<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 13, 1995
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
District of Columbia l-7102 52-0891669
(state or other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) (Identification No.)
Woodland Park, 2201 Cooperative Way, Herndon, VA 22071-3025
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703)709-6717
____________________________________________________________
(Former name or former address, if changed since last report)
<PAGE>
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Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(c) Exhibits
The following exhibit is filed herewith:
1.1 An Agency Agreement dated April 13, 1995 between the
Company and the Agents named therein, relating to the
distribution of the Company's Medium-Term Notes, Series
C, within the United States.
10.1 Calculation Agent Agreement dated April 13, 1995
between the Company and Lehman Brothers Inc., as
Calculation Agent.
<PAGE>
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION
/s/ STEVEN L. LILLY
Steven L. Lilly
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Dated: April 13, 1995
<PAGE>
<PAGE> 4 EXECUTION COPY
U.S. $448,240,000
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
Medium-Term Notes, Series C
AGENCY AGREEMENT
April 13, 1995
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
World Headquarters
World Financial Center, North Tower
New York, New York 10281
Dear Sirs:
National Rural Utilities Cooperative Finance
Corporation, a District of Columbia cooperative association (the
"Company"), confirms its agreement with each of you
(individually, an "Agent" and, collectively, the "Agents") with
respect to the issue and sale by the Company of up to U.S.
$448,240,000* aggregate principal amount of its Medium-Term
Notes, Series C (the "Securities"). The Securities are to be
issued from time to time pursuant to an Indenture, dated as of
December 15, 1987 (as supplemented by a First Supplemental
Indenture dated as of October 1, 1990, and as it may be
supplemented or amended from time to time, the "Indenture"),
between the Company and Harris Trust and Savings Bank, as
successor trustee (the "Trustee").
Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell
Securities directly on its own behalf at any time, and to any
person, and to designate or select additional agents, the Company
hereby appoints the Agents as the exclusive agents of the Company
for the purpose of soliciting or receiving offers to purchase the
Securities from the Company by others. This Agreement shall only
apply to sales of the Securities on original issuance and not to
<PAGE> 5
sales of any other securities or evidences of indebtedness of the
Company and only on the specific terms set forth herein.
SECTION 1. Representations and Warranties. The
Company represents and warrants to each Agent as of the date
hereof, as of the Closing Date referred to in Section 2(f) hereof
and as of the times referred to in Sections 6(a) and 6(b) hereof
(the Closing Date and each such time being hereinafter sometimes
referred to as a "Representation Date"), as follows:
(a) Registration Statement and Prospectus. The
Company has filed with the Securities and Exchange Commission
(the "Commission") Registration Statements on Form S-3
Nos. 33-50463 and 33-58445 for the registration under the
Securities Act of 1933 (the "Act") of the Securities (including a
prospectus relating to the registration statements) and has filed
and may file one or more amendments thereto (including one or
more amended or supplemental prospectuses) and such registration
statements and any such amendments have become effective. A
prospectus supplement dated April 13, 1995, relating to the
Securities and to the registration statements, including a
prospectus (together, the "Prospectus"), has been prepared and
will be filed pursuant to Rule 424 of the rules and regulations
of the Commission (the "Rules and Regulations") under the Act.
Such registration statements, including financial statements and
exhibits, at the times they became effective under the Act, as
amended and supplemented (including all documents incorporated
therein by reference), are hereinafter called the Registration
Statement or the Registration Statements, as the context
requires. Any reference in this Agreement to the Prospectus as
amended or supplemented shall include, without limitation, any
prospectus filed with the Commission pursuant to Rule 424 of the
Rules and Regulations which amends or supplements the Prospectus.
Any reference herein to the Registration Statements or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934 (the
"Exchange Act") on or before the effective date of such Regis-
tration Statement or the date of such Prospectus, as the case may
be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statements or the
Prospectus shall be deemed to refer to and include the filing of
any document under the Exchange Act after the respective
effective date of such Registration Statement, or the date of any
Prospectus, as the case may be, and deemed to be incorporated
therein by reference.
(b) Accuracy of Registration Statements. The
Registration Statements (and the Registration Statements as
amended if any post-effective amendment thereof shall have become
effective) each comply in all material respects with the
provisions of the Act and the Exchange Act and the Rules and
Regulations and do not contain an untrue statement of a material
fact and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein not
<PAGE> 6
misleading; and the Prospectus (and the Prospectus as amended or
supplemented, if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) fully complies with
the provisions of the Act and the Exchange Act and the Rules and
Regulations and does not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that none of the representations
and warranties in this paragraph (b) shall apply to (i) that part
of either Registration Statement which shall constitute the
Statement of Eligibility (Form T-1) under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), of the Trustee
or (ii) statements in, or omissions from, either Registration
Statement or the Prospectus or any amendment thereof or supple-
ment thereto made in reliance upon and in conformity with infor-
mation furnished in writing to the Company by or on behalf of an
Agent for use in connection with the preparation of such
Registration Statement or the Prospectus or any such amendment or
supplement.
(c) Accountants. The accountants who have certified
or shall certify the financial statements filed and to be filed
with the Commission as parts of the Registration Statements and
the Prospectus are independent with respect to the Company as
required by the Act and the Rules and Regulations.
(d) Due Incorporation. The Company has been duly
incorporated and is a validly existing cooperative association in
good standing under the laws of the District of Columbia, duly
qualified and in good standing in each jurisdiction in which the
ownership or leasing of properties or the conduct of its business
requires it to be qualified (or the failure to be so qualified
will not have a material adverse effect upon the business or
condition of the Company), and the Company has the corporate
power and holds all valid permits and other required
authorizations from governmental authorities necessary to carry
on its business as now conducted and as to be conducted on the
Closing Date and any Representation Date, and as contemplated by
the Prospectus.
(e) Material Changes. Since the respective dates as
of which information is given in each Registration Statement and
the Prospectus, and except as set forth in the Prospectus, there
has not been any material adverse change in the condition,
financial or other, or the results of operations of the Company,
whether or not arising from transactions in the ordinary course
of business.
(f) Litigation. Except as set forth in the
Prospectus, the Company does not have any litigation pending of a
character which in the opinion of counsel for the Company
referred to in Section 5(f) hereof could result in a judgment or
decree having a material adverse effect on the condition,
financial or other, or the results of operations of the Company.
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(g) Legality. The Securities and the Indenture are
duly and validly authorized, and no further authorization,
consent or approval of the members and no further authorization
or approval of the Board of Directors of the Company or any
committee thereof is required for the issuance and sale of the
Securities as contemplated herein; and neither such issuance or
sale of Securities nor the consummation of any other of the
transactions herein contemplated will conflict with, result in
the creation or imposition of any lien, charge or encumbrance
upon any of the assets of the Company or will result in a breach
by the Company of any terms of, or constitute a default under,
any other agreement or undertaking of the Company; and except as
required by the Act, the Trust Indenture Act, the Exchange Act
and applicable state securities laws, no consent, authorization
or order of, or filing or registration with, any court or
governmental agency is required for the execution, delivery and
performance by the Company of the transactions contemplated by
this Agreement, each applicable Purchase Agreement (as defined in
Section 11), if any, or the Indenture. The Securities and the
Indenture conform in all material respects to the descriptions
thereof contained in the Prospectus. Each Security delivered or
sold hereunder will constitute, as of such delivery or sale, the
legal, valid and binding obligation of the Company enforceable in
accordance with its terms and will be entitled to the benefits of
the Indenture and the terms of such Security will have been
approved by the Governor or the Chief Financial Officer of the
Company.
(h) No Stop Order. The Commission has not issued and,
to the best knowledge of the Company, is not threatening to issue
any order preventing or suspending the use of the Prospectus (as
amended or supplemented, if the Company shall have filed with the
Commission any amendment thereof or supplement thereto).
(i) Regulation. The Company is not required to be
registered as an investment company under the Investment Company
Act of 1940 and is not subject to regulation under the Public
Utility Holding Company Act of 1935.
SECTION 2. Solicitations as Agent. (a) On the basis
of the representations and warranties contained herein, but
subject to the terms and conditions herein set forth, each Agent
agrees, as an agent of the Company, to use its best efforts to
solicit offers to purchase the Securities upon the terms and
conditions set forth in the Prospectus. Neither Agent shall
otherwise employ, pay or compensate any other person to solicit
offers to purchase the Securities or to perform any of its func-
tions as Agent without the prior written consent of the Company,
which consent shall not be unreasonably withheld, except that
Lehman Brothers Inc. may solicit offers to purchase Securities
through its indirect wholly-owned subsidiary, Lehman Government
Securities Inc., which affiliate shall in such capacity be
treated together with Lehman Brothers Inc. as an Agent hereunder.
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(b) The Company reserves the right, in its sole
discretion, to suspend solicitation by the Agents in their
capacities as Agents of offers to purchase the Securities from
the Company commencing at any time for any period of time or
permanently. Upon receipt of at least one business day's prior
notice from the Company, the Agents will forthwith suspend
solicitation of offers to purchase Securities from the Company
until such time as the Company has advised the Agents that such
solicitation may be resumed.
(c) Promptly upon the closing of the sale of any
Securities sold by the Company as a result of a solicitation made
by an Agent, the Company agrees to pay such Agent a commission in
accordance with the schedule set forth in Exhibit A hereto.
(d) The Agents are authorized to solicit offers to
purchase the Securities only in denominations of U.S.
$1,000or any amount in excess thereof which is an
integral multiple thereof, at a purchase price equal to 100% of
the principal amount thereof or such other amount as shall be
specified by the Company. Each Agent shall communicate to the
Company, in accordance with the Procedures (as defined below),
each reasonable offer to purchase Securities received by it as an
Agent other than those rejected by such Agent. The Company shall
have the sole right to accept offers to purchase the Securities
and may reject any such offer in whole or in part. Each Agent
shall have the right, in its discretion reasonably exercised
without advising the Company, to reject any offer to purchase the
Securities received by it, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained
herein.
(e) Administrative procedures respecting the sale of
Securities (the "Procedures") shall be agreed upon from time to
time by the appropriate representatives of each Agent and the
Company. The Procedures initially shall include those procedures
set forth in Exhibit B hereto. Each Agent and the Company agree
to perform the respective duties and obligations specifically
provided to be performed by each of them herein and in the
Procedures.
(f) The documents required to be delivered by
Section 5 hereof shall be delivered at the office of Milbank,
Tweed, Hadley & McCloy, One Chase Manhattan Plaza, New York, New
York 10005, not later than 10:00 A.M., New York City time, on the
date of this Agreement or at such later time as may be mutually
agreed upon by the Company and the Agents (the "Closing Date").
<PAGE> 9 SECTION 3. Covenants of the Company. The Company
covenants and agrees:
(a) to furnish promptly to each Agent and to its
counsel, without charge, a signed copy of Registration Statement
No. 33-58445 as filed with the Commission and each amendment or
supplement thereto, and a copy of each Prospectus thereafter
filed with the Commission, including all supplements thereto and,
upon request of such Agent, all documents incorporated therein by
reference and all consents and exhibits filed therewith;
(b) to deliver promptly to the Agents such number of
the following documents as they may request:
(i) conformed copies of the Registration Statements
(excluding exhibits other than the computation of the ratio
of earnings to fixed charges, the Indenture and this Agree-
ment);
(ii) each Prospectus; and
(iii) any documents incorporated by reference in the
Prospectus;
and the Company authorizes each Agent to use such documents
during the period referred to in (c) below (subject to the
limitations set forth therein) in connection with the sale of the
Securities in accordance with the applicable provisions of the
Act and the Rules and Regulations;
(c) if, during any period in which, in the opinion of
counsel for the Agents (provided, if the Agents are no longer
soliciting (or have been instructed to stop soliciting) purchases
of Securities, such opinion is known to the Company), a
prospectus relating to the Securities is required to be delivered
under the Act, any event known to the Company occurs as a result
of which the Prospectus would include an untrue statement of a
material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary
at any time to amend the Prospectus to comply with the Act or the
Rules and Regulations, to notify the Agents promptly to suspend
solicitation of purchases of the Securities (and the Agents will
do so); and if the Company shall decide to amend or supplement
either Registration Statement or the Prospectus for purposes of
offering the Securities, to promptly advise the Agents by
telephone (with confirmation in writing) and, except as otherwise
provided in any relevant Purchase Agreement, to promptly prepare
and file with the Commission an amendment or supplement, whether
by filing such documents pursuant to the Act or the Exchange Act,
as may be necessary to correct such untrue statement or omission
or to make such Registration Statement or the Prospectus comply
with such requirements and to prepare and furnish to the Agents
at its own expense such amendment or supplement to such
Registration Statement or the Prospectus as will correct such
<PAGE> 10
Registration Statement or Prospectus; provided, however, that the
Company shall in any event promptly prepare, file and furnish an
Agent with such an amendment or supplement if such Agent shall
then hold any Securities acquired from the Company as principal
(other than such Securities as such Agent shall have held for a
period of six months or more);
(d) to timely file with the Commission during the
period referred to in the proviso to (c) above and during any
time the Agents are permitted to solicit offers as Agents as
provided hereunder (i) any amendment or supplement to either
Registration Statement or any Prospectus that may, in the
judgment of the Company, be required by the Act or requested by
the Commission and (ii) all documents (and any amendments to
previously filed documents) required to be filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act;
(e) prior to filing with the Commission, during the
period referred to in the proviso to (c) above and during any
time the Agents are permitted to solicit offers as Agents as
provided hereunder, (i) any amendment or supplement to either
Registration Statement, (ii) any amendment or supplement to the
Prospectus or (iii) upon request of either Agent, any document
incorporated by reference in any of the foregoing or any
amendment of or supplement to any such incorporated document, to
furnish a copy thereof to the Agents and counsel for the Agents;
(f) to advise the Agents immediately (i) when any post-
effective amendment to either Registration Statement relating to
or covering the Securities becomes effective and when any further
amendment of or supplement to the Prospectus shall be filed with
the Commission, (ii) of any request or proposed request by the
Commission for an amendment or supplement to either Registration
Statement, to the Prospectus, to any document incorporated by
reference in any of the foregoing or for any additional
information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of either Registration
Statement or any order directed to the Prospectus or any document
incorporated therein by reference or the initiation or threat of
any stop order proceeding or of any challenge to the accuracy or
adequacy of any document incorporated by reference in the
Prospectus, (iv) of receipt by the Company of any notification
with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or
threat of any proceeding for that purpose and (v) of the
happening of any event which makes untrue any statement of a
material fact made in either Registration Statement or the
Prospectus as amended or supplemented or which requires the
making of a change in such Registration Statement or the
Prospectus as amended or supplemented in order to make any
material statement therein not misleading;
(g) if, during the period referred to in the proviso to
(c) above and during any time the Agents are permitted to solicit
<PAGE> 11
offers as Agents as provided hereunder, the Commission shall
issue a stop order suspending the effectiveness of either
Registration Statement, to make every reasonable effort to obtain
the lifting of that order at the earliest possible time;
(h) as soon as practicable, but not later than
18 months, after the date of each acceptance by the Company of an
offer to purchase Securities hereunder, to make generally
available to its security holders an earnings statement covering
a period of at least 12 months beginning after the later of
(i) the effective date of Registration Statement No. 33-58445,
(ii) the effective date of the most recent post-effective
amendment to either Registration Statement to become effective
prior to the date of such acceptance and (iii) the date of the
Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of such acceptance which will
satisfy the provisions of Section 11(a) of the Act (including, at
the option of the Company, Rule 158 of the Rules and Regulations
under the Act);
(i) so long as any of the Securities are outstanding,
to make available to the Agents, not later than the time the
Company makes the same available to others, copies of all public
reports or releases and all reports and financial statements
furnished by the Company to any securities exchange on which the
Securities are listed pursuant to requirements of or agreements
with such exchange or to the Commission pursuant to the Exchange
Act or any rule or regulation of the Commission thereunder;
(j) on or prior to the date on which the Company shall
release to the general public interim financial information, if
any, with respect to each of the first three quarters of any
fiscal year, to make available such information to each Agent
and, except as otherwise provided in any relevant Purchase
Agreement, to cause the Prospectus to be amended or supplemented
to set forth or incorporate by reference such information, as
well as such other information and explanations as shall be
necessary for an understanding of such amounts or as shall be
required by the Act or the Rules and Regulations; provided,
however, that if on the date of such release the Agents shall not
be engaged or shall have been instructed not to engage in
solicitation of purchases of the Securities as Agents of the
Company, and shall not then hold any Securities acquired from the
Company as principal (other than such Securities as shall have
been held for a period of six months or more), the Company shall
not be obligated so to amend or supplement the Prospectus until
such time as solicitation of purchases of the Securities shall
with the Company's consent be resumed or the Company shall subse-
quently enter into a new Purchase Agreement with one of you;
(k) on or prior to the date on which the Company shall
release to the general public financial information included in
or derived from the audited financial statements of the Company
for the preceding fiscal year, to make available such information
to each Agent and to cause the Registration Statements and the
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Prospectus to be amended or supplemented, initially to set forth
capsule financial information with respect to the results of
operations of the Company for such year and corresponding infor-
mation for the prior year, as well as such other information and
explanations as shall be necessary for an understanding of such
amounts or as shall be required by the Act or the Rules and
Regulations, and, on or before the date that the Company's Annual
Report on Form 10-K is filed with the Commission, to cause the
Registration Statement and the Prospectus to be amended to set
forth or incorporate such audited financial statements and the
report or reports of independent accountants with respect
thereto, as well as such other information and explanations as
shall be necessary for an understanding of such financial
statements or as shall be required by the Act or the Rules and
Regulations; provided, however, that if on the date of such
release the Agents shall not be engaged or shall have been
instructed not to engage in solicitation of purchases of the
Securities as Agents of the Company, and shall not then hold any
Securities acquired from the Company as principal (other than
such Securities as shall have been held for a period of six
months or more), the Company shall not be obligated so to amend
or supplement the Prospectus until such time as solicitation of
purchases of the Securities shall with the Company's consent be
resumed or the Company shall subsequently enter into a new
Purchase Agreement with one of you; and
(l) to endeavor, in cooperation with the Agents, to
qualify the Securities for offering and sale under the securities
laws of such jurisdictions as either Agent may designate, and to
maintain such qualifications in effect for as long as may be
required for the distribution of the Securities; and to file such
statements and reports as may be required by the laws of each
jurisdiction in which the Securities have been qualified as above
provided; provided that the Company shall not be required to
register or qualify as a foreign corporation nor, except as to
matters relating to the offer and sale of the Securities, take
any action which would subject it to service of process generally
in any jurisdiction.
SECTION 4. Payment of Expenses. The Company will pay
(i) the costs incident to the authorization, issuance and
delivery of the Securities and any taxes (other than transfer
taxes) payable in that connection, (ii) the costs incident to the
preparation, printing and filing under the Act of the
Registration Statements and any amendments and exhibits thereto,
(iii) the costs incident to the preparation, printing and filing
of any document and any amendments and exhibits thereto required
to be filed by the Company under the Exchange Act, (iv) the costs
of distributing the Registration Statements, as originally filed,
and each amendment and post-effective amendment thereof
(including exhibits), the Prospectus, any supplement or amendment
to the Prospectus and any documents incorporated by reference in
any of the foregoing documents, (v) the fees and disbursements of
the Trustee and its counsel, (vi) the costs and fees in
connection with the listing of the Securities on any securities
<PAGE> 13
exchange, (vii) the cost of any filings with the National
Association of Securities Dealers, Inc., (viii) the fees and
disbursements of counsel to the Company, (ix) the fees paid to
rating agencies in connection with the rating of the Securities,
(x) the fees and expenses of qualifying the Securities under the
securities laws of the several jurisdictions as provided in
Section 3(l) hereof and of preparing and printing a Blue Sky
Memorandum and a memorandum concerning the legality of the
Securities as an investment (including fees and expenses of
counsel for the Agents in connection therewith), (xi) the cost of
the "tombstone" advertisement and such other advertising expenses
agreed to by the Company and Agents in connection with the
solicitation of offers to purchase Securities, and (xii) all
other costs and expenses incident to the performance of the
Company's obligations under this Agreement (including any
Purchase Agreement). In addition, subject to the provisions of
Section 7, the Company agrees to reimburse the Agents for the
fees and disbursements of their legal counsel (except that the
Company shall not be liable for the fees and disbursements of
more than one separate firm of attorneys).
Except as specifically provided in this Section and
herein, the Agents agree to pay all their costs and expenses.
SECTION 5. Conditions of Obligations. The obligation
of the Agents, as agents of the Company, under this Agreement to
solicit offers to purchase the Securities, as well as the
obligation of either Agent to purchase Securities pursuant to any
Purchase Agreement, is subject to the accuracy, on each
Representation Date, of the representations and warranties of the
Company contained herein, to the accuracy of the statements of
the Company's officers made in any certificate furnished pursuant
to the provisions hereof to the extent then relevant, to the
performance by the Company in all material respects of its
obligations hereunder, and to each of the following additional
terms and conditions:
(a) No stop order suspending the effectiveness of
either Registration Statement, or any part thereof, nor any order
directed to any document incorporated by reference in the
Prospectus shall have been issued and no stop order proceeding
shall have been initiated or threatened by the Commission and no
challenge by the Commission shall be pending to the accuracy or
adequacy of any document incorporated by reference in the
Prospectus; any request of the Commission for inclusion of
additional information in either Registration Statement or the
Prospectus or otherwise shall have been withdrawn or complied
with; and after the date of any Purchase Agreement (and prior to
the closing date for the Securities referred to therein) the
Company shall not have filed with the Commission any amendment or
supplement to either Registration Statement or the Prospectus (or
any document incorporated by reference therein) without the
consent of the Agent or Agents party thereto.
<PAGE> 14
(b) No order suspending the sale of the Securities in
any jurisdiction designated by an Agent pursuant to Section 3(l)
hereof shall have been issued, and no proceeding for that purpose
shall have been initiated or threatened.
(c) The Agents shall not have discovered and disclosed
to the Company that either Registration Statement or the
Prospectus, as amended or supplemented, contains an untrue
statement of a fact which, in the opinion of counsel for the
Agents, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not
misleading.
(d) The form and validity of the Indenture, the form
and validity of the Securities, the legality and sufficiency of
the authorization of the issuance and sale of the Securities
hereunder, and all corporate proceedings and other legal matters
incident to the foregoing, and the form of the Registration
Statements and of the Prospectus (other than financial statements
and other financial data), shall have been approved as of the
Closing Date by Cravath, Swaine & Moore, counsel for the Agents.
(e) At the Closing Date, the Agents shall have
received the opinion, addressed to the Agents and dated the
Closing Date, of John Jay List, Esq., General Counsel of the
Company, in form and scope satisfactory to the Agents and their
counsel, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a cooperative association under the laws
of the District of Columbia with corporate power to conduct
its business as described in the Registration Statements;
(ii) the issuance and sale of the Securities by the
Company pursuant to this Agreement (and, if the opinion is
being given pursuant to Section 6(c) hereof on account of
the Company having entered into a Purchase Agreement, the
applicable Purchase Agreement) have been duly and validly
authorized by all necessary corporate action (subject to the
approval of the terms of each Security by the Governor or
the Chief Financial Officer of the Company); and no author-
ization, consent, order or approval of, or filing or
registration with, or exemption by, any government or public
body or authority of the District of Columbia or any
department or subdivision thereof is required for the
validity of the Securities or for the issuance, sale and
delivery of the Securities by the Company pursuant to this
Agreement and any Purchase Agreement or for the execution
and delivery of this Agreement, any Purchase Agreement and
the Indenture by the Company (except that such counsel need
not express an opinion as to whether offers or sales by
Agents require qualification or registration under the
securities laws of the District of Columbia);
<PAGE> 15
(iii) the Indenture has been duly authorized by the
Company and constitutes an instrument valid and binding on
the Company and enforceable in accordance with its terms;
(iv) the Securities, assuming they are in a form
conforming to the specimens thereof examined by such
counsel, and assuming due execution of the Securities on
behalf of the Company and authentication thereof by the
Trustee and issuance thereof in accordance with the terms of
the Indenture and delivery thereof against payment therefor
in accordance with the terms of this Agreement (and any
Purchase Agreement) and subject to the approval of the terms
of each Security by the Governor or the Chief Financial
Officer of the Company, will constitute valid and binding
obligations of the Company enforceable in accordance with
their terms and will be entitled to the benefits of the
Indenture;
(v) this Agreement has been duly authorized, executed,
and delivered by the Company and the performance of this
Agreement and the consummation of the transactions herein
contemplated will not result in a breach of any terms or
provisions of, or constitute a default under, the Articles
of Incorporation or By-Laws of the Company or any indenture,
deed of trust, note, note agreement or other agreement or
instrument known to such counsel, after due inquiry, to
which the Company is a party or by which the Company or any
of its properties is bound or affected;
(vi) no consent, approval, authorization or order of any
court or governmental agency, authority or body of the
District of Columbia is required for the consummation of the
transactions contemplated in this Agreement (including any
Purchase Agreement) (except that such counsel need not
express an opinion as to whether offers or sales by Agents
require qualification or registration under the securities
laws of the District of Columbia); and
(vii) there is no tax of the District of Columbia or the
Commonwealth of Virginia applicable to the execution of the
Indenture.
Such counsel shall state that nothing has come to the
attention of such counsel causing him to believe, based upon such
counsel's participation in the preparation of the Registration
Statements or otherwise, that either Registration Statement (or
any post-effective amendment thereof) or the Prospectus (as
amended or supplemented, if amended or supplemented) contains an
untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading as of the effective date of
Registration Statement No. 33-50463 (in the case of such
Registration Statement) and as of the effective date of
Registration Statement No. 33-58445 (in the case of such
<PAGE> 16
Registration Statement) and as of the effective date of any such
amendment or supplement and as of the Closing Date and such
counsel does not know of any litigation or any governmental pro-
ceeding instituted or threatened against the Company required to
be disclosed in either Registration Statement or the Prospectus
and which is not disclosed therein.
Insofar as such opinion relates to the enforceability
of the Securities and the Indenture, such counsel may state that
the enforceability thereof may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws of
general application relating to or affecting the enforcement of
creditors' rights and may be limited by laws with respect to or
affecting the remedies provided for in the Securities and the
Indenture (provided that such laws do not, in the opinion of such
counsel, make inadequate the remedies afforded thereby for the
realization of the benefits provided for in the Securities and
the Indenture).
Such counsel may also state that provisions of the
Indenture or this Agreement that permit the Trustee, the Agents,
or any of the noteholders to take action or make determinations,
or provide for indemnities or similar undertakings of the Company
in favor of the Trustee, the Agents, or any of the noteholders or
for limitations on their liability to the Company or other
persons, may be subject to requirements that such action be taken
or such determinations be made, or that any action or inaction by
the Trustee, the Agents, or any of the noteholders that may give
rise to a claim under such indemnities or similar undertakings or
to such liability be taken or not taken, on a reasonable basis
and in good faith.
(f) At the Closing Date, the Agents shall have
received the opinion, addressed to the Agents and dated the
Closing Date, of Milbank, Tweed, Hadley & McCloy, counsel to the
Company, in form and scope satisfactory to the Agents and their
counsel, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a cooperative association in good
standing under the laws of the District of Columbia with
corporate power to conduct its business as described in the
Prospectus;
(ii) the issuance and sale of the Securities by the
Company pursuant to this Agreement (and, if the opinion is
being given pursuant to Section 6(c) hereof on account of
the Company having entered into a Purchase Agreement, the
applicable Purchase Agreement) have been duly and validly
authorized by all necessary corporate action (subject to the
approval of the terms of each Security by the Governor or
the Chief Financial Officer of the Company); and no author-
ization, consent, order or approval of, or filing or
registration with, or exemption by, any governmental or
public body or authority (including, without limitation, the
<PAGE> 17
Rural Utilities Service) of the United States or of the
State of New York or any department or subdivision thereof,
or, to the best knowledge of such counsel, any court, other
than such as may be required under State securities or blue
sky laws and other than registration of the Securities under
the Act and qualification of the Indenture under the Trust
Indenture Act, is required for the validity of the
Securities or for the issuance, sale and delivery of the
Securities by the Company pursuant to this Agreement
(including any Purchase Agreement) or for the execution and
delivery of this Agreement (including any Purchase
Agreement) and the Indenture by the Company;
(iii) the Indenture has been duly authorized by the
Company, has been duly qualified under the Trust Indenture
Act and constitutes an instrument valid and binding on the
Company and enforceable in accordance with its terms;
(iv) the Securities, assuming they are in a form
conforming to the specimens thereof examined by such
counsel, and assuming due execution of the Securities on
behalf of the Company and authentication thereof by the
Trustee and issuance thereof in accordance with the terms of
the Indenture and delivery thereof against payment therefor
in accordance with the terms of this Agreement (and any
Purchase Agreement) and subject to the approval of the terms
each Security by the Governor or the Chief Financial Officer
of the Company, will constitute valid and binding obliga-
tions of the Company enforceable in accordance with their
terms and will be entitled to the benefits of the Indenture;
(v) this Agreement (including any Purchase Agreement)
has been duly authorized, executed and delivered by the
Company and the performance of this Agreement (including any
Purchase Agreement) and the consummation of the transactions
herein contemplated will not result in a breach of any terms
or provisions of, or constitute a default under, the
Articles of Incorporation or By-Laws of the Company or any
indenture, deed of trust, note, note agreement or other
agreement or instrument known to such counsel, after due
inquiry, to which the Company is a party or by which the
Company or any of its properties is bound or affected;
(vi) the Securities and the Indenture conform in all
material respects to the descriptions thereof contained in
the Registration Statements; and the statements made in the
Prospectus under the caption "Description of Securities" and
in the prospectus supplement dated April 13, 1995, under the
caption "Description of the Medium-Term Notes" (and the
comparable provisions of any supplement to the Prospectus
approved by the Agents), insofar as they purport to
summarize the provisions of documents or agreements
specifically referred to therein, fairly present the
information called for with respect thereto by Form S-3;
<PAGE> 18
(vii) the Registration Statements (and any posteffective
amendment thereof) have become and are effective under the
Act and the Securities have become registered under the Act,
and, to the best of the knowledge of such counsel, no stop
order suspending the effectiveness of either Registration
Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated,
and the Registration Statements (and any post-effective
amendment thereof) and the Prospectus and each amendment
thereof or supplement thereto (except for the financial
statements and other financial data included therein as to
which such counsel need express no opinion) when they became
effective or were filed with the Securities and Exchange
Commission complied as to form in all material respects with
the requirements of the Act, the Exchange Act, the Trust
Indenture Act and the rules and regulations issued
thereunder;
(viii) the Company is not required to be registered as an
investment company under the Investment Company Act of 1940;
(ix) the Company is not subject to regulation under the
Public Utility Holding Company Act of 1935; and
(x) the Company is not a public utility as defined in
the Federal Power Act.
Such counsel shall state that based upon such counsel's
participation in the preparation of the Registration Statements,
the Prospectus and documents incorporated by reference therein,
such counsel's discussions with certain officers and employees of
the Company, such counsel's conferences with representatives of
the Company's independent certified public accountants and such
counsel's representation of the Company, nothing has come to the
attention of such counsel causing it to believe that either
Registration Statement (or any post-effective amendment thereof)
or the Prospectus (as amended or supplemented, if amended or
supplemented) contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading as of
the effective date of Registration Statement No. 33-50463 (in the
case of such Registration Statement) and as of the effective date
of Registration Statement No. 33-58445 (in the case of such
Registration Statement) and as of the effective date of any such
amendment or supplement and as of the Closing Date (it being
understood that such counsel need express no opinion concerning
financial or statistical data included therein) and such counsel
does not know of any litigation or any governmental proceeding
instituted or threatened against the Company required to be
disclosed in either Registration Statement or the Prospectus and
which is not disclosed therein.
Such counsel shall also state that to the best
knowledge of such counsel, no order directed to any document
<PAGE> 19
incorporated by reference in the Prospectus has been issued and
no challenge has been made by any regulatory agency to the
accuracy or adequacy of any such document.
Insofar as such opinion relates to the enforceability
of the Securities and the Indenture, such counsel may state that
the enforceability thereof may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws of
general application relating to or affecting the enforcement of
creditors' rights and may be limited by laws with respect to or
affecting the remedies provided for in the Securities and the
Indenture (provided that such laws do not, in the opinion of such
counsel, make inadequate the remedies afforded thereby for the
realization of the benefits provided for in the Securities and
the Indenture).
Such counsel may also state that provisions of the
Indenture or this Agreement that permit the Trustee, the Agents,
or any of the noteholders to take action or make determinations,
or provide for indemnities or similar undertakings of the Company
in favor of the Trustee, the Agents, or any of the noteholders or
for limitations on their liability to the Company or other
persons, may be subject to requirements that such action be taken
or such determinations be made, or that any action or inaction by
the Trustee, the Agents, or any of the noteholders that may give
rise to a claim under such indemnities or similar undertakings or
to such liability be taken or not taken, on a reasonable basis
and in good faith.
In rendering the foregoing opinion, Milbank, Tweed,
Hadley & McCloy may rely as to matters of the law of the District
of Columbia upon the opinion of John Jay List, Esq., General
Counsel of the Company, addressed to the Agents and dated the
Closing Date, satisfactory in form and scope to counsel for the
Agents. If Milbank, Tweed, Hadley & McCloy shall so rely upon
the opinion of John Jay List, Esq., (i) copies of the opinion so
relied upon (to the extent such opinion is different than the
opinion required by Section 5(e)) shall be delivered to you and
to counsel for the Agents and (ii) the opinion required by this
Section 5(f) shall also state that Milbank, Tweed, Hadley &
McCloy has made an independent investigation of the matters in
its opinion covered by the opinion so relied upon and that the
Agents are justified in relying upon such opinion.
(g) The Company shall have furnished to the Agents on
the Closing Date a certificate, dated the Closing Date, of its
President, Governor, Vice President or Chief Financial Officer
stating that: (i) the representations, warranties and agreements
of the Company in Section 1 hereof are true and correct as of the
Closing Date; the Company has complied in all material respects
with all its agreements contained herein; and the conditions set
forth in Sections 5(a) and 5(b) hereof have been fulfilled,
(ii) in his opinion, as of the effective date of Registration
Statement No. 33-50463, such Registration Statement, and as of
the effective date of Registration Statement No. 33-58445, such
<PAGE> 20
Registration Statement did not contain an untrue statement of a
material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading, and, as of the effective date of Registration
Statement No. 33-58445, the Prospectus did not contain an untrue
statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, (iii) since the effective
date of Registration Statement No. 33-50463, no event has
occurred which should have been set forth in an amendment or
supplement to the Prospectus but which has not been so set forth,
(iv) since the respective dates as of which information is given
in Registration Statement No. 33-58445 and the Prospectus, as
amended or supplemented, there has not been any material adverse
change in the condition, financial or other, or earnings of the
Company, whether or not arising from transactions in the ordinary
course of business, (v) the Company has no material contingent
obligations which are required to be disclosed in either
Registration Statement or the Prospectus and are not disclosed
therein, (vi) no stop order suspending the effectiveness of
either Registration Statement is in effect on the Closing Date
and no proceedings for the issuance of such an order have been
taken or to the knowledge of the Company are contemplated by the
Commission on or prior to the Closing Date, (vii) there are no
material legal proceedings to which the Company is a party or of
which property of the Company is the subject which are required
to be disclosed in either Registration Statement or the
Prospectus and are not disclosed therein and (viii) there are no
material contracts to which the Company is a party which are
required to be disclosed in either Registration Statement or the
Prospectus and are not disclosed therein.
(h) Arthur Andersen LLP (or successor independent
public accountants with respect to the Company within the meaning
of the Act and the Rules and Regulations) shall have furnished to
the Agents, at or prior to the Closing Date, a letter, addressed
to the Agents and dated the Closing Date, confirming that they
are independent public accountants with respect to the Company
within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission;
and stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective
dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the
date of such letter), the conclusions and findings of such firm
with respect to the financial information and other matters
covered by its letter delivered to the Agents concurrently with
the execution of this Agreement and confirming in all material
respects the conclusions and findings set forth in such prior
letter or, if no such letter shall have been delivered to you,
the conclusions and findings of such firm, in form and substance
satisfactory to the Agents with respect to such financial
<PAGE> 21
information and other matters as the Agents shall reasonably
request.
(i) There shall not have occurred (i) any suspension
or material limitation (other than limitations on hours or days
of trading) in trading in securities generally on the New York
Stock Exchange or any establishment of minimum prices on such
exchange, (ii) any banking moratorium declared by either Federal
or New York State authorities or (iii) any outbreak of hostili-
ties involving the United States or escalation of hostilities
involving the United States or a declaration of a national
emergency or war by the United States.
(j) Prior to the Closing Date, the Company shall have
furnished to the Agents and to Cravath, Swaine & Moore, counsel
to the Agents, such further certificates and documents as the
Agents or counsel to the Agents may have reasonably requested
prior to the Closing Date.
If any of the conditions specified in this Section 5
shall not have been fulfilled when and as required by this Agree-
ment to be fulfilled, this Agreement and all obligations of the
Agents hereunder may be canceled on, or at any time prior to, the
Closing Date by the Agents. Notice of such cancelation shall be
given to the Company in writing, or by telegraph, telephone or
telex confirmed in writing.
All opinions, letters, evidence and certificates
mentioned above or elsewhere in this Agreement shall be deemed to
be in compliance with the provisions hereof only if they are on
the date of delivery in the form and scope satisfactory to
counsel for the Agents.
SECTION 6. Additional Covenants of the Company. The
Company covenants and agrees that:
(a) Each acceptance by it of an offer for the purchase
of Securities shall be deemed to be an affirmation to the Agent
which procured the offer that the representations and warranties
of the Company contained in this Agreement and in any certificate
theretofore given to the Agents pursuant hereto (to the extent
relevant to such purchase) are true and correct at the time of
such acceptance, and an undertaking that such representations and
warranties will be true and correct at the time for delivery to
the purchaser or his agent of the Securities relating to such
acceptance as though made at and as of each such time (and it is
understood that such representations and warranties shall relate
to the Registration Statements and the Prospectus as amended or
supplemented to each such time).
(b) Each time that either Registration Statement or
the Prospectus shall be amended or supplemented (other than by an
amendment or supplement providing solely for a change in the
interest rates or maturities of the Securities or a change in the
principal amount of Securities remaining to be sold or similar
<PAGE> 22
changes) or the Company files with the Commission any document
incorporated by reference into the Prospectus (except in all
cases by filing a report on Form 8-K, pursuant to the Exchange
Act, solely to add exhibits to documents previously filed), the
Company shall, concurrently with such amendment, supplement or
filing, furnish the Agents with a certificate of the President,
Governor or Chief Financial Officer of the Company in form satis-
factory to the Agents to the effect that the statements contained
in the certificate referred to in Section 5(g) hereof which was
last furnished to the Agents are true and correct at the time of
such amendment, supplement or filing, as the case may be, as
though made at and as of such time (except that such statements
shall be deemed to relate to the Registration Statements and the
Prospectus as amended and supplemented to such time) or, in lieu
of such certificate, a certificate of the same tenor as the
certificate referred to in said Section 5(g) modified as
necessary to relate to the Registration Statements and the
Prospectus as amended and supplemented to the time of delivery of
such certificate provided, that, except if the Agents shall then
hold any Securities acquired from the Company as principal (other
than such Securities as shall have been held for a period of six
months or more), no certificate need be given during any period
in which the Agents have been instructed to or have suspended the
solicitation and receipt of offers to purchase Securities but
shall be required to be given before the Agents shall again be
obligated to solicit offers to purchase the Securities.
(c) Each time that either Registration Statement or
the Prospectus shall be amended or supplemented (other than by an
amendment or supplement providing solely for a change in the
interest rates or maturities of the Securities or a change in the
principal amount of Securities remaining to be sold or similar
changes) or the Company files with the Commission any document
incorporated by reference into the Prospectus (except in all
cases by filing a report on Form 8-K, pursuant to the Exchange
Act, solely to add exhibits to documents previously filed), the
Company shall, concurrently with such amendment, supplement or
filing, furnish the Agents and their counsel with written
opinions of (i) the General Counsel of the Company and
(ii) Milbank, Tweed, Hadley & McCloy, counsel to the Company,
addressed to the Agents and dated the date of delivery of such
opinions, in form satisfactory to the Agents, of the same tenor
as the respective opinions referred to in Sections 5(e) and 5(f)
hereof, but modified, as necessary, to relate to the Registration
Statements and the Prospectus as amended or supplemented to the
time of delivery of such opinions; provided, however, that in
lieu of such opinions, either of such counsel may furnish the
Agents with letters to the effect that the Agents may rely on
such prior opinions to the same extent as though they were dated
the date of such letter authorizing reliance (except that
statements in such prior opinions shall be deemed to relate to
the Registration Statements and the Prospectus as amended or
supplemented to the time of delivery of such letters authorizing
reliance); provided further that, except if the Agents shall
then hold any Securities acquired from the Company as principal
<PAGE> 23
(other than such Securities as each Agent shall have held for a
period of six months or more), no opinion need be given during
any period in which the Agents have been instructed to or have
suspended the solicitation and receipt of offers to purchase
Securities but shall be required to be given before the Agents
shall again be obligated to solicit offers to purchase the
Securities.
(d) Each time that either Registration Statement or
the Prospectus shall be amended or supplemented to include
additional financial information with respect to the Company or
the Company files with the Commission any document incorporated
by reference into the Prospectus which contains additional
financial information the Company shall cause Arthur Andersen LLP
(or successor independent public accountants with respect to the
Company within the meaning of the Act and the Rules and
Regulations) to furnish the Agents, concurrently with such
amendment, supplement or filing, a letter, addressed jointly to
the Company and the Agents and dated the date of delivery of such
letter, in form and substance reasonably satisfactory to the
Agents, of the same tenor as the letter referred to in
Section 5(h) hereof but modified to relate to the Registration
Statements and the Prospectus, as amended and supplemented to the
date of such letter, with such changes as may be necessary to
reflect changes in the financial statements and other information
derived from the accounting records of the Company; provided,
however, that if either Registration Statement or the Prospectus
is amended or supplemented solely to include financial
information with respect to the Company as of and for a fiscal
quarter, Arthur Andersen LLP (or successor independent public
accountants with respect to the Company within the meaning of the
Act and the Rules and Regulations) may limit the scope of such
letter to the unaudited financial statements included in such
amendment or supplement unless there is contained therein any
other accounting, financial or statistical information with
respect to the Company that, in the reasonable judgment of the
Agents, should be covered by such letter, in which event such
letter shall also cover such other information; provided further
that, except if the Agents shall then hold any Securities
acquired from the Company as principal (other than such
Securities as shall have been held for a period of six months or
more), no letter need be given during any period in which the
Agents have been instructed to or have suspended the solicitation
and receipt of offers to purchase Securities but shall be
required to be given before the Agents shall again be obligated
to solicit offers to purchase the Securities.
(e) On request from time to time by either Agent, the
Company will advise the Agents of the amount of Securities sold
(which for this purpose shall include medium-term notes having
terms substantially similar to the terms of the Securities but
constituting one or more separate series of securities for
purposes of the Indenture and sold outside the United States
pursuant to any other agreement), and the amount remaining
<PAGE> 24
registered under the Securities Act and authorized for issuance
and sale hereunder.
SECTION 7. Indemnification and Contribution. (a) The
Company shall indemnify and hold harmless the Agents (for
purposes of this Section 7, the "Agents" shall be deemed to
include the Agents and all subsidiaries and affiliates of the
Agents to the extent such subsidiaries and affiliates are agents
of the Company in accordance with the provisions of Section 2(a))
and each person, if any, who controls either Agent within the
meaning of the Act from and against any loss, claim, damage or
liability, joint or several, to which such Agent or controlling
person may become subject, under the Act, the Exchange Act or
other federal or state statutory law or regulation or common law,
and to reimburse the Agents and such controlling persons for any
legal or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as
such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement
of a material fact contained in either Registration Statement or
any post-effective amendment thereof or the Prospectus (as
amended or supplemented, if the Company shall have filed with the
Commission any amendment thereof or supplement thereto), if used
within the period during which the Agent claiming indemnification
is authorized to use the Prospectus as provided hereunder, or
arises out of, or is based upon, the omission or alleged omission
to state therein (if so used, in the case of such Prospectus) a
material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that
the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in either
Registration Statement or any post-effective amendment thereof or
the Prospectus (as amended and supplemented) in reliance upon and
in conformity with written information furnished to the Company
by the Agent claiming indemnification specifically for inclusion
therein or contained in that part of either Registration
Statement constituting the Statement of Eligibility (Form T-1)
under the Trust Indenture Act of the Trustee; and provided
further that as to any Prospectus (as amended and supplemented)
this indemnity agreement shall not inure to the benefit of either
Agent or any person controlling such Agent on account of any
loss, claim, damage, liability or action arising from the sale of
Securities to any person by such Agent if such Agent failed to
send or give a copy of the Prospectus (or the Prospectus as
amended or supplemented if the Company shall have made any
amendments thereof or supplements thereto which shall have been
furnished to such Agent prior to the time of the below-written
confirmation) to that person at or prior to the time written
confirmation of the sale of such Securities was sent to such
person, and the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact in such Prospectus was corrected in such Prospectus or
amendment or supplement, unless such failure resulted from non-
<PAGE> 25
compliance by the Company with Section 3(b) hereof. For purposes
of the second proviso to the immediately preceding sentence, the
term "Prospectus (or the Prospectus as amended or supplemented if
the Company shall have made any amendments thereof or supplements
thereto)" shall not be deemed to include the documents
incorporated therein by reference and under no circumstances
shall either Agent be obligated to send or give any document
incorporated by reference or any supplement or amendment to any
document incorporated by reference in the Prospectus to any
person. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to either Agent or
controlling person.
(b) Each Agent shall indemnify and hold harmless the
Company, each of its directors, each of its officers who signed
either Registration Statement and any person who controls the
Company within the meaning of the Act from and against any loss,
claim, damage or liability, joint or several, and any action in
respect thereof, to which the Company or any such director,
officer or controlling person may become subject, under the Act,
the Exchange Act or federal or state statutory law or regulation,
at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact
contained in either Registration Statement or any post-effective
amendment thereof or the Prospectus (or any amendment thereof or
supplement thereto), or arises out of, or is based upon, the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Agent
specifically for inclusion therein, and shall reimburse the
Company or any such director, officer or controlling person for
any legal and other expenses reasonably incurred by such indem-
nified party in investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action. The
foregoing indemnity agreement is in addition to any liability
which either Agent may otherwise have to the Company or any of
its directors, officers or controlling persons. The statements
with respect to the manner of distribution of the Securities by
the Agents and with respect to the Agents set forth (i) on the
table (including the footnotes) and in the last paragraph on the
cover page of the Prospectus Supplement dated April 13, 1995 (to
the Prospectus dated April 13, 1995), (ii) in the first paragraph
on page 2 of such Prospectus Supplement and of the Prospectus and
(iii) under the heading "Plan of Distribution" in such Prospectus
Supplement and in the Prospectus (and the comparable provisions
of any other supplement to the Prospectus approved by the Agents)
constitute the only information furnished in writing by the
Agents for inclusion in the Registration Statements and the
Prospectus, and the Agents confirm that such statements are
correct.
<PAGE> 26
(c) Each indemnified party will, promptly after the
receipt of notice of the commencement of any action against such
indemnified party in respect of which indemnity may be sought
from an indemnifying party on account of an indemnity agreement
contained in this Section 7, notify the indemnifying party in
writing of the commencement thereof. The omission of any
indemnified party so to notify an indemnifying party of any such
action shall not relieve the indemnifying party from any
liability (to the extent not prejudiced by such delay) which it
may have to such indemnified party on account of the indemnity
agreement contained in this Section 7 or otherwise. Except as
provided in the next succeeding sentence, in case any such action
shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such
indemnifying party will be entitled to participate therein and,
to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and
after notice in writing from such indemnifying party to such
indemnified party of its election so to assume the defense
thereof, such indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs
of investigation. Such indemnified party shall have the right to
employ its own counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of such counsel has
been authorized in writing by the indemnifying party in
connection with the defense of such action, (ii) such indemnified
party shall have been advised by such counsel that there are
material legal defenses available to it which are different from
or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified
party) or (iii) the indemnifying party shall not have assumed the
defense of such action and employed counsel therefor satisfactory
to such indemnified party within a reasonable time after notice
of commencement of such action, in any of which events such fees
and expenses shall be borne by the indemnifying party, provided
that (x) the indemnifying party shall not, in connection with any
one such action, or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses
with respect to any period during the pendency of such action or
similar or related actions of more than one separate firm of
attorneys (except where local counsel is necessary in connection
with such action or similar or related actions) for all
indemnified parties so named, designated in writing by such Agent
or the Agents if the indemnifying party is the Company or by the
Company if the indemnifying party is either Agent or the Agents,
and (y) the firm of attorneys so designated may be changed from
time to time with respect to different periods during the
pendency of such action or similar or related actions. The
indemnifying party shall not be liable for any settlement of any
<PAGE> 27
action or claim effected without its consent, which consent shall
not be unreasonably withheld.
(d) If the indemnification provided for in this
Section 7 shall for any reason be unavailable to an indemnified
party under Section 7(a) or 7(b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu
of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such
loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and the
indemnified or indemnifying Agent or Agents on the other from the
offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the indemnified or
indemnifying Agent or Agents on the other with respect to the
statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits
received by the Company on the one hand and either Agent on the
other with respect to such offering shall be deemed to be in the
same proportion as the total net proceeds from the offering of
the Securities (before deducting expenses) received by the
Company bears to the total commissions received by such Agent
with respect to such offering. The relative fault shall be
determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the
Company or such Agent, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and
the Agents agree that it would not be just and equitable if
contributions pursuant to this Section 7(d) were to be determined
by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as
a result of the loss, claim, damage or liability, or action in
respect thereof, referred to above in this Section 7(d) shall be
deemed to include, for purposes of this Section 7(d), any legal
or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7(d),
neither Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the
Securities sold through such Agent and distributed to the public
were offered to the public exceeds the amount of any damages
which such Agent has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
<PAGE> 28
not guilty of such fraudulent misrepresentation. No person shall
be obligated to contribute hereunder any amounts in payment for
any settlement of any action or claim effected without such
person's consent, which consent shall not be unreasonably
withheld.
SECTION 8. Status of Each Agent. In soliciting offers
to purchase the Securities from the Company pursuant to this
Agreement (other than offers to purchase pursuant to Section 11),
each Agent is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to
purchase Securities from the Company has been solicited by such
Agent and accepted by the Company but such Agent shall have no
liability to the Company in the event any such purchase is not
consummated for any reason. If the Company shall default (which
default shall include, but is not limited to, the Company having
told an Agent not to settle any order which the Company has
accepted) in its obligations to deliver Securities to a purchaser
whose offer it has accepted, the Company shall hold each Agent
harmless against any loss, claim or damage arising from or as a
result of such default by the Company, provided such default is
not attributable to the fault of such Agent.
SECTION 9. Representations and Warranties to Survive
Delivery. All representations and warranties of the Company
contained in this Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of the
termination or cancellation of this Agreement or any
investigation made by or on behalf of either Agent or any person
controlling such Agent or by or on behalf of the Company, and
shall survive each delivery of and payment for any of the
Securities.
SECTION 10. Termination. This Agreement may be
terminated for any reason, at any time, by any party hereto upon
the giving of one day's written notice of such termination to the
other parties hereto, provided, however, if such terminating
party is an Agent, such termination shall be effective only with
respect to such terminating party. The provisions of
Sections 3(c), 3(h), 4, 7, 8, 9, 13 and 14 hereof shall survive
any such termination.
SECTION 11. Purchases as Principal. From time to time
either Agent (including Lehman Government Securities Inc. on
behalf of Lehman Brothers Inc.) may agree with the Company to
purchase Securities from the Company as principal, in which case
such purchase shall be made in accordance with the terms of a
separate agreement (a "Purchase Agreement") to be entered into
between such Agent and the Company in the form attached hereto as
Exhibit C. A Purchase Agreement, to the extent set forth
therein, may incorporate by reference specified provisions of
this Agreement.
<PAGE> 29
SECTION 12. Notices. Except as otherwise provided
herein, all notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if
received or transmitted by any standard form of
telecommunication.
Notices to the Agents shall be directed to them as follows:
Lehman Brothers Inc.
3 World Financial Center, 12th Floor
New York, New York 10285
Attention: Medium Term Note Department
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Headquarters
World Financial Center
North Tower, 23rd Floor
New York, New York 10281
Attention: Product Management-Medium Term Notes
Notices to the Company shall be directed to it as follows:
National Rural Utilities Cooperative
Finance Corporation
Woodland Park
2201 Cooperative Way
Herndon, Virginia 22071
Attention: Chief Financial Officer
SECTION 13. Binding Effect; Benefits. This Agreement
shall be binding upon each Agent, the Company and their
respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons,
except that (a) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of any entity or entities deemed
to be an "Agent" for the purposes of Section 7 and the person or
persons, if any, who control either Agent within the meaning of
Section 15 of the Act, and (b) the indemnity agreements of the
Agents contained in Section 7 hereof shall be deemed to be for
the benefit of directors of the Company, officers of the Company
who have signed either Registration Statement and any persons
controlling the Company. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons
referred to in this Section, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision
contained herein. No purchaser of Securities shall be deemed to
be a successor by reason merely of such purchase.
SECTION 14. Miscellaneous. (a) The term "business
day" as used in this Agreement shall mean any day which is not a
Saturday or Sunday, which in New York City is not a day on which
banking institutions are generally authorized or obligated by law
<PAGE> 30
to close and on which the New York Stock Exchange, Inc. is open
for trading.
(b) Section headings have been inserted in this
Agreement as a matter of convenience of reference only and it is
agreed that such section headings are not a part of this
Agreement and will not be used in the interpretation of any
provision of this Agreement.
SECTION 15. Governing Law; Counterparts. This
Agreement shall be governed by and construed in accordance with
the laws of New York. This Agreement may be executed in
counterparts and the executed counterparts shall together
constitute a single instrument.
If the foregoing correctly sets forth our agreement,
please indicate your acceptance hereof in the space provided for
that purpose below.
Very truly yours,
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE
CORPORATION,
by
_____________________
CONFIRMED AND ACCEPTED, as of
the date first above written:
LEHMAN BROTHERS INC.,
by
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED,
by
<PAGE> 31 EXHIBIT A
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
Medium-Term Notes, Series C
Schedule of Payments
The Company agrees to pay each Agent a commission equal
to the following percentage of the aggregate principal amount of
Securities or percentage of the aggregate Dollar Equivalent of
the Foreign Currency or Dollar Equivalent of the Currency Unit
(as defined in the Indenture) of the principal amount of
Securities placed by such Agent, as the case may be:
Term Commission Rate
9 months to less than 1 year 0.125%
1 year to less than 18 months 0.150%
18 months to less than 2 years 0.200%
2 years to less than 3 years 0.250%
3 years to less than 4 years 0.350%
4 years to less than 5 years 0.450%
5 years to less than 7 years 0.500%
7 years to less than 10 years 0.550%
10 years to less than 15 years 0.600%
15 years to less than 30 years 0.625%
30 years or more To be
negotiated
at time of
sale<PAGE>
<PAGE> 32
EXHIBIT B
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
Medium-Term Notes, Series C
Administrative Procedures
Medium-Term Notes, Series C, with maturities of
nine months or more from date of issue (the "Notes") are to
be offered on a continuing basis by National Rural Utilities
Cooperative Finance Corporation (the "Company"). Lehman
Brothers Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as agents (each an "Agent" and, collectively,
the "Agents"), have agreed to use their best efforts to
solicit offers to purchase the Notes. The Notes are being
sold pursuant to an Agency Agreement between the Company and
the Agents dated April 13, 1995 (as it may be supplemented
or amended from time to time, the "Agency Agreement"), to
which these administrative procedures are attached as an
exhibit. The Company has also reserved the right to sell
Notes directly on its own behalf. The Notes will be issued
pursuant to an Indenture, dated as of December 15, 1987 (as
supplemented by a First Supplemental Indenture dated as of
October 1, 1990 and as it may be supplemented or amended
from time to time, the "Indenture"), between the Company and
Harris Trust and Savings Bank, as successor trustee (the
"Trustee"). The Notes will rank equally with all other
unsecured and unsubordinated indebtedness of the Company and
will have been registered with the Securities and Exchange
Commission (the "Commission"). Unless otherwise defined
herein, terms defined in the Agency Agreement or Indenture
shall have the same meaning when used in this exhibit.
Each Note will be represented by either a Global
Security (as defined hereinafter) delivered to the Trustee
as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC (a
"Book-Entry Note") or a certificate delivered to the Holder
thereof or a Person designated by such Holder (a "Certifi-
cated Note"). Only Notes denominated and payable in U.S.
dollars may be issued as Book-Entry Notes. Owners of
beneficial interests in Book-Entry Notes will be entitled to
delivery of Certificated Notes only under the limited
circumstances described in the Indenture.
Administrative responsibilities, document control
and record-keeping functions to be performed by the Company
will be performed by its Treasurer or Chief Financial
Officer. Administrative procedures for the offering are
explained below.
Book-Entry Notes will be issued in accordance with
the administrative procedures set forth in Part II and Part
III hereof and the Letter of Representations of the Company
and the Trustee to DTC dated February 24, 1995, as
supplemented on April 13, 1995 and as amended or
<PAGE> 33
supplemented from time to time (the "Letter of Represen-
tations"), and Certificated Notes will be issued in
accordance with the administrative procedures set forth in
Part I and Part III hereof. Notes for which interest is
calculated on the basis of a fixed interest rate, which may
be zero, are referred to herein as "Fixed Rate Notes."
Notes for which interest is calculated on the basis of a
floating interest rate are referred to herein as "Floating
Rate Notes." To the extent the procedures set forth below
conflict with the provisions of the Notes, the Indenture,
the Letter of Representations or the Agency Agreement, the
relevant provisions of the Notes, the Indenture, the Letter
of Representations and the Agency Agreement shall control.
PART I
Administrative Procedures for Certificated Notes
Price to Public
Each Certificated Note will be issued at 100% of
principal amount, unless otherwise determined by the
Company.
Date of Issuance
Each Certificated Note will be dated and issued as
of the date of its authentication by the Trustee.
Maturities
Each Certificated Note will mature on a Business
Day (as defined in Part III below) selected by the purchaser
and agreed upon by the Company, with maturities of nine
months or more from the date of issuance.
<PAGE>
<PAGE> 34
Registration
Certificated Notes will be issued only in fully
registered form. Bank of Montreal Trust Company (the
"Paying Agent") will serve as registrar and transfer agent
in connection with the Certificated Notes.
Denominations
The Certificated Notes will be issued and payable
in U.S. dollars in the denomination of $1,000 or any
integral multiple thereof unless otherwise determined by the
Company.
The Company may determine, upon agreement with a
purchaser of Certificated Notes, that such Certificated
Notes will be denominated and payable in a foreign currency
or currency unit to be specified in a supplement to the
Prospectus ("Specified Currency"). In such case, unless
otherwise specified in such supplement, the authorized
denominations of such Certificated Notes will be the
equivalent, as determined by the noon (New York City time)
buying rate for such Specified Currency for cable transfers
quoted in New York City as certified for customs purposes by
the Federal Reserve Bank of New York (the "Market Exchange
Rate") on the Business Day immediately preceding the
Settlement Date (as defined below) for such Certificated
Notes, of U.S. $1,000 (rounded down to an integral multiple
of units of specified denominations of such Specified
Currency). If such rates are not available for any reason,
the Market Exchange Rate will be determined in accordance
with the alternative provision for determining the Market
Exchange Rate pursuant to Section 311(i) of the Indenture.
Interest Payments
Each Fixed Rate Certificated Note will bear
interest from its issue date (the "Original Issue Date") at
the annual rate stated on the face thereof, payable on
January 15 and July 15 of each year (the "Interest Payment
Dates"), commencing (unless otherwise specified in the
applicable supplement to the Prospectus) on the first
Interest Payment Date after issuance, and at Stated Maturity
or upon redemption, if applicable. Interest on each
Certificated Note will be calculated and paid on the basis
of a 360-day year of twelve 30-day months (unless otherwise
specified in the applicable supplement to the Prospectus).
Interest will be payable to the Person in whose name such
Certificated Note is registered at the close of business on
the January 1 or July 1 (the "Regular Record Dates") next
preceding the respective Interest Payment Date; provided,
however, that (i) if an Original Issue Date falls between a
Regular Record Date and an Interest Payment Date, the first
payment of interest will occur on the Interest Payment Date
following the next Regular Record Date and (ii) interest
<PAGE> 35
payable at Maturity will be payable to the Person to whom
principal shall be payable (whether or not such Maturity is
an Interest Payment Date). Any payment of principal and
interest on such Certificated Note required to be paid on an
Interest Payment Date or at Stated Maturity or upon redemp-
tion, if applicable, which is not a Business Day shall be
postponed to the next day which is a Business Day. All
interest payments (excluding interest payments made at
Stated Maturity or upon redemption, if applicable) will be
made by check mailed to the Person entitled thereto as
provided above. Notwithstanding the foregoing, a holder of
$10,000,000 or more in aggregate principal amount of
Certificated Notes of like tenor and terms shall be entitled
to receive such payments of interest by wire transfer in
immediately available funds, but only if appropriate
instructions have been received in writing by the Paying
Agent on or prior to the applicable Regular Record Date for
any such payment of interest.
On the fifth Business Day immediately preceding
each Interest Payment Date, the Trustee will furnish the
Company with the total amount (to the extent known to the
Trustee on such date) of the interest payments to be made on
such Interest Payment Date. The Trustee (or any duly
selected paying agent) will provide monthly to the Company's
finance department a list of the principal and interest to
be paid on Certificated Notes maturing in the next succeed-
ing month. To the extent provided in the Indenture, the
Company will provide to the Paying Agent not later than the
payment date sufficient moneys to pay in full all principal
and interest payments due on such payment date. The Paying
Agent will assume responsibility for withholding taxes on
interest paid as required by law.
For special provisions relating to the Floating
Rate Notes, see Appendix A hereto. Special provisions
relating to Certificated Notes denominated in a Specified
Currency may be agreed upon by the Company and the Agents at
a later time (the "Specified Currency Provisions").
<PAGE>
<PAGE> 36
Settlement
The receipt of immediately available funds in U.S.
dollars by the Company in payment for a Certificated Note
(less the applicable commission) and the authentication and
issuance of such Certificated Note shall, with respect to
such Certificated Note, constitute "Settlement" and the date
thereof shall be referred to as the "Settlement Date". All
offers to purchase Certificated Notes accepted by the
Company will be settled from one to five Business Days, or
one to three Business Days, should the U.S. Securities and
Exchange Commission so require, from the date of acceptance
by the Company pursuant to the timetable for Settlement set
forth below unless the Company and the purchaser agree to
Settlement on a different date; provided, however, that the
Company will so notify the Trustee (which notice with
respect to a Certificated Note denominated in a Specified
Currency will not be less than five Business Days prior to
the Settlement Date) of any such different date on or before
the Business Day immediately prior to the Settlement Date.
Settlement Procedures
In the event of a purchase of Certificated Notes
by an Agent, as principal, appropriate Settlement details
will be set forth in the applicable Purchase Agreement to be
entered into between such Agent and the Company pursuant to
the Agency Agreement.
Settlement procedures with regard to each
Certificated Note sold through an Agent, as agent (the
"Presenting Agent"), shall be as follows:
A. The Presenting Agent will advise the Company,
and after the Company has accepted the offer, the
Trustee, in writing by telex, facsimile or other
electronic transmission, of the following Settlement
information:
1. Exact name in which Certificated Note is
to be registered ("Registered Owner").
2. Exact address of the Registered Owner
and address for payment of principal and
interest, if any.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount of the Certificated
Note (and, if multiple Certificated
Notes are to be issued, denominations
thereof).
<PAGE> 37
5. If the Certificated Notes are to be
denominated in a Specified Currency,
whether principal and interest is to be
paid in U.S. dollars or the Specified
Currency.
6. Settlement Date.
7. Date of Maturity.
8. Interest rate:
(a) Fixed Rate Notes:
i) Interest Rate
ii) Interest Reset Dates
(b) Floating Rate Notes:
i) Interest Rate Basis
ii) Initial Interest Rate
iii) Spread or Spread Multiplier, if
any
iv) Interest Reset Periods and
Interest Reset Dates
v) Index Maturity
vi) Maximum and Minimum Interest
Rates, if any
vii) Calculation Agent
viii) Calculation Date
ix) Interest Determination Dates
(c) Interest Payment Periods and
Interest Payment Dates
(d) Regular Record Date.
9. If applicable, the date on or after
which the Certificated Notes are
redeemable at the option of the Company.
10. Wire transfer information (including
overseas bank account of the country of
the Specified Currency, if any).
11. Presenting Agent's commission (to be
paid in the form of a discount from the
proceeds remitted to the Company upon
Settlement).
12. Trade Date
13. Net Proceeds to Company
<PAGE> 38
14. Extension of Maturity Option (including
the basis or formula, of any, for the
setting of the Interest Rate or Spread
and/or Spread Multiplier, as
applicable).
15. Renewal of Note Provisions.
B. The Company will confirm to the Trustee (i) by
telephone, telex, facsimile or other electronic
transmission, the above Settlement information and
(ii) by facsimile in the form attached as Appendix B,
that the terms of the Notes have been approved by the
Governor or the Chief Financial Officer of the Company,
and the Trustee will assign a Certificated Note number
to the transaction. If the Company rejects an offer,
the Company will promptly notify the Presenting Agent
by telephone, telex, facsimile or other electronic
transmission.
C. The exchange rate agent, if any, appointed by
the Company will notify the Company, the Trustee and
the Presenting Agent of the Market Exchange Rate and
the denominations of Certificated Notes which are to be
denominated and payable in a Specified Currency.
D. The Trustee will complete the preprinted 4-ply
Certificated Note packet, the form of which was
previously approved by the Company, the Agents and the
Trustee.
E. The Trustee will authenticate and deliver the
Certificated Note (with the attached white
confirmation) and the yellow and blue stubs to the
Presenting Agent. The Presenting Agent will
acknowledge receipt of the Certificated Note by
completing the yellow stub and returning it to the
Trustee.
F. The Presenting Agent will cause to be wire
transferred to a bank account designated by the Company
immediately available funds in U.S. dollars in the
amount of the principal amount of the Certificated
Note, less the applicable commission.
G. The Presenting Agent will deliver the
Certificated Note (with the attached white confirma-
tion) to the purchaser against payment in immediately
available funds in the amount of the principal amount
of the Certificated Note. The Presenting Agent will
deliver to the purchaser a copy of the most recent
Prospectus applicable to the Certificated Note with or
prior to delivery of the Certificated Note and the
confirmation and payment by the purchaser for the
Certificated Note. If instructed by the purchaser to
<PAGE> 39
deliver the Certificated Note and confirmation to
different locations, the Certificated Note and the
confirmation will each be accompanied or preceded by
the Prospectus applicable to the Certificated Note
being delivered.
H. The Presenting Agent will obtain the acknowl-
edgement of receipt for the Certificated Note and
Prospectus by the purchaser through the purchaser's
completion of the blue stub.
I. The Trustee will mail the pink stub to the
Company's Chief Financial Officer or other appropriate
official.
Settlement Procedures Timetable
For offers accepted by the Company, Settlement
procedures "A" through "I" set forth above shall be
completed on or before the respective times set forth below:
Settlement
Procedure Time (New York)
A 4 P.M. on date of order (2 P.M. on
date of order in the case of
Certificated Notes with a
Settlement Date on the
Business Day after the date of
order)
B 5 P.M. on date of order (3 P.M. on
date of order in the case of
Certificated Notes with a
Settlement Date on the
Business Day after the date of
order)
C 10 A.M. on the Settlement Date
D-E 12:30 P.M.on the Settlement Date (1 P.M.
on the Settlement Date in the
case of Certificated Notes
denominated in a Specified
Currency)
F 2 P.M. on the Settlement Date
G-H 3 P.M. on the Settlement Date
I 5 P.M.on the Business Day after the
Settlement Date
Fails
<PAGE> 40
In the event that a purchaser of a Certificated
Note shall either fail to accept delivery of or make payment
for Certificated Note on the date fixed by the Company for
Settlement, the Presenting Agent will immediately notify the
Trustee and the Company's Chief Financial Officer or other
appropriate official by telephone, confirmed in writing, of
such failure and return the Certificated Note to the
Trustee. Upon the Trustee's receipt of the Certificated
Note from the Presenting Agent, the Company will promptly
return to the Presenting Agent an amount of immediately
available funds in U.S. dollars equal to any amount previ-
ously transferred to the Company in respect of the Certifi-
cated Note pursuant to advances made by such Agent. Such
returns will be made on the Settlement Date, if possible,
and in any event not later than 12 noon (New York City time)
on the Business Day following the Settlement Date. The
Company will reimburse the Presenting Agent on an equitable
basis for its loss of the use of the funds during the period
when the funds were credited to the account of the Company.
Upon receipt of the Certificated Note in respect of which
the default occurred, the Trustee will mark the Certificated
Note "cancelled", make appropriate entries in its records
and deliver the Certificated Note to the Company with an
appropriate debit advice. The Presenting Agent will not be
entitled to any commission with respect to any Certificated
Note which the purchaser does not accept or make payment
for.
Redemption
Except as otherwise specified in an applicable
supplement to the Prospectus and on the Certificated Notes,
the Certificated Notes will not be redeemable prior to their
Stated Maturity. If so specified in such a supplement and
on the Certificated Note, such Certificated Note will be
subject to redemption by the Company, at one or more
redemption prices (expressed as a percentage of the
principal amount of such Certificated Note) applicable
during one or more redemption periods, together with
interest accrued thereon on the date fixed for redemption.
Notice of redemption shall be given in accordance
with Section 1104 of the Indenture. In the event of redemp-
tion in part of any Certificated Note, a new Certificated
Note for the amount of the unredeemed portion shall be
issued in the name of the Holder upon cancellation of the
redeemed Certificated Note.
Maturity
Upon presentation of each Certificated Note at
Stated Maturity (unless the Company has exercised its option
to extend the Stated Maturity of a Certificated Note) or
upon redemption the Trustee (or any duly appointed Paying
Agent) will pay the principal amount or redemption price
<PAGE> 41
thereof, together with accrued interest due at Stated
Maturity or the date of redemption. Such payment shall be
made in immediately available funds in U.S. dollars (except
as provided in any Specified Currency Provisions), provided
that the Certificated Note is presented to the Trustee (or
any such Paying Agent) in time for the Trustee (or such
Paying Agent) to make payments in such funds in accordance
with its normal procedures. To the extent provided in the
Indenture, the Company will provide the Trustee (and any
such Paying Agent) with funds available for immediate use
for such purpose. Certificated Notes presented at Stated
Maturity or upon redemption will be cancelled by the Trustee
as provided in the Indenture.
<PAGE>
<PAGE> 42 PART II
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-
Entry Notes for eligibility in the book-entry system main-
tained by DTC, the Trustee will perform the custodial,
document control and administrative functions described
below, in accordance with its obligations under the Letter
of Representations and a Medium-Term Note Certificate
Agreement between the Trustee and DTC dated as of
October 18, 1989 (the "Medium-Term Note Certificate
Agreement"), a copy of which is attached hereto, and its
obligations as a participant in DTC, including DTC's Same-
Day Funds Settlement System ("SDFS").
Price to Public
Each Book-Entry Note will be issued at 100% of
principal amount, unless otherwise determined by the Com-
pany.
Date of Issuance
On any Settlement Date (as defined under "Settle-
ment" below) for one or more Book-Entry Notes, the Company
will issue a single global security in fully registered form
without coupons (a "Global Security") representing up to
$200,000,000 principal amount of all such Book-Entry Notes
that have the same terms. Each Global Security will be
dated and issued as of the date of its authentication by the
Trustee. Each Global Security will bear an original issue
date, which will be (i) with respect to an original Global
Security (or any portion thereof), the original issue date
specified in such Global Security and (ii) following a
consolidation of Global Securities, with respect to the
Global Security resulting from such consolidation, the most
recent Interest Payment Date (as defined in the Indenture)
to which interest has been paid or duly provided for on the
predecessor Global Securities, regardless of the date of
authentication of such resulting Global Security. No Global
Security will represent (i) both Fixed Rate Book-Entry Notes
and Floating Rate Book-Entry Notes or (ii) any Certificated
Note.
Identification Numbers
The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of a series of CUSIP numbers,
which series consists of approximately 900 CUSIP numbers and
relates to Global Securities representing Book-Entry Notes
and book-entry medium-term notes issued by the Company with
other series designations. The Company has obtained from
<PAGE> 43
the CUSIP Service Bureau a written list of such reserved
CUSIP numbers and has provided a copy of such list to DTC
and the Trustee. The Company will assign CUSIP numbers to
Global Securities as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the Company has
assigned to Global Securities. The Trustee will notify the
Company at any time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Global Securities, and,
if it deems necessary, the Company will reserve additional
CUSIP numbers for assignment to Global Securities. Upon
obtaining such additional CUSIP numbers, the Company shall
deliver a list of such addition CUSIP numbers to the Trustee
and DTC.
Registration
Global Securities will be issued only in fully
registered form without coupons. Each Global Security will
be registered in the name of CEDE & CO., as nominee for DTC,
on the securities register for the Notes maintained under
the Indenture. The beneficial owner of a Book-Entry Note
(or one or more indirect participants in DTC designated by
such owner) will designate one or more participants in DTC
(with respect to such Book-Entry Note, the "Participants")
to act as agent or agents for such owner in connection with
the book-entry system maintained by DTC, and DTC will record
in book-entry form, in accordance with instructions provided
by such Participants, a credit balance with respect to such
beneficial owner in such Book-Entry Note in the account of
such Participants. The ownership interest of such benefi-
cial owner (or such indirect participant in DTC) in such
Book-Entry Note will be recorded through the records of such
Participants or through the separate records of such Partic-
ipants and one or more indirect participants in DTC.
Transfers
Transfers of a Book-Entry Note will be accom-
plished by book entries made by DTC and, in turn, by Partic-
ipants (and in certain cases, one or more indirect partici-
pants in DTC) acting on behalf of beneficial transferors and
transferees of such Note.
Exchanges
The Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written notice of consolidation
specifying (i) the CUSIP numbers of two or more outstanding
Global Securities that represent (A) Fixed Rate Book-Entry
Notes having the same terms and for which interest has been
paid to the same date or (B) Floating Rate Book-Entry Notes
having the same terms and for which interest has been paid
to the same date, (ii) a date, occurring at least thirty
days after such written notice is delivered and at least
<PAGE> 44
thirty days before the next Interest Payment Date for such
Book-Entry Notes, on which such Global Securities shall be
exchanged for a single replacement Global Security and
(iii) a new CUSIP number, obtained from the Company, to be
assigned to such replacement Global Security. Upon receipt
of such a notice, DTC will send to its participants (includ-
ing the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date. Prior to
the specified exchange date, the Trustee will deliver to the
CUSIP Service Bureau a written notice setting forth such
exchange date and such new CUSIP number and stating that, as
of such exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be valid. On the
specified exchange date, the Trustee will exchange such
Global Securities for a single Global Security bearing the
new CUSIP number and the CUSIP Numbers of the exchanged
Global Securities will, in accordance with CUSIP Service
Bureau procedures, be canceled and not immediately reas-
signed. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed $200,000,000 in aggregate
principal amount, one Global Security will be authenticated
and issued to represent each $200,000,000 of principal
amount of the exchanged Global Securities and an additional
Global Security will be authenticated and issued to repre-
sent any remaining principal amount of such Global Secur-
ities (see "Denominations" below).
Maturity
Each Book-Entry Note will mature on a date nine
months or more after the Settlement date for such Note.
Denominations
Book-Entry Notes will be issued in principal
amounts of $1,000 or any integral multiple thereof. Global
Securities will be denominated in principal amounts not in
excess of $200,000,000. If one or more Book-Entry Notes
having an aggregate principal amount in excess of
$200,000,000 would, but for the preceding sentence, be
represented by a single Global Security, then one Global
Security will be authenticated and issued to represent each
$200,000,000 principal amount of such Book-Entry Note or
Notes and an additional Global Security will be
authenticated and issued to represent any remaining
principal amount of such Book-Entry Note or Notes. In such
a case, each of the Global Securities representing such
Book-Entry Note or Notes shall be assigned the same CUSIP
number.
Interest
Interest, if any, on each Fixed Rate Book-Entry
Note will accrue from the original issue date for the first
interest period or the last date to which interest has been
<PAGE> 45
paid, if any, for each subsequent interest period, on the
Global Security representing such Book-Entry Note, and will
be calculated and paid in the manner described in such Book-
Entry Note. Unless otherwise specified therein, each
payment of interest on a Fixed Rate Book-Entry Note will
include interest accrued to but excluding the Interest
Payment Date or to but excluding the date of Maturity.
Interest on Fixed Rate Book-Entry Notes (including interest
for partial periods) will be calculated on the basis of a
360-day year of twelve 30-day months.
Interest payable at the date of Maturity of a
Book-Entry Note will be payable to the Person to whom the
principal of such Note is payable. Standard & Poor's
Ratings Group may use the information received in the
pending deposit message described under Settlement Proce-
dure "C" below in order to include the amount of any inter-
est payable and certain other information regarding the
related Global Security in the appropriate (daily or weekly)
bond report published by Standard & Poor's Ratings Group.
For special provisions relating to the Floating
Rate Notes, see Appendix A hereto.
Payments of Interest
Promptly after each Regular Record Date, the
Paying Agent will deliver to the Company and DTC a written
notice setting forth, by CUSIP number, the amount of
interest to be paid on each Global Security on such Interest
Payment Date (other than an Interest Payment Date coinciding
with Maturity) and the total of such amounts. DTC will
confirm the amount payable on each Global Security on such
Interest Payment Date by reference to the appropriate (daily
or weekly) bond reports published by Standard & Poor's
Corporation. The Company will pay to the Paying Agent the
total amount of interest due on such Interest Payment Date
(other than at Maturity), and the Paying Agent will pay such
amount to DTC, at the times and in the manner set forth
below under "Manner of Payment." If any Interest Payment
Date for a Book-Entry Note is not a Business Day, the
payment due on such day shall be made on the next succeeding
Business Day and no interest shall accrue on such payment
for the period from and after such Interest Payment Date.
Payment at Maturity
On or about the first Business Day of each month,
the Paying Agent will deliver to the Company and DTC a
written list of principal and interest to be paid on each
Global Security maturing in the following month (excluding
principal on a Book-Entry Note where the Company has
exercised its option to extend the Stated Maturity). The
Company and DTC will confirm the amounts of such principal
and interest payments with respect to each such Global
<PAGE> 46
Security on or about the fifth Business Day preceding the
Maturity of such Global Security. On or before Maturity,
the Company will pay to the Paying Agent, the principal
amount of such Global Security, together with interest due
at such Maturity. The Paying Agent will pay such amount to
DTC at the times and in the manner set forth below under
"Manner of Payment." If any Maturity of a Global Security
representing Book-Entry Notes is not a Business Day, the
payment due on such day shall be made on the next succeeding
Business Day and no interest shall accrue on such payment
for the period from and after such Maturity. Promptly after
payment to DTC of the principal and interest due at Maturity
of such Global Security, the Paying Agent will cancel such
Global Security in accordance with the Indenture and so
advise the Company.
Manner of Payment
The total amount of any principal and interest due
on Global Securities on any Interest Payment Date or at
Maturity shall be paid by the Company to the Paying Agent in
immediately available funds no later than 9:30 A.M. (New
York City time) on such date. The Company will make such
payment on such Global Securities by instructing the Paying
Agent to withdraw funds from an account maintained by the
Company at the Paying Agent or by wire transfer to the
Paying Agent. The Company will confirm any such
instructions in writing to the Paying Agent. Prior to
10 A.M. (New York City time) on the date of Maturity or as
soon as possible thereafter, the Paying Agent will pay by
separate wire transfer (using Fedwire message entry instruc-
tions in a form previously specified by DTC) to an account
at the Federal Reserve Bank of New York previously specified
by DTC, in funds available for immediate use by DTC, each
payment of principal (together with interest thereon) due on
a Global Security on such date. On each Interest Payment
Date (other than at Maturity), interest payments shall be
made to DTC, in funds available for immediate use by DTC, in
accordance with existing arrangements between the Paying
Agent and DTC. On each such date, DTC will pay, in
accordance with its SDFS operating procedures then in
effect, such amounts in funds available for immediate use to
the respective Participants in whose names the Book-Entry
Notes represented by such Global Securities are recorded in
the book-entry system maintained by DTC. Neither the
Company (as issuer) nor the Paying Agent (as trustee,
security registrar or paying agent) shall have any direct
responsibility or liability for the payment by DTC to such
Participants of the principal of and interest on the Book-
Entry Notes.
Withholding Taxes
The amount of any taxes required under applicable
law to be withheld from any interest payment on a Book-Entry
<PAGE> 47
Note will be determined and withheld by the Participant,
indirect participant in DTC or other Person responsible for
forwarding payments and materials directly to the beneficial
owner of such Note.
Settlement
The receipt by the Company of immediately avail-
able funds in payment for a Book-Entry Note and the authen-
tication and issuance of the Global Security representing
such Book-Entry Note shall constitute "Settlement" with
respect to such Book-Entry Note and the date thereof shall
be referred to as the "Settlement Date". All orders for
Book-Entry Notes accepted by the Company will be settled on
the fifth Business Day, or the third Business Day, should
the U.S. Securities and Exchange Commission so require,
following the date of acceptance by the Company pursuant to
the timetable for Settlement set forth below unless the
Company and the purchaser agree to Settlement on another day
which shall be no earlier than the next Business Day
following the date of acceptance.
Settlement Procedures
In the event of a purchase of Book-Entry Notes by
an Agent, as principal, appropriate Settlement details will
be set forth in the applicable Purchase Agreement to be
entered into between such Agent and the Company pursuant to
the Agency Agreement.
Settlement Procedures with regard to each Book-
Entry Note sold by the Company through an Agent, as agent
(the "Presenting Agent"), shall be as follows:
A. The Presenting Agent will advise the Company
by telephone of the following Settlement information:
1. Principal amount.
2. Settlement Date.
3. Date of Maturity.
4. Interest rate:
(a) Fixed Rate Notes:
i) Interest Rate
ii) Interest Reset Dates
(b) Floating Rate Notes:
i) Interest Rate Basis
ii) Initial Interest Rate
<PAGE> 48
iii) Spread or Spread Multiplier, if
any
iv) Interest Reset Periods and
Interest Reset Dates
v) Index Maturity
vi) Maximum and Minimum Interest
Rates, if any
vii) Calculation Agent
viii) Calculation Date
ix) Interest Determination Dates
(c) Interest Payment Periods and
Interest Payment Dates.
(d) Regular Record Date.
5. If applicable, the date on or after
which the Book-Entry Notes are redeem-
able at the option of the Company.
6. Presenting Agent's commission (to be
paid in the form of a discount from the
proceeds remitted to the Company upon
Settlement).
7. Trade Date.
8. Net Proceeds to Company.
9. Extension of Maturity Option (including
the basis or formula, if any, for the
setting of the Interest Rate, or the
Spread and/or Spread Multiplier, as
applicable).
10. Renewal of Note Provisions.
B. The Company will assign a CUSIP number to the
Global Security representing such Book-Entry Note and
then advise the Trustee by telephone (confirmed in
writing at any time on the same date) or electronic
transmission of the information set forth in Settlement
Procedure "A" above, such CUSIP number and the name of
the Presenting Agent. The Company will confirm to the
Trustee, by facsimile in the form attached as
Appendix B, that the terms of the Notes have been
approved by the Governor or the Chief Financial Officer
of the Company. The Company will also notify the
Presenting Agent by telephone of such CUSIP number as
soon as practicable.
C. The Trustee will enter a pending deposit
message through DTC's Participant Terminal System
providing the following Settlement information to DTC
(which shall route such information to Standard &
<PAGE> 49
Poor's Ratings Group and Interactive Data Corporation)
and the Presenting Agent:
1. The information set forth in Settlement
Procedure "A".
2. Identification as a Fixed Rate Book-
Entry Note or a Floating Rate Book-Entry
Note.
3. Initial Interest Payment Date for such
Book-Entry Note, number of days by which
such date succeeds the related Regular
Record Date (which, in the case of
Floating Rate Book-Entry Notes that
reset weekly, shall be the DTC Record
Date, which is the date five calendar
days immediately preceding the applica-
ble Interest Payment Date and, in the
case of all other Book-Entry Notes,
shall be the Regular Record Date as
defined in the Indenture) and amount of
interest payable on such Interest
Payment Date.
4. The interest payment period.
5. CUSIP number of the Global Security
representing such Book-Entry Note.
6. Whether such Global Security will
represent any other Book-Entry Note (to
the extent known at such time).
7. Numbers of the participant accounts
maintained by DTC on behalf of the
Trustee and the Presenting Agent.
D. To the extent the Company has not already done
so, the Company will deliver to the Trustee a Global
Security in a form that has been approved by the
Company, the Agents and the Trustee.
E. The Trustee will complete such Book-Entry
Note, stamp the appropriate legend, as instructed by
DTC, if not already set forth thereon, and authenticate
the Global Security representing such Book-Entry Note.
F. DTC will credit such Book-Entry Note to the
Trustee's participant account at DTC.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System instructing
DTC to (i) debit such Book-Entry Note to the Trustee's
participant account and credit such Book-Entry Note to
<PAGE> 50
the Presenting Agent's participant account and
(ii) debit the Presenting Agent's Settlement account
and credit the Trustee's Settlement account for an
amount equal to the principal amount of such Book-Entry
Note less the Presenting Agent's commission. The entry
of such a deliver order shall constitute a representa-
tion and warranty by the Trustee to DTC that (i) the
Global Security representing such Book-Entry Note has
been issued and authenticated and (ii) the Trustee is
holding such Global Security pursuant to the Medium-
Term Note Certificate Agreement.
H. The Presenting Agent will enter an SDFS
deliver order through DTC's Participant Terminal System
instructing DTC (i) to debit such Book-Entry Note to
the Presenting Agent's participant account and credit
such Book-Entry Note to the participant accounts of the
Participants with respect to such Book-Entry Note and
(ii) to debit the Settlement accounts of such Partici-
pants and credit the Settlement account of the Present-
ing Agent for an amount equal to the principal amount
of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement Procedures "G"
and "H" will be settled in accordance with SDFS operat-
ing procedures in effect on the Settlement date.
J. The Trustee will, upon receipt of funds from
the Agent in accordance with Settlement Procedure "G",
credit to an account of the Company maintained at the
Trustee funds available for immediate use in the amount
transferred to the Trustee in accordance with
Settlement Procedure "G".
K. The Trustee will send a copy of the Book-Entry
Note by first-class mail to the Company.
L. The Presenting Agent will confirm the purchase
of such Book-Entry Note to the purchaser either by
transmitting to the Participants with respect to such
Book-Entry Note a confirmation order or orders through
DTC's institutional delivery system or by mailing a
written confirmation to such purchaser.
Settlement Procedures Timetable
For orders of Book-Entry Notes solicited by any
Agent and accepted by the Company for Settlement on the
first Business Day after such acceptance, Settlement Proce-
dures "A" through "K" set forth above shall be completed as
soon as possible but not later than the respective times set
forth below:
Settlement
<PAGE> 51
Procedure Time (New York)
A 11 A.M. on date of order
B 12 P.M. on date of order
C 2 P.M. on date of order
D 3 P.M. on date of order
E 9 A.M. on Settlement Date
F 10 A.M. on Settlement Date
G-H 2 P.M. on Settlement Date
I 4:45 P.M. on Settlement Date
J-K 5 P.M. on Settlement Date
If an order is to be settled more than one Busi-
ness Day after acceptance by the Company, Settlement Proce-
dures "A", "B" and "C" may be completed not later than
11:00 A.M., 12:00 Noon and 2:00 P.M., respectively, on the
Business Day after the date of acceptance. If the initial
interest rate for a Floating Rate Book-Entry Note has not
been determined at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C" shall be
completed as soon as such rate has been determined but not
later than 12:00 Noon and 2:00 P.M., respectively, on the
Business Day after the date of acceptance. Settlement
Procedure "I" is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other
events specified in SDFS operating procedures in effect on
the Settlement Date.
If Settlement of a Book-Entry Note is rescheduled
or canceled, the Company will advise the Trustee and the
Trustee will deliver to DTC, through DTC's Participant
Terminal System, a cancelation message to such effect by no
later than 2:00 P.M. on the Business Day immediately preced-
ing the scheduled Settlement Date.
Failure to Settle
If the Trustee fails to enter an SDFS deliver
order with respect to a Book-Entry Note pursuant to Settle-
ment Procedure "G", the Trustee may deliver to DTC, through
DTC's Participant Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such Book-Entry
Note to the Trustee's participant account. DTC will process
the withdrawal message, provided that the Trustee's partici-
pant account contains a principal amount of the Global
Security representing such Book-Entry Note that is at least
equal to the principal amount to be debited. If a with-
drawal message is processed with respect to all the Book-
Entry Notes represented by a Global Security, the Trustee
will cancel such Global Security in accordance with the
Indenture and so advise the Company. The CUSIP number
assigned to such Global Security shall, in accordance with
CUSIP Service Bureau procedures, be canceled and not immedi-
ately reassigned. If a withdrawal message is processed with
respect to one or more, but not all, of the Book-Entry Notes
<PAGE> 52
represented by a Global Security, the Trustee will exchange
such Book-Entry Note for two Global Securities, one of which
shall represent such Book-Entry Notes and shall be canceled
immediately after issuance and the other of which shall
represent the other Book-Entry Notes previously represented
by the surrendered Global Security and shall bear the CUSIP
number of the surrendered Global Security.
If the purchase price for any Book-Entry Note is
not timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a Person,
including an indirect participant in DTC, acting on behalf
of such purchaser), such Participants and, in turn, the
Presenting Agent may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders entered
pursuant to Settlement Procedures "H" and "G", respectively.
Thereafter, the Trustee will deliver the withdrawal message
and take the related actions described in the preceding
paragraph. The Company will reimburse the Presenting Agent
and the Trustee, as applicable, on an equitable basis for
their loss of the use of the funds during the period when
the funds were credited to the account of the Company
(except that the Company shall not be required to reimburse
a party if such party's default hereunder or under the
Agency Agreement shall have caused such failure by the
beneficial purchaser to make timely payment of the purchase
price),
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take any
actions in accordance with its SDFS operating procedures
then in effect. In the event of a failure to settle with
respect to one or more, but not all, of the Book-Entry Notes
to have been represented by a Global Security, the Trustee
will provide, in accordance with Settlement Procedure "E",
for the authentication and issuance of a Global Security
representing the other Book-Entry Notes to have been repre-
sented by such Global Security and will make appropriate
entries in its records.
Trustee Not to Risk Funds
Nothing herein shall be deemed to require the
Trustee to risk or expend its own funds in connection with
any payment to the Company, DTC, the Agents or the pur-
chaser, it being understood by all parties that payments
made by the Trustee to the Company, DTC, the Agents or the
purchaser shall be made only to the extent that funds are
provided to the Trustee for such purpose.
PART III
Administrative Procedures for Book-Entry Notes
and Certificated Notes
<PAGE> 53
Procedures for Establishing the Terms of the Notes
The Company and the Agents will discuss from time
to time the rates to be borne by the Notes that may be sold
as a result of the solicitation of offers by the Agents.
Once either Agent has recorded any indication of interest in
Notes upon certain terms, and communicated with the Company,
if the Company plans to accept an offer to purchase Notes
upon such terms, it will prepare a sticker reflecting the
terms of such Notes (if the interest rate, Stated Maturity
or other terms have changed) and, after approval from such
Agent, will arrange to have such sticker (together with the
Prospectus if amended or supplemented), electronically filed
or transmitted by a means reasonably calculated to result in
filing with the Commission by the second Business Day after
the Company has accepted such offer (or by the Business Day
prior to the Settlement Date in the event the Settlement
Date is the first or second Business Day after such
acceptance) and pursuant to Rule 424(b) of the Rules and
Regulations, and will supply an appropriate number of copies
of the Prospectus, as then amended or supplemented, and
bearing such sticker, to the Agent that presented such
offer. No Settlements with respect to Notes upon such terms
may occur prior to such filing or such transmission and the
Agents will not, prior to such filing or such transmission,
mail confirmations to customers who have offered to purchase
Notes upon such terms. After such filing or such transmis-
sion, sales, mailing of confirmations and Settlements may
occur with respect to Notes upon such terms, subject to the
provisions of "Delivery of Prospectus" below.
If the Company decides to post rates and a deci-
sion has been reached to change interest rates, the Company
will promptly so notify each Agent. Each Agent will forth-
with suspend solicitation of purchases. At that time, the
Agents will recommend and the Company will establish rates
to be so posted. Following establishment of posted rates
and prior to the filing or transmission described in the
following sentence, the Agents may record indications of
interest in purchasing Notes only at the posted rates. Once
either Agent has recorded any indication of interest in
Notes at the posted rates and communicated with the Company,
if the Company plans to accept an offer at the posted rate,
it will prepare a sticker reflecting such posted rates and,
after approval from such Agent, will arrange to have such
sticker (together with the Prospectus if amended or supple-
mented), electronically filed or transmitted by a means
reasonably calculated to result in filing with the Commis-
sion by the second Business Day after the Company has
accepted such offer (or by the Business Day prior to the
Settlement Date in the event the Settlement Date is the
first or second Business Day after such acceptance) and
pursuant to Rule 424(b) of the Rules and Regulations, and
will supply an appropriate number of copies of the
Prospectus, as then amended or supplemented, to the Agent
<PAGE> 54
who presented such offer. No Settlements at the posted
rates may occur prior to such filing or such transmission
and the Agents will not, prior to such filing or such
transmission, mail confirmations to customers who have
offered to purchase Notes at the posted rates. After such
filing or such transmission, sales, mailing of confirmations
and Settlements may resume, subject to the provisions of
"Delivery of Prospectus" below.
Acceptance and Rejection of Offers
The Company shall have the sole right to accept
offers to purchase Notes from the Company and may reject any
such offer in whole or in part. Each Agent shall promptly
communicate to the appropriate official of the Company,
orally or in writing, each reasonable offer to purchase
Notes from the Company received by it other than those
rejected by such Agent. Each Agent shall have the right, in
its discretion reasonably exercised without advising the
Company, to reject any offers in whole or in part.
Suspension of Solicitation; Amendment or Supplement
If, during any period in which, in the opinion of
counsel for the Agents (provided, if the Agents are no
longer soliciting (or have been instructed not to solicit)
purchases of Securities from the Company such opinion is
known to the Company), a prospectus relating to the Notes is
required to be delivered under the Act, any event known to
the Company occurs as a result of which the Prospectus would
include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time
to amend the Prospectus to comply with the Act or the Rules
and Regulations, the Company will notify the Agents promptly
to suspend solicitation of purchases of the Notes and the
Agents shall suspend their solicitations of purchases of
Notes; and if the Company shall decide to amend or supple-
ment the Registration Statement or the Prospectus for
purposes of offering the Securities, it will promptly advise
the Agents by telephone (with confirmation in writing) and,
except as otherwise provided in any relevant Purchase
Agreement, will promptly prepare and file with the Commis-
sion an amendment or supplement which will correct such
statement or omission or an amendment, whether by filing
such documents pursuant to the Act or the Exchange Act, as
may be necessary to correct such untrue statement or omis-
sion or to make the Registration Statement or the Prospectus
comply with such requirements and to prepare and furnish to
the Agents at its own expense such amendment or supplement
to the Registration Statement or the Prospectus as will
correct such Registration Statement or Prospectus; provided,
however, that the Company shall in any event promptly
prepare, file and furnish an Agent with such an amendment or
<PAGE> 55
supplement if such Agent shall then hold any Securities
acquired from the Company as principal (other than such
Securities as such Agent shall have held for a period of six
months or more). Upon the Agents' receipt of such amendment
or supplement and advice from the Company that solicitations
may be resumed, the Agents will resume solicitations of
purchases of the Notes.
In addition, the Company may instruct the Agents
to suspend solicitation of offers to purchase at any time.
Upon receipt of such instructions the Agents will forthwith
(but in any event within one Business Day) suspend solicita-
tion of offers to purchase from the Company until such time
as the Company has advised it that solicitation of offers to
purchase may be resumed and the Company has complied with
Section 6 of the Agency Agreement to the extent then
required. If the Company decides to amend or supplement the
Registration Statement or the Prospectus relating to the
Notes (other than to change interest rates or maturities or
similar changes and except in all cases by filing a report
on Form 8-K, pursuant to the Exchange Act, solely to add
exhibits to documents previously filed), it will promptly
advise the Agents and the Trustee and will furnish the
Agents and the Trustee with copies of the proposed amendment
or supplement.
In the event that at the time the Agents, at the
direction of the Company, suspend solicitation of offers to
purchase from the Company there shall be any orders out-
standing which have not been settled, the Company will
promptly advise the Agents and the Trustee whether such
orders may be settled and whether copies of the Prospectus
as theretofore amended and/or supplemented as in effect at
the time of the suspension may be delivered in connection
with the Settlement of such orders. The Company will have
the sole responsibility for such decision and for any
arrangements which may be made in the event that the Company
determines that such orders may not be settled or that
copies of such Prospectus may not be so delivered.
Delivery of Prospectus
A copy of the Prospectus as most recently amended
or supplemented on the date of delivery thereof must be
delivered to a purchaser prior to or together with the
earliest of (i) any written offer of such Note, (ii) confir-
mation of the purchase of such Note and (iii) payment for
such Note by its purchaser. The Company shall ensure that
an Agent receives copies of the Prospectus and each amend-
ment or supplement thereto (including appropriate pricing
stickers as described in the section entitled "Procedures
for Establishing the Terms of the Notes" above) in such
quantities and within such time limits as will enable such
Agent to deliver such confirmation or Note to a purchaser as
contemplated by these procedures and in compliance with the
<PAGE> 56
preceding sentence. If, since the date of acceptance of a
purchaser's offer, the Prospectus shall have been supple-
mented solely to reflect any sale of Notes on terms dif-
ferent from those agreed to between the Company and such
purchaser or a change in posted rates not applicable to such
purchaser, such purchaser shall not receive the Prospectus
as supplemented by such new supplement, but shall receive
the Prospectus as supplemented to reflect the terms of the
Notes being purchased by such purchaser and otherwise as
most recently amended or supplemented on the date of deliv-
ery of the Prospectus. The Trustee will make all such
deliveries with respect to all Notes sold directly by the
Company.
Confirmation
For each order to purchase a Note solicited by any
Agent and accepted by the Company, the Presenting Agent will
issue a confirmation to the purchaser (with a copy to the
Company), including delivery and payment instructions.
Advertising Costs
The Company will determine with the Agents the
amount and nature of advertising that may be appropriate in
offering the Notes. The "tombstone" advertisement and such
other expenses agreed to by the Company and Agents in
connection with solicitation of offers to purchase Notes
from the Company will be paid by the Company.
Business Day
"Business Day" shall mean, for all purposes of
these Administrative Procedures, any day which is not a
Saturday or Sunday and which is not a day on which banking
institutions are generally authorized or obligated by law or
executive order to close (i) in New York City, (ii) in the
case of Notes denominated in a Specified Currency, in the
city designated in an applicable supplement to the Prospec-
tus as the principal financial center of the country of such
Specified Currency, (iii) in the case of Notes denominated
in ECU, in Brussels and (iv) in the case of LIBOR Notes (as
defined in Appendix A), in New York City and London.
<PAGE> 57 EXHIBIT C
PURCHASE AGREEMENT
, 199
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
Woodland Park
2201 Cooperative Way
Herndon, Virginia 22071
Attention: Chief Financial Officer
The undersigned agrees to purchase the following
principal amount of the Securities described in the Agency
Agreement dated April 13, 1995 (as it may be supplemented or
amended from time to time, the "Agency Agreement"):
Principal Amount: [$]
Currency:
Interest Rate: %
Discount: % of Principal Amount
Aggregate Price to
be paid to Company
(in immediately
available funds): [$]
Settlement Date:
Other Terms:
In the case of Securities issued in a foreign
currency or currency unit, unless otherwise specified below,
settlement and payments of principal and interest will be in
U.S. dollars based on the highest bid quotation in the City
of New York received by the Exchange Rate Agent (as defined
in the Indenture dated as of December 15, 1987, as
supplemented by the First Supplemental Indenture dated as of
October 1, 1990, between National Rural Utilities
Cooperative Finance Corporation and Harris Trust and Savings
Bank, as successor trustee) at approximately 11:00 A.M. New
York City time, on the second Business Day (as defined in
the Procedures) preceding the applicable payment date from
three recognized foreign exchange dealers (one of which may
be the Exchange Rate Agent) for the purchase by the quoting
dealer of the Specified Currency for U.S. dollars for
settlement on such payment date in the aggregate amount of
the Specified Currency payable to all holders of Securities
denominated in such Specified Currency electing to receive
<PAGE> 58
U.S. dollar payments and at which the applicable dealer
commits to execute a contract. If such bid quotations are
not available, payments will be made in the Specified
Currency.
Our obligation to purchase Securities hereunder is
subject to the continued accuracy of your representations
and warranties contained in the Agency Agreement and to your
performance and observance in all material respects of all
applicable covenants and agreements contained therein,
including, without limitation, your obligations pursuant to
Section 7 thereof. Our obligation hereunder is subject to
the further condition that we shall receive (a) the opinions
required to be delivered pursuant to Sections 5(e) and 5(f)
of the Agency Agreement, (b) the certificate required to be
delivered pursuant to Section 5(g) of the Agency Agreement
and (c) the letter required to be delivered pursuant to 5(h)
of the Agency Agreement, in each case dated as of the above
Settlement Date.
In further consideration of our agreement here-
under, you agree that between the date hereof and the above
Settlement Date, you will not offer or sell, or enter into
any agreement to sell, except to your members, any debt
securities of the Company of substantially the form of the
Securities.
We may terminate this Agreement, immediately upon
notice to you, at any time prior to the above Settlement
Date, if prior thereto (a) trading in securities generally
on the New York Stock Exchange is suspended, or minimum
prices are established on that Exchange, or (b) a banking
moratorium is declared by either Federal or New York State
authorities, or (c) the United States is or becomes engaged
in any outbreak of hostilities, an escalation of hostilities
or a national emergency or war. In the event of such
termination, no party shall have any liability to the other
party hereto, except as provided in Sections 4, 7 and 13 of
the Agency Agreement.
Except as expressly designated, capitalized terms
used herein are defined in the Agency Agreement (including
the exhibits thereto).
<PAGE> 59
This Agreement shall be governed by and construed
in accordance with the laws of New York.
[Insert Name of Agent],
By ____________________
Title:
Accepted: _________ __, 199_
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By __________________________
Chief Financial Officer<PAGE>
<PAGE> 60
APPENDIX A
APPENDIX A
Special Provisions Relating
to Floating Rate Notes
Interest Rate: Interest on Floating Rate Notes will be
determined by reference to an "Interest
Rate Basis", which shall be the
"Commercial Paper Rate" ("Commercial
Paper Rate Notes"), "LIBOR" ("LIBOR
Notes"), the "Treasury Rate" ("Treasury
Rate Notes"), the "Federal Funds
Effective Rate" ("Fed Funds Notes"), the
"CD Rate" ("CD Rate Notes"), the "Prime
Rate" ("Prime Rate Notes") or such other
interest rate formula as may be
designated by the Company, based upon
the Index Maturity and adjusted by a
Spread or Spread Multiplier, if any, as
specified in the applicable pricing
supplement to the Prospectus setting
forth the terms of each issuance of
Notes (the "Pricing Supplement"). The
"Index Maturity" is the particular
maturity of the type of instrument or
obligation from which the Interest Rate
Basis is calculated (e.g., in the case
of commercial paper, 30-day rather than
90-day commercial paper). The "Spread"
is the number of basis points (100 basis
points equals one percent) above or
below the Interest Rate Basis
applicable, to such Floating Rate Note,
and the "Spread Multiplier" is the
percentage of the Interest Rate Basis
applicable to the interest rate for such
Floating Rate Note. The Spread, Spread
Multiplier, Index Maturity and other
variable terms as described below are
subject to change by the Company from
time to time, but no such change will
affect any Floating Rate Note
theretofore issued or as to which an
offer has been accepted by the Company.
A Floating Rate Note may also have
either or both of the following: (i) a
maximum limit, or ceiling ("Maximum
Interest Rate"), on the rate of interest
which may apply during any Interest
Period (as defined below); and (ii) a
minimum limit, or floor ("Minimum
Interest Rate"), on the rate of interest
which may apply during any Interest
Period. In addition to any Maximum
Interest Rate which may be applicable to
any Floating Rate Note pursuant to the
above provisions, the interest rate on
<PAGE> 61
the Floating Rate Notes will in no event
be higher than the maximum rate
permitted by New York law, as the same
may be modified by United States law of
general application. Under present New
York law, the maximum rate of interest
is 25% per annum on a simple interest
basis. The limit may not apply to
Floating Rate Notes in which $2,500,000
or more has been invested.
The Calculation Agent appointed by the
Company (the "Calculation Agent")
(initially Lehman Brothers Inc.) will,
upon request of a holder of Floating
Rate Notes, provide the interest rate
then in effect and, if determined, the
interest rate which will become
effective as a result of a determination
made with respect to the most recent
Interest Determination Date (as defined
below) with respect to such Floating
Rate Notes. The applicable Pricing
Supplement will specify for each
Floating Rate Note the following terms:
Interest Rate Basis, rate of interest
for the initial Interest Period (the
"Initial Interest Rate"), date of issue,
Interest Determination Dates, Interest
Reset Dates (as defined below), Interest
Payment Dates (as defined below),
Regular Record Date (as defined below),
Index Maturity, maturity date, Maximum
Interest Rate and Minimum Interest Rate,
if any, and the Spread or Spread
Multiplier, if any.
Interest Payment Except as set forth in the applicable
Dates: Pricing Supplement and except as
provided below, interest will be payable
in the case of Floating Rate Notes with
a daily, weekly or monthly Interest
Reset Date, on the third Wednesday of
each month or on the third Wednesday of
March, June, September and December of
each year, as specified in the
applicable Pricing Supplement; in the
case of Floating Rate Notes with a
quarterly Interest Reset Date, on the
third Wednesday of March, June,
September and December of each year; in
the case of Floating Rate Notes with a
semi-annual Interest Reset Date, on the
third Wednesday of two months of each
year, as specified in the applicable
<PAGE> 62
Pricing Supplement; and in the case of
Floating Rate Notes with an annual
Interest Reset Date, on the third
Wednesday of one month of each year, as
specified in the applicable Pricing
Supplement. If any Interest Payment
Date for any Floating Rate Note would
otherwise be a day that is not a
Business Day (as defined below) for such
Floating Rate Note, the Interest Payment
Date for such Floating Rate Note shall
be postponed to the next day that is a
Business Day for such Floating Rate
Note, except that in the case of a LIBOR
Note, if such day falls in the next
calendar month, such Interest Payment
Date shall be the preceding day that is
a London Business Day (as defined below)
with respect to such Note. Each date on
which interest is payable on a Floating
Rate Note is referred to herein as an
"Interest Payment Date."
Interest Reset The rate of interest on each Floating
Dates: Rate Note will be reset daily, weekly,
monthly, quarterly, semi-annually or
annually (each an "Interest Reset
Date"), as specified in the applicable
Pricing Supplement. Except as set forth
in the applicable Pricing Supplement,
the Interest Reset Date will be, in the
case of Floating Rate Notes which reset
daily, each Business Day; in the case of
Floating Rate Notes (other than Treasury
Rate Notes) which reset weekly, the
Wednesday of each week; in the case of
Treasury Rate Notes which reset weekly,
the Tuesday of each week; in the case of
Floating Rate Notes which reset monthly,
the third Wednesday of each month; in
the case of Floating Rate Notes which
reset quarterly, the third Wednesday of
March, June, September and December; in
the case of Floating Rate Notes which
reset semiannually, the third Wednesday
of two months of each year, as specified
in the applicable Pricing Supplement;
and in the case of Floating Rate Notes
which reset annually, the third
Wednesday of one month of each year, as
specified in the applicable Pricing
Supplement; provided, however, that
(i) the interest rate in effect from the
date of issue to the first Interest
Reset Date with respect to a Floating
<PAGE> 63
Rate Note will be the Initial Interest
Rate (as set forth in the applicable
Pricing Supplement) and (ii) unless
otherwise specified in the applicable
Pricing Supplement, the interest rate in
effect for the ten calendar days
immediately prior to maturity or
redemption, if applicable, will be that
in effect on the tenth calendar day
preceding such maturity or redemption.
If any Interest Reset Date for any
Floating Rate Note would otherwise be a
day that is not a Business Day for such
Floating Rate Note, the Interest Reset
Date for such Floating Rate Note shall
be postponed to the next day that is a
Business Day for such Floating Rate
Note, except that in the case of a LIBOR
Note, if such Business Day is in the
next succeeding calendar month, such
Interest Reset Date shall be the
immediately preceding Business Day.
Interest Determi- Except as set forth in the applicable
nation Dates: Pricing Supplement, the "Interest
Determination Date" pertaining to an
Interest Reset Date for a Commercial
Paper Rate Note (the "Commercial Paper
Interest Determination Date"), a Fed
Funds Note (the "Fed Funds Interest
Determination Date"), a CD Rate Note
(the "CD Interest Determination Date")
or a Prime Rate Note (the "Prime
Interest Determination Date") will be
the second Business Day preceding such
Interest Reset Date. The "Interest
Determination Date" pertaining to an
Interest Reset Date for a LIBOR Note
(the "LIBOR Interest Determination
Date") will be the second London
Business Day preceding such Interest
Reset Date. The "Interest Determination
Date" pertaining to an Interest Reset
Date for a Treasury Rate Note (the
"Treasury Interest Determination Date")
will be the day of the week in which
such Interest Reset Date falls on which
Treasury bills would normally be
auctioned. Treasury bills are usually
sold at auction on Monday of each week,
unless that day is a legal holiday, in
which case the auction is usually held
on the following Tuesday, except that
such auction may be held on the
preceding Friday. If, as the result of
<PAGE> 64
a legal holiday, an auction is so held
on the preceding Friday, such Friday
will be the Treasury Interest
Determination Date pertaining to the
Interest Reset Date occurring in the
next succeeding week. If an auction
date for Treasury bills shall fall on
any Interest Reset Date for a Treasury
Rate Note, then such Interest Reset Date
shall instead be the first Business Day
immediately following such auction date.
Calculation Dates: The Calculation Date, where applicable,
pertaining to any Interest Determination
Date will be the earlier of (i) the
tenth calendar day after such Interest
Determination Date or if any such day is
not a Business Day, the next succeeding
Business Day or (ii) the Business Day
preceding the applicable Interest
Payment Date or maturity, as the case
may be.
All percentages resulting from any
calculation on Floating Rate Notes will
be rounded to the nearest one hundred-
thousandth of a percentage point, with
five one millionths of a percentage
point rounded upwards (e.g., 9.876545%
(or .09876545) would be rounded to
9.87655% (or .0987655), and all dollar
amounts used in or resulting from such
calculation on Floating Rate Notes will
be rounded to the nearest cent or, in
the case of Notes denominated other than
in United States dollars, the nearest
unit (with one-half cent or unit being
rounded upward).
Commercial Paper Unless otherwise indicated in the
Rate: applicable Pricing Supplement, the
"Commercial Paper Rate" for each such
Interest Reset Date will be determined
as of the Commercial Paper Interest
Determination Date and will be the Money
Market Yield (as defined below) on such
date of the rate for commercial paper
having the Index Maturity specified in
the applicable Pricing Supplement as
published by the Board of Governors of
the Federal Reserve System in
"Statistical Release H.15(519), Selected
Interest Rates" or any successor
publication selected by the Calculation
Agent ("H.15(519)") under the heading
<PAGE> 65
"Commercial Paper". In the event that
such rate is not published prior to
9:00 A.M., New York City time, on the
Calculation Date pertaining to such
Commercial Paper Interest Determination
Date, then the Commercial Paper Rate
shall be the Money Market Yield on such
Commercial Paper Interest Determination
Date of the rate for commercial paper of
the specified Index Maturity as
published by the Federal Reserve Bank of
New York in its daily statistical
release, "Composite 3:30 P.M.
Quotations for U.S. Government
Securities", or any successor
publication selected by the Calculation
Agent ("Composite Quotations") under the
heading "Commercial Paper". If by
3:00 P.M., New York City time, on such
Calculation Date such rate is not
published in either H.15(519) or
Composite Quotations, the Commercial
Paper Rate for that Commercial Paper
Interest Determination Date shall be
calculated by the Calculation Agent and
shall be the Money Market Yield of the
arithmetic mean of the offered rates as
of 11:00 A.M., New York City time, on
that Commercial Paper Interest
Determination Date, of three leading
dealers of commercial paper in The City
of New York selected by the Calculation
Agent for commercial paper of the
specified Index Maturity placed for an
industrial issuer whose bond rating is
"AA", or the equivalent, from a
nationally recognized securities rating
agency; provided, however, that if the
dealers selected as aforesaid by the
Calculation Agent are not quoting as
mentioned in this sentence, the
Commercial Paper Rate with respect to
such Commercial Paper Interest
Determination Date will be the
Commercial Paper Rate in effect on such
Commercial Paper Interest Determination
Date.
Money Market Yield: "Money Market Yield" shall be a yield
(expressed as a percentage rounded
upwards, if necessary, to the next
higher one hundred-thousandth of a
percentage point) calculated in
accordance with the following formula:
<PAGE> 66
Money Market Yield = D x 360 x 100
-----------
360 - (DxM)
where "D" refers to the per annum rate
for commercial paper quoted on a bank
discount basis and expressed as a
decimal, and "M" refers to the actual
number of days in the interest period
for which interest is being calculated.
LIBOR: Each LIBOR Note will bear interest at
the interest rate (calculated with
reference to LIBOR and the Spread and/or
Spread Multiplier, if any) specified in
such LIBOR Note and in the applicable
Pricing Supplement.
Unless otherwise indicated in the
applicable Pricing Supplement, "LIBOR"
will be determined by the Calculation
Agent in accordance with the following
provisions:
(i) With respect to a LIBOR Interest
Determination Date, LIBOR will be, as
specified in the applicable Pricing
Supplement, either: (a) the arithmetic
mean of the offered rates for deposits
in the U.S. dollars having the Index
Maturity designated in the applicable
Pricing Supplement, commencing on the
second day on which dealings in deposits
in U.S. dollars are transacted in the
London interbank market ("London
Business Day") immediately following
such LIBOR Interest Determination Date,
that appear on the Reuters Screen LIBO
Page as of 11:00 A.M., London time, on
such LIBOR Interest Determination Date,
if at least two such offered rates
appear on the Reuters Screen LIBO Page
("LIBOR Reuters"), or (b) the rate for
deposits in U.S. dollars having the
Index Maturity designated in the
applicable Pricing Supplement,
commencing on the second London Business
Day immediately following such LIBOR
Interest Determination Date, that
appears on Telerate Page 3750 as of
11:00 A.M., London Time, on such LIBOR
Interest Determination Date ("LIBOR
Telerate"). "Reuters Screen LIBO Page"
means the display designated as page
"LIBO" on the Reuters Monitor Money
Rates Service (or such other page as may
<PAGE> 67
replace page LIBO on that service for
the purpose of displaying London
interbank offered rates of major banks).
"Telerate Page 3750" means the display
designated as page "3750" on the
Telerate Service (or such other page as
may replace the 3750 page on that
service or such other service or
services as may be nominated by the
British Bankers' Association for the
purpose of displaying London interbank
offered rates for U.S. dollar deposits).
If neither LIBOR Reuters nor LIBOR
Telerate is specified in the applicable
Pricing Supplement, LIBOR will be
determined as if LIBOR Telerate had been
specified. If fewer than two offered
rates appear on the Reuters Screen LIBO
Page, or if no rate appears on Telerate
Page 3750, as applicable, LIBOR in
respect of such LIBOR Interest
Determination Date will be determined as
if the parties had specified the rate
described in (ii) below.
(ii) With respect to a LIBOR Interest
Determination Date on which fewer than
two offered rates appear on the Reuters
Screen LIBO Page, as specified in
(i) (a) above, or on which no rate
appears on Telerate Page 3750, as
specified in (i) (b) above, as
applicable, LIBOR will be determined on
the basis of the rates at which deposits
in U.S. dollars having the Index
Maturity designated in the applicable
Pricing Supplement are offered at
approximately 11:00 A.M., London time,
on such LIBOR Interest Determination
Date by four major banks in the London
interbank market selected by the
Calculation Agent (the "Reference
Banks") to prime banks in the London
interbank market, commencing on the
second London Business Day immediately
following such LIBOR Interest
Determination Date and in a principal
amount equal to an amount of not less
than $1,000,000 that is representative
for a single transaction in such market
at such time. The Calculation Agent
will request the principal London office
of each of the Reference Banks to
provide a quotation of its rate. If at
least two such quotations are provided,
<PAGE> 68
LIBOR in respect of such LIBOR Interest
Determination Date will be the
arithmetic mean of such quotations. If
fewer than two quotations are provided,
LIBOR in respect of such LIBOR Interest
Determination Date will be the
arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City
time, on such LIBOR Interest
Determination Date by three major banks
in The City of New York selected by the
Calculation Agent for loans in U.S.
dollars to leading European banks having
the Index Maturity designated in the
applicable Pricing Supplement,
commencing on the second London Business
Day immediately following such LIBOR
Interest Determination Date and in a
principal amount equal to an amount of
not less than $1,000,000 that is
representative for a single transaction
in such market at such time; provided,
however, that if the banks selected as
aforesaid by the Calculation Agent are
not quoting as mentioned in this
sentence, LIBOR with respect to such
LIBOR Interest Determination Date will
be the interest rate otherwise in effect
on such LIBOR Interest Determination
Date.
Treasury Rate: Unless otherwise indicated in the
applicable Pricing Supplement, the
"Treasury Rate" for each such Interest
Reset Date will be determined as of the
Treasury Interest Determination Date and
will be the rate applicable to the most
recent auction of direct obligations of
the United States ("Treasury bills")
having the Index Maturity specified in
the applicable Pricing Supplement, as
such rate is published in H.15(519)
under the heading "U.S. Government
Securities--Treasury Bills--Auction
Average (Investment)" or, if not so
published by 9:00 A.M., New York City
time, on the Calculation Date pertaining
to such Treasury Interest Determination
Date, the auction average rate
(expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as
applicable, and applied on a daily
basis) as otherwise announced by the
United States Department of the
Treasury. In the event that the results
<PAGE> 69
of the auction of Treasury bills having
the specified Index Maturity are not
reported as provided by 3:00 P.M., New
York City time, on such Calculation
Date, or if no such auction is held in a
particular week, then the Treasury Rate
shall be calculated by the Calculation
Agent and shall be a yield to maturity
(expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as
applicable, and applied on a daily
basis) of the arithmetic mean of the
secondary market bid rates, as of
approximately 3:30 P.M., New York City
time, on such Treasury Interest
Determination Date, of three leading
primary United States government
securities dealers, selected by the
Calculation Agent, for the issue of
Treasury bills with a remaining maturity
closest to the applicable Index
Maturity; provided, however, that if the
dealers selected as aforesaid by the
Calculation Agent are not quoting as
mentioned in this sentence, the Treasury
Rate with respect to such Treasury
Interest Determination Date will be the
Treasury Rate in effect on such Treasury
Interest Determination Date.
Fed Funds Rate: Unless otherwise indicated in the
applicable Pricing Supplement, "Fed
Funds Rate" means, with respect to any
Fed Funds Interest Determination Date,
the rate on such date for Federal Funds
as such rate shall be published
in H.15(519) under the heading "Federal
Funds (Effective)" or, if not so
published by 9:00 A.M., New York City
time, on the Calculation Date pertaining
to such Fed Funds Interest Determination
Date, the Fed Funds Rate will be the
rate on such Fed Funds Interest
Determination Date as published in
Composite Quotations under the heading
"Federal Funds/Effective Rate". If such
rate is not published by 3:00 P.M., New
York City time, on such Calculation
Date, then the Fed Funds Rate on such
Fed Funds Interest Determination Date
will be calculated by the Calculation
Agent and will be the arithmetic mean of
the rates as of 9:00 A.M., New York City
time, on such Fed Funds Interest
Determination Date for the last
<PAGE> 70
transaction in overnight Federal Funds
arranged by three leading brokers of
Federal Funds transactions in The City
of New York selected by the Calculation
Agent; provided, however, that if the
brokers selected as aforesaid by the
Calculation Agent are not quoting as
mentioned in this sentence, the Fed
Funds Rate with respect to such Fed
Funds Interest Determination Date will
be the Fed Funds Rate in effect on such
Fed Funds Interest Determination Date.
CD Rate: Unless otherwise indicated in the
applicable Pricing Supplement, the "CD
Rate" for each such Interest Reset Date
will be determined as of the CD Interest
Determination Date and will be the rate
on such date for negotiable certificates
of deposit having the Index Maturity
designated in the applicable Pricing
Supplement as published in H.15(519)
under the heading "CDs (Secondary
Market)" or, if not so published by
9:00 A.M., New York City time, on the
Calculation Date pertaining to such CD
Interest Determination Date, the CD Rate
will be the rate on such CD Interest
Determination Date for negotiable
certificates of deposit of the Index
Maturity designated in the applicable
Pricing Supplement as published in
Composite Quotations under the heading
"Certificates of Deposit". If such rate
is not published by 3:00 P.M., New York
City time, on such Calculation Date,
then the CD Rate on such CD Interest
Determination Date will be calculated by
the Calculation Agent and will be the
arithmetic mean of the secondary market
offered rates as of the opening of
business, New York City time, on such CD
Interest Determination Date, of three
leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in
The City of New York selected by the
Calculation Agent for negotiable
certificates of deposit of major United
States money market banks (in the market
for negotiable certificates of deposit)
with a remaining maturity closest to the
Index Maturity designated in the Pricing
Supplement in a denomination of
$5,000,000 or if greater, an amount that
is representative for a single
<PAGE> 71
transaction in the relevant market at
the time; provided, however, that if the
dealers selected as aforesaid by the
Calculation Agent are not quoting as
mentioned in this sentence, the CD Rate
with respect to such CD Interest
Determination Date will be the CD Rate
in effect on such CD Interest
Determination Date.
Prime Rate: Each Prime Rate Note will bear interest
at the interest rate (calculated with
reference to the Prime Rate and the
Spread and/or Spread Multiplier, if any)
specified in such Prime Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the
applicable Pricing Supplement, "Prime
Rate" means, with respect to any Prime
Interest Determination Date, the rate
set forth in H.15(519) for such date
opposite the caption "Bank Prime Loan,"
or, if not so published by 9:00 A.M.,
New York City time, on the Calculation
Date pertaining to such Prime Interest
Determination Date, the Prime Rate will
be calculated by the Calculation Agent
and will be the arithmetic mean of the
rates of interest publicly announced by
each bank named on the Reuters Screen
NYMF Page as such bank's prime rate or
base lending rate as in effect for such
Prime Interest Determination Date as
quoted on the Reuters Screen NYMF Page
on such Prime Interest Determination
Date, or, if fewer than four such rates
appear on the Reuters Screen NYMF Page
for such Prime Interest Determination
Date, the rate shall be the arithmetic
mean of the prime rates quoted on the
basis of the actual number of days in
the year divided by 360 as of the close
of business on such Prime Interest
Determination Date by at least two of
the three major money center banks in
The City of New York selected by the
Calculation Agent from which quotations
are requested. If fewer than two
quotations are quoted as aforesaid, the
Prime Rate for such Prime Interest
Determination Date shall be calculated
by the Calculation Agent and shall be
the arithmetic means of the prime rates
quoted in The City of New York on such
<PAGE> 72
date by the appropriate number of
substitute banks or trust companies
organized and doing business under the
laws of the Untied States, or any State
thereof, having total equity capital of
at least $500 million and being subject
to supervision or examination by a
federal or State authority, selected by
the Calculation Agent to quote such rate
or rates; provided, however, that if the
Prime Rate is not published in H.15(519)
and the banks or trust companies
selected as aforesaid are not quoting as
mentioned in this sentence, the Prime
Rate with respect to such Prime Interest
Determination Date will be the interest
rate otherwise in effect on such Prime
Interest Determination Date. "Reuters
Screen NYMF Page" means the display
designated as page "NYMF" on the Reuters
Monitor Money Rates Service (or such
other page as may replace page NYMF on
that service for the purpose of
displaying prime rates or base lending
rates of major United States banks).
Record Dates: Interest payments on Floating Rate Notes
will be made on each Interest Payment
Date to the registered owners at the
close of business on the date 15
calendar days prior to such Interest
Payment Date (the "Regular Record
Date"). If a Note is issued between a
Regular Record Date and an Interest
Payment Date, the first payment of
Interest will occur on the Interest
Payment Date following the next Regular
Record Date to the registered holder on
such next succeeding Regular Record
Date. Interest payable at maturity or
upon redemption (whether or not such
maturity or redemption date is an
Interest Payment Date) will be paid to
the same person to whom principal is
payable. Interest will begin to accrue
on the issue date of a Note for the
first interest period and from and
including the most recent Interest
Payment Date to which interest has been
paid for all subsequent interest
periods. Each payment of interest shall
include interest accrued from and
including the most recent date in
respect of which interest has been paid
or duly provided for, or from and
<PAGE> 73
including the date of issue, through the
day before the Interest Payment Date (or
maturity date) (an "Interest Period").
In the case of Floating Rate Notes on
which the interest rate is reset daily
or weekly, the interest payments shall
include interest accrued from but
excluding the most recent Regular Record
Date in respect of which interest has
been paid or duly provided for, or from
and including the date of issue, to and
including the Regular Record Date next
preceding the applicable Interest
Payment Date, except that the interest
payment at the maturity date will
include interest accrued to such date.
Accrued Interest: Unless otherwise indicated in the
applicable Pricing Supplement, interest
payments for Floating Rate Notes will
include interest accrued from and
including the most recent date in
respect of which interest has been paid
or duly provided for, or from and
including the date of issuance to but
excluding the next Interest Payment Date
(or maturity date); provided, however,
that if the Interest Reset Dates with
respect to such Note are daily or
weekly, interest payable on any Interest
Payment Date, other than interest
payable on any date on which principal
for such Note is payable, will include
interest accrued from but excluding the
most recent Regular Record Date in
respect of which interest has been paid
or duly provided for, or from and
including the date of issue, to and
including the next preceding Regular
Record Date. Interest payments on
Floating Rate Notes made at maturity
will include interest accrued to but
excluding the date of maturity. Accrued
interest from the date of issue or from
the last date to which interest has been
paid is calculated by multiplying the
face amount of a Note by an accrued
interest factor. This accrued interest
factor is computed by adding the
interest factors calculated for each day
in the period for which accrued interest
is being calculated. The interest
factor for each such day is computed by
dividing the interest rate applicable to
such date by 360, in the case of Commer-
<PAGE> 74
cial Paper Rate Notes, LIBOR Notes, Fed
Funds Notes, CD Rate Notes and Prime
Rate Notes, or by the actual number of
days in the year, in the case of
Treasury Rate Notes.
<PAGE> 75 EXECUTION COPY
U.S. $448,240,000
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
Medium-Term Notes, Series C
CALCULATION AGENT AGREEMENT
This AGREEMENT dated April 13, 1995,
between National Rural Utilities Cooperative
Finance Corporation, a District of Columbia
cooperative association (hereinafter called
the "Issuer"), whose principal office is at
Woodland Park, 2201 Cooperative Way, Herndon,
Virginia 22071, and Lehman Brothers Inc., a
Delaware corporation (hereinafter sometimes
called the "Calculation Agent" which term
shall, unless the context shall otherwise
require, include its successors and
assignees), whose principal office is at 3
World Financial Center, New York, New York
10285-0900.
WHEREAS (A) The Issuer proposes to issue from time
to time an aggregate principal amount of up to $448,240,000
of Medium-Term Notes, Series C (the "Notes") entitled to the
benefits of the Indenture dated as of December 15, 1987 (as
supplemented by the First Supplemental Indenture dated as of
October 1, 1990 and as it may be supplemented or amended
from time to time, the "Indenture"), between the Issuer and
Harris Trust and Savings Bank, as successor Trustee;
(B) Each Note will bear interest at either (a) a
fixed rate or (b) a floating rate determined by reference to
an interest rate formula (the "Floating Rate Notes");
NOW IT IS HEREBY AGREED THAT,
1. Terms defined in the "Description of
Securities" and "Description of the Medium-Term Notes" shall
bear the same meanings herein unless the context otherwise
requires. The "Description of Securities" means the terms
and conditions of the Notes as set forth in the Prospectus,
dated April 13, 1995, as supplemented by a Prospectus
Supplement, dated April 13, 1995, relating to the Notes.
The "Description of the Medium-Term Notes" means the terms
and conditions of the Notes as set forth in the Prospectus
Supplement, dated April 13, 1995, relating to the Notes.
Such Prospectus Supplement will be supplemented or amended
by one or more Pricing Supplements (each a "Supplement")
setting forth additional terms and conditions of the Notes.
<PAGE> 76
2. The Issuer hereby appoints Lehman Brothers
Inc. as Calculation Agent for the Notes, upon the terms and
subject to the conditions herein mentioned, and Lehman
Brothers Inc. hereby accepts such appointment. The
Calculation Agent shall act as an agent of the Issuer for
the purpose of determining the interest rate of the Floating
Rate Notes in accordance with the Description of the Medium-
Term Notes and the provisions of this Agreement.
3. The Calculation Agent shall calculate the
applicable interest rates for the Floating Rate Notes in
accordance with the provisions set forth in the Prospectus
Supplement relating to the Notes dated April 13, 1995, under
the heading "Description of Medium-Term Notes--Floating Rate
Notes" which provisions are incorporated by reference herein
as if set forth in full in this Agreement.
4. In no event shall the interest rate be less
than the floor, if any, or more than the ceiling, if any,
designated in the applicable Supplement.
5. The Calculation Agent will, as soon as practi-
cable after (i) 3:00 p.m., New York City time, on the
Calculation Date pertaining to each Interest Determination
Date relating to Commercial Paper Rate Notes, Fed Funds Rate
Notes, CD Rate Notes and Treasury Rate Notes or
(ii) 11:00 a.m., London time, on each Interest Determination
Date relating to LIBOR Notes, determine (and notify the
Issuer and the Trustee of) the interest rate applicable
during the next succeeding interest period (if the interest
rate cannot be determined in accordance with the provisions
set forth in the Prospectus Supplement relating to the Notes
dated April 13, 1995, in clause (i) under the heading
"Description of the Medium-Term Notes--Floating Rate Notes--
LIBOR", the Calculation Agent agrees to determine (and
notify the Issuer and Trustee of) the interest rate in
accordance with the provisions in clause (ii) of such
heading).
6. As soon as determined after each Interest
Determination Date, the Calculation Agent will cause to be
forwarded to the Issuer, the Trustee and the Paying Agent
information regarding the interest rates and the interest
periods for each interest period and the relevant Interest
Payment Date.
7. The Issuer will pay such compensation as shall
be agreed upon and the expenses, including reasonable
counsel fees, properly incurred by the Calculation Agent in
connection with its duties hereunder, upon receipt of such
invoices as the Issuer shall reasonably require.
8. The Issuer will indemnify the Calculation
Agent against any losses, liabilities, costs, claims,
actions or demands which it may incur or sustain or which
<PAGE> 77
may be made against it in connection with its appointment or
the exercise of its powers and duties hereunder as well as
the reasonable costs, including the expenses and fees of
counsel in defending any claim, action or demand, except
such as may result from the negligence, wilful default or
bad faith of the Calculation Agent or any of its employees.
The Calculation Agent shall incur no liability and shall be
indemnified and held harmless by the Issuer for, or in
respect of, any actions taken or suffered to be taken in
good faith by the Calculation Agent in reliance upon (i) the
written opinion or advice of counsel or (ii) written
instructions from the Issuer.
9. The Calculation Agent accepts its obligations
herein (and agrees to act in good faith in the performance
of its obligations) set forth upon the terms and conditions
hereof, including the following, to all of which the Issuer
agrees:
(i) in acting under this Agreement and in connec-
tion with the Notes, the Calculation Agent, acting as
agent for the Issuer, does not assume any obligation
towards, or any relationship of agency or trust for or
with, any of the holders of the Notes;
(ii) unless herein otherwise specifically
provided, any order, certificate, notice, request or
communication from the Issuer made or given under any
provision of this Agreement shall be sufficient if
signed by any person whom the Calculation Agent
reasonably believes to be a duly authorized officer of
the Issuer;
(iii) the Calculation Agent shall be obligated to
perform only such duties as are set forth specifically
herein and any duties necessarily incidental thereto;
and
(iv) the Calculation Agent shall be protected and
shall incur no liability for or in respect of any
action taken or omitted to be taken by it in reliance
upon anything contained in a Floating Rate Note, the
Description of Securities, the Description of the
Medium-Term Notes or one or more Prospectus
Supplements.
10. (A) The Issuer agrees to notify the
Calculation Agent at least five London Business Days prior
to the issuance of any LIBOR Note. The Calculation Agent
agrees to select four Reference Banks prior to the issuance
of the first LIBOR Note by the Issuer; to make all appropri-
ate arrangements for such banks to act as Reference Banks;
and to notify the Issuer, the Trustee and each of the Agents
as to the names and addresses of such Reference Banks. The
Calculation Agent covenants that, for so long as it is
<PAGE> 78
required so to do in accordance with the applicable
Description of the Medium-Term Notes it shall ensure that
there shall at all times be four Reference Banks. Forthwith
upon any change in the identity of the Reference Banks the
Calculation Agent shall notify the Issuer, the Trustee and
the Agents of such change. If fewer than two Reference
Banks are quoting, the Calculation Agent agrees to select
three major banks in The City of New York in accordance with
the applicable Description of the Medium-Term Notes. The
Calculation Agent shall not be responsible to the Issuer or
any third party for any failure of the Reference Banks to
fulfill their duties or meet their obligations as Reference
Banks or as a result of the Calculation Agent having acted
(except in the event of negligence, wilful default or bad
faith) on any certificate given by any Reference Bank which
subsequently may be found to be incorrect.
(B) If necessary, in accordance with the provi-
sions set forth in the Prospectus Supplement relating to the
Notes dated April 13, 1995, under the Heading "Description
of the Medium-Term Notes--Floating Rate Notes-Prime Rate",
the Calculation Agent agrees to select a substitute major
bank or trust company (meeting the requirements specified
under such heading). The Calculation Agent shall not be
responsible to the Issuer or any third party for the failure
of such bank or trust company to fulfill any duty or
obligation contemplated under such heading.
(C) Except as provided below, the Calculation
Agent may at any time resign as Calculation Agent by giving
written notice to the Issuer and the Trustee of such inten-
tion on its part, specifying the date on which its desired
resignation shall become effective, provided that such
notice shall be given not less than two months prior to the
said effective date unless the Issuer and the Trustee
otherwise agree in writing. Except as provided below, the
Calculation Agent may be removed by the filing with it of an
instrument in writing signed by the Issuer specifying such
removal and the date when it shall become effective (such
effective date being at least 20 days after said filing).
Such resignation or removal shall take effect upon:
(i) the appointment by the Issuer as hereinafter
provided of a successor Calculation Agent approved by
the Trustee, which shall be a responsible financial
firm or institution having an established place of
business in The City of New York;
(ii) the acceptance of such appointment by such
successor Calculation Agent; and
(iii) the giving of notice of such appointment to
the holders of the Notes, provided that if the
Calculation Agent fails duly to establish the amount of
interest for any interest period, such removal will
<PAGE> 79
take effect immediately upon such appointment of, and
acceptance thereof by, a successor Calculation Agent
approved by the Trustee and qualified as aforesaid, in
which event notice of such appointment shall be given
to the holders of the Notes as soon as practicable
thereafter. Upon its resignation or removal becoming
effective, the retiring Calculation Agent shall be
entitled to the payment of its compensation and the
reimbursement of all expenses incurred by such retiring
Calculation Agent pursuant to paragraph 7 hereof.
(D) If at any time the Calculation Agent shall
resign or be removed, or shall become incapable of acting or
shall be adjudged bankrupt or insolvent, or liquidated or
dissolved, or an order is made or an effective resolution is
passed to wind up the Calculation Agent, or if the
Calculation Agent shall file a voluntary petition in bank-
ruptcy or make an assignment for the benefit of its credi-
tors, or shall consent to the appointment of a receiver,
administrator or other similar official of all or any
substantial part of its property, or shall admit in writing
its inability to pay or meet its debts as they mature, or if
a receiver, administrator or other similar official of the
Calculation Agent or of all or any substantial part of its
property shall be appointed, or if any order of any court
shall be entered approving any petition filed by or against
the Calculation Agent under the provisions of any applicable
bankruptcy or insolvency law, or if any public officer shall
take charge or control of the Calculation Agent or its
property or affairs for the purpose of rehabilitation,
conservation or liquidation, then a successor Calculation
Agent, approved by the Trustee, shall be appointed by the
Issuer by an instrument in writing filed with the successor
Calculation Agent. Upon the appointment as aforesaid of a
successor Calculation Agent and acceptance by the latter of
such appointment and (except in cases of removal for failure
to establish the amount of interest) the giving of notice to
the holders of the Notes, the former Calculation Agent shall
cease to be Calculation Agent hereunder.
(E) Any successor Calculation Agent appointed
hereunder shall execute and deliver to its predecessor and
the Issuer an instrument, in the form acceptable to the
Trustee, accepting such appointment hereunder, and thereupon
such successor Calculation Agent, without any further act,
deed or conveyance, shall become vested with all the author-
ity, rights, powers, trusts, immunities, duties and obliga-
tions of such predecessor with like effect as if originally
named as the Calculation Agent hereunder, and such predeces-
sor shall thereupon become obliged to transfer and deliver,
and such successor Calculation Agent shall be entitled to
receive, copies of any relevant records maintained by such
predecessor Calculation Agent.
<PAGE> 80
(F) Any corporation into which the Calculation
Agent may be merged or converted or any corporation with
which the Calculation Agent may be consolidated or any
corporation resulting from any merger, conversion or consol-
idation to which the Calculation Agent shall be a party
shall, to the extent permitted by applicable law and
provided that it shall be a responsible financial firm or
institution having an established place of business in The
City of New York, be the successor Calculation Agent under
this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto.
Notice of any such merger, conversion or consolidation shall
forthwith be given to the Issuer and the Trustee.
11. Any notice required to be given hereunder
shall be delivered in person, sent by letter or telex or
communicated by telephone (subject, in the case of communi-
cation by telephone, to confirmation dispatched within two
business days by letter or telex), in the case of the
Issuer, to it at Woodland Park, 2201 Cooperative Way,
Herndon, Virginia 22071, Attention: Chief Financial
Officer; in the case of the Calculation Agent, to it at 3
World Financial Center, New York, New York 10285, Attention:
Medium-Term Note Department; and in the case of the Trustee,
to it c/o Bank of Montreal Trust Company, 77 Water Street,
4th Floor, New York, New York 10005, Attention: Corporate
Trustee Administration Department or, in any case, to any
other address of which the party receiving notice shall have
notified the party giving such notice in writing.
12. This Agreement may be amended only by a
writing duly executed and delivered by each of the parties
signing below.
13. The provisions of this Agreement shall be
governed by, and construed in accordance with, the laws of
the State of New York.
14. This Agreement may be executed in
counterparts and the executed counterparts shall together
constitute a single instrument.
IN WITNESS WHEREOF, this Agreement has been
executed and delivered as of the day and year first above
written.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE
CORPORATION,
by
_______________________
<PAGE> 81
LEHMAN BROTHERS INC.,
by
_______________________
