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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 28, 1996
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
District of Columbia l-7102 52-0891669
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(state or other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) (Identification No.)
Woodland Park, 2201 Cooperative Way, Herndon, VA 22071-3025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 709-6700
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(Former name or former address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(c) Exhibits
The following exhibits are filed herewith:
1. Underwriting Agreement dated August 28, 1996 between the
registrant and Lehman Brothers Inc., Goldman, Sachs & Co. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
4. Form of Global Certificate for the 6.75% Collateral Trust
Bonds, due 2001.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION
/s/ STEVEN L. LILLY
--------------------------------
Steven L. Lilly
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Dated: September 5, 1996
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EXHIBIT INDEX
Exhibit No. Description
1. Underwriting Agreement dated August 28, 1996 between the
registrant and Lehman Brothers Inc., Goldman, Sachs & Co. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
4. Form of Global Certificate for the 6.75% Collateral Trust
Bonds, due 2001.
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Exhibit 1.
EXECUTION COPY
$100,000,000
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
6.75% Collateral Trust Bonds, Due 2001
Underwriting Agreement
August 28, 1996
LEHMAN BROTHERS INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
As Representatives of the several Underwriters
In care of Lehman Brothers Inc.
3 World Financial Center
New York, NY 10285
Dear Sirs:
National Rural Utilities Cooperative Finance Corporation, a District of
Columbia cooperative association (the "Company"), proposes to issue
$100,000,000 principal amount of its 6.75% Collateral Trust Bonds, Due 2001
(the "Bonds"), to be issued under and secured by an Indenture dated as of
February 15, 1994, between the Company and First Bank National Association (the
"Trustee"). Such Indenture, as amended by any supplemental indenture, is
hereinafter called the "Indenture." The Bonds are more fully described in the
Registration Statement and in the Prospectus hereinafter mentioned. The Bonds
will be issued in fully registered form only, in denominations of $1,000 and
any integral multiple thereof.
You have advised us (i) that you and any other firms and corporations
named in Schedule I attached hereto (you and such firms and corporations being
hereinafter called the Underwriters, which term shall also include any
underwriter substituted as provided in Section 11 hereof), acting severally and
not jointly, are willing to purchase, on the terms and conditions hereinafter
set forth, the respective principal amounts of the Bonds, aggregating
$100,000,000 principal amount
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thereof, specified in such Schedule I, and (ii) that you are authorized, on
behalf of yourselves and the other Underwriters, to enter into this Agreement.
1. Certain Representations and Warranties by the Company. The
Company represents and warrants to each Underwriter as follows:
(a) Registration Statement and Prospectus. The Company has filed
with the Securities and Exchange Commission (the "Commission") Registration
Statement No. 33-56065, for the registration under the Securities Act of 1933
(the "Securities Act") of the Bonds (including a prospectus relating thereto)
and may have filed one or more amendments thereto (including one or more
amended or supplemental prospectuses) and such registration statement and any
such amendments have become effective. The Company has also filed with the
Commision Registration Statement No. 333-05689, which, pursuant to Rule 429
under the Securities Act, includes a prospectus covering certain of the
Company's securities previously registered and unissued under Registration
Statement No. 33-56065, and such registration statement has become effective.
A prospectus supplement relating to the Bonds, including a prospectus
(together, the "Prospectus"), has been prepared and will be filed pursuant to
Rule 424 under the Securities Act. The Company will not file any other
amendment of such registration statements or such prospectus or any supplement
to such prospectus on or after the date of this Agreement and prior to the date
and time of delivery of and payment for the Bonds referred to in Section 3
hereof (the "Closing Date"), except with your approval. Such registration
statements, including financial statements and exhibits, at the time they
became effective, are hereinafter collectively called the Registration
Statement. Any reference in this Agreement to the Prospectus as amended or
supplemented shall include, without limitation, any prospectus filed with the
Commission pursuant to Rule 424 of the Commission under the Securities Act
which amends or supplements the Prospectus. Any reference herein to the
Registration Statement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934 (the
"Exchange Act") on or before the effective date of the Registration Statement
or the date of such Prospectus, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the effective date of the
Registration Statement, or the date of any Prospectus, as the case may be, and
deemed to be incorporated therein by reference.
(b) Accuracy of Registration Statement. At all times subsequent to
the date of this Agreement up to and including the Closing Date, and when any
post-effective amendment thereof shall become effective, the Registration
Statement (and the
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Registration Statement as amended if any post-effective amendment thereof shall
have become effective) will comply in all material respects with the provisions
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact and will not omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and, at all times
subsequent to the date of this Agreement up to and including the Closing Date,
the Prospectus (and the Prospectus as amended or supplemented, if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto) will fully comply with the provisions of the Securities Act and the
Exchange Act and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact and will not omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that none of the representations and
warranties in this paragraph (b) shall apply to (i) that part of the
Registration Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of 1939 (the "Trust
Indenture Act"), of the Trustee or (ii) statements in, or omissions from, the
Registration Statement or the Prospectus or any amendment thereof or supplement
thereto made in reliance upon and in conformity with information furnished as
herein stated or otherwise furnished in writing to the Company by or on
behalf of any Underwriter through you for use in connection with the
preparation of the Registration Statement or the Prospectus or any such
amendment or supplement.
(c) Accountants. The accountants who have certified or shall
certify the financial statements filed and to be filed with the Commission as
parts of the Registration Statement and the Prospectus are independent with
respect to the Company as required by the Securities Act and rules and
regulations of the Commission thereunder.
(d) Due Incorporation. The Company has been duly incorporated and
is now, and on the Closing Date will be, a validly existing cooperative
association in good standing under the laws of the District of Columbia, duly
qualified and in good standing in each jurisdiction in which the ownership or
leasing of properties or the conduct of its business requires it to be
qualified (or the failure to be so qualified will not have a material adverse
effect upon the business or condition of the Company), and the Company has the
corporate power and holds all valid permits and other required authorizations
from governmental authorities necessary to carry on its business as now
conducted and as to be conducted on the Closing Date and as contemplated by the
Prospectus.
(e) Material Changes. Since the respective dates as of which
information is given in the Registration Statement and
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the Prospectus, and except as set forth therein, there has not been any
material adverse change in the condition, financial or other, or the results of
operations of the Company, whether or not arising from transactions in the
ordinary course of business.
(f) Litigation. On the date hereof, except as set forth in the
Prospectus, the Company does not have any litigation pending of a character
which in the opinion of counsel for the Company referred to in Section 10(c)
hereof could result in a judgment or decree having a material adverse effect on
the condition, financial or other, or the results of operations of the Company.
(g) Legality. On the Closing Date, the Bonds will be duly and
validly authorized, and no further authorization, consent or approval of the
members and no further authorization or approval of the Board of Directors of
the Company or any committee thereof will be required for the issuance and sale
of the Bonds as contemplated herein; and neither such issuance or sale of the
Bonds nor the consummation of any other of the transactions herein contemplated
will result in a breach by the Company of any terms of, or constitute a default
under, any other agreement or undertaking of the Company.
(h) No Stop Order. The Commission has not issued and, to the best
knowledge of the Company, is not threatening to issue any order preventing or
suspending the use of the Prospectus (as amended or supplemented, if the
Company shall have filed with the Commission any amendment thereof or
supplement thereto).
(i) Regulation. The Company is not required to be registered as an
investment company under the Investment Company Act of 1940 and is not subject
to regulation under the Public Utility Holding Company Act of 1935.
2. Agreement to Purchase. Subject to the terms and conditions and
upon the representations and warranties herein set forth, the Company agrees to
sell to you and any other Underwriters, severally and not jointly, and you and
such other Underwriters, severally and not jointly, agree to purchase from the
Company, at 98.874% of the principal amount thereof, plus interest accrued
thereon, if any, from September 5, 1996, to the Closing Date, the respective
principal amounts of the Bonds set forth opposite the names of the respective
Underwriters in Schedule I hereto, aggregating $100,000,000 principal amount
thereof.
3. Closing. Delivery of and payment for the Bonds shall be made at
the office of Lehman Brothers Inc., Three World Financial Center, New York, New
York 10285, at 9:30 A.M., New York City time, on September 5, 1996, or such
later date (not later than September 12, 1996) as you, as Representatives of
the Underwriters, shall designate, which date and time may be postponed by
agreement between you, as such Representatives, and
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the Company or as provided in Section 11 hereof. Delivery of the Bonds shall
be made to you, for the respective accounts of the several Underwriters,
against payment by the several Underwriters through you of the purchase price
thereof, to or upon the order of the Company by certified or official bank
check or checks payable, or wire transfers, in immediately available funds.
The Bonds shall be delivered in definitive global form through the facilities
of Depository Trust Company.
4. Prospectuses. The Company has caused to be delivered to you, as
Representatives of the Underwriters, copies of the Prospectus and has consented
to the use of such copies for the purposes permitted by the Securities Act.
The Company agrees to deliver to you, as Representatives of the Underwriters,
without charge, from time to time during such period as in the opinion of
Cravath, Swaine & Moore, counsel for the Underwriters, the Prospectus is
required by law to be delivered in connection with sales by an Underwriter or
dealer, as many copies of the Prospectus (and, in the event of any amendment of
or supplement to the Prospectus, of such amended or supplemented Prospectus) as
you, as Representatives of the Underwriters, may reasonably request. If, at
any time during the period in which the Company is required to deliver copies
of the Prospectus, as provided in this Section 4, any event known to the
Company relating to or affecting the Company shall occur which should be set
forth in an amendment of or supplement to the Prospectus in order to make the
statements in the Prospectus not misleading in the light of the circumstances
at the time it is delivered to the purchaser, or it shall be necessary to amend
or supplement the Prospectus to comply with law or with the rules and
regulations of the Commission, the Company, at its expense, will forthwith
prepare and furnish to you for distribution to the Underwriters and dealers a
reasonable number of copies of an amendment or amendments of or a supplement or
supplements to the Prospectus which will so amend or supplement the Prospectus
that, as amended or supplemented, it will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements in the Prospectus not misleading in
the light of the circumstances when it is delivered to a purchaser, and will
comply with law and with such rules and regulations. The Company authorizes
the Underwriters and all dealers effecting sales of the Bonds to use the
Prospectus, as from time to time amended or supplemented, in connection with
the sale of the Bonds in accordance with applicable provisions of the
Securities Act and the applicable rules and regulations thereunder for the
period during which the Company is required to deliver copies of the Prospectus
as provided in this Section 4.
5. Commission Proceedings as to Registration Statement. The Company
agrees to advise you promptly, as Representatives of the Underwriters, and to
confirm such advice in writing, (a) when any post-effective amendment of the
Registration Statement shall have become effective and when any
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further amendment of or supplement to the Prospectus shall be filed with the
Commission, (b) of any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for additional information and (c)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the initiation of any
proceedings for that purpose. The Company will use every reasonable effort to
prevent the issuance of such a stop order and, if any such order shall at any
time be issued, to obtain the withdrawal thereof at the earliest possible
moment.
6. Blue Sky. The Company will diligently endeavor, when and as
requested by you, to qualify the Bonds, or such portion thereof as you may
request, for offering and sale under the securities or blue sky laws of any
jurisdictions which you shall designate.
7. Earnings Statement. The Company agrees to make generally
available to its security holders, in accordance with Section 11(a) of the
Securities Act and Rule 158 thereunder, an earnings statement of the Company
(which need not be audited) in reasonable detail and covering a period of at
least twelve months beginning after the effective date of the Registration
Statement.
8. Expenses. The Company agrees to pay all fees and expenses in
connection with (a) the preparation, printing and filing of the Registration
Statement (including all exhibits to the Registration Statement), the
Prospectus and any amendments thereof and supplements thereto, and the
furnishing of copies of each thereof to the Underwriters (including costs of
mailing and shipment), (b) the issuance of the Bonds, (c) the rating of the
Bonds by rating agencies, (d) the delivery of the Bonds to you in New York City
for the respective accounts of the several Underwriters and (e) the qualifying
of the Bonds as provided in Section 6 hereof and the determination of the
eligibility of the Bonds for investment under the laws of such jurisdictions as
you may designate (including fees of not more than $10,000 and disbursements of
counsel for the Underwriters in connection therewith).
9. Indemnities.
(a) By the Company. The Company agrees to indemnify and hold
harmless each Underwriter and each person who controls any Underwriter within
the meaning of Section 15 of the Securities Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or any other
statute or common law, and to reimburse the Underwriters and such controlling
persons, as incurred, for any legal or other expenses incurred by them in
connection with investigating any claims and defending any actions, insofar as
such losses, claims, damages, liabilities or actions arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a
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material fact contained in the Registration Statement or any post-effective
amendment thereof, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (as amended or
supplemented, if the Company shall have filed with the Commission any amendment
thereof or supplement thereto), if used within the period during which the
Underwriters are authorized to use the Prospectus as provided in Section 4
hereof, or the omission or alleged omission to state therein (if so used) a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the indemnity agreement contained
in this Section 9(a) shall not apply to any such losses, claims, damages,
liabilities or actions arising out of, or based upon, any such untrue statement
or alleged untrue statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon and in conformity with
information furnished as herein stated in Section 12 or otherwise furnished in
writing to the Company by or on behalf of any Underwriter through you for use
in connection with the preparation of the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto, or was
contained in that part of the Registration Statement constituting the Statement
of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
the Trustee; provided, further, that, with respect to any untrue statement or
alleged untrue statement made in, or omission or alleged omission from, the
Prospectus, the indemnity agreement contained in this Section 9(a) with respect
to the Prospectus shall not inure to the benefit of any Underwriter (or the
benefit of any person controlling such Underwriter) from whom the person
asserting any such losses, claims, damages or liabilities purchased the Bonds
which are the subject thereof, if such person did not receive a copy of the
Prospectus (or the Prospectus as amended or supplemented if the Company shall
have made any amendments thereof or supplements thereto which shall have been
furnished to you, as Representatives of the Underwriters, or to such
Underwriter prior to the time of the below-written confirmation), excluding the
documents incorporated therein by reference, at or prior to the written
confirmation of the sale of such Bonds to such person in any case where
delivery of the Prospectus is required under the Securities Act and the rules
and regulations of the Commission thereunder and any untrue statement or
alleged untrue statement or omission or alleged omission was corrected in the
Prospectus (or the Prospectus as amended or supplemented).
(b) By the Underwriters. Each Underwriter agrees, in the manner and
to the same extent as set forth in Section 9(a) hereof, to indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, the directors of the Company and
those officers of the Company who shall have signed the Registration
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Statement, with respect to any statement in or omission from the Registration
Statement or any post-effective amendment thereof or the Prospectus (as amended
or supplemented, if so amended or supplemented), if such statement or omission
was made in reliance upon and in conformity with information furnished as
herein stated in Section 12 or otherwise furnished in writing to the Company
through you on behalf of such Underwriter for use in connection with the
preparation of the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto.
(c) General. Each indemnified party will, within ten days after
the receipt of notice of the commencement of any action against such
indemnified party in respect of which indemnity may be sought from an
indemnifying party on account of an indemnity agreement contained in this
Section 9, notify the indemnifying party in writing of the commencement
thereof. The omission of any indemnified party so to notify an indemnifying
party of any such action shall not relieve the indemnifying party from any
liability which it may have to such indemnified party on account of the
indemnity agreement contained in this Section 9 or otherwise. Except as
provided in the next succeeding sentence, in case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice in writing
from such indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. Such indemnified party
shall have the right to employ its own counsel in any such action, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of such counsel has been authorized in writing by the
indemnifying party in connection with the defense of such action, (ii) such
indemnified party shall have been advised by such counsel that there are
material legal defenses available to it which are different from or additional
to those available to the indemnifying party (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf
of such indemnified party) or (iii) the indemnifying party shall not have
assumed the defense of such action and employed counsel therefor satisfactory
to such indemnified party within a reasonable time after notice of commencement
of such action, in any of which events such fees and expenses shall be borne by
the indemnifying party. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification
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may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include any
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party. No indemnified party shall effect the
settlement or compromise of, or consent of the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification may be sought hereunder without the consent of the indemnifying
party (which consent shall not be unreasonably withheld).
(d) Contribution. If the indemnification provided for in this
Section 9 shall for any reason be unavailable to an indemnified party under
Section 9(a) or 9(b) hereof in respect of any loss, claim, damage or liability
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Bonds or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Bonds (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by
the Underwriters with respect to such offering, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault of the
Company on the one hand and the Underwriters on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 9(d) were to be determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
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action in respect thereof, referred to above in this Section 9(d) shall be
deemed to include, for purposes of this Section 9(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Bonds
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 9(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) Survival of Indemnities. The respective indemnity and
contribution agreements of the Company and the Underwriters contained in this
Section 9, and the representations and warranties of the Company set forth in
Section 1 hereof, shall remain operative and in full force and effect,
regardless of any termination or cancelation of this Agreement or any
investigation made by or on behalf of any Underwriter or any such controlling
person or the Company or any such controlling person, director or officer, and
shall survive the delivery of the Bonds, and any successor of any Underwriter
or of any such controlling person or of the Company, and any legal
representative of any such controlling person, director or officer, as the case
may be, shall be entitled to the benefit of the respective indemnity and
contribution agreements.
10. Conditions to Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of and
compliance with the representations and warranties of the Company contained in
Section 1 hereof, as of the date hereof and as of the Closing Date, and to the
following further conditions:
(a) Effectiveness of Registration Statement. No stop order
suspending the effectiveness of the Registration Statement or
qualification of the Indenture shall be in effect on the Closing Date, and
no proceedings for the issuance of such an order shall be pending or, to
the knowledge of the Company or you, threatened by the Commission on the
Closing Date.
(b) Opinion of Counsel for the Underwriters. The form and
validity of the Indenture, the form and validity of the Bonds, the
legality and sufficiency of the authorization of the issuance and sale of
the Bonds hereunder, and all corporate proceedings and other legal matters
incident to
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the foregoing, and the form of the Registration Statement and of the
Prospectus (other than financial statements and other financial data),
shall have been approved as of the Closing Date by Cravath, Swaine &
Moore, counsel for the Underwriters.
(c) Opinion of Counsel for the Company. The Company shall have
furnished to you, as Representatives of the Underwriters, on the Closing
Date, the opinion, addressed to the Underwriters and dated the Closing
Date, of Milbank, Tweed, Hadley & McCloy, counsel for the Company, which
opinion shall be satisfactory in form and scope to counsel for the
Underwriters, to the following effect:
(i) the Company has been duly incorporated and is validly
existing as a cooperative association in good standing under the
laws of the District of Columbia with corporate power to conduct its
business as described in the Registration Statement;
(ii) the issuance and sale of the Bonds by the Company
pursuant to this Agreement have been duly and validly authorized by
all necessary corporate action; and no authorization, consent, order
or approval of, or filing or registration with, or exemption by, any
government or public body or authority (including, without
limitation, the Rural Utilities Service) of the United States or of
the State of New York or any department or subdivision thereof or to
the best of such counsel's knowledge any court, other than such as
may be required under State securities or blue sky laws and other
than registration of the Bonds under the Securities Act and
qualification of the Indenture under the Trust Indenture Act, is
required for the validity of the Bonds or for the issuance, sale and
delivery of the Bonds by the Company pursuant to this Agreement or
for the execution and delivery of this Agreement by the Company;
(iii) the Indenture has been duly authorized by the Company,
has been duly qualified under the Trust Indenture Act, constitutes
an instrument valid and binding on the Company and enforceable in
accordance with its terms and the Indenture Trustee has a valid
first perfected security interest in the Mortgage Notes in its
possession in New York and, subject to the requirements of Section
9-306 of the New York Uniform Commercial Code, in the proceeds
thereof, subject only to the exceptions permitted by the Indenture,
pledged pursuant to the Indenture (except that no opinion need be
expressed as to the lien on the Mortgages, as defined in the
Indenture, so pledged);
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(iv) the Bonds are in the forms provided for in the
Indenture, and, assuming due execution of the Bonds on behalf of the
Company and authentication thereof by the Trustee, the Bonds
constitute valid and binding obligations of the Company enforceable
in accordance with their terms and are entitled to the benefits of
the Indenture;
(v) this Agreement has been duly authorized, executed and
delivered by the Company and the performance of this Agreement and
the consummation of the transactions herein contemplated will not
result in a breach of any terms or provisions of, or constitute a
default under, the Articles of Incorporation or By-laws of the
Company or any indenture, deed of trust, note, note agreement or
other agreement or instrument known to such counsel, after due
inquiry, to which the Company is a party or by which the Company or
any of its properties is bound or affected;
(vi) the Bonds and the Indenture conform in all material
respects to the descriptions thereof contained in the Registration
Statement;
(vii) the Registration Statement (and any post-effective
amendment thereof) has become and is effective under the Securities
Act and the Bonds have become registered under the Securities Act,
and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are pending or contemplated, and the Registration Statement (and any
post-effective amendment thereof), the Prospectus and each amendment
thereof or supplement thereof (except for the financial statements
and other financial data included therein as to which such counsel
need express no opinion) when they became effective or were filed
with the Securities and Exchange Commission complied as to form in
all material respects with the requirements of the Securities Act,
the Exchange Act, the Trust Indenture Act and the rules and
regulations issued thereunder;
(viii) based upon such counsel's participation in the
preparation of the Registration Statement, the Prospectus and
documents incorporated by reference therein, such counsel's
discussions with certain officers and employees of the Company, such
counsel's conferences with representatives of the Company's
independent Certified Public Accountants and such counsel's
representation of the Company, and while such counsel does not pass
on or assume any responsibility for the accuracy, completeness or
fairness thereof,
12
<PAGE> 13
nothing has come to such counsel's attention that causes it to
believe that either the Registration Statement (or any
post-effective amendment thereof) as of the date it became
effective, or the Prospectus and each supplement thereto as of the
Closing Date (except in each case for the financial or statistical
data included therein, as to which such counsel expresses no view)
contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and such counsel does not know of
any litigation or any governmental proceeding instituted or
threatened against the Company required to be disclosed in the
Registration Statement or Prospectus and which is not disclosed
therein;
(ix) the Company is not required to be registered as an
investment company under the Investment Company Act of 1940;
(x) the Company is not subject to regulation under the
Public Utility Holding Company Act of 1935; and
(xi) the Company is not a public utility as defined in the
Federal Power Act and is not a natural gas company as defined in the
Natural Gas Act.
If the certification referred to in clause (ix) of subsection 10(e)
below indicates that the Pledged Property includes collateral other than
Mortgage Notes, the opinion referred to in clause (iii) above shall also
address the security interest of the Indenture Trustee in the Pledged
Property (and in the proceeds thereof), in form reasonably satisfactory to
you.
The foregoing opinion may contain qualifications to the effect that
any sale or transfer by the Trustee under the Indenture of any Pledged
Property (other than a transfer into the name of the Trustee or a nominee
thereof) may be subject to the provisions of the Securities Act and other
applicable securities laws and regulations promulgated thereunder, and,
insofar as such opinion relates to the enforceability of the Bonds and the
Indenture, the enforceability thereof may be limited by bankruptcy,
reorganization, insolvency, moratorium or other laws of general
application relating to or affecting the enforcement of creditors' rights
and by general principals of equity (regardless of whether considered in a
proceeding in equity or at law), including without limitation (a) the
possible unavailability of specific performance, injunctive relief or any
other equitable remedy and (b) concepts of materiality, reasonableness,
good faith and fair dealing. In addition, the Company's obligations and
the rights and remedies of the Trustee and the Bondholders may be subject
to possible
13
<PAGE> 14
limitations on the exercise of remedial or procedural provisions contained
in the Indenture (provided that such limitations do not, in the opinion of
such counsel, make inadequate the remedies afforded thereby for the
practical realization of the substantive benefits provided for in the
Bonds and the Indenture).
In rendering the foregoing opinion, Milbank, Tweed, Hadley & McCloy
may rely as to matters of the law of the District of Columbia upon the
opinion of John Jay List, Esq., General Counsel of the Company, addressed
to the Underwriters and dated the Closing Date, satisfactory in form and
scope to counsel for the Underwriters. If Milbank, Tweed, Hadley & McCloy
shall so rely upon the opinion of John Jay List, Esq., (i) copies of the
opinion so relied upon shall be delivered to you, as Representatives of
the Underwriters, and to counsel for the Underwriters and (ii) the opinion
required by this Section 10(c) shall also state that Milbank, Tweed,
Hadley & McCloy has made an independent investigation of the matters in
its opinion covered by the opinion so relied upon and that the
Underwriters are justified in relying upon such opinion.
(d) Accountants' Letter. Arthur Andersen LLP shall have furnished
to you, as Representatives of the Underwriters, at or prior to the Closing
Date, a letter, addressed to the Underwriters and dated the Closing Date,
confirming that they are independent public accountants with respect to
the Company within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission; and
stating, as of the date of such letter (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date
not more than five days prior to the date of such letter), the conclusions
and findings of such firm with respect to the financial information and
other matters covered by its letter delivered to you, as Representatives
of the Underwriters, concurrently with the execution of this Agreement and
confirming in all material respects the conclusions and findings set forth
in such prior letter or, if no such letter shall have been delivered to
you, the conclusions and findings of such firm, in form and substance
satisfactory to you, as Representatives of the Underwriters, with respect
to such financial information and other matters as you, as Representatives
of the Underwriters, shall reasonably request.
(e) Officer's Certificate. You shall have received, on the Closing
Date, a certificate of the Company dated the Closing Date, signed on its
behalf by the President, the Governor or a Vice President of the Company,
to the effect that the signer of such certificate has examined the
14
<PAGE> 15
Registration Statement and the Prospectus and that (i) in his opinion, as
of the effective date of the Registration Statement, the Registration
Statement did not contain an untrue statement of a material fact and did
not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Prospectus did not contain an untrue statement of a material fact and did
not omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, (ii) since the effective date of the Registration Statement no
event has occurred which should have been set forth in an amendment or
supplement to the Prospectus but which has not been so set forth, (iii)
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change in the condition, financial or other, or earnings of the
Company, whether or not arising from transactions in the ordinary course
of business, other than changes which the Registration Statement and the
Prospectus indicate might occur after the effective date of the
Registration Statement, (iv) the Company has no material contingent
obligations which are required to be disclosed in the Registration
Statement and the Prospectus and are not disclosed therein, (v) no stop
order suspending the effectiveness of the Registration Statement is in
effect on the Closing Date and no proceedings for the issuance of such an
order have been taken or to the knowledge of the Company are contemplated
by the Commission at or prior to the Closing Date, (vi) there are no
material legal proceedings to which the Company is a party or of which
property of the Company is the subject which are required to be disclosed
and which are not disclosed in the Registration Statement and the
Prospectus, (vii) there are no material contracts to which the Company is
a party which are required to be disclosed and which are not disclosed in
the Registration Statement or the Prospectus, (viii) the representations
and warranties of the Company herein are true and correct as of the
Closing Date and (ix) the Pledged Property consists solely of Mortgage
Notes, or if such is not the case, a description of the other collateral
included in the Pledged Property.
(f) (i) The Company shall not have sustained since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus or
(ii) since such date there shall not have been any change in the members'
equity or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change,
15
<PAGE> 16
in or affecting the general affairs, management, financial position,
member's equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (i)
or (ii), is, in your judgment, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Bonds on the terms and in the manner contemplated in the
Prospectus.
(g) On or after the date hereof: (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) of the Rules and
Regulations and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities.
(h) On or after the date hereof, there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, (ii) a banking
moratorium on commercial banking activities in New York declared by
Federal or state authorities, (iii) the United States shall have become
engaged in hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States or (iv) such a material
adverse change in general economic, political or financial conditions (or
the effect of international conditions on the financial markets in the
United States shall be such) the effect of which, in any such case
described in clause (iii) or (iv), is, in your reasonable judgment, to
make it impracticable or inadvisable to proceed with the public offering
or delivery of the Bonds on the terms and in the manner contemplated in
the Prospectus.
(i) Miscellaneous. The Company shall have taken, on or prior to
the Closing Date, all other action, if any, which it is stated in the
Registration Statement (or any post-effective amendment thereof) or the
Prospectus (as amended or supplemented, if so amended or supplemented)
that the Company will take prior to or concurrently with the issuance and
delivery of the Bonds, and all agreements herein contained to be performed
on the part of the Company on or prior to the Closing Date shall have been
so performed.
(j) Other Documents. The Company shall have furnished to you and
to Cravath, Swaine & Moore, counsel for the Underwriters, such further
certificates and documents as you
16
<PAGE> 17
or they may have reasonably requested prior to the Closing Date.
If any of the conditions specified in this Section 10 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this
Agreement and all obligations of the Underwriters hereunder may be canceled on,
or at any time prior to, the Closing Date by you, as Representatives of the
Underwriters. Notice of such cancelation shall be given to the Company in
writing, or by telegraph, telephone or telex confirmed in writing.
11. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse on the Closing Date to purchase and pay for
the Bonds which it or they have agreed to purchase hereunder, then (a) if the
aggregate principal amount of the Bonds which the defaulting Underwriter or
Underwriters so agreed to purchase shall not exceed $10,000,000, the
nondefaulting Underwriters of shall be obligated to purchase the Bonds from the
Company, in proportion to their respective obligations hereunder and upon the
terms herein set forth, or (b) if the aggregate principal amount of the Bonds
which the defaulting Underwriter or Underwriters so agreed to purchase shall
exceed $10,000,000, either you, as Representatives of the Underwriters, or the
Company shall have the right at any time prior to 9:30 A.M., New York City
time, on the next business day after the Closing Date to procure one or more of
the other Underwriters, or any others, to purchase such Bonds from the Company,
in such amounts as may be agreed upon and upon the terms herein set forth. If
within such specified time neither you, as such representative, nor the Company
shall have procured such other Underwriters or any others to purchase the Bonds
agreed to be purchased by the defaulting Underwriter or Underwriters, this
Agreement shall terminate without liability on the part of any nondefaulting
Underwriter or of the Company. In the event of a default by any Underwriter or
Underwriters, as set forth in this Section 11, the Closing Date may be
postponed for such period, not exceeding seven days, as you, as such
representative, shall determine in order that any required changes in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken or termination of this
Agreement under this Section 11 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
12. Information Furnished by Underwriters. The statement set forth
in the last paragraph on the cover of, in the last paragraph on page 2 of, and
under the heading "Underwriting" in, the prospectus supplement portion of the
Prospectus, and under the heading "Plan of Distribution" in the Prospectus,
constitute the only information furnished in writing by you, on behalf of the
Underwriters, for inclusion therein, and you, as Representatives of the
Underwriters, confirm that such statements are correct.
17
<PAGE> 18
13. Termination. This Agreement shall be subject to termination by
you, by notice given to the Company prior to delivery of and payment for the
Bonds, if prior to such time any of the events described in Sections 10(f),
10(g) or 10(h) occurs.
14. Miscellaneous.
(a) Except as otherwise expressly provided in this Agreement, (i)
whenever notice is required by all the provisions of this Agreement to be given
to the Company, such notice shall be in writing addressed to the Company at its
office, Woodland Park, 2201 Cooperative Way, Herndon, Virginia 22071, attention
of the Governor, and (ii) whenever notice is required by the provisions of this
Agreement to be given to you, as Representatives of the Underwriters or of any
of them, such notice shall be in writing addressed to you at your office, Three
World Financial Center, New York, New York 10285.
(b) The Company agrees to furnish to you and to Cravath, Swaine &
Moore, without charge, a signed copy of the Registration Statement and each
amendment thereof, including all financial statements and all exhibits thereto
(except such financial statements and exhibits as are incorporated therein by
reference and which shall have been previously furnished to you), and to
furnish to each of the other Underwriters, without charge, a copy of the
Registration Statement and each amendment thereof, including all financial
statements (except such financial statements as are incorporated therein by
reference) but without exhibits.
(c) This Agreement is made solely for the benefit of the several
Underwriters and the Company and their respective successors and assigns, and,
to the extent provided in Section 9 hereof, any controlling person referred to
in such Section 9 and the directors of the Company and those officers of the
Company who shall have signed the Registration Statement, and their respective
legal representatives, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. The term
"successor" or the term "successors and assigns" as used in this Agreement
shall not include any purchaser, as such purchaser, from any of the
Underwriters of the Bonds.
(d) If this Agreement shall be canceled or terminated by the
Underwriters on any of the grounds referred to or specified in Section 10
hereof or because of any failure or refusal on the part of the Company to
comply with any of the terms or to fulfill any of the conditions of this
Agreement, the Company will reimburse the Underwriters severally for all their
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by them in connection with the subject matter of this
Agreement.
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<PAGE> 19
(e) The term "business day" as used in this Agreement shall mean
any day on which the New York Stock Exchange, Inc., is open for trading.
(f) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
(g) Section headings have been inserted in this Agreement as a
matter of convenience of reference only and it is agreed that such section
headings are not a part of this Agreement and will not be used in the
interpretation of any provision of this Agreement.
Please confirm that you are acting on behalf of yourself and the
other several Underwriters and that the
19
<PAGE> 20
foregoing correctly sets forth the agreement between the Company and the
several Underwriters.
Very truly yours,
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE
CORPORATION,
By
/s/ Steven L. Lilly
--------------------------------
Name: Steven L. Lilly
Title: Senior Vice President
and Chief Financial
Officer
Acting on behalf of ourselves and
the other several Underwriters named
in Schedule I attached to the
foregoing letter, we hereby confirm
as of the date thereof that such letter
correctly sets forth the agreement between
the Company and the several Underwriters:
LEHMAN BROTHERS INC.,
By
/s/ Robert R. Edmiston
----------------------------
Name: Robert R. Edmiston
Title: Managing Director
20
<PAGE> 21
SCHEDULE I
Underwriting Agreement dated August 28, 1996
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
<TABLE>
<CAPTION>
Principal Amount
6.75% Collateral
Trust Bonds
Due 2001
Underwriter to be Purchased
- ----------- ---------------
<S> <C>
Lehman Brothers Inc. ............................................... $ 70,000,000
Goldman, Sachs & Co. ............................................... 15,000,000
Merrill Lynch, Pierce,
Fenner & Smith Incorporated. ..................................... 15,000,000
-------------
Total .................................................... $100,000,000
=============
</TABLE>
21
<PAGE> 1
EXHIBIT 4.
[FORM OF CERTIFICATE FOR COLLATERAL TRUST BOND, DUE 2001]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Certificate No.: 1 CUSIP No.: 637432BM6
PRINCIPAL AMOUNT: $___________
MATURITY DATE: September 1, 2001 CERTIFICATE
INTEREST RATE: 6.75%
ISSUE DATE: September __, 1996 FRACTIONAL SHARE: 100%
6.75% COLLATERAL TRUST BOND, DUE 2001
National Rural Utilities Cooperative Finance Corporation, a
District of Columbia cooperative association (hereinafter called the "Company",
which term includes any successor corporation under the Indenture referred to
on the reverse hereof), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, the principal sum of $100,000,000 dollars on
September 1, 2001, and to pay interest thereon as set forth below, until the
principal hereof is paid or made available for payment. Interest for the Bonds
is payable on the 1st day of March and September (each, an "Interest Payment
Date"), in each year, commencing March 1, 1997, for the period
<PAGE> 2
commencing on and including the immediately preceding Interest Payment Date and
ending on and including the day next preceding the Interest Payment Date (an
"Interest Period"), with the exception that the first Interest Period shall
commence on and include September __, 1996 and end on and include February 28,
1997. Interest will be paid to registered holders of Bonds at the close of
business on the fifteenth day of the month (the "Regular Record Date")
preceding the Interest Payment Date.
The Bonds will bear interest at an interest rate per annum of
6.75%. Interest on the Bonds will be calculated on the basis of twelve 30-day
months.
Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the registered holder on such Regular
Record Date, and may be paid to the person in whose name this Bond 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 Bondholders not less than 10 days prior to such Special Record Date,
all as more duly provided in such Indenture. Payment of the principal of and
interest on this Bond will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, City and State 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.
Reference is hereby made to the further provisions of this
Bond set forth on the reverse hereof which further
2
<PAGE> 3
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been
executed by or on behalf of First Bank National Association, the Trustee under
such Indenture, or its successor thereunder, by manual signature, this Bond
shall not be entitled to any benefit under such 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
Dated: September __, 1996
By:
--------------------------------------
(Seal) Steven L. Lilly
Chief Financial Officer
Attest:
By:
---------------------------------
John Jay List
Assistant Secretary-Treasurer
Trustee's Certificate of
- ------------------------
Authentication
- --------------
This is one of the Bonds,
of the series designated therein,
described in the within-mentioned Indenture.
By: FIRST BANK NATIONAL ASSOCIATION,
Trustee
By:
------------------------------------------
Authorized Officer
3
<PAGE> 4
[FORM OF REVERSE OF COLLATERAL TRUST BOND, DUE 2001]
This Bond is one of an authorized issue of Bonds of the
Company known as its "Collateral Trust Bonds", issued and to be issued in one
or more series under, and all equally and ratably secured (except as any
sinking or other fund may afford additional special security for the Bonds of
any particular series) by, an Indenture dated as of February 15, 1994 (as
amended, supplemented and modified and in effect from time to time, the
"Indenture"), executed by the Company to First Bank National Association, as
Trustee (herein called the "Trustee", which term includes any successor Trustee
under the Indenture), to which Indenture reference is hereby made for a
description of the nature and extent of the securities and other property
assigned, pledged, transferred and mortgaged thereunder, the rights of the
Holders of said Bonds and of the Trustee and of the Company in respect of such
security, and the terms upon which said Bonds are and are to be authenticated
and delivered.
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 Bonds under
the Indenture at any time by the Company with the consent of the Holders of
not less than a majority in aggregate principal amount of the Bonds at the
time Outstanding, as defined in the Indenture. The Indenture also permits,
with certain exceptions as therein provided, the amendment of the terms of
Mortgage Notes pledged under the Indenture, and Mortgages and Loan Agreements
pursuant to which
4
<PAGE> 5
they were issued, at any time by the Company with the consent of the Holders of
not less than a majority in aggregate principal amount of the Bonds at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Bonds at the time
Outstanding, on behalf of the Holders of all Bonds, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Bond shall be conclusive and binding upon such Holder and upon
all future Holders of this Bond and of any Bond issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Bond.
As provided in the Indenture, said Bonds are issuable in
series which may vary as in said Indenture provided or permitted. This Bond is
one of a series entitled 6.75% Collateral Trust Bonds, Due 2001.
The Bonds of this series are not subject to redemption prior
to maturity.
If an Event of Default, as defined in the Indenture, shall
occur, the principal of this Bond may become or be declared due and payable, in
the manner and with the effect provided in the Indenture.
This Bond is transferable by the registered owner hereof in
person or by attorney authorized in writing, at the office or agency of the
Company referred to on the face hereof and at such other offices or agencies as
may be maintained for
5
<PAGE> 6
such purpose, upon surrender of this Bond, and upon any such transfer a new
Bond of the same series, for the same aggregate principal amount, will be
issued to the transferee in exchange herefor.
The Bonds of this series are issuable only as registered Bonds
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in, and subject to the provisions of, the Indenture, Bonds of this
series are exchangeable for other Bonds of this series of a different
authorized denomination or denominations, as requested by the Holder
surrendering the same.
No service charge will be made for any such transfer or
exchange, but the Company or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment for transfer at any office or agency
of the Company designated for such purpose, the Company, the Trustee and any
agent of the Company or the Trustee may treat the person in whose name this
Bond is registered as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes whether or not this Bond be overdue,
and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
6
<PAGE> 7
No reference herein to the Indenture and no provision of this
Bond or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Bond at the times, place and rate, and in the coin or currency, herein
prescribed.
7
<PAGE> 8
ASSIGNMENT
For value received the undersigned sells, assigns and
transfers unto (name, address including zip code and taxpayer I.D. or Social
Security number of assignee) _______________________________________________
_______________________________________________________________________ the
within Certificate and does hereby irrevocably constitute and appoint
_____________________________________________________________________________
attorney to transfer the said Certificate on the books kept for registration
thereof with full power of substitution on the premises.
Dated:
------------------------
------------------------------
Signature by or on behalf of
assignor
