1
EXHIBIT 1
EXECUTION COPY
$1,500,000,000
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
6.00% Collateral Trust Bonds, due 2006
Underwriting Agreement
May 16, 2001
Xxxxxx Brothers Inc.
X.X. Xxxxxx Securities Inc.
As Representatives of the several Underwriters
In care of Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
National Rural Utilities Cooperative Finance Corporation, a
District of Columbia cooperative association (the "Company"), proposes to issue
$1,500,000,000 principal amount of its 6.00% Collateral Trust Bonds due 2006
(the "Bonds"), to be issued under and secured by an Indenture dated as of
February 15, 1994, between the Company and U.S. Bank National Association, as
successor trustee (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 14 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 $1,500,000,000 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
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Underwriting Agreement
Agreement. Terms used but not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
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. 333-51308 and Registration Statement No. 333-38234
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 statements 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.
(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
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Underwriting Agreement
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 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
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Underwriting Agreement
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 13(c)
hereof could result in a judgment or decree having a material adverse effect on
the condition, financial or other, or the results of operations of the Company.
(g) Legality. On the Closing Date, the Bonds will be duly
and validly authorized, and no further authorization, consent or approval of the
members and no further authorization or approval of the Board of Directors of
the Company or any committee thereof will be required for the issuance and sale
of the Bonds as contemplated herein; and neither such issuance or sale of the
Bonds nor the consummation of any other of the transactions herein contemplated
will result in a breach by the Company of any terms of, or constitute a default
under, any other agreement or undertaking of the Company.
(h) No Stop Order. The Commission has not issued and, to the
best knowledge of the Company, is not threatening to issue any order preventing
or suspending the use of the Prospectus (as amended or supplemented, if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto).
(i) Regulation. The Company is not required to be registered
as an investment company under the Investment Company Act of 1940 and is not
subject to regulation under the Public Utility Holding Company Act of 1935.
2. Agreement to Purchase. Subject to the terms and
conditions and upon the representations and warranties herein set forth, the
Company agrees to sell to you and any other Underwriters, severally and not
jointly, and you and such other Underwriters, severally and not jointly, agree
to purchase from the Company, the 6.00% Collateral Trust Bonds
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Underwriting Agreement
due 2006, at 99.19% 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 $1,500,000,000 principal amount thereof.
3. Closing. Delivery of and payment for the Bonds shall be
made at the office of Xxxxxx Brothers Inc., Three World Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, at 9:30 a.m., New York City time, on May 23, 2001, or such
later date (not later than May 31, 2001) 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
14 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 The Depository Trust Company
("DTC").
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 & Xxxxx, counsel for the Underwriters, the Prospectus
as 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
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Underwriting Agreement
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.
8. Listing. The Company will use its best efforts to (a)
comply in all material respects with the listing requirements of the Luxembourg
Stock Exchange and
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Underwriting Agreement
(b) complete the listing of the Bonds to be sold by the Company on such exchange
prior to the Closing Date.
9. Clearance and Settlement. The Company will cooperate
with the Underwriters to permit the Bonds to be eligible for clearance and
settlement through DTC, Clearstream Banking and Euroclear Bank S.A./N.V.
10. 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, (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), (f) the costs incident to
the listing of the Bonds on the Luxembourg Stock Exchange and (g) any fees of a
book-entry depositary listing agent, paying agent or transfer agent.
11. Offering Restrictions. Each of the Underwriters agrees
to abide by the following offering restrictions:
(a) United Kingdom. It and each of its affiliates:
(i) has not offered or sold, and will not offer or
sell, in the United Kingdom any Bonds prior to the date which is
six months after their date of issue, and will not offer or sell
in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the
purposes of their business or in circumstances which have not
resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995;
(ii) has complied and will comply with all applicable
provisions of the Financial Services Xxx 0000 with respect to
anything done by it in
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Underwriting Agreement
relation to the Securities in, from or otherwise involving the
United Kingdom; and
(iii) has only issued or passed on, and will only
issue or pass on, to any person in the United Kingdom, any
document received in connection with the issue of the Securities
to a person who is of a kind described in Article 11(3) of the
Financial Services Act of 1986 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(b) The Netherlands. It and each of its affiliates has not
publicly promoted and will not publicly promote the offer or sale of the
Bonds by conducting a generalized advertising or cold-calling campaign
within or outside The Netherlands.
(c) Japan. It and each of its affiliates has not offered or
sold, and will not offer or sell directly or indirectly, any of the
Bonds in or to residents of Japan or to any persons for reoffering or
resale, directly or indirectly, in Japan or to any resident of Japan,
except pursuant to an exemption from the registration requirements of
the Securities and Exchange Law of Japan (the "SEL") available
thereunder and otherwise in compliance with the SEL and the other
relevant laws, regulations and guidelines of Japan.
12. 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
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Underwriting Agreement
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 12(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 15 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 12(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 12(a) hereof, to indemnify
and hold harmless the Company, each person, if any, who controls the Company
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Underwriting Agreement
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 15 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 12, 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 12 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 12 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
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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 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 12 shall for any reason be unavailable to an indemnified party
under Section 12(a) or 12(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
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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 12(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 12(d) shall be deemed to include, for purposes
of this Section 12(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 12(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 12(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 12, 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
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Underwriting Agreement
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.
13. Conditions to Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of and
compliance with the representations and warranties of the Company contained in
Section 1 hereof, as of the date hereof and as of the Closing Date, and to the
following further conditions:
(a) Effectiveness of Registration Statement. No stop order
suspending the effectiveness of the Registration Statement or
qualification of the Indenture shall be in effect on the Closing Date,
and no proceedings for the issuance of such an order shall be pending
or, to the knowledge of the Company or you, threatened by the Commission
on the Closing Date.
(b) Opinion of Counsel for the Underwriters. You, as
Representatives of the Underwriters, shall have received from Cravath,
Swaine & Xxxxx an opinion and letter, each dated the Closing Date and
addressed to the Underwriters, with respect to the issuance and sale of
the Bonds, the form of the Registration Statement and of the Prospectus
(other than financial statements and other financial data) and other
related matters as you may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(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, Xxxxxx & XxXxxx 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
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Underwriting Agreement
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, 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, after due inquiry, to which the Company
15
Underwriting Agreement
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
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
16
Underwriting Agreement
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
13(f) 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
17
Underwriting Agreement
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, Xxxxxx &
XxXxxx LLP may rely as to matters of the law of the District of Columbia
upon the opinion of Xxxx Xxx 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,
Xxxxxx & XxXxxx LLP shall so rely upon the opinion of Xxxx Xxx 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 13(c) shall
also state that Milbank, Tweed, Xxxxxx & XxXxxx 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) Opinion of Special Tax 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 Hunton & Xxxxxxxx, which
shall be satisfactory in form and scope to counsel for the Underwriters,
with respect to the disclosure contained in the Prospectus under the
caption "U.S. Taxation" insofar as such disclosure describes or
summarizes matters of U.S. tax law or constitutes conclusions of U.S.
tax law.
(e) Accountants' Letter. Xxxxxx Xxxxxxxx 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
18
Underwriting Agreement
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.
(f) 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
such person's opinion, as of the effective date of the Registration
Statement, the Registration Statement did not contain an untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus did not contain an untrue
statement of a material fact and did not omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (ii) since the
effective date of the Registration Statement no event has occurred which
should have been set forth in an amendment or supplement to the
Prospectus but which has not been so set forth, (iii) since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material adverse
change in the condition, financial or other, or earnings of the Company,
whether or not arising from transactions in the ordinary course of
business, other than changes which the Registration Statement and the
Prospectus indicate might occur after the effective date of the
Registration Statement, (iv) the Company has no material contingent
obligations which are required to be disclosed in the Registration
Statement and the Prospectus and are not disclosed therein, (v) no stop
order suspending the effectiveness of the Registration Statement is in
effect on the Closing Date and no proceedings for the issuance of such
an order have been taken or to the knowledge of the Company are
contemplated by the Commission at or prior to the Closing Date, (vi)
there are no material
19
Underwriting Agreement
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.
(g) (i) The Company shall not have sustained since the date
of the latest audited financial statements included or incorporated by
reference in the Prospectus, exclusive of any amendment or supplement
thereto after the date hereof, 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.
(h) 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.
(i) On or after the date hereof, there shall not have
occurred any of the following: (i) a suspension
20
Underwriting Agreement
or material limitation in trading in securities generally on the New
York Stock Exchange or the Luxembourg 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 domestically or internationally (or the effect of
international conditions on the financial markets in the United States
or the effect of conditions in the United States on international
financial markets 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.
(j) On or prior to the Closing Date, the Company shall have
used its best efforts to obtain listing of the Bonds on the Luxembourg
Stock Exchange.
(k) 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.
(l) Other Documents. The Company shall have furnished to you
and to Cravath, Swaine & Xxxxx 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 13 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.
21
Underwriting Agreement
14. 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 $150,000,000, the
nondefaulting Underwriters 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 $150,000,000, 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 14, 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 14 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
15. Information Furnished by Underwriters. The Company
acknowledges that (i) the table of Underwriters and their respective
participation in the sale of the Bonds, (ii) the first paragraph under the table
of underwriters related to offering price, concessions and reallowances and
(iii) the second paragraph under the table of underwriters related to
stabilization, syndicate covering transactions and penalty bids under the
heading "Underwriting" in the prospectus supplement portion of the Prospectus,
and the last two paragraphs 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.
22
Underwriting Agreement
16. 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 13(g), 13(h) or 13(i) occurs.
17. 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, 0000 Xxxxxxxxxxx Xxx, Xxxxxxx,
Xxxxxxxx 00000, 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 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(b) The Company agrees to furnish to you and to Cravath,
Swaine & Xxxxx, 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 12 hereof, any controlling
person referred to in such Section 12 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 13 hereof
or because of any failure or refusal on the part of the Company to comply
23
Underwriting Agreement
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.
(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.
24
Underwriting 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/ Xxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
& Chief Financial
Officer
Acting on behalf of ourselves and the other several Underwriters named in
Schedule I attached hereto, we hereby confirm as of the date hereof that this
letter correctly sets forth the agreement between the Company and the several
Underwriters:
XXXXXX BROTHERS INC.
X.X. XXXXXX SECURITIES INC.
by XXXXXX BROTHERS INC.
by
/s/ Xxxxx X. Xxxxx
------------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
25
SCHEDULE I
Underwriting Agreement dated May 16, 2001
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
Principal Amount of 6.00% Collateral
Trust Bonds due 2006 To Be
Underwriter Purchased
----------- ---------
Xxxxxx Brothers Inc. ........................................................ $600,000,000
-----------
X.X. Xxxxxx Securities Inc................................................... 600,000,000
-----------
ABN AMRO Incorporated........................................................ 75,000,000
----------
Banc of America Securities LLC............................................... 45,000,000
----------
Barclays Capital Inc......................................................... 45,000,000
----------
BNP Paribas Securities Corp.................................................. 45,000,000
----------
Mizuho International plc..................................................... 45,000,000
----------
Tokyo-Mitsubishi International plc........................................... 45,000,000
----------
Total.................................................................. $1,500,000,000
=============
