The Limited, Inc., and Consolidated Subsidiaries - Page 11

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               On November 19, 1992, by letter agreement (the letter                  
          agreement), WFNNB appointed Merrill, Lynch, Pierce, Fenner &                
          Smith, Inc. (Merrill Lynch), as its agent for its customers who             
          desired to purchase CDs.  The letter agreement provided that the            
          CDs would be sold in denominations of $100,000 or integral                  
          multiples thereof.                                                          
               During December 1992 and January 1993, WFNNB, acting through           
          its agent, Merrill Lynch, sold 17 CDs, receiving $26.3 million.             
          Those 17 CDs comprised 263 “transferable individual time deposit            
          accounts” of $100,000 each.  Each of those accounts was insured             
          by the Federal Deposit Insurance Corp.                                      
               MFE (Netherlands Antilles) N.V. (MFE N.V.), is a Netherlands           
          Antilles corporation.  On January 28, 1993, MFE N.V. purchased              
          eight CDs from WFNNB in the total amount of $174.9 million (the             
          MFE N.V. CDs).  Each MFE N.V. CD was for a term of 1 year, showed           
          an annual interest rate of 3.1 percent (annual yield of                     
          3.14 percent), and provided that it was a “non-negotiable and               
          non-transferable time deposit”.  Each also provided:  “This Time            
          Deposit shall renew automatically for a like term unless and                
          until notice of withdrawal is presented at the Bank within * * *            
          seven calendar days after the maturity date”.                               
          Reduction of Indebtedness to Limited Service                                
               On January 28, 1993, WFNNB transferred the $174.9 million              
          received from MFE N.V. on the sale of the CDs to Limited Service            

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