Exhibit 4.1
UNDERWRITING AGREEMENT
DATED AS OF [ ]
BETWEEN
THE STATE OF ISRAEL
AND
DEVELOPMENT CORPORATION FOR ISRAEL
(UNDERWRITER)
[ BOND ISSUE ]
AGREEMENT made [ ] between the STATE OF ISRAEL (the "State") and
DEVELOPMENT CORPORATION FOR ISRAEL (the "Corporation").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the State has duly authorized the issue of its bonds in
one or more series known as its [NAME OF BONDS] in the aggregate principal
amount of [$ ] (the "Bonds") and has duly authorized the execution
and delivery of this Agreement; and
WHEREAS, the Corporation, duly organized and incorporated under the laws
of the State of New York, has agreed to undertake the sale of the Bonds in
accordance with the terms herein contained; and
WHEREAS, the State intends to enter into a Fiscal Agency Agreement (the
"Fiscal Agency Agreement") with [ ]. (the "Fiscal Agent"), substantially in
the form attached hereto as Schedule A; and
WHEREAS, the Bonds will be substantially in the form attached to said
Fiscal Agency Agreement as Exhibit A thereto;
NOW, THEREFORE, IT IS AGREED THAT:
1. The Corporation shall be the sole and exclusive underwriter and
broker for the State throughout the United States for the sale of the Bonds.
2. (a) The Corporation shall use its best efforts to sell the entire
authorized issue of the Bonds. The Corporation shall act as agent in the sale of
the Bonds and shall receive, with respect to all Bonds sold pursuant to this
Section 2(a), a commission at a rate to be determined from time to time by the
State and the Corporation, but not to exceed 6% of the Purchase Price (as
defined in the Fiscal Agency Agreement) of the Bonds sold for the account of the
State by the Corporation as agent. The Corporation may utilize the services of
any other person or persons as
broker, dealer or agent under any arrangements not inconsistent herewith that it
may deem appropriate.
(b) The Bonds shall be issuable only as provided for and
defined in the Fiscal Agency Agreement.
3. In effectuating the sale of the Bonds, (a) the Corporation shall be
entitled to utilize the services of the Fiscal Agent in accordance with the
terms and provisions of the Fiscal Agency Agreement; (b) the Corporation shall
keep accurate and complete records of the date of sale and the Purchase Price
(as defined in the Fiscal Agency Agreement) of each Bond and such other
applicable information as is required and generally expected of the Corporation;
(c) prior to effecting any sales of the Bonds, the Corporation will assure that
the purchaser thereof has properly completed all required subscription
documents; and (d) the Corporation shall deliver the subscription price and all
subscription documents to the Fiscal Agent within five (5) business days of
their completion by a purchaser of Bonds in form acceptable to the Corporation.
4. The State will provide every possible assistance to the Corporation
in its sales campaigns, including the use of its facilities and representatives
in Israel and elsewhere, at the request of the Corporation, to inform the public
of the economic development and security of the State; and otherwise to assist
in maintaining an atmosphere conducive to the sale of Bonds.
5. (a) With respect to the Bonds, the State shall file with the
Securities and Exchange Commission (the "SEC") a registration statement,
including a prospectus (such registration statement, prospectus and all
amendments and supplements thereto being herein referred to as the "Registration
Statement"), pursuant to and in conformity with the Securities Act of 1933, as
amended (the "Securities Act"). The State shall file such amended registration
statements and supplementary prospectuses and such other documents as may be
required to be
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filed with the SEC, in order to permit the continuous sale of the Bonds by the
Corporation from the effective date of the registration of the Bonds until sales
are completed.
(b) The State shall also file all statements, registrations or
other documents required to be filed by the State as the issuer of the Bonds in
order to permit the continuous sale of the Bonds by the Corporation in each
state of the United States from the effective date of the registration of the
Bonds through the third anniversary thereof. In the event that, under the laws
of any state, any such statement, registration or other document needs to be
filed by the Corporation on behalf of the State, then the Corporation may file
such document on behalf of the State.
6. The Corporation shall make a public offering of the Bonds within a
reasonable time after the effective date of the Registration Statement to be
filed with the SEC.
7. (a) The Bonds shall be offered for sale at prices equal to the
Purchase Price (as defined in the Fiscal Agency Agreement) as determined by the
State pursuant to the Fiscal Agency Agreement.
(b) The Corporation may allow reasonable concessions or commissions
to brokers and dealers who are regularly engaged in the securities business.
8. (a) In addition to the commissions provided for in Section 2 hereof,
the State shall pay and bear all charges, expenses and fees in connection with:
(i) The issuance of the Bonds, including, without
limitation, the preparation, printing and/or engraving, execution,
authentication and delivery thereof;
(ii) The preparation and filing of the Registration
Statement (and all amendments and supplements thereto) to be filed pursuant to
the Securities Act, and the registration of the Bonds thereunder;
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(iii) The preparation, printing, publication and
distribution of prospectuses, newspaper prospectuses, advertising, literature,
collection of subscriptions, public presentations, maintaining complete and
accurate records of all Bond transactions, and official visits of
representatives of the State;
(iv) The registration of the Bonds and of the State
pursuant to the statutes of the several states of the United States, including,
without limitation, all registration fees;
(v) All sums payable to the Fiscal Agent, pursuant to
the Fiscal Agency Agreement or Agreements made in conformity with its
provisions;
(vi) Any and all payments to be made to any
employees' pension fund of the Corporation; and
(vii) The Corporation, as paying agent of the State
and for the account thereof, may make any payments with respect to any of the
above items and the State agrees to make full reimbursement to the Corporation
with respect to such payments.
(b) The Corporation shall, at the end of each three-month
period, or at such similar intervals as may be requested by the State, render an
accounting to the State with respect to all proceeds of the sales of the Bonds,
and the expenses incurred on behalf of the State. The settlement of any amounts
which are shown by such accountings to be payable by either party to the other
shall be made promptly after such accountings.
9. The obligations of the Corporation hereunder are subject to the
following conditions:
(a) That the State shall furnish to the Corporation a written
opinion of the Legal Advisor to the Ministry of Finance of the State to the
effect that the Bonds have been duly
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authorized in accordance with the laws of the State, which opinion shall be
satisfactory to counsel for the Corporation; that upon the issuance and delivery
of the Bonds pursuant to the Fiscal Agency Agreement, they will constitute
valid, binding, absolute and unconditional obligations of the State for the
performance of which the full faith and credit of the State is obligated; and
that this Agreement has been duly authorized and executed in accordance with the
laws of the State applicable thereto and that all provisions hereof are valid
and binding upon the State.
(b) That the form and validity of the Bonds, the proceedings
and other related matters incident to the issuance and sale of the Bonds, the
form of the Registration Statement, and the form of the prospectus relating to
the Bonds shall be satisfactory to counsel for the Corporation.
10. The State warrants and represents to the Corporation that, when the
Registration Statement becomes effective, such Registration Statement will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, except that this representation and warranty does not apply to
statements or omissions in the Registration Statement based upon information
furnished to the State, in writing, by the Corporation, expressly for use
therein. The State agrees to indemnify and hold harmless the Corporation, its
officers and directors, the members of its Board of Governors, if any, and all
other persons whom the Corporation shall, in its discretion, determine to give a
like indemnity, against any and all losses, claims, damages and liabilities to
which they or any of them may become subject, and to reimburse each of them for
any legal or other expenses incurred by them in connection with defending any
actions, insofar as such losses, claims, damages, liabilities or actions, arise
out of or are based upon any such untrue
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statement of a material fact contained in the Registration Statement or arise
out of or are based upon the omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or actions arise out
of or are based upon any such untrue statement or omission which was made or
omitted in such Registration Statement in reliance upon information furnished,
in writing, to the State by the Corporation expressly for use therein. The
representations and warranties and the indemnity agreements herein contained
shall remain operative and in full force and effect regardless of any
termination of this Agreement, or any investigation made by or on behalf of the
Corporation or any other person. In the event that the Corporation shall make
any payment with respect to any loss, claim, damage or liability reasonably
determined by it to come within the scope of the indemnification agreement, the
State agrees to make full reimbursement to the Corporation with respect to such
payment.
11. The State will enter into a Fiscal Agency Agreement with the Fiscal
Agent in the form annexed hereto as Schedule A or as modified with the consent
of the Corporation. Said Fiscal Agency Agreement shall be deemed to be
incorporated herein and made a part of this Agreement. The Corporation agrees to
prescribe forms of subscription for the Bonds, determine the procedures for
effecting subscriptions and perform to the best of its ability all other
services to be performed by it pursuant to said Fiscal Agency Agreement, all in
accordance with such reasonable instructions as may be given to it from time to
time by the State; and agrees to perform its obligations hereunder in a manner
which shall be consistent with the terms and conditions of said Fiscal Agency
Agreement.
12. The Bonds shall be sold from the effective date of the registration
of the Bonds through the third anniversary thereof.
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(a) The terms of this Agreement shall be effective from the date
hereof until the third anniversary of the effective date of the registration of
the Bonds, inclusive, or until such earlier date as may be provided for in
accordance with subsection (b) of this section.
(b) On or after the first anniversary of the effective date of the
registration of the Bonds, either party to this Agreement may give notice, in
writing, to the other that this Agreement shall terminate on a date six (6)
months subsequent to the receipt of such notice.
(c) If this Agreement shall be continued by mutual consent after
the third anniversary of the effective date of the registration of the Bonds,
then it is agreed that from such date to termination of the Agreement, the
Corporation shall perform such services in connection with the Bonds as may be
agreed to between the State and the Corporation for which the Corporation shall
be paid reasonable compensation.
(d) Upon the cessation of the sale of securities of all issues
through the Corporation by the State, the State shall pay to the Corporation
such amount as shall be necessary to pay and discharge all out-of-pocket
expenses incurred in connection with the operations of the Corporation, whether
such expenses are then due or will thereafter become due, on a fully accountable
basis.
13. (a) Any notice, report, accounting or communication required to be
given to the State under this Agreement may be given by registered mail to the
Chief Fiscal Officer of the Ministry of Finance for the Western Hemisphere, or
to any other representative of the State duly authorized in writing to receive
such notice, report, accounting or communication.
(b) Any notice, report, account or communication required to be
given to the Corporation, may be given by registered mail to the President,
Executive Vice President, any other Vice President, Secretary or Treasurer of
the Corporation, such mail to be addressed to
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such persons at the principal office of the Corporation or to such other persons
or such other places as the Corporation may indicate by written notice to the
State.
14. With the written consent of the State, the Corporation may assign
this Agreement and all of its rights and duties hereunder to a successor which
shall assume the duties of the Corporation hereunder. Upon the making of such
assignment, the Corporation shall be thereby discharged of all liabilities and
obligations hereunder.
15. This Agreement is subject to amendment, from time to time, by
mutual consent of the State and the Corporation.
16. This Agreement has been executed and delivered in New York, New
York, and is made pursuant to, and shall in all respects be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of law.
17. This Agreement may be executed in several counterparts, each of
which so executed shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the State has caused this Agreement to be signed in
its behalf by the Chief Fiscal Officer and the Deputy Chief Fiscal Officer of
the Ministry of Finance for the Western Hemisphere, thereunto duly authorized,
and to be impressed with its seal, and Development Corporation for Israel has
caused this Agreement to be signed by its President or Vice President and to be
impressed with its corporate seal.
STATE OF ISRAEL
By:
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Chief Fiscal Officer of the
Ministry of Finance for the
Western Hemisphere
(Seal of the
State of Israel)
By:
--------------------------------------
Deputy Chief Fiscal Officer of the
Ministry of Finance for the
Western Hemisphere
DEVELOPMENT CORPORATION FOR
ISRAEL
(Seal of Development
Corporation for Israel) By:
--------------------------------------
Name:
Title:
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