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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)
October 30, 1998
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
District of Columbia l-7102 52-0891669
(state or other juris- (Commission (I.R.S. Employee
diction of incorporation) File Number) Identification No.)
Woodland Park, 2201 Cooperative Way, Herndon, VA 22071-3025
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703)709-6700
(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 October 30, 1998,
between the registrant and Lehman Brothers Inc., J.P.
Morgan Securities Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
2. Form of Global Certificate for the 6.55% Collateral Trust
Bonds, due 2018.
3. Form of Global Certificate for the 5.75% Collateral Trust
Bonds, due 2008.
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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
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Steven L. Lilly
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Dated: November 5, 1998
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1. Underwriting Agreement dated October 30, 1998 between
the registrant and Lehman Brothers Inc., J.P. Morgan
Securities Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
2. Form of Global Certificate for the 6.55% Collateral Trust
Bonds, due 2018.
3. Form of Global Certificate for the 5.75% Collateral Trust
Bonds, due 2008.
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EXHIBIT 1
$400,000,000
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
$225,000,000 5.75% Collateral Trust Bonds, Due 2008
$175,000,000 6.55% Collateral Trust Bonds, Due 2018
Underwriting Agreement
October 30, 1998
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
J.P. Morgan Securities Inc.
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
$225,000,000 principal amount of its 5.75% Collateral Trust Bonds, Due 2008, and
$175,000,000 principal amount of its 6.55% Collateral Trust Bonds, Due 2018
(collectively, 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
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respective principal amounts of each series of the Bonds, aggregating
$400,000,000 principal amount 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. 333-65873, 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. 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 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.
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(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 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
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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 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
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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, the 5.75% Collateral Trust
Bonds, Due 2008, at 99.313% of the principal amount thereof, and the 6.55%
Collateral Trust Bonds, Due 2018, at 98.641% of the principal amount thereof,
the respective principal amounts of each series of the Bonds set forth opposite
the names of the respective Underwriters in Schedule I hereto, aggregating
$400,000,000 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 November 4, 1998, or
such later date (not later than November 11, 1998) as you, as Representatives of
the Underwriters, shall designate, which date and time may be postponed by
agreement between you, as such Representatives, and 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
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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 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.
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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 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,
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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
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.
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(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 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
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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
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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 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
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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 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
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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);
(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
<PAGE> 14
14
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, 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
<PAGE> 15
15
(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 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
<PAGE> 16
16
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 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
<PAGE> 17
17
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, in or affecting the general affairs,
<PAGE> 18
18
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
<PAGE> 19
19
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 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 $40,000,000, 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 $40,000,000, 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
<PAGE> 20
20
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.
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 20171,
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
<PAGE> 21
21
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.
(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.
<PAGE> 22
22
(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 foregoing correctly sets forth the
agreement between the Company and the several Underwriters.
Very truly yours,
NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION,
By
------------------------------------
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
------------------------------
Name:
Title:
<PAGE> 23
SCHEDULE I
Underwriting Agreement dated October 30, 1998
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
<TABLE>
<CAPTION>
Principal Amount Principal Amount
of 5.75% Collateral of 6.55% Collateral
Trust Bonds Due 2008 Trust Bonds Due 2018
Underwriter to be Purchased to be Purchased
<S> <C> <C>
Lehman Brothers Inc. $157,500,000 $122,500,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated 33,750,000 26,250,000
J.P. Morgan Securities Inc. 33,750,000 26,250,000
------------ ------------
Total $225,000,000 $175,000,000
============ ============
</TABLE>
<PAGE> 1
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.: 637432CG8
PRINCIPAL AMOUNT: $175,000,000
MATURITY DATE: November 1, 2018 CERTIFICATE
INTEREST RATE: 6.55%
ISSUE DATE: November 4, 1998 FRACTIONAL SHARE: 100%
6.55% COLLATERAL TRUST BOND, DUE 2018
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 $175,000,000 on November 18, 2018, 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 May and November (each, an "Interest Payment Date"), in each year, commencing
May 1, 1999, for the period 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 the date of original
<PAGE> 2
issuance. 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 6.55%
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 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 U.S. 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.
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION
By:
----------------------------------------
(Seal) Steven L. Lilly
Chief Financial Officer
Dated: November 4, 1998
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: U.S. BANK NATIONAL ASSOCIATION,
Trustee
By:
--------------------------------------
Authorized Officer
<PAGE> 4
REVERSE OF BOND
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 U.S. 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 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
<PAGE> 5
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 6.55% Collateral Trust Bonds, Due 2018.
The Bonds of this series are not redeemable 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 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
<PAGE> 6
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.
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.
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
-------
<PAGE> 7
- -----------------------------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
<PAGE> 1
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.: 637432CFO
PRINCIPAL AMOUNT: $225,000,000
MATURITY DATE: November 1, 2008 CERTIFICATE
INTEREST RATE: 5.75%
ISSUE DATE: November 4, 1998 FRACTIONAL SHARE: 100%
5.75% COLLATERAL TRUST BOND, DUE 2008
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 $225,000,000 on November 1, 2008, 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 May and November (each, an "Interest Payment Date"), in each year, commencing
May 1, 1999, for the period 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 the date of original
<PAGE> 2
issuance. 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 5.75%.
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 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 U.S. 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.
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION
By:
-------------------------------------
(Seal) Steven L. Lilly
Chief Financial Officer
Dated: September 25, 1998
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: U.S. BANK NATIONAL ASSOCIATION,
Trustee
By:
-------------------------------
Authorized Officer
<PAGE> 4
REVERSE OF BOND
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 U.S. 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 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
<PAGE> 5
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 5.75% Collateral Trust Bonds, Due 2008.
The Bonds of this series are not redeemable 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 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
<PAGE> 6
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.
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.
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
-------
<PAGE> 7
- ------------------------------------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
