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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)
February 7, 2000
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 20171-3025
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(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 February 7, 2000, between the
registrant and Lehman Brothers Inc., Banc of America
Securities LLC, Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc.
2. Form of Global Certificate for the 7.375% Collateral Trust
Bonds, due 2003.
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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 LILLY
-----------------------------
Steven L. Lilly
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Dated: February 10, 2000
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EXHIBIT 1
EXECUTION COPY
$525,000,000
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
$525,000,000 7 3/8% Collateral Trust Bonds, Due 2003
Underwriting Agreement
February 7, 2000
Lehman Brothers Inc.
Banc of America Securities LLC
Goldman, Sachs & Co.
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
Ladies and Gentlemen:
National Rural Utilities Cooperative Finance Corporation, a District of
Columbia cooperative association (the "Company"), proposes to issue $525,000,000
principal amount of its 7 3/8% Collateral Trust Bonds, Due 2003 (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
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Underwriting Agreement
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 $525,000,000 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.
333-68645, 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
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Underwriting Agreement
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 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.
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Underwriting Agreement
(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 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
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Underwriting Agreement
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, the 7 3/8% Collateral Trust Bonds, Due 2003, at 99.499% of the
principal amount thereof, in the principal amounts of the Bonds set forth
opposite the names of the Underwriters in Schedule I hereto, aggregating
$525,000,000 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 February 10, 2000, or such later
date (not later than February 17, 2000) 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.
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Underwriting Agreement
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
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Underwriting Agreement
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.
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).
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Underwriting Agreement
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, 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
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Underwriting Agreement
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.
(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
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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 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
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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
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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 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
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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 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 LLP, 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
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Underwriting Agreement
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);
(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,
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Underwriting Agreement
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, 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
<PAGE> 16
16
Underwriting Agreement
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
<PAGE> 17
17
Underwriting Agreement
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 LLP 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 LLP 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 LLP 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
<PAGE> 18
18
Underwriting Agreement
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 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
<PAGE> 19
19
Underwriting Agreement
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, 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
<PAGE> 20
20
Underwriting Agreement
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 or they may have reasonably requested
prior to the Closing Date.
<PAGE> 21
21
Underwriting Agreement
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 $52,500,000, 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
$52,500,000, 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.
<PAGE> 22
22
Underwriting 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 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
<PAGE> 23
23
Underwriting Agreement
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.
(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, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS.
<PAGE> 24
24
Underwriting Agreement
(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: \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\ James W. Merli
---------------------
Name: James W. Merli
Title: Managing Director
<PAGE> 25
25
SCHEDULE I
Underwriting Agreement dated February 7, 2000
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
<TABLE>
<CAPTION>
Principal Amount of 7d%
Collateral Trust Bonds,
Due 2003
Underwriter To Be Purchased
----------- ---------------
<S> <C>
Lehman Brothers Inc. .............................. $105,000,000
Banc of America Securities LLC. ................... $105,000,000
Goldman Sachs & Co. ............................... $105,000,000
Merrill Lynch, Pierce,
Fenner & Smith Incorporated. ...................... $105,000,000
J.P. Morgan Securities Inc......................... $105,000,000
Total....................................... $525,000,000
============
</TABLE>
<PAGE> 1
Exhibit 2
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.: 637432CK9
PRINCIPAL AMOUNT: $525,000,000
MATURITY DATE: February 10, 2003 CERTIFICATE INTEREST RATE: 7.375%
ISSUE DATE: February 10, 2000 FRACTIONAL SHARE: 100%
7.375% COLLATERAL TRUST BOND, DUE 2003
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 $525,000,000 on February 10, 2003, 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 10th day
of February and August (each, an "Interest Payment Date"), in each year,
commencing August 10, 2000, 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 (the "Regular Record Date") preceding the Interest
Payment Date.
The Bonds will bear interest at an interest rate per annum of 7.375%.
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: February 10, 2000
Attest:
By:
---------------------------------
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 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
<PAGE> 5
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 7.375% Collateral Trust Bonds, Due 2003.
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 other Bonds of this series of a different authorized
denomination or denominations, as requested by the Holder surrendering the same.
<PAGE> 6
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.
<PAGE> 7
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
