<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 5, 1995
REGISTRATION NO. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C>
DISTRICT OF COLUMBIA 52-089-1669
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
2201 COOPERATIVE WAY
HERNDON, VIRGINIA 22071
(703) 709-6700
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
JOHN JAY LIST, GENERAL COUNSEL
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
2201 COOPERATIVE WAY
HERNDON, VIRGINIA 22071
(703) 709-6700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
<TABLE>
<S> <C>
MARK L. WEISSLER THOMAS R. BROME
MILBANK, TWEED, HADLEY & MCCLOY CRAVATH, SWAINE & MOORE
1 CHASE MANHATTAN PLAZA 825 EIGHTH AVENUE
NEW YORK, NEW YORK 10005 NEW YORK, NEW YORK 10019
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this registration statement as determined by
market conditions.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED PURSUANT
TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX. / /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A
DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX. /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================
PROPOSED PROPOSED
TITLE OF EACH MAXIMUM MAXIMUM AMOUNT OF
CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) FEE
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Debt Securities and/or Warrants to
Purchase Debt Securities............ $400,000,000 100% $400,000,000 $137,932
==================================================================================================================
</TABLE>
(1) Expressed as the principal amount of Debt Securities, or in the case of
Original Issue Discount Securities, the offering price thereof.
(2) Estimated solely for purposes of calculating the registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
PURSUANT TO RULE 429 OF THE COMMISSION UNDER THE SECURITIES ACT OF 1933,
THE WITHIN PROSPECTUS RELATES TO DEBT SECURITIES REGISTERED HEREBY AND TO DEBT
SECURITIES PREVIOUSLY REGISTERED BY REGISTRATION STATEMENT NO. 33-50463.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
APRIL 5, 1995
SUBJECT TO COMPLETION
PROSPECTUS
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
DEBT SECURITIES AND/OR WARRANTS
TO PURCHASE DEBT SECURITIES
------------------------
National Rural Utilities Cooperative Finance Corporation ("CFC" or the
"Company") intends to issue from time to time debt securities (the "Securities")
each of which will be a direct, unsecured obligation of the Company and which
will be offered to the public on terms determined by market conditions at the
time of sale, and/or Warrants to purchase Securities (the "Warrants"). The
Company may sell Securities and Warrants for proceeds up to $453,040,000, or the
equivalent thereof if any of the Securities or Warrants are denominated in a
foreign currency or a currency unit, (i) directly to purchasers, (ii) through
agents designated from time to time or (iii) through underwriters or a group of
underwriters which may include Lehman Brothers Inc. and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
The Securities may be issued in registered form without coupons, in a form
registered as to principal only with or without coupons, in bearer form with or
without coupons or any combination thereof. In addition, all or a portion of the
Securities may be issued in temporary or definitive global form. Securities in
bearer form are offered only to non-United States persons and to offices located
outside the United States of certain United States financial institutions. See
"Limitations on Issuance of Bearer Securities".
The Securities and Warrants may be sold for U.S. dollars, foreign
currencies or foreign currency units, and the principal (including any premium)
and any interest on the Securities may be payable in U.S. dollars, foreign
currencies or foreign currency units. The Securities may be issued in one or
more series with the same or various maturities at or above par or with an
original issue discount. The specific designation, aggregate principal amount,
currency, currencies or currency unit or units in which the principal, premium,
if any, or interest, if any, is payable, authorized denominations, purchase
price, maturity, rate (or method of calculation) and time of payment of any
interest, any redemption terms, any listing on a securities exchange, or other
specific terms of the Securities in respect of which this Prospectus is being
delivered ("Offered Securities") are set forth in the accompanying Prospectus
Supplement and in a supplement thereto relating to the specific Offered
Securities (together, the "Prospectus Supplement"), together with the terms of
offering of the Offered Securities. With regard to the Warrants, if any, in
respect of which this Prospectus is being delivered, the Prospectus Supplement
sets forth a description of the Offered Securities for which each Warrant is
exercisable and the offering price, if any, exercise price, duration and other
terms of such Warrant. Warrants may be sold in units with Securities or in
separate offerings, as specified in a Prospectus Supplement.
For a discussion of certain United States Federal income tax consequences,
see "United States Taxation".
A discussion of certain other United States Federal tax matters applicable
to the Offered Securities may be set forth in the Prospectus Supplement relating
to the Offered Securities.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES OR
WARRANTS UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------------
THE DATE OF THIS PROSPECTUS IS APRIL , 1995
<PAGE> 3
IN CONNECTION WITH AN OFFERING, THE UNDERWRITERS FOR SUCH OFFERING, IF ANY,
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICE OF THE OFFERED SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
---------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information can be
inspected at the office of the Commission, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, DC 20549, as well as at the Regional Offices of the Commission
at 7 World Trade Center, Suite 1300, New York, NY 10048 and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, IL 60661-2511. Copies can also be
obtained by mail from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549 at the prescribed
rates. In addition, certain of the Company's securities are listed on, and
reports and other information concerning the Company can also be inspected at,
the New York Stock Exchange, 20 Broad Street, New York, NY 10005.
---------------------
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus.
1. The Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1994.
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended August 31, 1994, November 30, 1994 and February 28, 1995.
3. The Company's Current Reports on Form 8-K dated June 14, 1994,
September 9, 1994, September 16, 1994 and February 28, 1995.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
of the Securities, shall be deemed to be incorporated in this Prospectus by
reference and to be a part hereof from the respective date of filing of each
such document. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will furnish without charge upon written or oral request by any
person, including any beneficial owner, to whom this Prospectus is delivered a
copy of any or all of the documents referred to above which have been or may be
incorporated in this Prospectus by reference, other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
the information that this Prospectus incorporates. Requests for such copies
should be directed to Steven L. Lilly, Senior Vice President and Chief Financial
Officer, National Rural Utilities Cooperative Finance Corporation, Woodland
Park, 2201 Cooperative Way, Herndon, VA 22071. Telephone requests may be
directed to (703) 709-6700.
---------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS PROSPECTUS OR THE PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND THE
PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS AND THE
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF, OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SINCE ITS DATE.
2
<PAGE> 4
THE COMPANY
National Rural Utilities Cooperative Finance Corporation ("CFC" or the
"Company") was incorporated as a private, not-for-profit cooperative association
under the laws of the District of Columbia in 1969. The principal purpose of CFC
is to provide its members with a source of financing to supplement the loan
program of the Rural Utilities Service ("RUS") (formerly the Rural
Electrification Administration) of the United States Department of Agriculture.
CFC makes loans primarily to its rural utility system members ("Utility
Members") to enable them to acquire, construct and operate electric
distribution, generation, transmission and related facilities. CFC also makes
loans to service organization members ("Service Members") to finance office
buildings, equipment, related facilities and services provided by them to the
rural utility systems. CFC has also provided guarantees for tax-exempt financing
of pollution control facilities and other properties constructed or acquired by
its members, and in addition has provided loans or guarantees through National
Cooperative Services Corporation ("NCSC") in connection with certain lease
transactions of its members. Also, through Rural Telephone Finance Cooperative
("RTFC"), a controlled affiliate of CFC established in 1987, CFC provides
financing to rural telephone and telecommunications companies and their
affiliates. In addition, through Guaranty Funding Cooperative, ("GFC"), a
controlled affiliate of CFC established in 1991, CFC provides financing for
members to refinance their debt to the Federal Financing Bank of the United
States Treasury ("FFB"). CFC's offices are located at Woodland Park, 2201
Cooperative Way, Herndon, VA 22071 and its telephone number is (703) 709-6700.
CFC's 1,039 members as of May 31, 1994, included 899 Utility Members,
virtually all of which are consumer-owned cooperatives, 71 Service Members and
69 associate members. The Utility Members included 833 distribution systems and
66 generation and transmission ("Power Supply") systems operating in 46 states
and U.S. territories. At December 31, 1993, CFC's member systems served
approximately 12.4 million consumers, representing service to an estimated 32.5
million ultimate users of electricity, and owned approximately $62.6 billion
(before depreciation of $17.9 billion) in total utility plant.
CFC's long-term loans to Utility Members generally have 35-year maturities.
They are made primarily in conjunction with concurrent RUS loans and are
generally secured ratably with RUS's loans by a common mortgage on substantially
all the Utility Member's property (including revenues). Interest rates on these
loans are either fixed or variable. Fixed rates are offered weekly based on
CFC's overall cost of long-term capital and may be obtained for any period from
one to 30 years. Variable rates are adjusted monthly in line with changes in
CFC's cost of short-term funds.
CFC makes short-term unsecured line-of-credit loans and secured
intermediate-term loans with up to five-year maturities. Rates on these loans
may be adjusted semi-monthly in line with changes in CFC's short-term cost of
funds. The intermediate-term loans are generally made to Power Supply systems in
connection with the planning and construction of new generating plants and
transmission facilities.
CFC also makes loans to telecommunication systems through RTFC. Such loans
are long-term fixed or variable rate loans with maturities not exceeding 15
years and short-term loans.
CFC's guarantees are senior obligations ranking on a par with its other
senior debt. Even if the system defaults in payment of the guaranteed
obligations, the debt cannot be accelerated as long as CFC pays the debt service
under its guarantee as due. The system is generally obligated to reimburse CFC
on demand for amounts paid on the guarantee, and this obligation is usually
secured by a mortgage (often joint with RUS) on the system's property or, in the
case of a lease transaction, on the leased property. Holders of $1,214.6 million
of the guaranteed pollution control debt (at May 31, 1994) have the right at
certain times to tender their bonds for remarketing, and, if they cannot
otherwise be remarketed, CFC has committed to purchase bonds so tendered.
By policy, CFC maintains an allowance for loan and guarantee losses at a
level believed to be adequate in relation to the quality and size of its loans
and guarantees outstanding. At May 31, 1994, the allowance was $188.2 million.
At May 31, 1994, CFC's ten largest borrowers, which were all Power Supply
members, had outstanding loans totaling $461.6 million (excluding $394.1 million
of loans guaranteed by RUS), which represented approximately 7.5% of CFC's total
loans outstanding. As of May 31, 1994, outstanding guarantees for these same ten
largest borrowers totaled $2,117.7 million, which represented 79.2% of CFC's
total guarantees outstanding, including guarantees of the maximum amounts of
lease obligations at such date. On that date, no
3
<PAGE> 5
member had loans and guarantees outstanding in excess of 10% of the aggregate
amount of CFC's outstanding loans and guarantees; however, one of the ten
largest borrowers, Deseret Generation & Transmission Co-operative ("Deseret"),
was in financial difficulty. At May 31, 1994, Deseret accounted for 1.8% of
loans outstanding (excluding loans guaranteed by RUS) and 12.6% of guarantees
outstanding and represented 26.8% of total Members' Equity, Members'
Subordinated Certificates and the allowance for loan and guarantee losses.
Fixed charge coverage ratio (unaudited):
<TABLE>
<CAPTION>
NINE
MONTHS
ENDED
FEBRUARY YEAR ENDED MAY 31,
28, ----------------------------------------
1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1.17.. 1.13 1.16 1.14 1.14 1.11
</TABLE>
Margins used to compute the fixed charge coverage ratio represent net
margins before extraordinary loss resulting from redemption premiums on bonds
plus fixed charges. The fixed charges used in the computation of the fixed
charge coverage ratio consist of interest and amortization of bond discount and
bond issuance expenses. The ratio for the nine months ended February 28, 1995
may not be representative of the ratio for the full fiscal year ending May 31,
1995.
USE OF PROCEEDS
Except as may be otherwise provided in a Prospectus Supplement, the net
proceeds from the sale of the Securities will be added to the general funds of
the Company and will be available for making loans to members, the repayment of
short-term borrowings, the refinancing of existing long-term debt and for other
corporate purposes. The Company expects to incur additional indebtedness from
time to time, the amount and terms of which will depend upon the volume of its
business, general market conditions and other factors.
DESCRIPTION OF SECURITIES
The following description of the Securities summarizes certain general
terms and provisions of the Securities to which any Prospectus Supplement may
relate. The particular terms of the Securities and the extent, if any, to which
such general provisions may apply to any series of Securities will be described
in the Prospectus Supplement relating to such series.
The Securities are to be issued under an Indenture dated as of December 15,
1987, as supplemented by a First Supplemental Indenture dated as of October 1,
1990 between the Company and Harris Trust and Savings Bank, as successor Trustee
(as so supplemented, the "Indenture"). The Indenture does not limit the
aggregate principal amount of Securities which may be issued thereunder.
The statements under this heading are subject to the detailed provisions of
the Indenture and the Securities. Whenever particular provisions of the
Indenture and the Securities or terms defined therein are referred to, such
provisions or definitions are incorporated by reference herein as a part of the
statements made and the statements are qualified in their entirety by such
reference.
GENERAL
The Securities may be issued in fully registered form without coupons
("Registered Securities"), or in a form registered as to principal only with or
without coupons or in bearer form with or without coupons ("Bearer Securities")
or any combination thereof. Securities may also be issued in temporary or
definitive global bearer form. Unless otherwise specified in the Prospectus
Supplement accompanying the Offered Securities, the Securities will be only
Registered Securities. The Securities denominated in U.S. dollars will be
issued, unless otherwise set forth in the Prospectus Supplement accompanying the
Offered Securities, in denominations of $1,000 or an integral multiple thereof
for Registered Securities, and in denominations of $5,000 or an integral
multiple thereof for Bearer Securities.
The Securities will be direct, unsecured obligations of the Company.
4
<PAGE> 6
If any of the Securities are sold for any foreign currency or currency unit
or if principal of (or premium, if any) or any interest on any of the Securities
is payable in any foreign currency or currency unit, the restrictions,
elections, tax consequences, specific terms and other information with respect
to such issue of Securities and such foreign currency or currency unit will be
set forth in the Prospectus Supplement relating thereto.
The Securities may be issued in one or more series with the same or various
maturities at or above par or with an original issue discount. Offered
Securities bearing no interest or interest at a rate which at the time of
issuance is below market rates ("Original Issue Discount Securities") will be
sold at a discount (which may be substantial) below their stated principal
amount. See "United States Taxation--U.S. Holders--Original Issue Discount" for
a discussion of certain Federal income tax considerations with respect to any
such Original Issue Discount Securities.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Securities: (i) the title and the limit, if any, on the aggregate
principal amount of Offered Securities; (ii) the percentage of their principal
amount at which the Offered Securities will be sold; (iii) the date or dates on
which the Offered Securities will mature; (iv) the rate or rates (which may be
fixed or variable) per annum, if any, at which the Offered Securities will bear
interest or the method of determining such rate or rates; (v) the date or dates
from which such interest, if any, shall accrue and the date or dates at which
such interest, if any, will be payable; (vi) the place where the principal of
(and premium, if any) and the interest, if any, on the Offered Securities will
be payable; (vii) the terms for redemption for early payment, if any, including
any mandatory or optional sinking fund or analogous provision; (viii) the
principal amount of the Offered Securities which are Original Issue Discount
Securities payable upon declaration of acceleration of the maturity of the
Offered Securities; (ix) the means of satisfaction and discharge of the
Indenture with respect to the Offered Securities; (x) any deletions or
modifications of or additions to the Events of Default or covenants of the
Company; (xi) the currency, currencies or currency unit or units for which the
Offered Securities may be purchased and the currency, currencies or currency
unit or units in which the payment of principal of (and premium, if any) and
interest, if any, on such Offered Securities will be made and, if the Company or
the Holders of Offered Securities may elect for such payment in a currency,
currencies or currency unit or units other than that in which the Offered
Securities are stated to be payable, then the period or periods within which,
and the terms and conditions upon which, such election may be made and, if the
amount of such payments may be determined with reference to an index based on a
currency, currencies or currency unit or units, other than that in which the
Offered Securities are stated to be payable, then the manner in which such
amounts shall be determined; (xii) whether the Offered Securities will be issued
in registered form without coupons, in a form registered as to principal only
with or without coupons, in bearer form with or without coupons, including
temporary and definitive global form, or any combination thereof and the
circumstances, if any, upon which such Offered Securities may be exchanged for
Offered Securities issued in a different form; (xiii) whether and under what
circumstances the Company will pay additional amounts to any Holder of Offered
Securities who is not a United States person (as defined under "United States
Taxation") in respect of any tax, assessment or governmental charge required to
be withheld or deducted and, if so, whether the Company will have the option to
redeem rather than pay additional amounts; (xiv) whether the covenants described
below under "Restriction on Indebtedness" will not apply to the Offered
Securities; and (xv) any other terms of the Offered Securities not inconsistent
with the Indenture. (Section 301)
EXCHANGE, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement,
Registered Securities of any series will be exchangeable for other Registered
Securities of the same series and of a like aggregate principal amount and tenor
of different authorized denominations. In addition, if Securities of any series
are issuable as both Registered Securities and Bearer Securities, at the option
of the Holder upon request confirmed in writing, and subject to the terms of the
Indenture, Bearer Securities (with all unmatured coupons, except as provided
below, and all matured coupons in default) of such series will be exchangeable
into Registered Securities of the same series of any authorized denominations
and of a like aggregate principal amount and tenor. Bearer Securities with
coupons appertaining thereto surrendered in exchange for Registered Securities
between a Regular Record Date or a Special Record Date and the relevant date for
payment of interest must be surrendered without the coupon relating to such date
for payment of interest and interest will not be payable in respect of the
Registered Security issued in
5
<PAGE> 7
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the terms of the Indenture. Bearer
Securities will not be issued in exchange for Registered Securities. No service
charge will be made for any registration of transfer or exchange of the
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge in connection therewith. (Section 305)
Unless otherwise specified in the applicable Prospectus Supplement,
Securities may be presented for exchange as provided above, and Registered
Securities may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose with respect to any series of Securities and referred to in an
applicable Prospectus Supplement. Such transfer or exchange will be effected
upon the Security Registrar or such transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person making the
request. The Company has appointed Bank of Montreal Trust Company as Security
Registrar. (Section 305) If a Prospectus Supplement refers to any transfer
agents (in addition to the Security Registrar) initially designated by the
Company with respect to any series of Securities, the Company may at any time
rescind the designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, except that, if Securities
of a series are issuable solely as Registered Securities, the Company will be
required to maintain a transfer agent in each Place of Payment for such series
and, if Securities of a series are issuable as Bearer Securities, the Company
will be required to maintain (in addition to the Security Registrar) a transfer
agent in a Place of Payment for such series. The Company may at any time
designate additional transfer agents with respect to any series of Securities.
(Section 1002)
In the event of any redemption in part, the Company will not be required
to: (i) issue, register the transfer of or exchange Securities of any series
during a period beginning at the opening of business 15 days before any
selection of Securities of that series to be redeemed and ending at the close of
business on (a) if Securities of the series are issuable only as Registered
Securities, the day of mailing of the relevant notice of redemption and (b) if
Securities of the series are issuable only as Bearer Securities, the day of the
first publication of the relevant notice of redemption or, if Securities of the
series are also issuable as Registered Securities and there is no publication,
the day of mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Registered Security, or portion thereof, called for
redemption, except the unredeemed portion of any Registered Security being
redeemed in part; or (iii) exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered Security of that series
and like tenor which is simultaneously surrendered for redemption. (Section 305)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Registered Securities
will be made at the office of such Paying Agent or Paying Agents as the Company
may designate from time to time, except that at the option of the Company
payment of any interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register. (Section
301) Unless otherwise indicated in an applicable Prospectus Supplement, payment
of any installment of interest on Registered Securities will be made to the
Person in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the
office of Bank of Montreal Trust Company in the Borough of Manhattan, The City
of New York will be designated as the Company's sole Paying Agent for payments
with respect to Offered Securities that are issuable solely as Registered
Securities and as the Company's Paying Agent in the Borough of Manhattan, The
City of New York, for payments with respect to Offered Securities. Any Paying
Agents outside the United States and any other Paying Agents in the United
States initially designated by the Company for the Offered Securities will be
named in an applicable Prospectus Supplement. The Company may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that, unless otherwise indicated in an applicable Prospectus Supplement,
if Securities of a series are issuable solely as Registered Securities, the
Company will be required to maintain a Paying Agent in each Place of Payment for
6
<PAGE> 8
such series and, if Securities of a series are issuable as Bearer Securities,
the Company will be required to maintain (i) a Paying Agent in the Borough of
Manhattan, The City of New York, for payments with respect to any Registered
Securities of the series (and for payments with respect to Bearer Securities of
the series in certain circumstances) and (ii) a Paying Agent in a Place of
Payment located outside the United States where Bearer Securities of such series
and any coupons appertaining thereto may be presented and surrendered for
payment. (Section 1002)
All moneys paid by the Company to a Paying Agent for the payment of
principal of (and premium, if any) or any interest on any Security or coupon
that remains unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to the Company and the
Holder of such Security or coupon will thereafter, as an unsecured general
creditor, look only to the Company for payment thereof. (Section 1003)
RESTRICTION ON INDEBTEDNESS
The Company may not incur any Superior Indebtedness or make any optional
prepayment on any Capital Term Certificate if, as a result, the principal amount
of Superior Indebtedness outstanding, less a principal amount thereof equal to
the principal amount of Government or Government Insured Obligations (as defined
in the Indenture) held by the Company, thereafter or on any future date would
exceed 20 times the sum of the Members' equity in the Company at the time of
determination plus the principal amount of Capital Term Certificates outstanding
at the time of determination or at such given future date, as the case may be.
The principal amounts of Superior Indebtedness and Capital Term Certificates to
be outstanding on any future given date will be computed after giving effect to
maturities and sinking fund requirements. (Section 1007) "Superior Indebtedness"
means all indebtedness of the Company (including all guarantees by the Company
of indebtedness of others) except Capital Term Certificates. A "Capital Term
Certificate" is defined for the purposes of the Indenture as a note of the
Company substantially in the form of the capital term certificates of the
Company outstanding on the date of the Indenture and any other indebtedness
having substantially similar provisions as to subordination. As of May 31, 1994,
the Company had $6,772,325,000 outstanding of Superior Indebtedness and within
the restrictions of the Indenture was permitted to have outstanding an
additional $22,904,195,000 of Superior Indebtedness.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture provides that the Company, without the consent of the Holders
of any of the Outstanding Securities, may consolidate with or merge into any
other corporation or transfer its assets substantially as an entirety to any
Person provided that: (i) the successor is a corporation organized under the
laws of any domestic jurisdiction; (ii) the successor corporation assumes the
Company's obligations under the Indenture and the Securities issued thereunder;
(iii) immediately after giving effect to the transaction, no Event of Default
(as defined below under "Events of Default, Notice and Waiver") and no event
that, after notice or lapse of time, or both, would become an Event of Default,
shall have occurred and be continuing; and (iv) certain other conditions are
met. (Section 801)
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee may, without the
consent of any Holders of Securities, enter into supplemental indentures for the
purposes, among other things, of adding to the Company's covenants, adding
additional Events of Default, establishing the form or terms of Securities of
any series, changing or eliminating any restriction on the manner or place of
payment of principal of or interest on Bearer Securities or, provided such
action shall not adversely affect the interests of the Holders of any series of
Securities in any material respect, curing ambiguities or inconsistencies in the
Indenture or making other provisions with respect to matters arising under the
Indenture. (Section 901)
The Indenture contains provisions permitting the Company, with the consent
of the Holders of not less than a majority in principal amount of the
Outstanding Securities of all affected series (acting as one class), to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the
7
<PAGE> 9
Indenture or modifying the rights of the Holders of the Securities of such
series, except that no such supplemental indenture may, without the consent of
the Holders of all the Outstanding Securities affected thereby, among other
things: (i) change the maturity of the principal of, or any installment of
principal of or interest on, any of the Securities; (ii) reduce the principal
amount thereof (or any premium thereon) or the rate of interest, if any,
thereon; (iii) reduce the amount of the principal of Original Issue Discount
Securities payable on any acceleration of maturity; (iv) change the currency,
currencies or currency unit or units in which any of the Securities or any
premium or interest thereon is payable; (v) change any obligation of the Company
to maintain an office or agency in the places and for the purposes required by
the Indenture; (vi) impair the right to institute suit for the enforcement of
any payment on or after the applicable maturity date; (vii) reduce the
percentage in principal amount of the Outstanding Securities of any series, the
consent of the Holders of which is required for any such supplemental indenture
or for any waiver of compliance with certain provisions of, or of certain
defaults under, the Indenture; or (viii) with certain exceptions, to modify the
provisions for the waivers of certain covenants and defaults and any of the
foregoing provisions. (Section 902)
WAIVER OF CERTAIN COVENANTS
The Indenture provides that the Company may omit to comply with certain
restrictive covenants (including that described above under "Restriction on
Indebtedness") if the Holders of not less than a majority in principal amount of
all series of Outstanding Securities affected thereby (acting as one class)
waive compliance with such restrictive covenants. (Section 1009)
EVENTS OF DEFAULT, NOTICE AND WAIVER
An Event of Default in respect of any series of Securities (unless it is
either inapplicable to a particular series or has been modified or deleted with
respect to any particular series) is defined in the Indenture to be: (i) a
default for 30 days in the payment of any installment of interest upon any of
the Securities of such series when due; (ii) a default in the payment of
principal of (or premium, if any, on) any of the Securities of such series when
due; (iii) a default in the deposit of any sinking fund payment when the same
becomes due by the terms of the Securities of such series; (iv) a default in the
performance, or breach, of the covenant of the Company described above under
"Restrictions on Indebtedness" which shall not have been remedied for a period
of 60 days after such default has become known to an officer of the Company; (v)
a default by the Company in the performance, or breach, of any of its other
covenants or warranties in the Indenture which shall not have been remedied for
a period of 60 days after notice from the Trustee thereunder or the Holder of
not less than 25% in principal amount of the Outstanding Securities of such
series; (vi) certain events of bankruptcy, insolvency or reorganization of the
Company; and (vii) such other events as may be specified for each series.
(Section 501)
The Indenture provides that if an Event of Default specified therein in
respect of any series of Outstanding Securities shall have happened and be
continuing, either the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities of such series may declare the principal
(or, if such Securities are Original Issue Discount Securities, such portion of
the principal amount as may be specified by the terms of such Securities) of all
of the Outstanding Securities of such series to be immediately due and payable.
(Section 502)
The Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that such Trustee may act in
any way that is not inconsistent with such directions and may decline to act if
any such direction is contrary to law or to the Indenture or would involve such
Trustee in personal liability. (Section 507)
The Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all of the Outstanding Securities of such series waive any past
default with respect to such series and its consequences, except a default (i)
in the payment of the principal of (or premium, if any) or any interest on any
of the Securities of such series or (ii) in respect of a covenant or provision
which, under the terms of the Indenture, cannot be modified or amended without
the consent of the Holders of all of the Outstanding Securities of such series
affected thereby. (Section 508)
8
<PAGE> 10
The Indenture contains provisions entitling the Trustee, subject to the
duty during an Event of Default in respect of any series of Securities to act
with the required standard of care, to be indemnified by the Holders of the
Securities of such series before proceeding to exercise any right or power at
the request of the Holders of the Securities of such series. (Sections 601 and
603)
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default in respect of any series of Securities, give to the
Holders of the Securities of such series notice of all uncured and unwaived
defaults known to it; provided, however, that, except in the case of a default
in the payment of the principal of (or premium, if any) or any interest on, or
any sinking fund or purchase fund installment with respect to, any of the
Securities of such series, the Trustee will be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interest of the Holders of the Securities of such series; and provided,
further, that such notice shall not be given until at least 60 days after the
occurrence of an Event of Default regarding the performance, or breach, of any
covenant or warranty of the Company other than for the payment of the principal
of (or premium, if any) or any interest on, or any sinking fund installment with
respect to, any of the Securities of such series. The term default for the
purpose of this provision only means any event that is, or after notice or lapse
of time, or both, would become, an Event of Default with respect to the
Securities of such series. (Section 602)
The Indenture requires the Company to file annually with the Trustee a
certificate, executed by two officers of the Company, indicating whether the
Company is in default under the Indenture. (Section 1008)
MEETINGS
The Indenture contains provisions for convening meetings of the Holders of
Securities of a series if Securities of that series are issuable as Bearer
Securities. (Section 1201) A meeting may be called at any time by the Trustee,
and also, upon request, by the Company or the Holders of at least 10% in
principal amount of the Outstanding Securities of such series, in any such case
upon notice given in accordance with "Notices" below. (Section 1202) Persons
entitled to vote a majority in principal amount of the Outstanding Securities of
a series shall constitute a quorum at a meeting of Holders of Securities of such
series, except that in the absence of a quorum, a meeting, called by the Company
or the Trustee shall be adjourned for a period of not less than 10 days, and in
the absence of a quorum at any such adjourned meeting, the meeting shall be
further adjourned for a period of not less than 10 days, at which further
adjourned meeting persons entitled to vote 25% in aggregate principal amount of
the Outstanding Securities of such series shall constitute a quorum. Except for
any consent which must be given by the Holder of each Outstanding Security
affected thereby, as described above under "Modification of the Indenture", and
subject to the provisions described in the last sentence under this subheading,
any resolution presented at a meeting or adjourned meeting duly reconvened at
which a quorum is present may be adopted by the affirmative vote of the lesser
of (i) the Holders of a majority in principal amount of the Outstanding
Securities of that series and (ii) 66 2/3% in aggregate principal amount of
Outstanding Securities of such series represented and voting at the meeting;
provided, however, that any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which may be
made, given or taken by the Holders of a specified percentage, which is less
than a majority, in principal amount of Outstanding Securities of a series may
be adopted at a meeting or adjourned meeting duly reconvened at which a quorum
is present by the affirmative vote of the lesser of (i) the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series and (ii) a majority in principal amount of Outstanding Securities of such
series represented and voting at the meeting. Any resolution passed or decision
taken at any meeting of Holders of Securities of any series duly held in
accordance with the Indenture will be binding on all Holders of Securities of
that series and the related coupons. With respect to any consent, waiver or
other action which the Indenture expressly provides may be given by the Holders
of a specified percentage of Outstanding Securities of all series affected
thereby (acting as one class), only the principal amount of Outstanding
Securities of any series represented at a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid and voting in favor of such
action shall be counted for purposes of calculating the aggregate principal
amount of Outstanding Securities of all series affected thereby favoring such
action. (Section 1204)
9
<PAGE> 11
NOTICES
Except as otherwise provided in the Indenture, notices to Holders of Bearer
Securities will be given by publication at least once in a daily newspaper in
The City of New York and London and in such other city or cities as may be
specified in such Bearer Securities and will be mailed to such Persons whose
names and addresses were previously filed with the Trustee, within the time
prescribed for the giving of such notice. Notices to Holders of Registered
Securities will be given by mail to the address of such Holders as they appear
in the Security Register. (Section 106)
TITLE
Title to any Bearer Security (including any Bearer Security in temporary or
definitive global bearer form) and any coupons appertaining thereto will pass by
delivery. The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of any Bearer Security and the bearer of any coupon and the
registered owner of any Registered Security as the absolute owner thereof
(whether or not such Security or coupon shall be overdue and notwithstanding any
notice to the contrary) for the purpose of making payment and for all other
purposes. (Section 308)
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Security and any Security with a mutilated coupon
appertaining thereto will be replaced by the Company at the expense of the
Holder upon surrender of such mutilated Security or Security with a mutilated
coupon to the Trustee. Securities or coupons that become destroyed, stolen or
lost will be replaced by the Company at the expense of the Holder upon delivery
to the Trustee of evidence of the destruction, loss or theft thereof
satisfactory to the Company and the Trustee; in the case of any coupon which
becomes destroyed, stolen or lost, such coupon will be replaced (upon surrender
to the Trustee of the Security with all appurtenant coupons not destroyed,
stolen or lost) by issuance of a new Security in exchange for the Security to
which such coupon appertains. In the case of a destroyed, lost or stolen
Security or coupon an indemnity satisfactory to the Trustee and the Company may
be required at the expense of the Holder of such Security or coupon before a
replacement Security will be issued. (Section 306)
SATISFACTION AND DISCHARGE; DEFEASANCE
At the request of the Company, the Indenture will cease to be in effect as
to the Company (except for certain obligations to register the transfer or
exchange of Securities and hold moneys for payment in trust) with respect to the
Securities when all such Securities have been cancelled by the Trustee, or, in
the case of Securities and coupons not delivered to the Trustee for
cancellation, (i) such Securities or coupons have become due and payable, will
become due and payable at their stated maturity within one year, or are to be
called for redemption within one year, and, in each case, the Company has
deposited with the Trustee, in trust, money, and, in the case of Securities and
coupons denominated in U.S. dollars, U.S. Government Obligations (as defined in
the Indenture) or, in the case of Securities and coupons denominated in a
foreign currency, Foreign Government Securities (as defined in the Indenture),
which through the payment of interest thereon and principal thereof in
accordance with their terms will provide money in an amount sufficient to pay in
the currency, currencies or currency units or units in which the Offered
Securities are payable all the principal of, and interest on, the Offered
Securities on the dates such payments are due in accordance with the terms of
the Offered Securities, or (ii) such Securities or coupons are deemed paid and
discharged in the manner described in the next paragraph. (Section 401)
Unless the Prospectus Supplement relating to the Offered Securities
provides otherwise, the Company at its option (a) will be Discharged (as such
term is defined in the Indenture) from any and all obligations in respect of the
Offered Securities (except for certain obligations to register the transfer or
exchange of Securities, replace stolen, lost or mutilated Securities and
coupons, maintain paying agencies and hold moneys for payment in trust) or (b)
need not comply with certain restrictive covenants of the Indenture (including
those described above under "Restriction on Indebtedness"), in each case after
the Company deposits with the Trustee, in trust, money, and, in the case of
Securities and coupons denominated in U.S. dollars, U.S. Government Obligations
or,
10
<PAGE> 12
in the case of Securities and coupons denominated in a foreign currency, Foreign
Government Securities, which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in an amount
sufficient to pay in the currency, currencies or currency unit or units in which
the Offered Securities are payable all the principal of, and interest on, the
Offered Securities on the dates such payments are due in accordance with the
terms of the Offered Securities. Among the conditions to the Company's
exercising any such option, the Company is required to deliver to the Trustee an
opinion of counsel to the effect that the deposit and related defeasance would
not cause the Holders of the Offered Securities to recognize income, gain or
loss for United States federal income tax purposes and that the Holders will be
subject to United States federal income tax in the same amounts, in the same
manner and at the same times as would have been the case if such deposit and
related defeasance has not occurred. (Section 403)
At the request of the Company, the Trustee will deliver or pay to the
Company any U.S. Government Obligations, Foreign Government Securities or money
deposited, for the purposes described in the preceding two paragraphs, with the
Trustee by the Company and which, in the opinion of a nationally-recognized firm
of independent public accountants, are in excess of the amount thereof which
would then have been required to be deposited for such purposes. In addition,
the Trustee, in exchange for, simultaneously, other U.S. Government Obligations,
Foreign Government Securities or money, will deliver or pay to the Company, at
the Company's request, U.S. Government Obligations, Foreign Government
Securities or money deposited with the Trustee for the purposes described in the
preceding two paragraphs, provided that, in the opinion of a
nationally-recognized firm of independent public accountants, immediately after
such exchange the obligations, securities or money then held by the Trustee will
be in such amount as would then have been required to be deposited with the
Trustee for such purposes. (Section 403)
GOVERNING LAW
The Indenture, the Securities and the coupons will be governed by, and
construed in accordance with, the laws of the State of New York. (Section 113)
THE TRUSTEE
Harris Trust and Savings Bank, Chicago, Illinois is the Trustee under the
Indenture.
DESCRIPTION OF WARRANTS
The following statements with respect to the Warrants are summaries of, and
subject to, the detailed provisions of one or more separate Warrant Agreements
(each a "Warrant Agreement") between the Company and one or more banking
institutions or trust companies as Warrant Agents (each a "Warrant Agent"). A
form of Warrant Agreement will be filed as an exhibit to the Registration
Statement prior to the issuance of any Warrant.
GENERAL
Warrants, evidenced by Warrant Certificates (the "Warrant Certificates"),
may be issued under a Warrant Agreement independently or together with any
Offered Securities and may be attached to or separate from such Offered
Securities. If Warrants are offered, the Prospectus Supplement will describe the
terms of the Warrants, including the following: (i) the offering price, if any,
including the currency, currencies or currency unit or units in which such price
will be payable; (ii) the designation, aggregate principal amount and terms of
the Offered Securities purchasable upon exercise of the Warrants; (iii) if
applicable, the designation and terms of the Offered Securities with which the
Warrants are issued and the number of Warrants issued with each such Offered
Security; (iv) if applicable, the date on and after which the Warrants and the
related Offered Securities will be separately transferable; (v) the principal
amount of Offered Securities purchasable upon exercise of one Warrant and the
price or prices at which, and the currency, currencies or currency unit or units
in which such principal amount of Offered Securities may be purchased upon
exercise; (vi) the date on which the right to exercise the Warrants shall
commence and the date on which such right shall expire; (vii) United States
Federal income tax
11
<PAGE> 13
consequences; (viii) whether the Warrants represented by the Warrant
Certificates will be issued in registered or unregistered form or both; and (ix)
any other terms of the Warrants.
Warrant Certificates, if any, may be exchanged for new Warrant Certificates
of different denominations and may (if in registered form) be presented for
registration of transfer at the corporate trust office of the Warrant Agent,
which will be listed in the Prospectus Supplement, or at such other office as
may be set forth therein. Warrantholders do not have any of the rights of
Holders of Offered Securities (except to the extent that the consent of
Warrantholders may be required for certain modifications of the terms of the
Indenture) and are not entitled to payments of principal (or premium, if any),
or interest, if any, on such Offered Securities.
EXERCISE OF WARRANTS
Warrants may be exercised by surrendering the Warrant Certificate, if any,
at the corporate trust office or other designated office of the Warrant Agent,
with the form of election to purchase on the reverse side of the Warrant
Certificate, if any, properly completed and executed, and by payment in full of
the exercise price, as set forth in the Prospectus Supplement. Upon exercise of
Warrants, the Warrant Agent will, as soon as practicable, deliver the Offered
Securities issuable upon the exercise of the Warrants in authorized
denominations in accordance with the instructions of the exercising
Warrantholder and at the sole cost and risk of such holder. If less than all of
the Warrants evidenced by the Warrant Certificate, if any, are exercised, a new
Warrant Certificate will be issued for the remaining amount of unexercised
Warrants, if sufficient time exists prior to the expiration date.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
Under U.S. federal tax laws, certain limitations on offers, sales and
delivery apply to Bearer Securities. These limitations, as well as additional
information regarding the U.S. federal income tax consequences in respect of a
Bearer Security, will be set forth in any Prospectus Supplement providing for
the issuance of Bearer Securities.
UNITED STATES TAXATION
The following is a summary of the principal U.S. federal income tax
consequences of the acquisition, ownership and disposition of Registered
Securities. The summary reflects present law, which is subject to prospective
and retroactive changes. It is not intended as tax advice, and it does not
describe all of the tax considerations that may be relevant to a prospective
purchaser. The summary addresses only original purchasers of the Securities that
hold the Securities as capital assets. It does not address U.S. federal income
tax issues relevant to purchasers subject to special rules, such as banks,
securities dealers, life insurance companies, controlled foreign corporations,
persons holding Securities in connection with a hedge or persons having a
functional currency other than the U.S. dollar. The summary does not consider
the tax consequences of Securities with terms other than those described in this
Prospectus. PROSPECTIVE PURCHASERS ARE URGED TO CONSULT THEIR TAX ADVISERS ABOUT
THE TAX CONSEQUENCES OF AN INVESTMENT IN THE SECURITIES UNDER THE LAWS OF THE
UNITED STATES AND OTHER JURISDICTIONS WHERE PURCHASERS ARE SUBJECT TO TAXATION.
For the purposes of this discussion, "U.S. Holder" means (i) a beneficial
owner of the Securities that is a citizen or resident of the United States, a
corporation or partnership organized in or under the laws of the United States,
or an estate or trust the income of which is subject to U.S. federal income
taxation regardless of its source or (ii) any other beneficial owner as to which
income from the Securities is effectively connected with the conduct of a trade
or business within the United States. The term "Non-U.S. Holder" refers to any
beneficial owner of the Securities other than a U.S. Holder.
12
<PAGE> 14
U.S. HOLDERS
PAYMENTS OF INTEREST
Interest on a Security generally will be taxable to a U.S. Holder as
ordinary interest income at the time of receipt or accrual in accordance with
the U.S. Holder's method of accounting for U.S. federal income tax purposes.
Special rules for the interest on Securities with original issue discount are
described below.
ORIGINAL ISSUE DISCOUNT
The following is a summary of the U.S. federal income tax consequences to
U.S. Holders of the purchase, ownership and disposition of Securities issued
with original issue discount ("OID"). The following summary is based on sections
1271 through 1273 and section 1275 of the U.S. Internal Revenue Code of 1986, as
amended (the "Code"), and on certain final regulations of the U.S. Department of
Treasury issued in 1994 (the "Final OID Regulations") interpreting these
provisions. Additionally, the summary includes a discussion of proposed
regulations issued in December 1994 relating principally to contingent payment
debt instruments issued with OID (the "Proposed OID Regulations").
General. A U.S. Holder of a Security issued at a discount with a maturity
of more than one year after the date of issue must include original issue
discount in income over the term of the Security. The U.S. Holder generally must
include in gross income for the taxable year the sum of the daily portions of
original issue discount that accrue on the Security for each day during the year
on which such holder held the Security. Accordingly, a U.S. Holder will be
required to include amounts attributable to original issue discount in income
before receiving cash attributable to that income.
A Security has original issue discount for U.S. federal income tax purposes
to the extent that the Security's stated redemption price at maturity exceeds
its issue price. The issue price of a Security is the initial offering price at
which a substantial amount of the Securities is sold to the public (excluding
bond houses, brokers or similar persons). The stated redemption price of a
Security is the total of all payments due on the Security other than payments of
"qualified stated interest." A Security is not treated as issued at a discount,
however, if the discount is less than 1/4 of 1 percent of the Security's stated
redemption price at maturity multiplied by the number of complete years to
maturity ("de minimis original issue discount"). A Security that bears interest
for any accrual period at a rate below the rate for the remaining term of the
Security (e.g., a Security with a "teaser rate") also will not be treated as
issued at a discount solely on account of that feature if the foregone interest
is less than 1/4 of 1 percent of the Security's adjusted stated redemption price
multiplied by the number of complete years to maturity.
Qualified stated interest is interest that is payable unconditionally in
cash or in property (other than debt of the issuer) at least annually at either
(a) a single fixed rate that appropriately takes into account the length of the
interval between payments or (b) the current values of (i) a single "qualified
floating rate," (ii) a single qualified floating rate followed by a second
qualified floating rate, (iii) a single fixed rate followed by a single
qualified floating rate or (iv) a single "objective rate" (each a "Variable
Rate"). A qualified floating rate is any floating rate the variations in which
reasonably can be expected to measure contemporaneous variations in the cost of
newly-borrowed funds (e.g., LIBOR). An objective rate is a rate, other than a
qualified floating rate, determined by a single formula that is fixed throughout
the term of the Security and is based on (i) one or more qualified floating
rates (e.g., a multiple of a qualified floating rate or the inverse of a
qualified floating rate), (ii) one or more rates each of which would be a
qualified floating rate for a Security denominated in a currency other than the
currency in which the Security is denominated, (iii) the yield or the changes in
the price of one or more items of actively traded personal property (other than
stock or debt of the Company or a related party), (iv) a combination of rates
described above in (i), (ii), or (iii), or (v) other rates designated from time
to time by the Internal Revenue Service. The Proposed OID Regulations provide
that an objective rate is any rate, other than a qualified floating rate, that
is determined using a single fixed formula and that is based on objective
financial or economic information. A rate will not be considered an objective
rate, however, if it is reasonably expected that the average value of the rate
during the first half of the Security's term will be either significantly less
than or significantly greater than the average value of the rate during the
final half of the Security's term. A fixed rate for an initial period of less
than one year followed by a qualified floating rate or an objective rate
together constitute a
13
<PAGE> 15
single qualified floating objective rate if the value of the qualified floating
rate or objective rate on the issue date is intended to approximate the fixed
rate.
To determine the daily portions of original issue discount, original issue
discount accruing during an accrual period is divided by the number of days in
the period. The amount of original discount accruing during an accrual period is
determined by using a constant yield to maturity method. The accrued amount for
any period is the excess of (i) the product of the Security's adjusted issue
price at the beginning of the accrual period and its yield to maturity
(determined on the basis of compounding at the close of each accrual period and
appropriately adjusted for the length of the accrual period) over (ii) the
amount of any qualified stated interest payments allocable to the accrual
period. The adjusted issue price of a Security at the beginning of any accrual
period generally equals the issue price of the Security increased by the
aggregate amount of original issue discount that accrued on that Security in all
prior accrual periods and reduced by the amount of payments in prior accrual
periods other than payments of qualified stated interest.
A U.S. Holder of a Security issued at a discount that purchases the
Security for more than the Security's adjusted issue price but less than the
Security's stated redemption price at maturity may reduce the daily portions of
original issue discount includible in gross income by daily portions of the
acquisition premium paid for the Security.
Variable Rate Securities. Special rules apply to the U.S. Holder of a
Security that bears interest at a Variable Rate (a "Variable Rate Security"). In
general, to compute the accrual of OID on a Variable Rate Security, the Final
OID Regulations convert the Variable Rate Security into a fixed rate debt
instrument and then apply the general rules discussed above to the deemed fixed
rate debt instrument. If a Variable Rate Security provides for stated interest
at either a single qualified floating rate or objective rate that is
unconditionally payable at least annually, (a) all stated interest with respect
to the Variable Rate Security is treated as qualified stated interest and (b)
the amount of OID, if any, is determined under the rules applicable to fixed
rate debt instruments discussed above by assuming that the Variable Rate is a
fixed rate equal to (i) in the case of a qualified floating rate or qualified
inverse floating rate, the value, as of the issue date of the Variable Rate
Security, of the qualified floating rate or the qualified inverse floating rate,
or (ii) in the case of an objective rate (other than a qualified inverse
floating rate), a fixed rate that reflects the yield that is reasonably expected
for the Variable Rate Security.
If the Variable Rate Security does not provide for stated interest as
described in the preceding paragraph, to determine the amounts of interest and
OID accruals an "equivalent fixed rate debt instrument" must be constructed. The
equivalent fixed rate debt instrument has terms that are identical to those
provided under the Variable Rate Security, except that the equivalent fixed rate
debt instrument provides for fixed rate substitutes in lieu of the qualified
floating rates or objective rate provided under the Variable Rate Security. The
fixed rate substitute (a) for each qualified floating rate is the value of each
such rate as of the issue date of the Variable Rate Security (with appropriate
adjustment for any differences in intervals between interest adjustment dates),
(b) for a qualified inverse floating rate is the value of the qualified inverse
floating rate as of the issue date of the Variable Rate Security and (c) for an
objective rate (other than a qualified inverse floating rate) is a fixed rate
that reflects the yield that is reasonably expected for the Variable Rate
Security. The amounts of qualified stated interest and OID, if any, are
determined for the equivalent fixed rate debt instrument under the rules
applicable to fixed rate debt instruments as described above and are taken into
account as if the holder of the Security held the equivalent fixed rate debt
instrument. Qualified stated interest or OID allocable to an accrual period is
increased (or decreased) if the interest actually accrued or paid during an
accrual period exceeds (or is less than) the interest assumed to be accrued or
paid during the accrual period under the equivalent fixed rate debt instrument.
This increase or decrease is an adjustment to qualified stated interest of the
accrual period if the equivalent fixed rate debt instrument provides for
qualified stated interest and the increase or decrease is reflected in the
amount actually paid during the accrual period. Otherwise, this increase or
decrease is an adjustment to OID for the accrual period. If the Variable Rate
Security provides for interest at a qualified floating rate or qualified inverse
floating rate and also provides for stated interest at a single fixed rate
(other than a single fixed rate for an initial period of less than one year that
is intended to approximate the value of the qualified floating or objective
rate), in constructing the equivalent fixed rate debt instrument, such a
Variable Rate Security is treated as if it provided for a qualified floating
rate (or qualified inverse floating rate, as the case may be) instead of the
fixed rate, which qualified floating (or inverse floating) rate is such that the
Variable Rate Security would have the same fair market
14
<PAGE> 16
value as of its issue date. The foregoing rules do not apply, and a Security is
treated as a Contingent Payment Security (defined below), if its issue price
exceeds the total of noncontingent principal payments by more than the lesser of
(i) the product of .015, the total noncontingent principal payments and the
number of complete years to maturity (or a lesser amount if principal is payable
in installments) and (ii) 15 percent of the total noncontingent principal
payments.
Optional Redemption. For purposes of determining the yield of a Security,
the Company will be presumed to exercise any right to redeem a Security before
its stated maturity or to extend the maturity of a Security if exercise would
reduce the yield on the Security. Likewise, the holder will be presumed to
exercise any right to require the redemption of a Security or to extend the
maturity of the Security if exercise would increase the yield on the Security.
If the Security is not actually redeemed on the date when the option was
presumed to have been exercised, the Security will be treated only for purposes
of determining yield as having been reissued at a price equal to that Security's
adjusted issue price on that date with a term based on the original final
maturity of the Security.
Short-Term Securities. U.S. Holders that do not use the accrual method of
accounting for tax purposes generally will not be required to recognize original
issue discount on Securities maturing within one year of original issuance until
they receive payments on the Securities. Taxpayers on the accrual method,
regulated investment companies, common trust funds, and certain others, however,
must accrue original issue discount on such short-term Securities on a
straight-line basis unless they elect to accrue the discount on a constant yield
basis with daily compounding. The original issue discount on a short-term
Security is the amount by which the total principal and interest payments on the
Security exceed its issue price. U.S. Holders may elect to include discount on
such short-term Securities into income based on acquisition discount rather than
original issue discount. Acquisition discount is the excess of a Security's
stated redemption price at maturity over the U.S. Holder's basis in the
Security.
Gain recognized on the sale or exchange of a short-term Security by a U.S.
Holder that has not accrued discount on the Security will be ordinary income to
the extent attributable to accrued interest and original issue discount. Such a
holder also must defer deductions for net interest expense on any borrowing
attributable to the short-term Security to the extent that the expense does not
exceed accrued but unrecognized interest and original issue discount (or
acquisition discount) on the Security.
ANTI-ABUSE RULE
The Internal Revenue Service can apply or depart from the rules contained
in the Final OID Regulations as necessary or appropriate to achieve a reasonable
result where a principal purpose in structuring a Security or applying the
otherwise applicable rules is to achieve a result that is unreasonable in light
of the purposes of the applicable statutes (which generally are intended to
achieve the clear reflection of income for both sellers and purchasers of the
Securities).
MARKET DISCOUNT
A U.S. Holder that purchases a Security at a market discount generally will
be required to treat payments other than qualified stated interest payments as
ordinary income to the extent of the accrued market discount and to treat gain
on the sale of the Security as ordinary income to the extent of the accrued
market discount not previously included in income. See "Sale or Exchange of
Securities" below. Market discount is the amount by which the stated redemption
price at maturity (or, in the case of a Security with original issue discount,
the revised issue price) exceeds the purchaser's basis in the Security
immediately after acquisition. A Security is not treated as purchased at a
market discount, however, if the discount is less than 1/4 of 1 percent of the
stated redemption price at maturity (or the revised issue price) multiplied by
the number of complete years remaining to maturity ("de minimis market
discount"). (The revised issue price of a Security is its initial issue price
increased by the amount of original issue discount includible in the gross
income of previous holders.) Market discount on a Security will accrue, at the
election of the holder, either ratably or at a constant yield to maturity. The
U.S. Holder may elect to take market discount into income as it accrues. Under
certain circumstances, the
15
<PAGE> 17
U.S. Holder may be required to defer deductions for interest expense
attributable to debt incurred or continued to purchase a Security with market
discount.
PREMIUM
A U.S. Holder that purchases a Security for more than its stated redemption
price at maturity may elect to amortize the bond premium. If a U.S. Holder makes
such an election, the amount of interest on the Security otherwise to be
included in the U.S. Holder's income will be reduced each year by the amount of
amortizable bond premium allocable to such year on a constant yield to maturity
basis (except to the extent regulations may provide otherwise). Amortized bond
premium will reduce the U.S. Holder's basis in the Security. An election to
amortize bond premium will apply to certain other debt instruments that the U.S.
Holder acquired at a premium, and the election may have different tax
consequences depending on when the debt instruments were issued or acquired. It
also is not entirely clear how amortizable bond premium would be computed for
obligations with contingent interest payments. A U.S. Holder should consult its
tax adviser before making an election to amortize bond premium.
INTEREST ELECTION
A U.S. Holder may elect, in the taxable year in which the U.S. Holder
acquires a Security, to treat all interest on any Security as OID and calculate
the amount includible in gross income under the constant yield method described
above. For purposes of this election, interest includes stated interest,
acquisition discount, OID, de minimis OID, market discount, de minimis market
discount and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium. If a U.S. Holder makes this election for a Security with
market discount or amortizable bond premium, the election is treated as an
election under the market discount or amortizable bond premium provisions,
described above, and the electing U.S. Holder will be required to amortize bond
premium or include market discount in income currently for all of its other debt
instruments with market discount or amortizable bond premium acquired during
such tax year and in any subsequent tax year. The election, once made, may not
be revoked without the consent of the Internal Revenue Service. U.S. Holders
should consult with their own tax advisers before making this election.
SALE OR EXCHANGE OF SECURITIES
Except to the extent that gain or loss is attributable to accrued but
unpaid interest or accrued market discount, a U.S. Holder generally will
recognize capital gain or loss upon a sale, exchange or complete retirement of a
Security equal to the difference between the amount realized and the U.S.
Holder's adjusted basis in the Security. The gain or loss will be long-term if
the Security has been held for more than one year. The adjusted basis of a
Security generally will equal its initial cost increased by any original issue
discount, market discount or acquisition discount with respect to the Security
previously included in the U.S. Holder's gross income and reduced by the
payments previously received on the Security, other than payments of qualified
stated interest, and by any amortized premium.
The tax consequences of the partial redemption of a Security will depend
upon the price at which the U.S. Holder purchased the Security. A U.S. Holder
that purchased a Security at a de minimis market discount or purchased a
Security for more than its revised issue price, but less than its principal
amount, will recognize capital gain equal to the difference between the
principal prepayment and the U.S. Holder's adjusted basis in the prepaid portion
of the Security. If a U.S. Holder purchased a Security at a market discount, (i)
the principal prepayment will be included in ordinary income to the extent of
the accrued market discount (and it is possible that amounts allocable to
unaccrued market discount will be recognized as capital gain) and (ii) any
principal prepayment exceeding the revised issue price allocable to the prepaid
portion of the Security will be capital gain. If a U.S. Holder purchased a
Security for more than its stated principal amount and has not elected to
amortize bond premium, the U.S. Holder will recognize a capital loss equal to
any amount by which the U.S. Holder's adjusted basis in the prepaid portion of
the Security exceeds the amount of the principal prepayment. If the U.S. Holder
has elected to amortize bond premium, all or part of such excess might be
deductible as amortizable bond premium rather than as capital loss. Any capital
gain or loss will be long-term if the Security has been held for more than one
year. It is possible that capital gain realized by holders of one or more
classes of Securities could be considered
16
<PAGE> 18
gain realized upon the disposition of property that was part of a "conversion
transaction." A "conversion transaction" is any transaction in which
substantially all of the expected return is attributable to the time value of
the U.S. Holder's net investment, if (i) the U.S. Holder entered the contract to
sell the Security substantially contemporaneously with acquiring the Security,
(ii) the Security is part of a straddle, (iii) the Security is marketed or sold
as producing capital gains, or (iv) the transaction is specified in Treasury
regulations that have not yet been issued. If the sale or other disposition of
the Security is part of a conversion transaction, all or any portion of the gain
realized upon the sale or other disposition of the Securities would be treated
as ordinary income instead of capital gain.
FOREIGN CURRENCY SECURITIES
The tax treatment of Securities the interest or principal on which may be
determined by reference to one or more foreign currencies will depend on the
application of special rules to the particular terms of the Securities. The tax
considerations relevant to such Securities will be described in an applicable
Prospectus Supplement, and each prospective purchaser should consult its tax
adviser about such matters.
CONTINGENT PAYMENT SECURITIES
The Proposed OID Regulations contain special rules for determining the
timing and amount of OID to be accrued in respect of Securities providing for
one or more contingent payments ("Contingent Payment Securities"). For this
purpose, a Security is not a Contingent Payment Security if it (i) is a Variable
Rate Security, (ii) provides for alternate payment schedules upon the occurrence
of contingencies or (iii) is a foreign currency debt instrument. Under the
Proposed OID Regulations, U.S. Holders generally would be required to take
contingent interest payments on Contingent Payment Securities into income on a
yield to maturity basis in accordance with a schedule of projected payments
provided by the Company to U.S. Holders and would make annual adjustments to
income to account for the difference between actual payments received and
projected payment amounts accrued. The Proposed OID Regulations have a
prospective effective date and would not apply to a Security issued at any time
prior to sixty days after the regulations are published in final form.
Additional disclosure will be provided for in a Prospectus Supplement in
connection with any offering of Contingent Payment Securities. Prospective
purchasers should consult their own tax advisers regarding the Proposed OID
Regulations in connection with ownership of a Security that provides for
contingent payments.
NON-U.S. HOLDERS
Interest received by a Non-U.S. Holder is exempt from U.S. federal income
tax unless the holder actually or constructively owns at least 10% of the total
combined voting power of the Company's stock or the holder is for U.S. income
tax purposes a controlled foreign corporation related to the Company through
stock ownership. However, "contingent interest" paid to a Non-U.S. Holder will
be subject to a 30% tax (unless an applicable tax treaty eliminates or reduces
the rate of the tax and the Non-U.S. Holder complies with the requirements for
obtaining that reduction or elimination of the tax). For this purpose,
contingent interest is an amount of interest determined by reference to (i)
receipts, sales, or other cash flows of the Company or a related person, (ii)
income or profits of the Company or a related person, (iii) any change in the
value of any property of the Company or a related person, or (iv) any dividend,
partnership distribution, or similar payment made by the Company or a related
person. To qualify for that exemption, a Non-U.S. Holder must provide a
statement signed under penalties of perjury certifying that the holder is not a
U.S. person for U.S. tax purposes and providing the holder's name and address.
The Internal Revenue Service currently is considering modifications to the
certification procedures required to qualify for the exemption. Gain from the
sale or other disposition of a Security by a Non-U.S. Holder is not subject to
U.S. federal income tax unless the Non-U.S. Holder is an individual who is
present in the United States for at least 183 days during the taxable year of
the disposition and certain other conditions are met.
Securities held by a Non-U.S. Holder will not be subject to the U.S.
federal estate tax unless the holder actually or constructively owns at least
10% of the total combined voting power of the Company's stock.
17
<PAGE> 19
INFORMATION REPORTING AND BACKUP WITHHOLDING
A 31% backup withholding of federal income tax and certain information
reporting requirements may apply to certain payments made on the Securities and
to the proceeds from the disposition of a Security if the holder is not a
corporation, a financial institution or otherwise entitled to an exemption. U.S.
Holders that provide a correct taxpayer identification number and Non-U.S.
Holders that provide the statement described above to establish an exemption
from withholding tax generally are exempt from backup withholding. Amounts
withheld under the backup withholding rules can be claimed as a refund or taken
as a credit against the holder's U.S. federal income tax liability on a properly
filed annual income tax return.
PLAN OF DISTRIBUTION
The Company may sell the Securities and/or Warrants being offered hereby
(i) directly to purchasers, (ii) through agents or (iii) through underwriters or
a group of underwriters which may include Lehman Brothers Inc. and/or Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Offers to purchase Offered Securities and/or Warrants may be solicited
directly by the Company or by agents designated by the Company from time to
time. Unless otherwise indicated in the Prospectus Supplement, any such agent
will be acting on a best-efforts basis for the period of its appointment. Agents
may be entitled under agreements which may be entered into with the Company to
indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Act").
If an underwriter or underwriters are utilized in the sale, the Company
will enter into an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction
will be set forth in the Supplement, which will be used by the underwriters to
make resales of the Offered Securities and/or Warrants in respect of which this
Prospectus is delivered to the public. The underwriters may be entitled, under
the underwriting agreement, to indemnification by the Company against certain
liabilities, including liabilities under the Act.
The agents and underwriters may be deemed to be underwriters and any
discounts, commissions or concessions received by them from the Company or any
profit on the resale of Offered Securities and/or Warrants by them may be deemed
to be underwriting discounts and commissions under the Act. Any such person who
may be deemed to be an underwriter and any such compensation received from the
Company will be described in the Prospectus Supplement.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
Offered Securities and/or Warrants from the Company at the public offering price
set forth in the Prospectus Supplement pursuant to delayed delivery contracts
("Contracts") providing for payment and delivery on the date stated in the
Prospectus Supplement. Each Contract will be for an amount not less than, and
unless the Company otherwise agrees the aggregate principal amount of Offered
Securities and/or Warrants sold pursuant to Contracts will be not less nor more
than, the respective amounts stated in the Prospectus Supplement. Institutions
with whom Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions, but will in all cases be
subject to the approval of the Company. Contracts will not be subject to any
conditions except that the purchase by an institution of the Offered Securities
and/or Warrants covered by its Contract shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which such
institution is subject. A commission indicated in the Prospectus Supplement will
be granted to agents and underwriters soliciting purchases of Offered Securities
pursuant to Contract accepted by the Company. Agents and underwriters will have
no responsibility in respect of the delivery or performance of Contracts.
The place and time of delivery for the Offered Securities and Warrants in
respect of which this Prospectus is delivered are set forth in the Supplement.
Each underwriter, dealer and agent participating in the distribution of any
Offered Securities which are issuable in bearer form will agree that it will not
offer, sell or deliver, directly or indirectly, Offered Securities in
18
<PAGE> 20
bearer form in the United States or its possessions or to United States persons
(other than qualifying financial institutions) in connection with the original
issuance of the Offered Securities. See "Limitations on Issuance of Bearer
Securities".
The Offered Securities may not be offered or sold directly or indirectly in
Great Britain other than to persons whose ordinary business it is to buy or sell
shares or debentures (except in circumstances which do not constitute an offer
to the public within the meaning of the Companies Act of 1985), and this
Prospectus and any Prospectus Supplement or any other offering material relating
to the Offered Securities may not be distributed in or from Great Britain other
than to persons whose business involves the acquisition and disposal, or the
holding, of securities whether as principal or as agent.
All Offered Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Offered Securities are sold
by the Company for public offering and sale may make a market in such Offered
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any Offered Securities.
Certain of the underwriters or agents and their associates may engage in
transactions with and perform services for the Company in the ordinary course of
business.
LEGAL OPINIONS
The validity of the Securities offered hereby will be passed upon for the
Company by Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York,
New York, and for the agents or underwriters, if any, by Cravath, Swaine &
Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York.
EXPERTS
The audited financial statements included in the Company's Annual Report on
Form 10-K for the year ended May 31, 1994 incorporated by reference in this
Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
19
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities covered hereby, other than underwriting commissions, are, subject to
further contingencies, estimated to be as follows:
<TABLE>
<S> <C>
Registration Statement Filing Fee................................. $137,932
Printing.......................................................... 100,000
Legal Fees and Expenses........................................... 100,000
Blue Sky Fees and Expenses........................................ 15,000
Accounting Fees................................................... 15,000
Fees of Trustee................................................... 15,000
Miscellaneous..................................................... 7,068
--------
Total................................................... $390,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 29-1104(9) of the District of Columbia Cooperative Association Act
provides that an association such as the Registrant shall have the capacity "to
exercise . . . any power granted to ordinary business corporations, save those
powers inconsistent with this chapter." Section 29-304(16) of the District of
Columbia Business Corporation Act permits any corporation:
"To indemnify any and all of its directors or officers or former
directors or officers or any person who may have served at its request as a
director or officer of another corporation in which it owns shares of
capital stock or of which it is a creditor against expenses actually and
necessarily incurred by them in connection with the defense of any action,
suit, or proceeding in which they, or any of them, are made parties, or a
party, by reason of being or having been directors or officers or a
director or officer of the corporation, or of such other corporation,
except in relation to matters as to which any such director or officer or
former director or officer or person shall be adjudged in such action,
suit, or proceeding to be liable for negligence or misconduct in the
performance of duty. Such indemnification shall not be deemed exclusive of
any other rights to which those indemnified may be entitled, under any
bylaw, agreement, vote of stockholders, or otherwise."
The Board of Directors of CFC has resolved to indemnify all CFC directors,
officers and employees in accordance with the terms of the first sentence of the
above Section. The Bylaws of CFC also provide for indemnification of all CFC
directors, officers and employees as set forth above.
II-1
<PAGE> 22
ITEM 16. LIST OF EXHIBITS
<TABLE>
<S> <C>
1.1 -- Debt Securities and/or Warrants to Purchase Debt Securities Underwriting
Agreement Basic Provisions has been filed as exhibit 1.1 to Post-Effective
Amendment No. 1 to Registration No. 33-2194 filed December 18, 1987 and is
incorporated herein by reference. An Underwriting Agreement with respect to
each particular offering of Securities registered hereunder will be filed as
an exhibit to a current report on Form 8-K and incorporated herein by
reference.
1.2 -- An Agency Agreement between the Company and the agents named therein,
relating to distribution of the Company's Medium-Term Notes, Series C, within
the United States will be filed as an exhibit to a current report on Form 8-K
and incorporated herein by reference.
1.3 -- A form of Placement Agency Agreement between the Company and the agents named
therein relating to the distribution, if any, of the Company's Medium-Term
Notes outside the United States will be filed as an exhibit to a current
report on Form 8-K and incorporated herein by reference prior to the use of
such agreement.
4.1 -- Indenture between the Company and Chemical Bank, as Trustee. Incorporated by
reference to Exhibit 4.1 to Amendment No. 1 to Registration Statement on Form
S-3 filed on October 12, 1990 (Registration No. 33-34927).
4.2 -- First Supplemental Indenture between the Company and Chemical Bank, as
Trustee.
4.3 -- Instrument of Resignation, Appointment and Acceptance among the Company,
Chemical Bank, Harris Trust and Savings Bank and Harris Trust Company of New
York dated as of October 1, 1993. Incorporated by reference to Exhibit 4.3 to
Registration Statement on Form S-3 filed on October 1, 1993 (Registration No.
33-50463).
4.4 -- Form of Fixed Rate Medium-Term Note (for offerings within the United States).
4.5 -- Form of Floating Rate Medium-Term Note (for offerings within the United
States).
4.6 -- A form of Fixed or Floating Rate Registered Medium-Term Note (for offerings
outside the United States) will be filed as an exhibit to a current report on
Form 8-K and incorporated herein by reference prior to the issuance of any
such Note.
4.7 -- A form of Fixed or Floating Rate Bearer Medium-Term Note (for offerings
outside the United States) will be filed as an exhibit to a current report on
Form 8-K and incorporated herein by reference prior to the issuance of any
such Note.
4.8 -- A form of Temporary Global Bearer Fixed or Floating Rate Medium-Term Note
(for offerings outside the United States) will be filed as an exhibit to a
current report on Form 8-K and incorporated herein by reference prior to the
issuance of any such Note.
4.9 -- A form of Definitive Global Bearer Fixed or Floating Rate Medium-Term Note
(for offerings outside the United States) will be filed as an exhibit to a
current report on Form 8-K and incorporated herein by reference prior to the
issuance of any such Note.
4.10 -- A form of Warrant Agreement between the Company and one or more banking
institutions or trust companies as Warrant Agents will be filed as an exhibit
to a current report on Form 8-K and incorporated herein by reference prior to
the issuance of any Warrants.
5 -- Opinion and consent of Milbank, Tweed, Hadley & McCloy. An opinion and
consent of Milbank, Tweed, Hadley & McCloy respecting Warrants will be filed
as an exhibit to a current report on Form 8-K and incorporated herein by
reference prior to the issuance of any Warrants.
8 -- Opinion of Milbank, Tweed, Hadley & McCloy. Included as part of Exhibit 5.
12 -- Schedule of computation of ratio of margins to fixed charges.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Milbank, Tweed, Hadley & McCloy. Included as part of Exhibit 5.
24 -- Power of Attorney (included on signature pages).
25 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
Harris Trust and Savings Bank, as Trustee.
</TABLE>
II-2
<PAGE> 23
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement (other than
as provided in the proviso and instructions to Item 512(a) of Regulation
S-K):
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 24
THE REGISTRANT AND EACH PERSON WHOSE SIGNATURE APPEARS BELOW HEREBY
AUTHORIZES EACH OF SHELDON C. PETERSEN, STEVEN L. LILLY AND JOHN JAY LIST (THE
"AGENTS") TO FILE ONE OR MORE AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS)
TO THE REGISTRATION STATEMENT WHICH AMENDMENTS MAY MAKE SUCH CHANGES IN THE
REGISTRATION STATEMENT AS SUCH AGENT DEEMS APPROPRIATE AND THE REGISTRANT AND
EACH SUCH PERSON HEREBY APPOINTS EACH SUCH AGENT AS ATTORNEY-IN-FACT TO EXECUTE
IN THE NAME AND ON BEHALF OF THE REGISTRANT AND EACH SUCH PERSON, INDIVIDUALLY
AND IN EACH CAPACITY STATED BELOW, ANY SUCH AMENDMENTS TO THE REGISTRATION
STATEMENT.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE COUNTY OF FAIRFAX, COMMONWEALTH OF VIRGINIA, ON THE 5TH
DAY OF APRIL, 1995.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By: /s/ SHELDON C. PETERSEN
------------------------------------
SHELDON C. PETERSEN
Governor and Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REPORT HAS
BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES
INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ---------------------------- ----------------------
<S> <C> <C>
/s/ SHELDON C. PETERSEN Governor and Chief
- ---------------------------------------- Executive Officer
SHELDON C. PETERSEN
/s/ STEVEN L. LILLY Senior Vice President and
- ---------------------------------------- Chief Financial Officer
STEVEN L. LILLY
/s/ ANGELO M. SALERA Controller (Principal
- ---------------------------------------- Accounting Officer)
ANGELO M. SALERA
/s/ J. CHRIS CARIKER President and Director April 5, 1995
- ----------------------------------------
J. CHRIS CARIKER
/s/ GARRY BYE Vice President and
- ---------------------------------------- Director
GARRY BYE
/s/ RALPH L. LOVELESS Secretary-Treasurer and
- ---------------------------------------- Director
RALPH L. LOVELESS
</TABLE>
II-4
<PAGE> 25
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ---------------------------- ----------------------
<S> <C> <C>
/s/ JOHN C. ANDERSON Director
- ----------------------------------------
JOHN C. ANDERSON
/s/ ROBERT J. BAUMAN Director
- ----------------------------------------
ROBERT J. BAUMAN
/s/ BILL BERTRAM Director
- ----------------------------------------
BILL BERTRAM
/s/ HAROLD I. DYCUS Director
- ----------------------------------------
HAROLD I. DYCUS
Director
- ----------------------------------------
GLENN ENGLISH
/s/ NADINE GRIFFIN Director
- ----------------------------------------
NADINE GRIFFIN
/s/ BENSON HAM Director
- ----------------------------------------
BENSON HAM
/s/ RALPH HARMEYER Director
- ----------------------------------------
RALPH HARMEYER
/s/ GORDON J. HUDSON Director
- ----------------------------------------
GORDON J. HUDSON
/s/ DAVID HUTCHENS Director April 5, 1995
- ----------------------------------------
DAVID HUTCHENS
/s/ GEORGE W. KLINE Director
- ----------------------------------------
GEORGE W. KLINE
/s/ PAUL J. LIESS Director
- ----------------------------------------
PAUL J. LIESS
Director
- ----------------------------------------
ROBERT MCCLURG
/s/ R. LAYNE MORRILL Director
- ----------------------------------------
R. LAYNE MORRILL
/s/ GERARD P. PAOLUCCI Director
- ----------------------------------------
GERARD P. PAOLUCCI
/s/ TERRY PITCHFORD Director
- ----------------------------------------
TERRY PITCHFORD
/s/ HENRY UMSCHEID Director
- ----------------------------------------
HENRY UMSCHEID
/s/ ROBERT O. WILLIAMS Director
- ----------------------------------------
ROBERT O. WILLIAMS
/s/ ELDWIN WIXSON Director
- ----------------------------------------
ELDWIN WIXSON
</TABLE>
II-5
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------- -------------
<C> <S> <C>
1.1 -- Debt Securities and/or Warrants to Purchase Debt Securities
Underwriting Agreement Basic Provisions has been filed as exhibit 1.1
to Post-Effective Amendment No. 1 to Registration No. 33-2194 filed
December 18, 1987 and is incorporated herein by reference. An
Underwriting Agreement with respect to each particular offering of
Securities registered hereunder will be filed as an exhibit to a
current report on Form 8-K and incorporated herein by reference.
1.2 -- An Agency Agreement between the Company and the agents named therein,
relating to distribution of the Company's Medium-Term Notes, Series C,
within the United States will be filed as an exhibit to a current
report on Form 8-K and incorporated herein by reference.
1.3 -- A form of Placement Agency Agreement between the Company and the
agents named therein relating to the distribution, if any, of the
Company's Medium-Term Notes outside the United States will be filed as
an exhibit to a current report on Form 8-K and incorporated herein by
reference prior to the use of such agreement.
4.1 -- Indenture between the Company and Chemical Bank, as Trustee.
Incorporated by reference to Exhibit 4.1 to Amendment No. 1 to
Registration Statement on Form S-3 filed on October 12, 1990
(Registration No. 33-34927).
4.2 -- First Supplemental Indenture between the Company and Chemical Bank, as
Trustee.
4.3 -- Instrument of Resignation, Appointment and Acceptance among the
Company, Chemical Bank, Harris Trust and Savings Bank and Harris Trust
Company of New York dated as of October 1, 1993. Incorporated by
reference to Exhibit 4.3 to Registration Statement on Form S-3 filed
on October 1, 1993 (Registration No. 33-50463).
4.4 -- Form of Fixed Rate Medium-Term Note (for offerings within the United
States).
4.5 -- Form of Floating Rate Medium-Term Note (for offerings within the
United States).
4.6 -- A form of Fixed or Floating Rate Registered Medium-Term Note (for
offerings outside the United States) will be filed as an exhibit to a
current report on Form 8-K and incorporated herein by reference prior
to the issuance of any such Note.
4.7 -- A form of Fixed or Floating Rate Bearer Medium-Term Note (for
offerings outside the United States) will be filed as an exhibit to a
current report on Form 8-K and incorporated herein by reference prior
to the issuance of any such Note.
4.8 -- A form of Temporary Global Bearer Fixed or Floating Rate Medium-Term
Note (for offerings outside the United States) will be filed as an
exhibit to a current report on Form 8-K and incorporated herein by
reference prior to the issuance of any such Note.
4.9 -- A form of Definitive Global Bearer Fixed or Floating Rate Medium-Term
Note (for offerings outside the United States) will be filed as an
exhibit to a current report on Form 8-K and incorporated herein by
reference prior to the issuance of any such Note.
4.10 -- A form of Warrant Agreement between the Company and one or more
banking institutions or trust companies as Warrant Agents will be
filed as an exhibit to a current report on Form 8-K and incorporated
herein by reference prior to the issuance of any Warrants.
5 -- Opinion and consent of Milbank, Tweed, Hadley & McCloy. An opinion and
consent of Milbank, Tweed, Hadley & McCloy respecting Warrants will be
filed as an exhibit to a current report on Form 8-K and incorporated
herein by reference prior to the issuance of any Warrants.
8 -- Opinion of Milbank, Tweed, Hadley & McCloy. Included as part of
Exhibit 5.
12 -- Schedule of computation of ratio of margins to fixed charges.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Milbank, Tweed, Hadley & McCloy. Included as part of
Exhibit 5.
24 -- Power of Attorney (included on signature pages).
25 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of Harris Trust and Savings Bank, as Trustee.
</TABLE>
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
to
CHEMICAL BANK, Trustee.
-------------
First Supplemental Indenture
-------------
Dated as of October 1, 1990
-------------
Supplemental to the Indenture
dated as of December 15, 1987
- --------------------------------------------------------------------------------
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE, dated as of October 1,
1990, between NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION, a District of Columbia cooperative association
(herein called the "Company"), having its principal executive
office at 2201 Cooperative Way, Herndon, Virginia 22071, and
CHEMICAL BANK, a corporation duly organized and existing under
the laws of the State of New York, as Trustee (herein called
the "Trustee"), having its corporate trust office at 55 Water
Street, New York, New York 10041.
RECITALS OF THE COMPANY
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an indenture, dated as of December 15, 1987 (the "Indenture"),
providing for the issuance from time to time of its unsecured debentures, notes
and other evidences of indebtedness (herein and therein called the
"Securities"), to be issued in one or more series as in the Indenture provided;
and
WHEREAS, Sections 901(5) and 901(8) of the Indenture provide,
among other things, that the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into an indenture
supplemental to the Indenture (a) in the case of Section 901(5), to cure any
ambiguity, to correct or supplement any provision therein which may be
inconsistent with any other provision therein, or to make any other provisions
with respect to matters or questions arising under the Indenture; provided that
such action shall not adversely affect the interests of the Holders of
Securities of any series in any material respect, and (b) in the case of
Section 901(8), for the purpose of changing or eliminating any provision of the
Indenture, provided that such change or elimination shall not be effective as
to any Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
and
WHEREAS, prior to the date hereof, the Company has issued and
sold Securities in the form of its Medium-Term Notes, Series A, pursuant to the
Indenture and such Securities have been heretofore issuable only in fully
registered form; and
WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this First Supplemental Indenture
for the purpose of amending the Indenture in order to permit the Company to
elect that any series of Securities issued after the execution hereof be issued
in fully registered form and represented by either (i) a Depositary Security
(as hereinafter defined) registered in the name of a Depositary (as hereinafter
defined) or its nominee or (ii) a certificate in definitive form; and
<PAGE> 3
- 2 -
WHEREAS, the Company has furnished the Trustee with (a) an
Opinion of Counsel pursuant to Section 903 of the Indenture stating that the
execution of this First Supplemental Indenture is authorized or permitted by
the Indenture, (b) an Officers' Certificate stating that all conditions
precedent provided for in the Indenture with respect to this First Supplemental
Indenture have been complied with, and (c) a copy of the resolutions of its
Board of Directors, certified by its Secretary or an Assistant
Secretary-Treasurer, pursuant to which this First Supplemental Indenture has
been authorized; and
WHEREAS, all things necessary to make this First Supplemental
Indenture a valid agreement of the Company, in accordance with its terms, have
been done.
AGREEMENT
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities or of
any series thereof, as follows:
ARTICLE ONE
Amendments of the Indenture
SECTION 101. Section 101 of the Indenture is amended to
include therein the following provisions:
(a) After the definition of Defaulted Interest:
"'Depositary' means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more
Depositary Securities, the Person designated as Depositary for such
series by the Company pursuant to Section 301, until a successor
Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean
or include each Person who is then a Depositary hereunder, and if at
any time there is more than one such Person, "Depositary" as used with
respect to the Securities of any such series shall mean the Depositary
with respect to the Securities of that series."
(b) After the definition of Fully Registered Security:
<PAGE> 4
- 3 -
"'Depositary Security' means a Registered Security evidencing all
or part of a series of Securities, issued to the Depositary for such
series or its nominee in accordance with Section 303, registered in
the name of such Depositary or nominee and bearing the legend
specified in Section 204."
SECTION 102. A new Section 204 is added, to read in its
entirety as follows:
"Section 204. Form of Legend for Depositary
Securities.
Any Depositary Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
'This Security is a Depositary Security within the meaning of
the Indenture hereinafter referred to and is registered in the name of
a Depositary or nominee of a Depositary. This Security is
exchangeable for Securities registered in the name of a Person other
than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Security (other
than a transfer of this Security as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary
or any nominee of the Depositary to a successor Depositary or a
nominee of such successor Depositary) may be registered except in such
limited circumstances.'"
SECTION 103. The word "and" is deleted at the end of Section
301(19) of the Indenture, Section 301(20) of the Indenture is renumbered
Section 301(21) and a new Section 301(20) is added, to read in its entirety as
follows:
"(20) whether the Securities of the series shall be issued upon
original issuance in whole or in part in the form of one or more
Depositary Securities and, in such case, (a) the Depositary with
respect to such Depositary Security or Securities; and (b) the
circumstances under which any such Depositary Security may be
exchanged for Securities registered in the name of, and any transfer
of such Depositary Security may be registered to, a Person other than
such Depositary or its nominee, if other than as set forth in Section
305; and"
SECTION 104. The following paragraphs are added immediately
following the last paragraph of Section 303 of the Indenture:
<PAGE> 5
- 4 -
"If the Company shall establish pursuant to Section 301(20) that
the Securities of any series are to be issued in whole or in part in
the form of one or more Depositary Securities, then the Company shall
execute and the Trustee shall, in accordance with this Section 303 and
the Company Order with respect to such series, authenticate and
deliver one or more Depositary Securities in temporary or definitive
form that (i) shall represent and shall be denominated in an aggregate
amount equal to the aggregate principal amount of the Outstanding
Securities of such series to be represented by such Depositary
Security or Securities, (ii) shall be registered in the name of the
Depositary for such Depositary Security or Securities or the nominee
of such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's or such nominee's
instruction and (iv) shall bear the legend specified in Section 204.
Each Depositary designated pursuant to Section 301(20) for a
Depositary Security in registered form shall, at the time of its
designation and at all times while it serves as Depositary, be a
clearing agency registered under the Securities Exchange Act of 1934,
as amended."
SECTION 105. The following paragraphs are added immediately
following the last paragraph of Section 305 of the Indenture:
"Notwithstanding any other provision of this Indenture, any
Security authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, any Depositary Security shall also
be a Depositary Security and bear the legend specified in Section 204
except for any Registered Security in definitive form authenticated
and delivered in exchange for, or upon registration of transfer of, a
Depositary Security pursuant to the following two paragraphs.
If at any time the Depositary for the Securities of any series
notifies the Company that it is unwilling or unable to continue as
Depositary for the Securities of such series or if at any time the
Depositary for the Securities of such series shall no longer be
eligible under Section 303, the Company shall appoint a successor
Depositary with respect to the Securities of such series. If a
successor Depositary for the Securities of such series is not
appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such ineligibility, the Company's
election pursuant to Section 301(20) shall no longer be effective with
respect to the Securities of such series and
<PAGE> 6
- 5 -
the Company shall execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of definitive Securities of
such series, shall authenticate and deliver, Registered Securities of
such series in definitive form in an aggregate principal amount equal
to the aggregate principal amount of the Depositary Security or
Securities representing such series in exchange for such Depositary
Security or Securities.
The Company may at any time and in its sole discretion determine
that the Securities of any series issued in the form of one or more
Depositary Securities shall no longer be represented by such
Depositary Security or Securities. In such event, the Company shall
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities of such series,
shall authenticate and deliver, Registered Securities of such series
in definitive form in an aggregate principal amount equal to the
aggregate principal amount of the Depositary Security or Securities
representing such series in exchange for such Depositary Security or
Securities.
Upon the exchange of a Depositary Security for Registered
Securities in definitive form, such Depositary Security shall be
canceled by the Trustee. Registered Securities issued in exchange for
a Depositary Security pursuant to this Section 305 shall be registered
in such names and in such authorized denominations as the Depositary
for such Depositary Security, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Registered Securities to the Persons in
whose names such Securities are so registered."
SECTION 106. The following paragraph is added immediately
following the last paragraph of Section 308 of the Indenture:
"No holder of any beneficial interest in any Depositary Security
held on its behalf by a Depositary shall have any rights under this
Indenture with respect to such Depositary Security, and such
Depositary may be treated by the Company, the Trustee, and any agent
of the Company or the Trustee as the owner of such Depositary Security
for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall impair, as between a Depositary and such holders of
beneficial interests, the operation of customary practices governing
the exercise of the rights of the Depositary as Holder of any
Security."
<PAGE> 7
- 6 -
SECTION 107. The following paragraph is added immediately
following the last paragraph of Section 501 of the Indenture:
"Upon receipt by the Trustee of any Notice of Default pursuant to
this Section 501, (i) with respect to Securities of a series all or
part of which is represented by a Depositary Security, the Trustee
shall establish a record date, which record date shall be at the close
of business on the day the Trustee receives such Notice of Default,
and (ii) with respect to any other series of Securities issued after
October 16, 1990, the Trustee may, but shall not be obligated to,
establish a record date, in each case for the purpose of determining
Holders of Outstanding Securities of such series entitled to join in
such Notice of Default. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to
join in such Notice of Default, whether or not such Holders remain
Holders after such record date; provided, that unless Holders of at
least the requisite principal amount (which amount is 25% in the case
of subclause (5) of this Section) of the Outstanding Securities of
such series, or their proxies, shall have joined in such Notice of
Default prior to the day which is 90 days after such record date, such
Notice of Default and the Act of Holders, or their proxies, joining in
such Notice of Default shall automatically and without further action
by any Holders be cancelled and of no effect. Nothing in this
paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
(i) after expiration of such 90-day period, a new Notice of Default to
the same effect as that cancelled pursuant to the proviso to the
preceding sentence, or (ii) during any such 90-day period in respect
of any Notice of Default with respect to a prospective Event of
Default with respect to Securities of such series, an additional
Notice of Default with respect to any other prospective Event of
Default (other than a prospective Event of Default as to which such a
90-day period has not expired) with respect to Securities of such
series, in either of which events a new record date shall or may, as
the case may be, be established pursuant to the provisions of this
Section 501 in respect of such new or additional Notice of Default."
SECTION 108. The following paragraph is added immediately
following the last paragraph of Section 502 of the Indenture:
"Upon receipt by the Trustee of any written notice declaring such
an acceleration, or rescission and annulment thereof, (i) with respect
to Securities of a series all or
<PAGE> 8
- 7 -
part of which is represented by a Depositary Security, the Trustee
shall establish a record date, which record date shall be at the close
of business on the day the Trustee receives such notice, and (ii) with
respect to any other series of Securities issued after October 16,
1990, the Trustee may, but shall not be obligated to, establish a
record date, in each case for the purpose of determining Holders of
Outstanding Securities of such series entitled to join in such notice.
The Holders on such record date, or their duly designated proxies, and
only such Persons, shall be entitled to join in such notice, whether
or not such Holders remain Holders after such record date; provided,
that unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue
of the requisite percentage having joined in such notice prior to the
day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case
may be, and the Act of Holders, or their proxies, joining in such
notice shall automatically and without further action by any Holders
be cancelled and of no effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, of Securities of any series
from giving, (i) after expiration of such 90-day period a new written
notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, to the same effect as that cancelled
pursuant to the proviso to the preceding sentence, or (ii) during any
such 90-day period in respect of any written notice of declaration of
acceleration or rescission and annulment thereof, as the case may be,
with respect to any Event of Default with respect to Securities of
such series, an additional written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be,
with respect to any other Event of Default (other than an Event of
Default as to which such a 90-day period has not expired) with respect
to Securities of such series, in either of which events a new record
date shall or may, as the case may be, be established pursuant to the
provisions of this Section 502 in respect of such new or additional
written notice."
SECTION 109. The following paragraph is added immediately
following paragraph (3) of Section 507 of the Indenture:
"Upon receipt by the Trustee of any written notice directing the
time, method or place of conducting any such proceeding or exercising
any such trust or power, (i) with respect to Securities of a series
all or part of which is represented by a Depositary Security, the
Trustee shall
<PAGE> 9
- 8 -
establish a record date, which record date shall be at the close of
business on the day the Trustee receives such notice, and (ii) with
respect to any other series of Securities issued after October 16,
1990, the Trustee may, but shall not be obligated to, establish a
record date, in each case for the purpose of determining Holders of
Outstanding Securities of such series entitled to join in such notice.
The Holders on such record date, or their duly designated proxies, and
only such Persons, shall be entitled to join in such notice, whether
or not such Holders remain Holders after such record date; provided,
that unless the Holders of a majority in principal amount of the
Outstanding Securities of such series shall have joined in such notice
prior to the date which is 90 days after such record date, such notice
and the Act of Holders, or their proxies, joining in such notice shall
automatically and without further action by any Holders be cancelled
and of no effect. Nothing in this paragraph shall prevent a Holder, or
a proxy of a Holder, from giving, (i) after expiration of such 90 day
period, a new notice to the same effect as that cancelled pursuant to
the proviso to the preceding sentence, or (ii) during any such 90-day
period in respect of any notice, a new notice giving directions
contrary to or otherwise different from such notice in either of which
events a new record date shall or may, as the case may be, be
established pursuant to the provisions of this Section 507 in respect
of such new notice."
SECTION 110. The following sentence is added to the end of
Section 1107 of the Indenture:
"provided, that if a Depositary Security is so surrendered,
such new Security so issued shall be a new Depositary Security in a
denomination equal to the unredeemed portion of the principal of the
Depositary Security so surrendered."
ARTICLE TWO
Sundry Provisions
SECTION 201. Instruments to be Read Together. This First
Supplemental Indenture is an indenture supplemental to and in implementation of
the Indenture, and the Indenture and this First Supplemental Indenture shall
henceforth be read together.
<PAGE> 10
- 9 -
SECTION 202. Confirmation. The Indenture as amended and
supplemented by this First Supplemental Indenture is in all respects confirmed
and preserved.
SECTION 203. Terms Defined. All terms defined elsewhere in
the Indenture have the same meanings in this First Supplemental Indenture.
SECTION 204. Execution in Counterparts. This instrument may
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
SECTION 205. Effectiveness. The provisions of this First
Supplemental Indenture will take effect immediately upon its execution and
delivery by the Trustee.
SECTION 206. Governing Law. This First Supplemental
Indenture shall be governed by and construed in accordance with the laws of the
State of New York.
SECTION 207. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the construction
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION,
By /s/Truman Brandt
------------------------------
Attest:
/s/Richard B. Bulman
- --------------------
CHEMICAL BANK,
as Trustee,
By /s/T.J. Foley
------------------------------
Attest:
/s/P.J.McGoran
- ----------------------
<PAGE> 11
- 10 -
DISTRICT OF COLUMBIA,)
ss.:
On the 3Oth day of August, 1990, before me personally came
Truman Brandt, to me known, who, being by me duly sworn, did depose and say
that he is Finance Officer of NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION the cooperative association described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed and said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
/s/Mary H. Schmidt
-------------------------
Notary Public
STATE OF NEW YORK,)
ss.:
COUNTY OF NEW YORK,)
On the 15th day of October, 1990, before me personally came
T.J. Foley, to me known, who, being by me duly sworn, did depose and say that
he is Vice President of CHEMICAL BANK, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/Louis Bodi
----------------------------
Notary Public
<PAGE> 1
EXHIBIT 4.4
[This Security is a Depositary Security within the meaning of
the Indenture hereinafter referred to and is registered in the name of a
Depositary or nominee of a Depositary. This Security is exchangeable for
Securities registered in the name of a Person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture, and no
transfer of this Security (other than a transfer of this Security as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any nominee of the Depositary to a successor Depositary or a nominee of such
successor Depositary) may be registered except in such limited circumstances.
Unless this certificate is presented by an authorized
representative of The Depositary Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depositary
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.]
REGISTERED REGISTERED
PRINCIPAL AMOUNT:
NO. FXR U.S. $
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
MEDIUM-TERM NOTE, SERIES C
(FIXED RATE) CUSIP
ORIGINAL ISSUE DATE: STATED MATURITY DATE:
INTEREST RATE:
REDEMPTION DATE(S): REDEMPTION PERIOD(S) AND PRICE(S):
REPAYMENT DATE(S): REPAYMENT PRICE(S):
INITIAL MATURITY DATE: RENEWAL TERMS: (IF ANY)
FINAL MATURITY DATE: EXTENSION TERMS: (IF ANY)
OTHER PROVISIONS: OPTIONAL RESET DATE(S): (IF ANY)
<PAGE> 2
2
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, a
District of Columbia cooperative association (herein called the "Company",
which term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to
, or registered assigns, the principal sum of
U.S. DOLLARS,
on the Stated Maturity Date set forth above, and to pay interest
thereon from the Original Issue Date set forth above or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually in arrears on January 15 and July 15 in each year, commencing on
the first such Interest Payment Date next succeeding the Original Issue Date
and at Maturity (as defined below), at the per annum Interest Rate set forth
above, until the principal hereof is paid or made available for payment. The
interest so payable and punctually paid or duly provided for on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the January 1 or July 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date; provided, however, that if
the Original Issue Date falls between a Regular Record Date and an Interest
Payment Date, the first payment of interest will be paid on the Interest
Payment Date following the next succeeding Regular Record Date to the person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on such next succeeding Regular Record Date; and
provided further that interest payable on the Stated Maturity Date or, if
applicable, upon redemption or repayment (such Stated Maturity Date, redemption
date or repayment date, a "Maturity") (whether or not such Maturity Date is an
Interest Payment Date) shall be payable to the Person to whom principal shall
be payable. Except as otherwise provided in the Indenture, any such interest
not so punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this Security
will be made [at the office or agency of the Company as may be designated by it
for such purpose in the Borough of Manhattan, The City of New York in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company, payment of interest may be made by United States dollar
check mailed to the address of the Person entitled
<PAGE> 3
3
thereto as such address shall appear in the Security Register. Notwithstanding
the foregoing, a holder of $10,000,000 or more in aggregate principal amount of
Securities of like tenor and terms shall be entitled to receive such payment 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 such payment of interest]
[by wire transfer to the account designated by the Depositary]. The Company
has initially designated Bank of Montreal Trust Company as its Paying Agent for
the Securities in the Borough of Manhattan, The City of New York.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
SECURITY SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS
PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof, directly or through
an Authenticating Agent, by manual signature of an authorized signatory, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION,
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION By
-----------------------------------
Governor
This is one of the Securities
of the series designated therein
issued under the within-mentioned
Indenture.
Dated:
Harris Trust and Savings ---------------------------------
Bank, as Trustee Assistant Secretary-Treasurer
Attest:
-------------------------------
Assistant Secretary-Treasurer
By
----------------------------
Authorized Signatory
<PAGE> 4
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
MEDIUM-TERM NOTE, SERIES C
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture dated as of December 15, 1987, as
supplemented by a First Supplemental Indenture dated as of October 1, 1990 (the
Indenture as so supplemented being herein called the "Indenture"), between the
Company and Harris Trust and Savings Bank, as successor trustee (herein called
the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, which series is unlimited in aggregate principal amount.
Each Security of this series shall be dated the date of its
authentication by the Trustee. Each Security of this series shall also bear an
Original Issue Date, as specified on the face hereof, and such Original Issue
Date shall remain the same for all Securities subsequently issued upon
transfer, exchange or substitution of such original Security (or such
subsequently issued Securities) regardless of their dates of authentication.
Unless one or more Redemption Dates are specified on the face
hereof, this Security shall not be redeemable at the option of the Company
before the Stated Maturity specified on the face hereof. If one or more
Redemption Dates (or ranges of Redemption Dates) are so specified, this
Security is subject to redemption on any such date (or during any such range)
at the option of the Company, upon notice by first-class mail, postage prepaid,
mailed not less than 30 days nor more than 60 days prior to the Redemption Date
specified in such notice, at the applicable Redemption Price specified on the
face hereof (expressed as a percentage of the principal amount of this
Security), together in the case of any such redemption with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is prior
to the Redemption Date will be payable to the Holder of this Security, or one
or more Predecessor Securities, of record at the close of business on the
relevant Regular or Special Record Dates, all as provided in the Indenture. The
Company may elect to redeem less than the entire principal amount hereof,
provided that the principal amount, if any, of this Security that remains
outstanding after such redemption is an Authorized Denomination as defined
herein. In the event of any redemption in part, the Company will not be
required to (i) issue, register the transfer of, or exchange any Security
during a period of 15 days next preceding the day of the first mailing of the
notice of redemption of Securities selected for redemption or (ii) register the
transfer or exchange of any Security, or any portion thereof, called for
redemption, except the unredeemed portion of any Security being redeemed in
part.
<PAGE> 5
2
Unless one or more Repayment Dates is specified above, this
Security shall not be repayable at the option of the Holder on any date prior
to the Stated Maturity specified above. If one or more Repayment Dates (or
ranges of Repayment Dates) are so specified, this Security is subject to
repayment on any such date (or during any such range) at the option of the
Holder at a price equal to 100% of the principal amount hereof or, if this
Security is a Discounted Security (as specified on the face hereof), the
applicable Repayment Price specified on the face hereof (expressed as a
percentage of the principal amount of this Security), together in the case of
any such repayment with accrued interest to the Repayment Date, but interest
installments whose Stated Maturity is prior to the Repayment Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant Regular or Special Record
Dates, all as provided in the Indenture. For this Security to be repaid at the
option of the Holder, the Paying Agent must receive, at least 30 days but not
more than 60 days prior to the Repayment Date on which this Security is to be
repaid, (a) appropriate wire transfer instructions and (b) either (i) this
Security with the form entitled "Option to Elect Repayment" below duly
completed or (ii) a telegram, telex, facsimile transmission or a letter from a
member of a national securities exchange, or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States setting forth the name of the Holder of this Security, the portion of
principal amount of this Security, the principal amount of this Security to be
repaid, the certificate number or a description of the tenor and terms of this
Security, a statement that the option to elect repayment is being exercised
thereby and a guarantee that this Security, together with the duly completed
form entitled "Option to Elect Repayment" on this Security, will be received by
the Paying Agent not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter, provided, however, that such
Security and form duly completed are received by the Paying Agent by such fifth
Business Day. Exercise of the repayment option by the Holder shall be
irrevocable, except a Holder who has tendered this Security for repayment
pursuant to a Reset Notice or an Extension Notice (each as defined in the
Prospectus Supplement related hereto). The repayment option with respect to
this Security may be exercised by the Holder for less than the entire principal
amount hereof, provided that the principal amount, if any, of this Security
that remains outstanding after such repayment must be an authorized
denomination as defined herein. The Company will not be required to register
the transfer or exchange of any Security following the receipt of a notice to
repay a Security as described above. All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Security for
repayment will be determined by the Trustee, whose determination will be final,
binding and non-appealable.
In the event of redemption or repayment of this Security in
part only, a new Security or Securities of this series and of like tenor and
for a principal amount equal to the unredeemed or unrepaid portion will be
delivered to the registered Holder upon the cancellation hereof.
<PAGE> 6
3
If so specified above, the Stated Maturity of this Security
may be extended at the option of the Company, in the manner set forth below
(unless otherwise provided on the face hereof), for the period or periods
specified above (each an "Extension Period") up to but not beyond the date (the
"Final Maturity Date") set forth above:
(a) The Company may exercise such option by notifying the
Paying Agent of such exercise at least 45 but no more than 60 days
prior to the Stated Maturity in effect prior to such exercise (the
"Original Stated Maturity"). If the Company exercises such option,
the Paying Agent will mail by first-class mail, postage prepaid, to
the Holder of this Security no later than 40 days prior to the
Original Stated Maturity a notice setting forth (i) the election of
the Company to extend the Stated Maturity, (ii) the new Stated
Maturity (which shall then be considered the Stated Maturity for all
purposes of this Security), (iii) the interest rate applicable to the
Extension Period and (iv) the provisions, if any, for redemption
during such Extension Period, including the date or dates on which or
the period or periods during which and the price or prices at which
such redemption may occur during the Extension Period. Upon the
Paying Agent's transmittal of the Extension Notice, the Original
Stated Maturity of this Security shall be extended automatically, and,
except as modified by the Extension Notice and as described in the
next paragraph, this Security will have the same terms as prior to the
transmittal of such Extension Notice.
(b) Notwithstanding the foregoing, not later than 20 days
prior to the Original Stated Maturity of this Security the Company
may, at its option, revoke the interest rate provided for in the
Extension Notice and establish an interest rate that is higher than
the interest rate provided for in the Extension Notice for the
Extension Period by mailing or causing the Paying Agent to transmit
notice, by first class mail, postage prepaid, of such higher interest
rate to the Holder of this Security. Such notice shall be
irrevocable. All Securities with respect to which the Stated Maturity
is extended will bear such higher interest rate for the Extension
Period.
(c) If the Company elects to extend the Stated Maturity of
this Security, the Holder hereof will have the option to elect
repayment of this Security by the Company on the Original Stated
Maturity at a price equal to the principal amount hereof plus interest
accrued to such date. In order for this Security to be so repaid on
the Original Stated Maturity, the Holder hereof must follow the
procedures set forth above for optional repayment, except that the
period for delivery of this Security or notification to the Paying
Agent shall be at least 25 but not more than 35 days prior to the
Original Stated Maturity and except that, if the Holder hereof has
tendered this Security for repayment pursuant to an Extension Notice,
such Holder may, by written notice to the Paying Agent, revoke such
tender for
<PAGE> 7
4
repayment until the close of business on the tenth day prior to the
Original Stated Maturity.
If so specified above, this Security may be renewed by the Holder of
the Security on an Interest Payment Date (specified above) occurring in or
prior to the twelfth month following the Original Issue Date (the "Initial
Maturity Date") in accordance with the procedures described below:
(a) On the Interest Payment Date occurring in the sixth month
(unless a different interval (the "Special Election Interval") is
specified above) prior to the Initial Maturity Date (as specified
above) of a Renewable Note (the "Initial Renewal Date") and on the
Interest Payment Date occurring in each sixth month (or in the last
month of each Special Election Interval) after such Initial Renewal
Date (each, together with the Initial Renewal Date, a "Renewal Date"),
the term of this Security may be extended to the Interest Payment Date
occurring in the twelfth month (or, if a Special Election Interval is
specified the last month in a period equal to twice the Special
Election Interval) after such Renewal Date, if the Holder of this
Security elects to extend the term of this Security or any portion
hereof as provided below. If the Holder of this Security does not
elect to extend the term of any portion of the principal amount of
this Security during the specified period prior to any Renewal Date,
such portion will become due and payable on the Interest Payment Date
occurring in the sixth month (or the last month in the Special
Election Interval) after such Renewal Date (the "New Maturity Date").
(b) A Holder of this Security may elect to renew the term of
this Security, or if specified above, any portion thereof, by
delivering a notice to such effect to the Trustee (or any duly
appointed Paying Agent) at the Corporate Trust Office not less than 15
nor more than 30 days prior to such Renewal Date (unless another
period is specified above as the "Special Election Period"). Such
election will be irrevocable and will be binding upon each subsequent
Holder of this Security. An election to renew the term of this
Security may be exercised with respect to less than the entire
principal amount of this Security only if so specified above and only
in such principal amount, or any integral multiple in excess thereof,
as specified above. Notwithstanding the foregoing, the term of this
Security may not be extended beyond the Stated Maturity specified
above.
(c) If the Holder of this Security does not elect to renew
this Security, this Security must be presented to the Trustee (or any
duly appointed Paying Agent) simultaneously with notice of such
election (or, in the event notice of such election, together with a
guarantee of delivery within five Business Days, is transmitted on
behalf of the Holder hereof from a member of a national securities
exchange, the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States, within five
Business Days of the date of such notice). As soon as practicable
following receipt of
<PAGE> 8
5
this Security the Trustee (or any duly appointed Paying Agent) will
issue in exchange of this Security in the name of the Holder hereof
(i) a Security, in a principal amount equal to the principal amount of
this Security for which the election to renew the term hereof was
exercised, with terms identical to those specified on this Security
(except for the Original Issue Date and the Initial Interest Rate and
except that such Security will have a fixed, nonrenewable Stated
Maturity on the New Maturity Date) and (ii) if such election is made
with respect to less than the full principal amount of this Security,
a replacement Security in a principal amount equal to the principal
amount of this Security for which the election was made, with terms
identical to this Security.
If so specified above, the interest rate of this Note may be
reset at the option of the Company on the date set forth on the face hereof
(each an "Optional Reset Date") in accordance with the procedures described
below:
(a) The Company may exercise such option by notifying the
Paying Agent of such exercise at least 45 but not more than 60 days
prior to an Optional Reset Date set forth on the face hereof. If the
Company exercises such option, the Paying Agent will mail by
first-class mail, postage prepaid, to the Holder of this Security not
later than 40 days prior to such Optional Reset Date a notice (the
"Reset Notice") setting forth (i) the election of the Company to reset
the interest rate of this Security, (ii) such new interest rate, and
(iii) the provisions, if any, for redemption of this Security during
the period from such Optional Reset Date to the next Optional Reset
Date or, if there is no such next Optional Reset Date, to the Stated
Maturity of this Security (each such period a "Subsequent Interest
Period"), including the date or dates on which or the period or
periods during which and the price or prices at which such redemption
may occur during such Subsequent Interest Period.
(b) Notwithstanding the foregoing, not later than 20 days
prior to an Optional Reset Date of this Security, the Company may, at
its option, revoke the interest rate provided for in the Reset Notice
and establish a interest rate that is higher for the Subsequent
Interest Period commencing on such Optional Reset Date by mailing or
causing the Paying Agent to mail notice of such higher interest rate
by first class mail, postage prepaid, to the Holder of this Security.
Such notice shall be irrevocable. All Securities with respect to
which the interest rate is reset on an Optional Reset Date will bear
such higher interest rate.
(c) If the Company elects to reset the interest rate of
this Security, the Holder of this Security will have the option to
elect repayment of this Security by the Company on any Optional Reset
Date at a price equal to the principal amount hereof plus interest
accrued to such Optional Reset Date. In order for this Security to be
so
<PAGE> 9
6
repaid on an Optional Reset Date, the Holder hereof must follow the
procedures set forth above for optional repayment, except that the
period for delivery of this Security or notification to the Paying
Agent shall be a least 25 but not more than 35 days prior to such
Optional Reset Date and except that, if the Holder hereof has tendered
this Security for repayment pursuant to a Reset Notice, such Holder
may, by written notice to the Paying Agent, revoke such tender for
repayment until the close of business on the tenth day prior to such
Optional Reset Date.
Interest payments for this Security will include interest
accrued from and including the most recent date to which interest has been paid
or duly provided for (or from and including the Original Issue Date, if no
interest has been paid with respect to this Security) to but excluding the
Interest Payment Date or Maturity Date. If any Interest Payment Date or the
Maturity falls on a day that is not a Business Day, the related payment of
principal, premium, if any, or interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest will
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be. "Business Day" means any day
that is not a Saturday or Sunday and that, in the City of New York, is not a
day on which banking institutions generally authorized or obligated by or
pursuant to law, regulation of executive order to close. Interest payments for
this Security shall be computed and paid on the basis of a 360-day year of
twelve 30-day months.
The Company at its option, subject to the terms and conditions
provided in the Indenture, (a) will be discharged from any and all obligations
in respect of the Securities (except for certain obligations including
obligations to register the transfer or exchange of Securities, replace stolen,
lost or mutilated Securities, maintain paying agencies and hold moneys for
payment in trust) or (b) need not comply with certain restrictive covenants of
the Indenture after the Company deposits with the Trustee (or, in certain
circumstances, 91 days after the Company deposits with the Trustee), pursuant
to an escrow trust agreement, money or U.S. Government Obligations, or a
combination of money and U.S. Government Obligations, which through the payment
of interest thereon and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay all the principal of, and interest
on, the Securities on the dates such payments are due in the currency,
currencies or currency unit or units, in which such Securities are payable and
in accordance with the terms of the Securities.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
<PAGE> 10
7
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of all series affected thereby
(acting as one class). The Indenture also contains provisions permitting the
Holders of not less than a majority in principal amount of the Outstanding
Securities of all series affected thereby (acting as one class), on behalf of
the Holders of all Securities of each such series, to waive compliance by the
Company with certain provisions of the Indenture. The Indenture also provides
that, regarding the Securities of any series, the Holders of not less than a
majority in principal amount of the Outstanding Securities of such series may
waive certain past defaults and their consequences on behalf of the Holders of
all Securities of such series. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Security of this series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to this series,
the Holders of not less than 25% in principal amount of the Outstanding
Securities of this series shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
the Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Securities of this series a direction inconsistent
with such request and the Trustee shall have failed to institute such
proceeding within 60 days; provided, however, that such limitations do not
apply to a suit instituted by the Holder hereof for the enforcement of payment
of the principal of (and premium, if any) or interest on this Security on or
after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest on this Security at the times, places and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency as may be designated by the Company in the
Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new
<PAGE> 11
8
Securities of this series and of the tenor and terms, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities of this series are issuable only in registered
form, without coupons, in denominations of U.S. $1,000 and any integral
multiple of U.S. $1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor and terms of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
<PAGE> 12
9
--------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN Act ____Custodian____
TEN ENT - as tenants by the entireties (cust) (Minor)
JT TEN - as joint tenants with right Under Uniform Gifts to
of survivorship and not as Minors Act__________________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
<PAGE> 13
10
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assigns and transfer(s) unto
Please insert social security
or other identifying number
of assignee
/ /
- ------------------------------------------------------------------------------
PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing_____________________________________________________
Attorney to transfer said Security on the books of the Company, with full power
of substitution in the premises.
Dated:
------------------- ------------------------------------
Signature
(The signature to this assignment must
correspond with the name as written
upon the face of the within instrument
in every particular, without
alteration or enlargement or any
change whatever.)
<PAGE> 14
11
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE AT THE OPTION OF THE
HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the
Company to repay the attached Security (or portion thereof specified below)
pursuant to its terms at a price equal to 100% of the principal amount thereof
together in the case of any such repayment with interest to the Repayment Date,
to the undersigned at ___________________________________________________.
For the Security to be repaid at the option of the Holder, the
paying agent must receive as its corporate trust office, at least 30 days but
not more than 60 days prior to the Repayment Date on which the Security is to
be repaid, (i) the Security together with this "Option to Elect Repayment" form
duly completed or (ii) a telegram, telex, facsimile transmission or a letter
from a member of a national securities exchange, or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States setting forth the name of the Holder of the Security, the principal
amount of the Security, the principal amount of the Security to be repaid, the
certificate number or a description of the tenor and terms of the Security, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Security, together with this duly completed form entitled
"Option to Elect Repayment" on the reverse of the Security, will be received by
the paying agent not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter, provided, however, that such
telegram, telex, facsimile transmission or letter shall be effective only if
the Security with such form duly completed are received by the paying agent by
such fifth Business Day.
If less than the entire principal amount of the attached
Security is to be repaid, specify the portion thereof which the Holder elects
to have repaid: ____________________; and specify the denomination or
denominations (which shall be an Authorized Denomination) of the Security or
Securities to be issued to the Holder for the portion of the within Security
not being repaid (in the absence of any specification, one such Security will
be issued for the portion not being repaid): ______________________.
Dated:
------------------ ------------------------------
NOTICE: The signature to this
Option to Elect Repayment must correspond with
the name as written upon the face of the within
instrument in every particular, without alteration
or enlargement or any change whatsoever.
<PAGE> 1
EXHIBIT 4.5
[This Security is a Depositary Security within the meaning of
the Indenture hereinafter referred to and is registered in the name of a
Depositary or nominee of a Depositary. This Security is exchangeable for
Securities registered in the name of a Person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture, and no
transfer of this Security (other than a transfer of this Security as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any nominee of the Depositary to a successor Depositary or a nominee of such
successor Depositary) may be registered except in such limited circumstances.
Unless this certificate is presented by an authorized
representative of The Depositary Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depositary
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.]
REGISTERED REGISTERED
PRINCIPAL AMOUNT:
NO. FLR U.S. $
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
MEDIUM-TERM NOTE, SERIES C
(FLOATING RATE) CUSIP
ORIGINAL ISSUE DATE: INITIAL INTEREST RATE:
STATED MATURITY DATE:
CALCULATION AGENT: INDEX MATURITY: SPREAD: +/-
___ 1 MONTH
___ 3 MONTHS SPREAD MULTIPLIER:
___ 6 MONTHS
___ 1 YEAR
___ OTHER
INTEREST COMMERCIAL TREASURY
RATE BASIS: __ PAPER RATE __ PRIME RATE __ LIBOR __ REUTERS ___ RATE
__ TELERATE
__ FED FUNDS __ CD RATE __ OTHER________________
RATE
MAXIMUM INTEREST RATE: % INTEREST PAYMENT PERIOD:________________
MINIMUM INTEREST RATE: % INTEREST RATE RESET PERIOD:_____________
<PAGE> 2
REGULAR RECORD DATE(S): INTEREST RESET DATE(S):
INTEREST PAYMENT DATE(S): INTEREST DETERMINATION DATE(S):
CALCULATION DATE:
REDEMPTION DATE(S): REDEMPTION PERIOD(S) AND PRICE(S):
REPAYMENT DATE(S): REPAYMENT PRICE(S):
INITIAL MATURITY DATE: RENEWAL TERMS: (IF ANY)
FINAL MATURITY DATE: EXTENSION TERMS: (IF ANY)
OTHER PROVISIONS: OPTIONAL RESET DATE(S): (IF ANY)
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, a
District of Columbia cooperative association (herein called the "Company",
which term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to
, or registered assigns, the principal sum of
U.S. DOLLARS,
on the Stated Maturity Date set forth above, and to pay interest thereon
at the rate per annum equal to the Initial Interest Rate specified
above until the first Interest Reset Date specified above following the
Original Issue Date specified above and thereafter at a rate determined in
accordance with the provisions on the reverse hereof under the heading
"Determination of Commercial Paper Rate," "Determination of Prime Rate,"
"determination of LIBOR," "Determination of Treasury Rate, "Determination of
Fed Funds Rate," "Determination of CD Rate" or "Determination of Other Interest
Rate Basis," depending upon whether the Interest Rate Basis specified above is
Commercial Paper Rate, Prime Rate, LIBOR, Treasury Rate, Fed Funds Rate, CD
Rate or Other, which Rate may be adjusted by adding or subtracting the Spread
or by multiplying the Spread Multiplier (as such terms are defined below)
depending on whether a Spread or Spread Multiplier is designated above, until
the principal hereof is paid or duly made available for payment. The "Spread,"
if any, is the number of basis points designated above, and the "Spread
Multiplier," if any, is the percentage designated above. The Company will pay
interest monthly, quarterly, semiannually or annually as specified above under
Interest Payment Period commencing with the First Interest Payment Date
specified above next succeeding the Original Issue Date, and thereafter on the
Interest Payment Dates as specified above, and on the Maturity Date or, if
applicable, upon redemption or repayment (such Stated Maturity Date, redemption
date or repayment date, a "Maturity"). The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or
<PAGE> 3
3
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest set forth above (whether or not a
Business Day), next preceding such Interest Payment Date; provided, however,
that if the Original Issue Date falls between a Regular Record Date and an
Interest Payment Date, the first payment of interest will be paid on the
Interest Payment Date following the next succeeding Regular Record Date to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on such next succeeding Regular Record
Date; and provided further that interest payable at Maturity shall be payable
to the Person to whom principal shall be payable (whether or not such Maturity
is an Interest Payment Date). Except as otherwise provided in the Indenture,
any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this Security
will be made [at the office or agency of the Company as may be designated by it
for such purpose in the Borough of Manhattan, The City of New York in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company, payment of interest may be made by United States dollar
check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register. Notwithstanding the foregoing, a holder
of $10,000,000 or more in aggregate principal amount of Securities of like
tenor and terms shall be entitled to receive such payment 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 such payment of interest][by wire transfer to the
account designated by the Depositary]. The Company has initially designated
Bank of Montreal Trust Company as its Paying Agent for the Securities the
Borough of Manhattan, The City of New York.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof, directly or through
an Authenticating Agent, by manual signature of an authorized signatory, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
<PAGE> 4
4
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION,
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION By
-----------------------------------
Governor
This is one of the Securities
of the series designated therein
issued under the within-mentioned
Indenture.
Dated:
Harris Trust and Savings ---------------------------------
Bank, as Trustee Assistant Secretary-Treasurer
Attest:
-------------------------------
Assistant Secretary-Treasurer
By
-------------------------
Authorized Signatory
<PAGE> 5
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
MEDIUM-TERM NOTE, SERIES C
(FLOATING RATE)
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture dated as of December 15, 1987, as
supplemented by a First Supplemental Indenture dated as of October 1, 1990 (the
Indenture as so supplemented being herein called the "Indenture"), between the
Company and Harris Trust and Savings Bank, as successor trustee (herein called
the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, which series is unlimited in aggregate principal amount.
Each Security of this series shall be dated the date of its
authentication by the Trustee. Each Security of this series shall also bear an
Original Issue Date, as specified on the face hereof, and such Original Issue
Date shall remain the same for all Securities subsequently issued upon
transfer, exchange or substitution of such original Security (or such
subsequently issued Securities) regardless of their dates of authentication.
Unless one or more Redemption Dates are specified on the face
hereof, this Security shall not be redeemable at the option of the Company
before the Stated Maturity specified on the face hereof. If one or more
Redemption Dates (or ranges of Redemption Dates) are so specified, this
Security is subject to redemption on any such date (or during any such range)
at the option of the Company, upon notice by first-class mail, postage prepaid,
mailed not less than 30 days nor more than 60 days prior to the Redemption Date
specified in such notice, at the applicable Redemption Price specified on the
face hereof (expressed as a percentage of the principal amount of this
Security), together in the case of any such redemption with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is prior
to the Redemption Date will be payable to the Holder of this Security, or one
or more Predecessor Securities, of record at the close of business on the
relevant Regular or Special Record Dates, all as provided in the Indenture. The
Company may elect to redeem less than the entire principal amount hereof,
provided that the principal amount, if any, of this Security that remains
outstanding after such redemption is an Authorized Denomination as defined
herein. In the event of any redemption in part, the Company will not be
required to (i) issue, register the transfer of, or exchange any Security
during a period of 15 days next preceding the day of the first mailing of the
notice of redemption of Securities selected for redemption or (ii) register the
transfer or exchange of any Security, or any portion thereof, called for
redemption, except the unredeemed portion of any Security being redeemed in
part.
<PAGE> 6
2
Unless one or more Repayment Dates is specified above, this
Security shall not be repayable at the option of the Holder on any date prior
to the Stated Maturity specified above. If one or more Repayment Dates (or
ranges of Repayment Dates) are so specified, this Security is subject to
repayment on any such date (or during any such range) at the option of the
Holder at a price equal to 100% of the principal amount hereof or, if this
Security is a Discounted Security (as specified on the face hereof), the
applicable Repayment Price specified on the face hereof (expressed as a
percentage of the principal amount of this Security), together in the case of
any such repayment with accrued interest to the Repayment Date, but interest
installments whose Stated Maturity is prior to the Repayment Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant Regular or Special Record
Dates, all as provided in the Indenture. For this Security to be repaid at the
option of the Holder, the Paying Agent must receive at least 30 days but not
more than 60 days prior to the Repayment Date on which this Security is to be
repaid, (a) appropriate wire transfer instructions and (b) either (i) this
Security with the form entitled "Option to Elect Repayment" below duly
completed or (ii) a telegram, telex, facsimile transmission or a letter from a
member of a national securities exchange, or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States setting forth the name of the Holder of this Security, the principal
amount of this Security, the portion of principal amount of this Security to be
repaid, the certificate number or a description of the tenor and terms of this
Security, a statement that the option to elect repayment is being exercised
thereby and a guarantee that this Security, together with the duly completed
form entitled "Option to Elect Repayment" on this Security, will be received by
the Paying Agent not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter, provided, however, that such
Security and form duly completed is received by the Paying Agent by such fifth
Business Day. Exercise of the repayment option by the Holder shall be
irrevocable, except a Holder who has tendered this Security for repayment
pursuant to a Reset Notice or an Extension Notice (each as defined in the
Prospectus Supplement related hereto). The repayment option with respect to
this Security may be exercised by the Holder for less than the entire principal
amount hereof, provided that the principal amount, if any, of this Security
that remains outstanding after such repayment must be an authorized
denomination as defined herein. The Company will not be required to register
the transfer or exchange of any Security following the receipt of a notice to
repay a Security as described above. All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Security for
repayment will be determined by the Trustee, whose determination will be final,
binding and non-appealable.
In the event of redemption or repayment of this Security in
part only, a new Security or Securities of this series and of like tenor and
for a principal amount equal to the unredeemed or unrepaid portion will be
delivered to the registered Holder upon the cancellation hereof.
<PAGE> 7
3
If so specified above, the Stated Maturity of this Security
may be extended at the option of the Company, in the manner set forth below
(unless otherwise provided on the face hereof), for the period or periods
specified above (each an "Extension Period") up to but not beyond the date (the
"Final Maturity Date") set forth above:
(a) The Company may exercise such option by notifying the
Paying Agent of such exercise at least 45 but no more than 60 days
prior to the Stated Maturity in effect prior to such exercise (the
"Original Stated Maturity"). If the Company exercises such option,
the Paying Agent will mail by first-class mail, postage pre-paid, to
the Holder of this Security no later than 40 days prior to the
Original Stated Maturity a notice setting forth (i) the election of
the Company to extend the Original Stated Maturity, (ii) the new
Stated Maturity (which shall then be considered the Stated Maturity
for all purposes of this Security), (iii) the Spread and/or Spread
Multiplier applicable to the Extension Period and (iv) the provisions,
if any, for redemption during such Extension Period, including the
date or dates on which or the period or periods during which and the
price or prices at which such redemption may occur during the
Extension Period. Upon the Paying Agent's transmittal of the
Extension Notice, the Original Stated Maturity of this Security shall
be extended automatically, and, except as modified by the Extension
Notice and as described in the next paragraph, this Security will have
the same terms as prior to the transmittal of such Extension Notice.
(b) Notwithstanding the foregoing, not later than 20 days
prior to the Original Stated Maturity of this Security the Company
may, at its option, revoke the Spread and/or Spread Multiplier
provided for in the Extension Notice and establish a Spread and/or
Spread Multiplier that is higher than the Spread and/or Spread
Multiplier provided for in the Extension Notice for the Extension
Period by mailing or causing the Paying Agent to transmit notice, by
first class mail, postage prepaid, of such higher Spread and/or Spread
Multiplier to the Holder of this Security. Such notice shall be
irrevocable. All Securities with respect to which the Stated Maturity
is extended will bear such higher Spread and/or Spread Multiplier for
the Extension Period.
(c) If the Company elects to extend the Stated Maturity of
this Security, the Holder hereof will have the option to elect
repayment of this Security by the Company on the Original Stated
Maturity at a price equal to the principal amount hereof plus interest
accrued to such date. In order for this Security to be so repaid on
the Original Stated Maturity, the Holder hereof must follow the
procedures set forth above for optional repayment, except that the
period for delivery of this Security or notification to the Paying
Agent shall be at least 25 but not more than 35 days prior to the
Original Stated Maturity and except that, if the Holder hereof has
tendered this Security for repayment pursuant to an Extension Notice,
such Holder may, by written notice to the Paying Agent, revoke such
tender for repayment until the
<PAGE> 8
4
close of business on the tenth day prior to the Original Stated
Maturity.
If so specified above, this Security may be renewed by the Holder of
the Security on an Interest Payment Date (specified above) occurring in or
prior to the twelfth month following the Original Issue Date (the "Initial
Maturity Date") in accordance with the procedures described below:
(a) On the Interest Payment Date occurring in the sixth month
(unless a different interval (the "Special Election Interval") is
specified above) prior to the Initial Maturity Date (as specified
above) of a Renewable Note (the "Initial Renewal Date") and on the
Interest Payment Date occurring in each sixth month (or in the last
month of each Special Election Interval) after such Initial Renewal
Date (each, together with the Initial Renewal Date, a "Renewal Date"),
the term of this Security may be extended to the Interest Payment Date
occurring in the twelfth month (or, if a Special Election Interval is
specified the last month in a period equal to twice the Special
Election Interval) after such Renewal Date, if the Holder of this
Security elects to extend the term of this Security or any portion
hereof as provided below. If the Holder of this Security does not
elect to extend the term of any portion of the principal amount of
this Security during the specified period prior to any Renewal Date,
such portion will become due and payable on the Interest Payment Date
occurring in the sixth month (or the last month in the Special
Election Interval) after such Renewal Date (the "New Maturity Date").
(b) A Holder of this Security may elect to renew the term of
this Security, or if specified above, any portion thereof, by
delivering a notice to such effect to the Trustee (or any duly
appointed Paying Agent) at the Corporate Trust Office not less than 15
nor more than 30 days prior to such Renewal Date (unless another
period is specified above as the "Special Election Period"). Such
election will be irrevocable and will be binding upon each subsequent
Holder of this Security. An election to renew the term of this
Security may be exercised with respect to less than the entire
principal amount of this Security only if so specified above and only
in such principal amount, or any integral multiple in excess thereof,
as specified above. Notwithstanding the foregoing, the term of this
Security may not be extended beyond the Stated Maturity specified
above.
(c) If the Holder of this Security does not elect to renew
this Security, this Security must be presented to the Trustee (or any
duly appointed Paying Agent) simultaneously with notice of such
election (or, in the event notice of such election, together with a
guarantee of delivery within five Business Days, is transmitted on
behalf of the Holder hereof from a member of a national securities
exchange, the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States, within five
Business Days of the date of such notice). As soon as practicable
following receipt of this
<PAGE> 9
5
Security the Trustee (or any duly appointed Paying Agent) will issue
in exchange of this Security in the name of the Holder hereof (i) a
Security, in a principal amount equal to the principal amount of this
Security for which the election to renew the term hereof was
exercised, with terms identical to those specified on this Security
(except for the Original Issue Date and the Initial Interest Rate and
except that such Security will have a fixed, nonrenewable Stated
Maturity on the New Maturity Date) and (ii) if such election is made
with respect to less than the full principal amount of this Security,
a replacement Security in a principal amount equal to the principal
amount of this Security for which the election was made, with terms
identical to this Security.
If so specified above, the Spread and/or Spread Multiplier of
this Security may be reset at the option of the Company on the date set forth
on the face hereof (each an "Optional Reset Date") in accordance with the
procedures described below):
(a) The Company may exercise such option by notifying the
Paying Agent of such exercise at least 45 but not more than 60 days
prior to an Optional Reset Date set forth on the face hereof. If the
Company exercises such option, the Paying Agent will mail by
first-class mail, postage prepaid, to the Holder of this Security not
later than 40 days prior to such Optional Reset Date a notice (the
"Reset Notice") setting forth (i) the election of the Company to reset
the Spread and/or Spread Multiplier of this Security, (ii) such new
Spread and/or Spread Multiplier, and (iii) the provisions, if any, for
redemption of this Security during the period from such Optional Reset
Date to the next Optional Reset Date or, if there is no such next
Optional Reset Date, to the Stated Maturity of this Security (each
such period a "Subsequent Period"), including the date or dates on
which or the period or periods during which and the price or prices at
which such redemption may occur during such Subsequent Interest
Period.
(b) Notwithstanding the foregoing, not later than 20 days
prior to an Optional Reset Date of this Security, the Company may, at
its option, revoke the Spread and/or Spread Multiplier provided for in
the Reset Notice and establish a Spread and/or Spread Multiplier that
is higher for the Subsequent Interest Period commencing on such
Optional Reset Date by mailing or causing the Paying Agent to mail
notice of such higher Spread and/or Spread Multiplier by first class
mail, postage prepaid, to the Holder of this Security. Such notice
shall be irrevocable. All Securities with respect to which the Spread
and/or Spread Multiplier is reset on an Optional Reset Date will bear
such higher Spread and/or Spread Multiplier.
(c) If the Company elects to reset the Spread and/or
Spread Multiplier of this Security, the Holder of this Security will
have the option to elect repayment of this Security by the Company on
any Optional Reset Date at a price equal to the principal amount
hereof
<PAGE> 10
6
plus interest accrued to such Optional Reset Date. In order for this
Security to be so repaid on an Optional Reset Date, the Holder hereof
must follow the procedures set forth above for optional repayment,
except that the period for delivery of this Security or notification
to the Paying Agent shall be a least 25 but not more than 35 days
prior to such Optional Reset Date and except that, if the Holder
hereof has tendered this Security for repayment pursuant to a Reset
Notice, such Holder may, by written notice to the Paying Agent, revoke
such tender for repayment until the close of business on the tenth day
prior to such Optional Reset Date.
Commencing with the first interest payment date specified on
the face hereof following the Original Issue Date, the rate at which interest
on this Security is payable shall be reset daily, weekly, monthly, quarterly,
semi-annually or annually (each an "Interest Reset Date") as shown on the face
hereof under Interest Rate Reset Period; provided, however, that (i) the
interest rate in effect from the Original Issue Date to the first Interest
Payment Date will be the Initial Interest Rate selected on the face hereof and
(ii) unless otherwise specified above, the interest rate in effect hereon for
the ten days immediately prior to the Maturity hereof shall be that in effect
on the 10th day preceding such Maturity hereof. Each such adjusted rate shall
be applicable on and after the Interest Reset Date to which it relates to but
not including the next succeeding Interest Reset Date or until Maturity. If
any Interest Reset Date specified on the face hereof would otherwise be a day
that is not a Business Day (as defined below), such Interest Reset Day shall be
postponed to the next day that is a Business Day, except that if (i) the rate
of interest on this Security shall be determined in accordance with the
provisions under the heading "Determination of LIBOR" below, and (ii) such
Business Day is in the next succeeding calendar month limit, such Interest
Reset Date shall be the immediately preceding Business Day. Subject to
applicable provisions of law and except as specified herein, on each Interest
Reset Date, the sum of interest on this Security shall be the sum determined in
accordance with the provisions under the applicable heading below.
The interest rate on this Security will in no event be higher
than the interest rate permitted by New York law as the same may be modified by
United States law of general applicability. Under present New York law,
subject to certain exceptions, the maximum rate of interest for any loan less
than $250,000 is 16% per annum and for any Loan in the amount of $250,000 or
more but less than $12,500,000 is 25% on a simple interest basis. This limit
may not apply if $2,500,000 or more has been invested in Securities.
DETERMINATION OF COMMERCIAL PAPER RATE. "Commercial Paper
Rate" means, with respect to each Interest Determination Date specified on the
face hereof, the Money Market Yield (calculated as described below) of the rate
on such date for commercial paper bearing the Index Maturity specified on the
face hereof as published by the Board of Governors of the Federal Reserve
System in "Statistical release H.15(519), Selected Interest Rates"
<PAGE> 11
7
or any successor publication of the Board of Governors of the Federal Reserve
System selected by the Calculation Agent ("H.15(519)") under the heading
"Commercial Paper." In the event that such rate is not published prior to 9:00
a.m. New York City time, on the Interest Calculation Date pertaining to such
Interest Determination Date, then the Commercial Paper Rate shall be the Money
Market Yield of the rate on such Interest Determination Date for Commercial
Paper during the Index Maturity specified on the face hereof 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 Interest Calculation Date such Rate is not yet published in
either H.15(519) or Composite Quotations, the rate for that 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 Interest Determination Date, of three leading
dealers of commercial paper in The City of New York Selected by the Calculation
Agent for Commercial Paper for the Index Maturity specified on the face hereof
placed for an industrial issuer whose bond rating is "AA", or the equivalent,
from a nationally recognized 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 will be the Commercial
Paper Rate then in effect on such Interest Determination Date.
"MONEY MARKET YIELD" means a yield (expressed as a percentage
rounded, if necessary, to the next higher one hundred thousandth of a
percentage point) calculated in accordance with the following formula:
D x 360
Money Market Yield = ---------------- x 100
360 - (D x M)
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.
DETERMINATION OF PRIME RATE. Unless otherwise specified
above, if the Interest Rate Basis on the Security is the Prime Rate, such rate
with respect to any Interest Reset Date shall equal (i) the rate set forth for
the relevant Interest Determination Date in H.15(519) under the heading "Bank
Prime Loan", or (ii) if such rate is not published prior to 9:00 A.M., New York
City time, on the Calculation Date pertaining to such Prime Rate 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 that appears on the display designated as page "NYMF" on the Reuters
Monitor Money Rates Service (or such other page as may replace the NYMF page on
that service for purpose of displaying prime rates or base lending rates of
major United States banks) ("Reuters Screen NYMF Page"), as such bank's prime
rate or base lending rate as in effect for
<PAGE> 12
8
such Interest Determination Date or (iii) if fewer than four such rates appear
on the Reuters Screen NYMF Page on such Interest Determination Date, the
arithmetic mean of the prime rates (quoted on the basis of the actual number of
days in the year divided by a 360-day year) as of the close of business on such
Prime Rate 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 for
which quotations are requested, adjusted in each case by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face hereof;
provided, however, that if fewer than two banks selected as aforesaid are
quoting as mentioned in this sentence, the Prime Rate shall be calculated by
the Calculation Agent and shall be determined as the arithmetic mean on the
basis of the prime rates in the City of New York on such date by the
appropriate number of substitute banks or trust companies, organized and doing
business under the laws of the United States, or any State thereof, having
total equity capital of at least U.S. $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 for such Prime Interest Determination Date will be the interest rate
otherwise in effect on such Prime Interest Determination.
DETERMINATION OF LIBOR. Unless otherwise specified above, if the
Interest Rate Basis on this Security is LIBOR, such rate with respect to any
Interest Reset Date will be determined by the Calculation Agent in accordance
with the following provisions:
(i) LIBOR will be, as specified on the face hereof, either: (a) the
arithmetic mean of the offered rates for deposits in U.S. Dollars having the
Index Maturity shown on the face hereof, commencing on the second London
Business Day immediately following such Interest Determination Date, which
appear on the display designated as page "LIBO" on the Reuters Monitor Money
Rates Service (or such other page as may replace the LIBOR page on that service
for the purpose of displaying London interbank offered rates of major banks)
("Reuters Screen LIBO Page") as of 11:00 A.M., London time, on such Interest
Determination Date, if at least two such offered rates appear on the Reuters
Screen LIBO Page ("LIBOR Reuters"), or (b) the rate for deposit in U.S. dollars
having the Index Maturity specified above, commencing on the second London
Business Day immediately following such Interest Determination Date, that
appears on the display designated as page "3750" on the Telerate Service (or
such other page as may replace page 3750 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)
("Telerate Page 3750) as of 11:00 A.M., London time, on such Interest
Determination Date ("LIBOR Telerate"). If neither LIBOR Reuters nor LIBOR
Telerate is specified above, 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
<PAGE> 13
9
on Telerate Page 3750, as applicable, LIBOR for such Interest Determination
Date will be determined as described in (ii) below.
(ii) With respect to an LIBOR Interest Determination Date on which fewer
than two offered rates appear on the Reuters Screen LIBO Page as described 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 shown on the
face hereof 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 Interest Determination Date and in a principal
amount equal to an amount of not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time (a
"Representative Amount"). The Calculation Agent will request the principal
London office of each of such banks to provide a quotation of its rate. If at
least two such quotations are provided, LIBOR with respect to such LIBOR
Interest Determination Date will be the arithmetic mean of such quotations as
determined by the Calculation Agent, adjusted by the addition or subtraction of
the Spread, if any, specified on the face hereof, or by multiplication of the
Spread Multiplier, if any, specified on the face hereof. If fewer than two
quotations are provided, LIBOR with respect to 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 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 shown on the face hereof commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date and in a
Representative 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, adjusted
by the addition or subtraction of the Spread, if any, specified on the face
hereof, or by multiplication by the Spread Multiplier, if any, specified on the
face hereof; 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 Interest Determination Date.
DETERMINATION OF TREASURY RATE. "Treasury Rate" means with
respect to each Interest Determination Date specified on the face hereof the
rate for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified on the face hereof as
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 Interest Calculation Date pertaining to such
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 Treasury. In the event that the results of the auction of
<PAGE> 14
10
Treasury bills bearing the Index Maturity specified on the face hereof are not
published or announced as provided above by 3:00 p.m. New York City time on
such Interest 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 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
specified 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 will be the Treasury Rate then in effect on such
Interest Determination Date.
DETERMINATION OF FED FUNDS RATE. "Fed Funds Rate" means with
respect to each Interest Determination Date specified on the face hereof 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
Interest Determination Date, the Fed Funds Rate will be the rate on such
Interest Determinate 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 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 Interest Determination Date for the last 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 will be the Fed Funds
Rate in effect as at such Interest Determination Date.
DETERMINATION OF CD RATE. "CD Rate" means, with respect to
each Interest Determination Date specified on the face hereof, the rate on such
date for negotiable certificates of deposit having the Index Maturity specified
on the face hereof 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 Interest Determination Date, the CD Rate
will be the rate on such Interest Determination Date for negotiable
certificates of deposit of the Index Maturity specified on the face hereof 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 Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
secondary market offered rates as of 10 a.m., New York City time, on such
Interest Determination Date, of three leading nonbank dealers in negotiable US
Dollar certificates of deposit in The City
<PAGE> 15
11
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 specified on the face hereof in a denomination of $5,000,000 or, if
greater, an amount that is representative for a single transaction in the
relevant market at the time, provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting, the CD Rate will be the CD
Rate in effect on such Interest Determination Date.
DETERMINATION OF OTHER INTEREST RATE BASES.
Notwithstanding the foregoing, the interest rate hereon shall
not be greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown on the face hereof. The Calculation Agent shall
calculate the interest rate on this Security in accordance with the foregoing
on or before each Interest Calculation Date.
The Interest Calculation Date, if applicable, pertaining to
any Interest Determination Date, shall be 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 if sooner the Business Day preceding the applicable
Interest Payment Date or Maturity, as the case may be. All percentages
resulting from any calculation on this Security will be rounded to the nearest
one hundred-thousandth of a percentage point, with five one millionths of a
percentage point rounded upwards, and all dollar amounts used in or resulting
from such calculation on this Security will be rounded to the nearest cent
(with one-half cent being rounded upward).
The Calculation Agent will upon the request of the Holder of
this Security provide to such Holder the interest rate hereon then in effect
and if different the interest rate which will become effective as a result of a
determination made on the most recent Interest Determination Date (outlined
below) specified on the face hereof.
If any Interest Payment Date specified hereof would otherwise
be a day that is not a business day, the Interest Payment Date shall be
postponed to the next day that is a Business Day, except that if (i) the rate
of interest on the Security shall be determined in accordance with the
provisions of the heading "Determination of LIBOR" above, and (ii) such
Business Day is in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Business Day. If the Maturity Date
falls on a day that is not a Business Day, the payment of principal, premium,
if any, and interest will be made on the next succeeding Business
<PAGE> 16
12
Day as if made on the date such payment was due, and no interest on such
payment will accrue.
"Business Day" means (i) any day that is not a Saturday or
Sunday and that in The City of New York is not a day on which banking
institutions generally are authorized or obligated by or pursuant to law,
regulation or executive order to close and (ii) only if the rate of interest on
the Security should be determined in accordance with the provisions of the
heading "Determination of LIBOR" above, any such day on which dealings on
deposit in U.S. dollars are transacted on the London interbank market (a
"London Business Day").
The date as of which the Interest Rate will be determined (the
"Interest Determination Date") for each Interest Reset Date if the rate of
interest on this Security shall be determined in accordance with the provisions
under the heading "Determination of Commercial Paper Rate", "Determination of
Prime Rate", "Determination of Fed Funds Rate", or "Determination of CD Rate"
above will be the second Business Day preceding such Interest Reset Date. The
Interest Determination Date pertaining to an Interest Reset Date if the rate of
interest on this Security shall be determined in accordance with the provisions
of the heading "Determination of LIBOR" above will be the second London
Business Day preceding such Interest Reset Date. The Interest Determination
Date pertaining to an Interest Reset Date if the rate of interest of the
Security shall be determined in accordance with the provisions of the heading
"Determination of Treasury Rate" above (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 normally
sold at auction on Monday of each week, unless that day is a legal holiday, in
which case the auction is normally held on the following Tuesday, except that
such auction may be held on the preceding Friday. If, as the result of 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
should fall on any Interest Reset Date, then such Interest Reset Date shall
instead be the first Business Day immediately following such auction date.
Interest payments for this Security 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 Original Issue
Date, if no interest has been paid with respect to this Security) to, but
excluding the Interest Payment Date (or Maturity Date); provided, however, that
if the Interest Reset Dates with respect to the Security are daily or weekly,
interest payable on any Interest Payment Date, other than interest payable on
any date on which principal hereof 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, provided
however, that interest payments for this Security at
<PAGE> 17
13
Maturity will include interest accrued to but excluding the Maturity Date.
Accrued interest hereon from the Original Issue Date or from the last date to
which interest hereon has been paid, as the case may be, shall be an amount
calculated by multiplying the face amount hereof by an accrued interest factor.
Such accrued interest factor shall be 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 shall be computed by
dividing the interest rate applicable to such day by 360, in the case of the
Commercial Paper Rate, Prime Rate, LIBOR, Fed Funds Rate or CD Rate, or by the
actual number of days in the year, in the case of the Treasury Rate.
The Company at its option, subject to the terms and conditions
provided in the Indenture, (a) will be discharged from any and all obligations
in respect of the Securities (except for certain obligations including
obligations to register the transfer or exchange of Securities, replace stolen,
lost or mutilated Securities, maintain paying agencies and hold moneys for
payment in trust) or (b) need not comply with certain restrictive covenants of
the Indenture after the Company deposits with the Trustee (or, in certain
circumstances, 91 days after the Company deposits with the Trustee), pursuant
to an escrow trust agreement, money or U.S. Government Obligations, or a
combination of money and U.S. Government Obligations, which through the payment
of interest thereon and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay all the principal of, and interest
on, the Securities on the dates such payments are due in the currency,
currencies or currency unit or units, in which such Securities are payable and
in accordance with the terms of the Securities.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of all series affected thereby
(acting as one class). The Indenture also contains provisions permitting the
Holders of not less than a majority in principal amount of the Outstanding
Securities of all series affected thereby (acting as one class), on behalf of
the Holders of all Securities of each such series, to waive compliance by the
Company with certain provisions of the Indenture. The Indenture also provides
that, regarding the Securities of any series, the Holders of not less than a
majority in principal amount of the Outstanding Securities of such series may
waive certain past defaults and their consequences on behalf of the Holders of
all Securities of such series. Any such consent or waiver by the Holder of
this Security shall be
<PAGE> 18
14
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Security of this series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to this series,
the Holders of not less than 25% in principal amount of the Outstanding
Securities of this series shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
the Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Securities of this series a direction inconsistent
with such request and the Trustee shall have failed to institute such
proceeding within 60 days; provided, however, that such limitations do not
apply to a suit instituted by the Holder hereof for the enforcement of payment
of the principal of (and premium, if any) or interest on this Security on or
after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest on this Security at the times, places and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency as may be designated by the Company in the
Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of the tenor and terms, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form, without coupons, in denominations of U.S. $1,000 and any integral
multiple of U.S. $1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor and terms of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
<PAGE> 19
15
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
<PAGE> 20
16
--------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN Act ____Custodian____
TEN ENT - as tenants by the entireties (cust) (Minor)
JT TEN - as joint tenants with right Under Uniform Gifts to
of survivorship and not as Minors Act__________________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assigns and transfer(s)
unto
Please insert social security
or other identifying number
of assignee
/ /
- -----------------------------------------------------------------------------
PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing_____________________________________________________Attorney
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
------------------- ------------------------------------
Signature
(The signature to this assignment must
correspond with the name as written
upon the face of the within instrument
in every particular, without
alteration or enlargement or any
change whatever.)
<PAGE> 21
17
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE AT THE OPTION OF THE
HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the
Company to repay the attached Security (or portion thereof specified below)
pursuant to its terms at a price equal to 100% of the principal amount thereof
together in the case of any such repayment with interest to the Repayment Date,
to the undersigned at ___________________________________________________.
For the Security to be repaid at the option of the Holder, the
paying agent must receive at its corporate trust office, at least 30 days but
not more than 60 days prior to the Repayment Date on which the Security is to
be repaid, (i) the Security together with this "Option to Elect Repayment" form
duly completed or (ii) a telegram, telex, facsimile transmission or a letter
from a member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States setting forth the name of the Holder of the Security, the principal
amount of the Security, the principal amount of the Security to be repaid, the
certificate number or a description of the tenor and terms of the Security, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Security, together with this duly completed form entitled
"Option to Elect Repayment" on the reverse of the Security, will be received by
the paying agent not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter, provided, however, that such
telegram, telex, facsimile transmission or letter shall be effective only if
the Security with such form duly completed are received by the paying agent by
such fifth Business Day.
If less than the entire principal amount of the attached
Security is to be repaid, specify the portion thereof which the Holder elects
to have repaid: ____________________; and specify the denomination or
denominations (which shall be an Authorized Denomination) of the Security or
Securities to be issued to the Holder for the portion of the within Security
not being repaid (in the absence of any specification, one such Security will
be issued for the portion not being repaid): ______________________.
Dated:
----------------------- ------------------------------
NOTICE: The signature to this
Option to Elect Repayment must
correspond with the name as written
upon the face of the within
instrument in every particular,
without alteration or enlargement
or any change whatsoever.
<PAGE> 1
EXHIBIT 5
[MTH&M Letterhead]
April 5, 1995
National Rural Utilities Cooperative
Finance Corporation
Woodland Park
2201 Cooperative Way
Herndon, Virginia 22071-3025
Dear Sirs:
We have acted as counsel for National Rural Utilities
Cooperative Finance Corporation (the "Company") in connection with the proposed
public offering from time to time, directly to purchasers or through agents or
underwriters to be designated from time to time (which may include Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and others),
of Debt Securities and Warrants to purchase Debt Securities of the Company
(collectively, the "Securities"), such Securities to be issued under an
Indenture dated as of December 15, 1987 as supplemented by a First Supplemental
Indenture dated as of October 1, 1990 (together, the "Indenture"), between the
Company and Harris Trust and Savings Bank, as successor Trustee, as
contemplated in the Company's Registration Statement filed on Form S-3 on the
date hereof (the "Registration Statement") pursuant to Rule 415 under the
Securities Act of 1933. We submit this opinion for use as Exhibits 5 and 8 to
the Registration Statement and hereby consent to the use of this opinion in the
Registration Statement and to the use of our name under the caption "Legal
Opinions" in the Prospectus.
We have investigated the corporate status of the Company and
have examined the corporate proceedings authorizing the creation and issuance
of the Securities.
<PAGE> 2
- 2 -
Based upon the foregoing, and having regard to legal
considerations that we deem relevant, we are the opinion that the Securities,
when duly authorized and executed by the Company and authenticated by or on
behalf of the successor Trustee, pursuant to the terms of the Indenture, and
issued for value in accordance with the terms of the Indenture and applicable
resolutions of the Board of Directors of the Company, will be validly issued,
binding obligations of the Company.
In our opinion, the discussion under the caption "United
States Taxation" in the Prospectus included as part of the Registration
Statement is correct in all material respects.
Very truly yours,
/s/Milbank, Tweed, Hadley & McCloy
MAW/BK
<PAGE> 1
EXHIBIT 12
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
COMPUTATION OF RATIO OF MARGINS TO FIXED CHARGES
(DOLLAR AMOUNTS IN THOUSANDS)
FOR THE NINE MONTHS ENDED FEBRUARY 28, 1995 AND THE
YEARS ENDED MAY 31, 1994, 1993, 1992, 1991 AND 1990
<TABLE>
<CAPTION>
FEBRUARY
28,
1995 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net margins before
extraordinary loss........... $ 43,976 $ 33,188 $ 41,648 $ 45,553 $ 48,305 $ 39,273
Add: Fixed charges............. 259,512 263,230 265,412 314,863 349,954 354,010
-------- -------- -------- -------- -------- --------
Margins available for fixed
charges...................... $303,488 $296,418 $307,060 $360,416 $398,259 $393,283
======== ======== ======== ======== ======== ========
Fixed charges:
Interest on all debt
(including amortization of
discount and issuance
costs).................... $259,512 $263,230 $265,412 $314,863 $349,954 $354,010
-------- -------- -------- -------- -------- --------
Total fixed
charges............ $259,512 $263,230 $265,412 $314,863 $349,954 $354,010
======== ======== ======== ======== ======== ========
Ratio of margins to fixed
charges...................... 1.17 1.13 1.16 1.14 1.14 1.11
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report dated July 18, 1994
included in National Rural Utilities Cooperative Finance Corporation's Form 10-K
for the year ended May 31, 1994 and to all references to our Firm included in
this Registration Statement.
ARTHUR ANDERSEN LLP
Washington, D.C.
April 5, 1995
<PAGE> 1
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS
TRUSTEE
Check if an Application to Determine
Eligibility of a Trustee Pursuant to Section
305(b)(2) ____
HARRIS TRUST AND SAVINGS BANK
(NAME OF TRUSTEE)
Illinois 36-1194448
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
111 West Monroe Street, Chicago, Illinois 60603
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Amy Roberts, Harris Trust and Savings Bank,
111 West Monroe Street, Chicago, Illinois, 60603
312-461-2121
(NAME, ADDRESS AND TELEPHONE NUMBER FOR AGENT FOR SERVICE)
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
(NAME OF OBLIGOR)
District of Columbia 52-089-1669
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
2201 Cooperative Way, Herndon, Virginia, 22071-3025
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Debt Securities
(Title of indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164 West
Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee,
describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. THRU 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in effect
which includes the authority of the trustee to commence business and
to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in
effect and includes the authority of the Trustee to commence business
and to exercise corporate trust powers was filed in connection with
the Registration Statement of Louisville Gas and Electric Company,
File No. 2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in connection
with the Registration Statement of Hillenbrand Industries, Inc., File
No. 33-44086, and is incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervision or examining
authority.
(included as Exhibit B on page 3 of this statement)
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
Harris Trust and Savings Bank, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of April, 1995.
HARRIS TRUST AND SAVINGS BANK
By: /s/ AMY S. ROBERTS
------------------------------
Amy S. Roberts
Assistant Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents
that reports of examinations of said trustee by Federal and State authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefore.
HARRIS TRUST AND SAVINGS BANK
By:/s/ AMY S. ROBERTS
------------------
Amy S. Roberts
Assistant Vice President
<PAGE> 4
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of December 31, 1994, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
The Seventh Reserve District.
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, and Foreign and Domestic Subsidiaries, at the close of
business on December 31, 1994, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner
of Banks and Trust Companies of the State of Illinois and by the Federal
Reserve Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
OF DOLLARS
<S> <C> <C>
ASSETS
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin $1,226,753
Interest bearing balances $732,083
Securities:
a. Held-to-maturity securities $718,072
b. Available-for-sale securities $1,795,896
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds sold $374,200
Securities purchased under agreements to resell $9,831
Loans and lease financing receivables:
Loans and leases, net of unearned income $6,371,039
LESS: Allowance for loan and lease losses $90,492
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b) $6,280,547
Assets held in trading accounts $169,830
Premises and fixed assets (including capitalized leases) $136,703
Other real estate owned $1,780
Investments in unconsolidated subsidiaries and associated companies $37
Customer's liability to this bank on acceptances outstanding $69,447
Intangible assets $24,851
Other assets $403,300
--------
TOTAL ASSETS $11,944,330
===========
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
LIABILITIES
Deposits:
In domestic offices $4,529,148
Non-interest bearing $2,659,945
Interest bearing $1,869,203
In foreign offices, Edge and Agreement subsidiaries, and IBFs $2,486,418
Non-interest bearing $31,903
Interest bearing $2,454,515
Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased $1,179,441
Securities sold under agreements to repurchase $1,643,381
Trading Liabilities $149,363
Other borrowed money:
a. With original maturity of one year or less $667,231
b. With original maturity of more than one year $14,268
Bank's liability on acceptances executed and outstanding $69,447
Subordinated notes and debentures $235,000
Other liabilities $240,902
--------
TOTAL LIABILITIES $11,214,599
===========
EQUITY CAPITAL
Common stock $100,000
Surplus $275,000
a. Undivided profits and capital reserves $375,032
b. Net unrealized holding gains (losses) on available-for-sale securities ($20,301)
---------
TOTAL EQUITY CAPITAL $729,731
========
Total liabilities, limited-life preferred stock, and equity capital $11,944,330
===========
</TABLE>
I, Paul Skubic, Controller of the above-named bank, do hereby declare that this
Report of Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true to
the best of my knowledge and belief,
PAUL SKUBIC
1/27/95
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
DONALD S. HUNT,
RICHARD E. TERRY,
JAMES J. GLASSER,
Directors.
