year period
commencing on the next succeeding September 1. The Trustee will
cause notice of such Series A Adjusted Interest Rate to be mailed
by first-class mail to each Bondholder on or before the third
business day following such Series A Determination Date.
<PAGE> 9
Redemption at the Option of the Holder
Bondholders have the option to have their Series A Bonds redeemed
in whole or in part (in integral multiples of $5,000) by the
Trustee (unless purchased by the Company or its assignee as
provided below) on September 1, 1998, September 1, 2003 and
September 1, 2008 (each being a "Series A Tender Redemption
Date"), at 100% of the principal amount thereof (the "Series A
Tender Redemption Price") plus accrued interest to the Series A
Tender Redemption Date, without premium. All Series A Bonds to
be so redeemed must be delivered to the corporate trust office of
the Trustee in New York, New York, between 10:00 A.M., New York
time, on August 1 and 4:00 P.M., New York time, on August 15 or,
if such August 15 is not a business day, on the next succeeding
business day preceding any Series A Tender Redemption Date, with
a properly completed and signed "Option to Elect Repayment" in
the form attached to each such Series A Bond.
The Trustee's determination, in its sole discretion, as to
whether an Option to Elect Repayment has been properly completed,
executed and delivered shall be binding on the Company, and any
assignee of the Company, the Authority and the Bondholder. The
delivery of a Series A Bond shall be irrevocable and binding upon
the Bondholder.
The Company or its assignee has the right, at any time during the
10-day period prior to a Series A Tender Redemption Date, to
elect to purchase on the Series A Tender Redemption Date, at a
price equal to the Series A Tender Redemption Price, all or any
part (in integral multiples of $5,000) of the Series A Bonds
which are properly delivered to the Trustee for redemption. As a
condition to the exercise of its right to purchase such Series A
Bonds, the Company or its assignee must deposit with the Trustee
moneys, designated by the Company to be used for the purchase of
Series A Bonds, in an amount sufficient to pay such purchase
price.
Payment of the Series A Tender Redemption Price or the purchase
price to a holder delivering Series A Bonds shall be made by
check mailed by the Trustee to the address appearing on the
Option to Elect Repayment. Accrued interest will be paid in the
same manner as regular interest payments.
Series A Bonds purchased by the Company or its assignee will
remain outstanding under the Series A Trust Agreement and may be
held, resold, delivered to the Trustee for cancellation or
otherwise disposed of by the Company upon terms and conditions
established by the Company.
Redemption at the Option of the Company
The Series A Bonds are subject to redemption prior to maturity at
the option of the Company in whole or in part on September 1,
1998, September 1, 2003 and September 1, 2008, at 100% of the
principal amount thereof plus accrued interest to the redemption
date.
Extraordinary Optional Redemption
The portion of the Series A Bonds allocable to a Phase of the
Project (as defined in the Series A Loan Agreement) will be
subject to redemption prior to maturity at the option of the
Company at any time at 100% of the principal amount thereof plus
accrued interest to the redemption date in the event that:
(a) Such Phase shall have been damaged or destroyed to
such an extent that in the opinion of this Company it cannot
be reasonably restored or repaired within a period of six
months, or the Company is thereby prevented or will likely
be prevented from causing its normal operation for a period
of six months or more, or its restoration and repair would
not be economically feasible; or
(b) Use or control of such Phase shall have been taken
under the exercise of the power of eminent domain to such an
extent that the Company is, or in its opinion would likely
be, thereby prevented from causing the normal operation of
such Phase for a period of six months or more; or
(c) As a result of any change in the Constitution or
laws of the United States of America or the Commonwealth or
of legislative or administrative action of the United States
of
<PAGE> 10
America or the Commonwealth or any political subdivision of
the Commonwealth, or any judicial action or regulatory
action or inaction, in the opinion of the Company, the
Series A Loan Agreement or the Series A Trust Agreement, or
any material provision thereof, shall have become void or
unenforceable or impossible of performance in any material
respect, use or occupancy of all or a significant part of
such Phase shall have been legally curtailed for six months
or more, or unreasonable burdens or excessive liabilities
with respect to such Phase or the Series A Bonds shall have
been imposed; or
(d) Changes in the economic availability of materials,
supplies, labor, equipment and other properties and things
necessary for the efficient operation of such Phase shall
have occurred, or technological, legal or other changes
shall have occurred, any of which, in the opinion of the
Company, renders the continued operation of such Phase
impractical or not economically feasible.
The portion of the Series A Bonds allocable to a Phase of the
Project shall be the amount of Series A Bond proceeds and
proceeds of the 1982 Bonds expended on such Phase. The Company
must exercise its option to redeem Series A Bonds pursuant to the
preceding paragraph within 180 days after the occurrence of the
event giving rise to such option.
Extraordinary Mandatory Redemption
The Series A Bonds are subject to mandatory redemption at any
time, in whole (or in part, if such partial redemption will
preserve the exemption from Federal income taxation of interest
on such Series A Bonds), at a redemption price equal to the
principal amount thereof, without premium, plus accrued interest
to the redemption date, upon a determination that, through a
final judgment or decree of a court of competent jurisdiction or
assessment by the Internal Revenue Service, the interest payable
on any Series A Bond must be included for Federal income tax
purposes in the gross income of any holder of such Series A Bond
as a result of a change in the legal status of the Commonwealth
or of a failure by the Company to observe any covenant,
agreement, representation or warranty in the Series A Loan
Agreement; provided, however, that no decree or judgment by any
court or assessment by the Internal Revenue Service shall be
considered final unless the Bondholder or Bondholders involved in
such proceeding (i) give the Company prompt notice of the
commencement thereof and (ii) offer the Company the opportunity
to control the proceeding, provided the Company agrees to pay all
expenses in connection therewith and to indemnify such Bondholder
or Bondholders against all liabilities in connection therewith,
and unless such proceeding shall not be subject to a further
right of appeal. Any such redemption shall be made within 180
days from the date of such final decree, judgment or assessment.
If the construction or operation of any Phase of the Project
ceases, then the portion of the Series A Bonds allocable to such
Phase (as described below) will be subject to mandatory
redemption at 100% of the principal amount thereof plus interest
accrued to the redemption date, which shall be any date selected
by the Company occurring not more than 180 days after cessation
of construction or operation of such Phase.
A cessation of construction or operation of a Phase of the
Project shall not be deemed to have occurred (i) until receipt by
the Trustee of written notice from the Authority stating that at
least 30 days have elapsed since written notice has been given to
the Company by the Authority that construction or operation of
such Phase has ceased and the Company has not demonstrated to the
satisfaction of the Authority that such Phase is being
constructed or operated as Industrial Facilities within the
meaning of the Act or the Company is, in good faith, seeking to
cause the resumption of an economically reasonable construction
or operation of such Phase as Industrial Facilities, or (ii)
until receipt by the Authority and the Trustee of written notice
from the Company stating that construction or operation of such
Phase has ceased and that the Company has no present intention of
causing the resumption of construction or operation of such Phase
as Industrial Facilities or of seeking, in good faith, to cause
the resumption of an economically reasonable construction or
operation of such Phase as Industrial Facilities. Cessation of
construction or operation of the Project as a result of Force
Majeure (as defined in the Series A Loan Agreement) shall not
give rise to a mandatory redemption during the continuance
thereof including a reasonable time for the removal of the effect
thereof.
The applicable portion of the Series A Bonds to be redeemed upon
cessation of construction or operation of a Phase of the Project
shall equal (i) the amount of Series A Bond proceeds and proceeds
of the 1982 Bonds
<PAGE> 11
expended on the Phase of the Project, the construction or
operation of which has ceased, less (ii) such amount as the
Company or any of its subsidiaries has expended since the date of
the execution and delivery of the loan agreement relating to the
1982 Bonds, or thereby undertakes to expend, to provide
Industrial Facilities in the Commonwealth from other than the
proceeds of bonds or notes of the Authority, all as set forth at
the option of the Company in a certificate delivered to the
Authority and the Trustee and less (iii) the principal amount of
Series A Bonds theretofore redeemed, provided that the amounts
described in (ii) and (iii) have not previously been used in
determining the applicable amount of Series A Bonds required to
be redeemed upon cessation of construction or operation of a
Phase of the Project.
Notice of Redemption; Partial Redemption
Notice of any redemption (other than a redemption at the option
of a holder) of the Series A Bonds shall be mailed to Bondholders
at least 25 days before the redemption date. Any notice of a
redemption of Series A Bonds at the option of the Company may
state that the redemption is conditioned upon receipt of moneys
for such redemption by the Trustee prior to the redemption date
and that if such moneys are not received, the redemption of the
Series A Bonds for which notice was given shall not be made.
If less than all the Series A Bonds are called for redemption,
the particular Series A Bonds to be redeemed shall be selected by
the Trustee by lot or by such other equitable method as the
Trustee shall deem fair and appropriate. For purposes of such
selection, each Series A Bond shall be treated as representing
the number of Series A Bonds obtained by dividing the principal
amount of such Series A Bond by $5,000. If part of a Series A
Bond is called for redemption, the Trustee shall deliver, without
charge, a new Series A Bond representing the unredeemed portion
to the holder thereof.
Presentment for Payment
Interest on Series A Bonds called for redemption ceases to accrue
on the redemption date if sufficient funds for payment of such
redemption are on deposit with the Trustee. If any Series A
Bonds are not properly presented for payment on the date fixed
for their redemption or if any bonds are not properly presented
for payment when due, the holders of such Series A Bonds will
thereafter be restricted to funds held by the Trustee for such
redemption or payment for the satisfaction of any claim relating
to such Series A Bonds. After two years, such moneys shall be
paid to the Company and the holders shall thereafter look only to
the Company for payment.
Security for the Series A Bonds
The Authority, in the Series A Trust Agreement, assigned and
pledged to the Trustee for the benefit of the Bondholders the
Authority's right, title and interest in the Series A Loan
Agreement, subject to the Authority's retention of certain rights
(including the right to collect moneys payable to the Authority
which are not received in respect of repayment of the loan), as
security for the payment of the Series A Bonds and the interest
thereon and as security for the satisfaction of any other
obligation assumed in connection with the Series A Bonds.
The Series A Bonds are limited obligations of the Authority and,
except to the extent payable from Series A Bond proceeds and the
investment thereof, will be payable solely from and secured by a
pledge and assignment of the amounts payable in repayment of the
loan made by the Authority to the Company.
The Series A Bonds are not secured by any mortgage or other
security interest in the Project or any property of the Company
or its subsidiaries.
SERIES B BONDS
The Series B Bonds were issued in an aggregate principal amount
of $30,000,000. The Series B Bonds are dated December 1, 1983
and will mature on December 1, 2013. Interest on the Series B
Bonds is payable semiannually on June 1 and December 1 of each
year, by check mailed to the persons who are registered holders
thereof at the close of business on the preceding May 15 or
November 15 (each a "Regular Record Date"), as the case may be.
The Series B Bonds will bear interest at the rate per annum set
forth on the cover page of the applicable Supplement to this
Official Statement and Prospectus through November 30, 2003, and
thereafter as
<PAGE> 12
described below under "Adjustment of Interest Rate". The
principal of the Series B Bonds will be payable at the corporate
trust office of the Trustee in New York, New York. In lieu of
payment of principal or interest by check, the Trustee may agree
to make such payment to any institutional holder of all the
Series B Bonds by other means acceptable to the Trustee and such
holder.
The Series B Bonds were issued as registered bonds without
coupons in denominations of $5,000 or any integral multiple
thereof. The transfer of any Series B Bond may be registered at
the corporate trust office of the Trustee in New York, New York.
The Authority or the Trustee may make a reasonable charge for
such registration of transfer sufficient to reimburse it for the
preparation of each new Series B Bond and any tax or other
governmental charge required to be paid by the holder requesting
the transfer as a condition precedent to the exercise of the
privilege. Neither the Authority nor the Trustee is required to
make an exchange or register a transfer (other than a
registration of transfer to the Company or its assignees in
connection with a purchase in lieu of a redemption at the option
of a holder as described herein) of any Series B Bond during the
15 days prior to the date the Trustee first gives notice of
redemption or after such Series B Bond or portion thereof has
been selected for redemption.
Adjustment of Interest Rate
The adjusted interest rate (the "Series B Adjusted Interest
Rate") for each five-year period commencing on December 1, 1998,
December 1, 2003 and December 1, 2008 will be a rate established
by the Company on the November 1 or, if such November 1 is not a
business day, on the next succeeding business day (the "Series B
Determination Date") preceding each such December 1 which, in the
judgment of the Company, such judgment to be exercised in its
sole discretion, would have resulted in the sale of the Series B
Bonds at par on the Series B Determination Date; provided,
however, that the Series B Adjusted Interest Rate shall not be
less than the interest rate established by Standard & Poor's J.J.
Kenny through its index for prime five-year municipal obligations
as of a date not more than 30 days prior to the Series B
Determination Date. If such index is unavailable, then the
Company and the Authority shall by written agreement establish an
alternative method for determining the minimum Series B Adjusted
Interest Rate, which alternative method may be changed from time
to time by written agreement between the Company and the
Authority if the chosen alternative becomes unavailable. In no
event shall the Series B Adjusted Interest Rate exceed the
maximum rate permitted by law, even if such maximum rate is less
than the minimum Series B Adjusted Interest Rate determined as
described above.
On or before the November 2 or, if such November 2 is not a
business day, on the next succeeding business day following each
Series B Determination Date, the Company will notify the Trustee
of the Series B Adjusted Interest Rate for the five-year period
commencing on the next succeeding December 1. The Trustee will
cause notice of such Series B Adjusted Interest Rate to be mailed
by first-class mail to each Bondholder on or before the third
business day following such Series B Determination Date.
Redemption at the Option of the Holder
Bondholders have the option to have their Series B Bonds redeemed
in whole or in part (in integral multiples of $5,000) by the
Trustee (unless purchased by the Company or its assignee as
provided below) on December 1, 1998, December 1, 2003 and
December 1, 2008 (each being a "Series B Tender Redemption
Date"), at 100% of the principal amount thereof (the "Series B
Tender Redemption Price") plus accrued interest to the Series B
Tender Redemption Date, without premium. All Series B Bonds to
be so redeemed must be delivered to the corporate trust office of
the Trustee in New York, New York, between 10:00 A.M., New York
time, on the November 1 and 4:00 P.M., New York time, on the
November 15 preceding any Series B Tender Redemption Date, or, if
such November 15 is not a business day, on the next succeeding
business day, with a properly completed and signed Option to
Elect Repayment in the form attached to each such Series B Bond.
The Trustee's determination, in its sole discretion, as to
whether an Option to Elect Repayment has been properly completed,
executed and delivered shall be binding on the Company, any
assignee of the Company, the Authority and the Bondholder. The
delivery of a Series B Bond shall be irrevocable and binding upon
the Bondholder.
The Company or its assignee has the right, at any time during the
10-day period prior to a Series B Tender Redemption Date, to
elect to purchase on the Series B Tender Redemption Date, at a
price equal to the Series B Tender Redemption Price, all or any
part (in integral multiples of $5,000) of the Series B Bonds
which are properly
<PAGE> 13
delivered to the Trustee for redemption. As a condition to the
exercise of its right to purchase such Series B Bonds, the
Company or its assignee must deposit with the Trustee moneys,
designated by the Company to be used for the purchase of Series B
Bonds, in an amount sufficient to pay such purchase price.
Payment of the Series B Tender Redemption Price or the purchase
price to a holder delivering Series B Bonds shall be made by
check mailed by the Trustee to the address appearing on the
Option to Elect Repayment. Accrued interest will be paid in the
same manner as regular interest payments.
Series B Bonds purchased by the Company or its assignee will
remain outstanding under the Series B Trust Agreement and may be
held, resold, delivered to the Trustee for cancellation or
otherwise disposed of by the Company upon terms and conditions
established by the Company, all in accordance with the Series B
Trust Agreement.
Redemption at the Option of the Company
The Series B Bonds are subject to redemption prior to maturity at
the option of the Company in whole or in part on December 1,
1998, December 1, 2003 and December 1, 2008, at 100% of the
principal amount thereof plus interest accrued to the redemption
date.
Extraordinary Optional Redemption
The portion of the Series B Bonds allocable to a Phase of the
Project (as defined in the Series B Loan Agreement) will be
subject to redemption prior to maturity at the option of the
Company at any time at 100% of the principal amount thereof plus
interest accrued to the redemption date in the event that:
(a) Such Phase shall have been damaged or destroyed to
such an extent that in the opinion of this Company it cannot
be reasonably restored or repaired within a period of six
months, or the Company is thereby prevented or will likely
be prevented from causing its normal operation for a period
of six months or more, or its restoration and repair would
not be economically feasible; or
(b) Use or control of such Phase shall have been taken
under the exercise of the power of eminent domain to such an
extent that the Company is, or in its opinion would likely
be, thereby prevented from causing the normal operation of
such Phase for a period of six months or more; or
(c) As a result of any change in the Constitution or
laws of the United States of America or the Commonwealth or
of legislative or administrative action of the United States
of America or the Commonwealth or any political subdivision
of the Commonwealth, or any judicial action or regulatory
action or inaction, in the opinion of the Company, the
Series B Loan Agreement or the Series B Trust Agreement, or
any material provision thereof, shall have become void or
unenforceable or impossible of performance in any material
respect, use or occupancy of all or a significant part of
such Phase shall have been legally curtailed for six months
or more, or unreasonable burdens or excessive liabilities
with respect to such Phase or the Series B Bonds shall have
been imposed; or
d) Changes in the economic availability of materials,
supplies, labor, equipment and other properties and things
necessary for the efficient operation of such Phase shall
have occurred, or technological, legal or other changes
shall have occurred, any of which, in the opinion of the
Company, render the continued operation of such Phase
impractical or not economically feasible.
The portion of the Series B Bonds allocable to a Phase of the
Project shall be the amount of Series B Bond proceeds expended on
such Phase. The Company must exercise its option to redeem
Series B Bonds pursuant to the preceding paragraph within 180
days after the occurrence of the event giving rise to such
option.
<PAGE> 14
Extraordinary Mandatory Redemption
The Series B Bonds are subject to mandatory redemption at any
time, in whole (or in part, if such partial redemption will
preserve the exemption from Federal income taxation of interest
on such Series B Bonds), at a redemption price equal to the
principal amount thereof, without premium, plus interest accrued
to the redemption date, upon a determination that, through a
final judgment or decree of a court of competent jurisdiction or
assessment by the Internal Revenue Service, the interest payable
on any Series B Bond must be included for Federal income tax
purposes in the gross income of any holder of such Series B Bond
as a result of a change in the legal status of the Commonwealth
or of a failure by the Company to observe any covenant,
agreement, representation or warranty in the Loan Agreement;
provided, however, that no decree or judgment by any court or
assessment by the Internal Revenue Service shall be considered
final unless the Bondholder or Bondholders involved in such
proceeding (i) give the Company prompt notice of the commencement
thereof and (ii) offer the Company the opportunity to control the
proceeding, provided the Company agrees to pay all expenses in
connection therewith and to indemnify such Bondholder or
Bondholders against all liabilities in connection therewith, and
unless such proceeding shall not be subject to a further right of
appeal. Any such redemption shall be made within 180 days from
the date of such final decree, judgment or assessment.
If the construction or operation of any Phase of the Project
ceases, then the portion of the Series B Bonds allocable to such
Phase (as described below) will be subject to mandatory
redemption at 100% of the principal amount thereof plus interest
accrued to the redemption date, which shall be any date selected
by the Company occurring not more than 180 days after cessation
of construction or operation of such Phase.
A cessation of construction or operation of a Phase of the
Project shall not be deemed to have occurred (i) until receipt by
the Trustee of written notice from the Authority stating that at
least 30 days have elapsed since written notice has been given to
the Company by the Authority that construction or operation of
such Phase has ceased and the Company has not demonstrated to the
satisfaction of the Authority that such Phase is being
constructed or operated as Industrial Facilities within the
meaning of the Act or the Company is, in good faith, seeking to
cause the resumption of an economically reasonable construction
or operation of such Phase as Industrial Facilities, or (ii)
until receipt by the Authority and the Trustee of written notice
from the Company stating that construction or operation of such
Phase has ceased and that the Company has no present intention of
causing the resumption of construction or operation of such Phase
as Industrial Facilities or of seeking, in good faith, to cause
the resumption of an economically reasonable construction or
operation of such Phase as Industrial Facilities. Cessation of
construction or operation of a Phase of the Project as a result
of Force Majeure (as defined in the Series B Loan Agreement)
shall not give rise to a mandatory redemption during the
continuance thereof including a reasonable time for the removal
of the effect thereof.
The applicable portion of the Series B Bonds to be redeemed upon
cessation of construction or operation of a Phase of the Project
shall equal (i) the amount of Series B Bond proceeds expended on
the Phase of the Project the construction or operation of which
has ceased, less (ii) such amount as the Company or any of its
subsidiaries has expended since the date of the execution and
delivery of the loan agreement relating to the 1982 Bonds, or
thereby undertakes to expend, to provide Industrial Facilities in
the Commonwealth from other than the proceeds of bonds or notes
of the Authority, all as set forth at the option of the Company
in a certificate delivered to the Authority and the Trustee and
less (iii) the principal amount of Series B Bonds theretofore
redeemed (other than by operation of the extraordinary mandatory
redemption provisions relating to redemption upon a cessation of
construction or operation of a Phase of the Project), provided
that the amounts described in (ii) and (iii) have not previously
been used in determining the applicable amount of Series B Bonds
required to be redeemed upon cessation of construction or
operation of a Phase of the Project.
Notice of Redemption; Partial Redemption
Notice of any redemption (other than a redemption at the option
of a holder) of the Series B Bonds shall be mailed to Bondholders
at least 25 days before the redemption date.
If less than all the Series B Bonds are called for redemption,
the particular Series B Bonds to be redeemed shall be selected by
the Trustee by lot or by such other equitable method as the
Trustee shall deem fair and appropriate. For purposes of such
selection, each Series B Bond shall be treated as representing
the number of Series B Bonds obtained by dividing the principal
amount of such Series B Bond by $5,000. If part of a Series B
<PAGE> 15
Bond is called for redemption, the Trustee shall deliver, without
charge, a new Series B Bond representing the unredeemed portion
to the holder thereof.
Presentment for Payment
Interest on Bonds called for redemption ceases to accrue on the
redemption date if sufficient funds for payment of such
redemption are on deposit with the Trustee. If any Series B
Bonds are not properly presented for payment on the date fixed
for their redemption or if any Bonds are not properly presented
for payment when due, the holders of such Series B Bonds will
thereafter be restricted to funds held by the Trustee for such
redemption or payment for the satisfaction of any claim relating
to such Series B Bonds. After two years, such moneys shall be
paid to the Company and the Bondholders shall thereafter look
only to the Company for payment.
Security for the Series B Bonds
The Authority, in the Series B Trust Agreement, assigned and
pledged to the Trustee for the benefit of the Bondholders the
Authority's right, title and interest in the Series B Loan
Agreement, subject to the Authority's retention of certain rights
(including the right to collect moneys payable to the Authority
which are not received in respect of repayment of the loan), as
security for the payment of the Series B Bonds and the interest
thereon and as security for the satisfaction of any other
obligation assumed in connection with the Series B Bonds.
The Series B Bonds are limited obligations of the Authority and,
except to the extent payable from Series B Bond proceeds and the
investment thereof, will be payable solely from and secured by a
pledge and assignment of the amounts payable in repayment of the
loan made by the Authority to the Company.
The Series B Bonds are not secured by any mortgage or other
security interest in the Project or any property of the Company
or its subsidiaries.
THE LOAN AGREEMENTS
Pursuant to the Loan Agreements, the Authority issued the Bonds
and loaned the proceeds (excluding any accrued interest) to the
Company (Sec. 4.01). The Company agreed to make payments
directly to the Trustee which, together with amounts then held in
the Bond Fund established under the Trust Agreements, are
sufficient to make the payments of principal of and interest on
the Bonds as the same become due (Sec. 4.01). The obligations of
the Company to make such payments under the Loan Agreements are
stated to be absolute and unconditional without right of set-off
for any reason (Sec. 4.02).
The Authority has assigned all its rights under the Loan
Agreements (except for rights to payment of certain costs and
expenses and indemnity and except for certain other limited
rights) to the Trustee (Sec. 6.02). The Project may be sold,
leased or otherwise transferred or encumbered as a whole or in
part without the consent of the Authority and the proceeds
thereof retained by the Company, and the Company may assign the
Loan Agreements but no such sale, lease, transfer, encumbrance or
assignment will relieve the Company of its obligations to make
payments under the Loan Agreements sufficient to pay principal of
and interest on the Bonds as the same become due (Sec. 6.01).
Construction of the Project
The Company was obligated under the Loan Agreements to complete
the Project, except under certain specified circumstances,
substantially in accordance with the Project plans and
specifications and with all reasonable dispatch, and to pay all
of the costs thereof in excess of moneys available in the
Construction Fund (hereinafter defined) without any right of
reimbursement or diminution in, or postponement of, amounts
payable under the Loan Agreements (Secs. 3.01, 3.02 and 3.05).
The Company has completed the Project in accordance with these
requirements.
<PAGE> 16
Further Agreements
The Company has agreed, as long as the Project is operated, to
cause the Project to be maintained and operated as Industrial
Facilities within the meaning of the Act (Sec. 4.04). The
Company has also agreed to notify the Authority and the Trustee
in writing in the event that the construction or operation of any
phase of the Project has ceased. (Sec. 4.04)
The Company has agreed that so long as any Bonds are outstanding,
it will not dispose of all or substantially all of its assets and
will not consolidate or merge into another corporation unless the
successor or transferee irrevocably and unconditionally assumes
in writing all the obligations of the Company under the Loan
Agreements (Sec. 5.01).
In the Loan Agreements, the Company has also agreed to indemnify
the Authority against losses, as provided therein, arising from
the operation of the Project or the Authority's participation in
the financing (Sec. 4.06) and will agree to pay the reasonable
fees and expenses of the Authority and the Trustee (Sec. 4.05).
Events of Default and Remedies
Each of the following is an Event of Default under the Loan
Agreements:
(a) Failure by the Company to pay the amounts required
to be paid with respect to principal of the Bonds when the
same shall become due and payable at maturity, upon
redemption or otherwise;
(b) Failure by the Company to pay the amounts required
to be paid with respect to interest on the Bonds when the
same shall become due and payable and the continuation of
such failure for a period of five days;
(c) Failure by the Company to make any other payments
required by the Loan Agreement when due and continuation of
such failure for 30 days after written notice thereof;
(d) Failure by the Company to observe and perform any
other agreements under the respective Loan Agreement and
continuation of such failure for 90 days after written
notice thereof; provided, however, that if such failure
cannot be corrected within such 90-day period, it shall not
constitute an Event of Default if corrective action is
instituted by the Company during such period and diligently
pursued until such failure is corrected; or
(e) Certain events of bankruptcy, liquidation,
reorganization or similar proceedings involving the Company
(Sec. 7.01).
The provisions of subsections (c) and (d) of the preceding
paragraph are subject to the following limitations: if by reason
of Force Majeure (as defined in the Loan Agreements) the Company
is unable to perform any of its agreements thereunder, except the
obligation to make payments sufficient to pay principal of and
interest on the Bonds and the obligation to maintain its
corporate existence, the Company shall not be deemed in default
during the continuance of such inability, including a reasonable
time for the removal of the effect thereof (Sec. 7.01).
The Authority has no power to waive any default under the Loan
Agreements without the consent of the Trustee. Under certain
circumstances, if a default shall be wholly cured, it shall be
automatically waived (Sec. 7.05).
Upon the occurrence of any of the foregoing Events of Default,
the Trustee, as assignee of the Authority, may declare all unpaid
amounts payable under the Loan Agreements to be immediately due
and payable, and may take any action at law or equity necessary
to enforce any obligation of the Company under the Loan
Agreements, but the Trustee shall take no remedial steps which
would entitle it to funds necessary for the payment of unmatured
principal and interest on the Bonds unless such principal and
interest has been declared due and payable in accordance with the
respective Trust Agreement and such declaration has not been
rescinded (Sec. 7.02).
<PAGE> 17
Prepayment of the Loan
The Company has the option to prepay all or a portion of amounts
it may be required to pay under the Loan Agreements. The Company
is obligated to prepay the principal and accrued interest on all
the outstanding Bonds (or such lesser amount as is required to
preserve the exemption from Federal income tax applicable to the
Bonds) in certain circumstances including a change in the legal
status of the Commonwealth or a failure of the Company to observe
any covenant, agreement, representation or warranty in the Loan
Agreements which result in the interest payable on the Bonds
being includable in gross income for Federal income tax purposes
(Secs. 8.01 and 8.02).
Amendment
Neither Loan Agreement may be effectively amended, changed,
modified, altered or terminated except in accordance with the
provisions of the related Trust Agreement (Sec. 9.11). See "The
Trust Agreements--Amendments and Supplements to the Loan
Agreements."
THE TRUST AGREEMENTS
Each Trust Agreement constitutes an assignment by the Authority
to the Trustee of all of the Authority's right, title and
interest in the related Loan Agreement (except for rights to
payment of certain costs and expenses and indemnity and except
for certain other limited rights) in trust as security for the
payment of the principal of and interest on the Bonds. No
additional bonds may be issued under the Trust Agreements.
Construction Fund
The proceeds of the initial sale of the Bonds, other than accrued
interest and the amounts transferred to the Trustee for the 1982
Bonds in order to refund such 1982 Bonds, were deposited in the
Construction Fund established under the Trust Agreements (Secs.
208 and 401). Payments were made from the Construction Fund upon
requisition by the Company to pay costs of the Project, as
defined in the Trust Agreements (Secs. 403 and 404).
Bond Fund
A Bond Fund has been established with the Trustee under each
Trust Agreement which has been used for the payment of the
principal of and interest on the Bonds. The Trustee may also use
moneys in the Bond Fund, at the direction of the Company, to
purchase Bonds (Secs. 501 and 503).
Investment of Funds
Pending their application, moneys held in the Construction Fund
and the Bond Fund may, at the direction of the Company, be
invested as provided in the Trust Agreements in obligations
issued or unconditionally guaranteed by the United States of
America or agencies acting as instrumentalities of the United
States of America pursuant to authority granted by Congress, in
time deposits, certificates of deposits or similar arrangements
(including Eurodollar certificates of deposit) with the Trustee
or any bank or an affiliate of such bank which bank or affiliate
together with such bank has reported capital and surplus of not
less than $50,000,000 and reported deposits of not less than
$250,000,000 and which has been designated by the Secretary of
the Treasury of the Commonwealth as a depository for public
funds, in repurchase agreements with respect to any of the above
investments, in bankers' acceptances (other than those of the
Company) issued by or drawn on and accepted by the Trustee or by
any commercial bank organized under the laws of the United States
of America or any state thereof which is a member of the Federal
Deposit Insurance Corporation having reported capital and surplus
of not less than $50,000,000 and reported deposits of not less
than $250,000,000, in commercial paper (other than of the
Company) of the highest rating by Moody's Investors Service, Inc.
or Standard & Poor's Corporation and in any other investment or
security to the extent permitted by applicable law. Any
investment income or loss resulting from investment of moneys in
any Fund shall be credited or charged to such Fund. Neither the
Trustee nor the Authority shall be responsible or liable for any
loss resulting from such investment (Sec. 602).
<PAGE> 18
Events of Default and Remedies
Each of the following is an Event of Default under the Trust
Agreements:
(a) Failure to pay principal of any of the Bonds when
the same shall become due and payable, either at maturity or
by proceedings for redemption or otherwise;
(b) Failure to pay any installment of interest on any
of the Bonds within five days after the same shall become
due and payable; or
(c) The occurrence of any Event of Default under the
respective Loan Agreement (Sec. 802).
If any Event of Default shall have occurred and be continuing,
the Trustee may, and upon the written request of the holders of
not less than 25% in aggregate principal amount of all Bonds then
outstanding shall, declare the principal of all Bonds then
outstanding to be due and payable immediately (Sec. 803). In
addition, the Trustee may, and upon the written request of the
holders of not less than 50% in aggregate principal amount of all
Bonds then outstanding shall, pursue any available remedy at law
or in equity to enforce the payment of the principal of and
interest on the bonds then outstanding or to enforce the
performance of any provision of the respective Trust Agreement or
of the respective Loan Agreement (Sec. 804). The Trustee may
require indemnification before taking any remedial action under
the Trust Agreements or the Loan Agreements (Sec. 902).
The Trustee may, and upon the direction of the holders of not
less than a majority in aggregate principal amount of all Bonds
then outstanding shall, annul any acceleration of principal and
interest and its consequences at any time before final action in
any proceeding instituted as a result of an Event of Default if
there is then a sufficient amount in the Bond Fund to pay the
principal of and all arrears of interest on all Bonds on which
the same is due otherwise than by acceleration and interest on
overdue installments of interest at the rate then borne by the
Bonds (adjusted as such rate is adjusted), if all costs and
expenses of the Trustee and the Authority have been paid or
provided for and if all existing events of default known to the
Trustee have been remedied (Sec. 803).
The holders of a majority in principal amount of all Bonds then
outstanding shall have the right to direct the time, method and
place of conducting all remedial proceedings to be taken by the
Trustee (Sec. 808). No Bondholder shall have any right to pursue
any remedy under the Trust Agreements unless (i) such holder
gives to the Trustee written notice of an Event of Default, (ii)
the holders of not less than 25% in aggregate principal amount of
all Bonds then outstanding make a written request to the Trustee
to pursue such remedy, (iii) an offer is made to the Trustee of
reasonable security and indemnity against costs, expenses and
liabilities, and (iv) the Trustee does not comply with such
request within a reasonable time (Sec. 809).
Under the Trust Agreements, the Trustee is required to mail to
Bondholders notices of any uncured default under the Trust
Agreements, provided the Trustee may withhold notice of any
default caused by the failure of the Company to observe or
perform any covenant, condition or agreement in the Loan
Agreements other than a covenant, condition or agreement relating
to payment if it determines that withholding such notice is in
the interest of the Bondholders (Sec. 815).
Amendments and Supplements to the Trust Agreements
The Trust Agreements may be amended or supplemented at any time
without the consent or approval of, or notice to, any of the
Bondholders (except that where all the Bonds are held by a single
Bondholder, such Bondholder shall receive such notice) for
purposes of (a) curing any ambiguity or formal defect or omission
in the Trust Agreement, (b) granting to or conferring upon the
Trustee for the benefit of the Bondholders additional rights,
remedies, powers, authority or security, (c) correcting any
description of, or reflecting changes in, any properties
comprising the Project, (d) providing for uncertificated Bonds in
addition to certificated Bonds or (e) adding to the covenants of
the Authority for the benefit of the Bondholders or surrendering
any right or power conferred upon the Authority by the Trust
Agreements (Sec. 1101).
The Trust Agreements may be amended or supplemented in all other
respects only with the consent of the holders of not less than a
majority in aggregate principal amount of the Bonds at the time
outstanding except that no such amendment or supplement may (a)
extend the time for payment of the principal of or interest on
any Bonds,
<PAGE> 19
(b) reduce the principal or the relevant Tender Redemption Price
of or the rate of interest on, or change the method of
calculating such rate of interest on, any Bonds, or reduce the
time period during which a holder may demand its Bond be
redeemed, (c) create any lien or security interest with respect
to the Loan Agreements or the payments thereunder, (d) permit a
preference or priority of any Bond or Bonds over any other Bond
or Bonds or (e) reduce the aggregate principal amount of the
Bonds at the time outstanding which is required for consent to
any supplemental agreement or amendment or any waiver under the
Trust Agreements (Sec. 1102). The Authority may fix in advance a
record date for the determination of the Bondholders entitled to
consent to an amendment or supplement (Sec. 1001). The Trustee
shall not be obligated to execute any proposed supplement or
amendment if its rights, obligations or interests would be
thereby affected (Sec. 1104). Any supplemental trust agreement
will not become effective without the written consent of the
Company (Sec. 1105).
Amendments and Supplements to the Loan Agreements
The Loan Agreements may not be amended or supplemented without
the approval of the holders of not less than a majority in
aggregate principal amount of the Bonds outstanding except, with
the consent of the Trustee, (a) to cure any ambiguity or formal
defect or omission, (b) to identify more precisely the Project or
to make permitted changes in the plans and specifications
thereof, (c) to grant to the Authority or the Trustee additional
rights, remedies, powers, authority or security for the benefit
of the Bondholders or (d) to add to the covenants of the Company
for the benefit of the Bondholders or to surrender any right or
power conferred upon the Company by the Loan Agreements (Sec.
1201 and 1202). No amendment shall be consented to by the
Trustee which would (1) decrease the amount payable on the Bonds,
(2) change the date of payment or prepayment provisions of the
Bonds or (3) change Section 4.01 of the Loan Agreements regarding
repayment of the loans by the Company; and no amendment shall be
consented to by the Trustee which affects the rights of some but
less than all the outstanding Bonds without the consent of the
holders of at least 66-2/3% in aggregate principal amount of the
Bonds so affected (Sec. 1202). The Authority may fix in advance
a record date for the determination of the Bondholders entitled
to consent to an amendment or supplement (Sec. 1001). The
Trustee shall not be obligated to consent to any amendment or
supplement if its rights, obligations or interests would thereby
be affected (Sec. 1202).
Defeasance
The Bonds shall be deemed paid and no longer outstanding under
the Trust Agreements and the lien of the Trust Agreements shall
be discharged upon the irrevocable deposit with the Trustee, in
trust, of moneys, or Government Obligations (as defined in the
Trust Agreements), designated by the Company to be used for the
purpose of defeasing the Bonds, the principal of and the interest
on which Government Obligations when due (without any
reinvestment thereof) will be sufficient to pay when due the
principal of and interest due and to become due on the Bonds.
If the Bonds are not to be redeemed or do not mature within 60
days after such deposit, the Trustee shall mail notice to the
Bondholders that such deposit has been made (Sec. 1301).
TAX MATTERS
Under provisions of the Acts of Congress in force on the
respective dates of issuance of the Bonds, the Bonds and the
interest thereon are, in the opinion of Brown & Wood LLP, exempt
from Federal, State, Commonwealth and local taxation.
In the opinion of Brown & Wood LLP, Bond Counsel, the purchase
and remarketing of the Bonds as described in the Registration
Statement will not constitute a new issue of the Authority and
will not cause the interest on the Bonds to become includable in
gross income for Federal income tax purposes or to become treated
as a specific preference item for purposes of the Federal
individual or corporate alternative minimum tax, nor has any
other statutory or regulatory event intervening between the
original issuance of the Bonds in 1983 and the purchase and
remarketing of the Bonds as contemplated herein caused the
interest on the Bonds to become includable in gross income for
Federal income tax purposes or to become treated as a specific
preference item for purposes of the Federal individual or
corporate alternative minimum tax; provided, however, that such
interest will be included in the computation of the Federal
alternative minimum tax imposed on corporations. Ownership of
tax-exempt obligations such as the Bonds may result in collateral
Federal income tax consequences to certain taxpayers, including,
without
<PAGE> 20
limitation, financial institutions, property and casualty
insurance companies, certain foreign corporations doing business
in the United States, certain S corporations with excess passive
income, individual recipients of Social Security or Railroad
Retirement Benefits, taxpayers who may be deemed to have incurred
or continued indebtedness to purchase or carry tax-exempt
obligations and taxpayers who may be deemed eligible for the
earned income tax credit. Prospective purchasers of the Bonds
should consult their tax advisors as to the applicability and
impact of any such collateral consequences. A purchaser of the
Bonds must amortize any bond premium for purposes of adjusting
such purchaser's basis in the Bonds. The bond premium is an
amount equal to the excess of the amount paid for the Bonds over
the amount payable on maturity of the Bonds (or the amount
payable on an earlier call date if it results in a smaller bond
premium attributable to the period to the earlier call date). No
deduction, however, is allowed for such amortization of bond
premium. Further, upon a subsequent sale or redemption of the
Bonds for an amount in excess of the purchase price of the Bonds,
a purchaser of the Bonds at a discount from their par value may
have taxable ordinary income to the extent the excess proceeds
received do not exceed the accrued market discount and taxable
capital gain to the extent of any additional excess proceeds.
Brown & Wood LLP is of the opinion that under existing statutes,
regulations, rulings, and judicial decisions, all Federal income
tax consequences material to a purchaser of the Bonds are
addressed in its opinions included in the Registration Statement
of which this Official Statement and Prospectus is a part and in
this Official Statement and Prospectus under the heading "Tax
Matters."
LEGAL INVESTMENT
The Bonds are eligible for deposit by banks in the Commonwealth
to secure public funds and are approved investments for insurance
companies to qualify them to do business in the Commonwealth as
required by law.
PLAN OF REMARKETING
Upon the terms and subject to the conditions of the applicable
Bond Purchase and Remarketing Agreement (the "Bond Purchase and
Remarketing Agreement") between the Company and an underwriter or
underwriters to be designated (collectively, the "Underwriter"),
the Underwriter will agree to purchase and sell one or both of
the series of Remarketed Bonds offered hereby.
The Bond Purchase and Remarketing Agreement will provide that the
obligations of the Underwriter are subject to the approval of
certain legal matters by counsel and the satisfaction of various
other conditions. The Bond Purchase and Remarketing Agreement
will also provide that the Underwriter is committed to purchase
all of a series of the Remarketed Bonds if any Remarketed Bonds
of a series are purchased by the Underwriter.
The Underwriter will offer the Remarketed Bonds directly to the
public at the public offering price set forth on the cover page
of the applicable Supplement to this Official Statement and
Prospectus. After the initial public offering, the offering
price and other terms may be changed.
The Underwriter may make a market for the Bonds. The Underwriter
will not be obligated to do so and, if commenced, such market
making may be discontinued at any time.
The Company will agree to indemnify the Underwriter against
certain liabilities, including liabilities under the Securities
Act.
<PAGE> 21
LEGAL MATTERS
Certain legal matters related to the sale of the Remarketed Bonds
will be passed upon for the Company by Gibson, Dunn & Crutcher
LLP, San Francisco, California and for the Underwriter by counsel
to be designated. Certain legal matters incident to the tax-
exempt status of the Remarketed Bonds will be passed upon by
Brown & Wood LLP, New York, New York, Bond Counsel.
EXPERTS
The consolidated financial statements of Intel Corporation
incorporated by reference in its Annual Report (Form 10-K) for
the year ended December 27, 1997 have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report
thereon incorporated therein and herein by reference. Such
consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.
<PAGE>
INTEL [Logo]
____________
$
____________
Puerto Rico Industrial,
Tourist, Educational, Medical
and
Environmental Control
Facilities Financing Authority
Adjustable Rate Industrial
Revenue Bonds,
1983 Series B
(Intel Corporation Project)
____________
____________
PRELIMINARY
SUPPLEMENT TO
OFFICIAL STATEMENT
AND
PROSPECTUS
____________
NATIONSBANC MONTGOMERY
SECURITIES LLC
November, 1998
