Exhibit 1
CONFORMED COPY
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
$1,250,000,000 5.75% Notes, due 2009
Underwriting Agreement
August 23, 2002
Banc of America Securities LLC
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representatives of the several Underwriters
Ladies and Gentlemen:
National Rural Utilities Cooperative Finance Corporation, a
District of Columbia cooperative association (the "Company"), proposes to issue
$1,250,000,000 principal amount of its 5.75% Notes due 2009 (the "Notes"), to be
issued under an Indenture dated as of December 15, 1987, as supplemented by a
First Supplemental Indenture dated as of October 1, 1990, between the Company
and State Street Bank and Trust Company, as successor trustee (the "Trustee").
Such Indenture, as amended by any supplemental indenture, is hereinafter called
the "Indenture". The Notes are more fully described in the Registration
Statement and in the Prospectus hereinafter mentioned. The Notes 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
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respective principal amounts of the Notes specified in such Schedule I, and (ii)
that you are authorized, on behalf of yourselves and the other Underwriters, to
enter into this 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. 333-84192 and Amendment No. 1 thereto for the registration under
the Securities Act of 1933 (the "Securities Act") of the Notes (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 Notes, 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 statement 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 Notes referred to in Section 3 hereof (the
"Closing Date"), except with your approval. Such registration statement,
including financial statements and exhibits, at the time it became effective, is
hereinafter called the "Registration Statement". Any reference in this Agreement
to the Prospectus as amended or supplemented shall include, without limitation,
any prospectus filed with the Commission pursuant to Rule 424 of the Commission
under the Securities Act which amends or supplements the Prospectus. Any
reference herein to the Registration Statement or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Securities Exchange Act of
1934 (the "Exchange Act") on or before the effective date of the Registration
Statement or the date of such Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the effective date of
the Registration Statement, or the date of any Prospectus, as the case may be,
and deemed to be incorporated therein by reference.
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(b) Accuracy of Registration Statement. At all times subsequent
to the date of this Agreement up to and including the Closing Date, and when any
post-effective amendment thereof shall become effective, the Registration
Statement (and the Registration Statement as amended if any post-effective
amendment thereof shall have become effective) will comply in all material
respects with the provisions of the Securities Act and the Exchange Act and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact and will not omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and, at all times subsequent to the date of this Agreement up to and
including the Closing Date, the Prospectus (and the Prospectus as amended or
supplemented, if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) will fully comply with the provisions of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact and will not omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that none of the
representations and warranties in this paragraph (b) shall apply to (i) that
part of the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of 1939
(the "Trust Indenture Act") of the Trustee or (ii) statements in, or omissions
from, the Registration Statement or the Prospectus or any amendment thereof or
supplement thereto made in reliance upon and in conformity with information
furnished as herein stated or otherwise furnished in writing to the Company by
or on behalf of any Underwriter through you for use in connection with the
preparation of the Registration Statement or the Prospectus or any such
amendment or supplement.
(c) Accountants. The accountants who have certified or shall
certify the financial statements filed and to be filed with the Commission as
parts of the Registration Statement and the Prospectus are independent with
respect to the Company as required by the Securities Act and rules and
regulations of the Commission thereunder.
(d) Due Incorporation. The Company has been duly incorporated and
is now, and on the Closing Date will be, a validly existing cooperative
association in good standing under the laws of the District of Columbia, duly
qualified and in good standing in each jurisdiction in which the ownership or
leasing of properties or the conduct of its
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business requires it to be qualified (or the failure to be so qualified will not
have a material adverse effect upon the business or condition of the Company),
and the Company has the corporate power and holds all valid permits and other
required authorizations from governmental authorities necessary to carry on its
business as now conducted and as to be conducted on the Closing Date and as
contemplated by the Prospectus.
(e) Material Changes. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, and
except as set forth therein, there has not been any material adverse change in
the condition, financial or other, or the results of operations of the Company,
whether or not arising from transactions in the ordinary course of business.
(f) Litigation. On the date hereof, except as set forth in the
Prospectus, the Company does not have any litigation pending of a character
which in the opinion of counsel for the Company referred to in Section 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 Notes 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 Notes as contemplated herein; and neither such issuance or sale of the
Notes nor the consummation of any other of the transactions herein contemplated
will result in a breach by the Company of any terms of, or constitute a default
under, any other agreement or undertaking of the Company.
(h) No Stop Order. The Commission has not issued and, to the best
knowledge of the Company, is not threatening to issue any order preventing or
suspending the use of the Prospectus (as amended or supplemented, if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto).
(i) Regulation. The Company is not required to be registered as
an investment company under the Investment Company Act of 1940 and is not
subject to regulation under the Public Utility Holding Company Act of 1935.
2. Agreement to Purchase. Subject to the terms and conditions and
upon the representations and warranties
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herein set forth, the Company agrees to sell to you and any other Underwriters,
severally and not jointly, and you and such other Underwriters, severally and
not jointly, agree to purchase from the Company at a purchase price of 98.959%
of the principal amount, the principal amount of Notes set forth opposite the
names of the Underwriters in Schedule I hereto.
3. Closing. Delivery of and payment for the Notes shall be made
at the office of Milbank Tweed Hadley & XxXxxx LLP, 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000 at 9:30 a.m., New York City time, on August 29, 2002, or
such later date (not later than September 5, 2002) 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 Notes 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 Notes 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 Xxxxxxx, 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
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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 Notes to use the Prospectus, as from time to time
amended or supplemented, in connection with the sale of the Notes 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 Notes, 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. [Reserved.]
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9. Clearance and Settlement. The Company will cooperate with
the Underwriters to permit the Notes 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 Notes, (c) the rating of the Notes by rating agencies,
(d) the delivery of the Notes to you in New York City for the respective
accounts of the several Underwriters, (e) the qualifying of the Notes as
provided in Section 6 hereof and the determination of the eligibility of the
Notes 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) and (f) any fees of a book-entry
depositary, listing agent, paying agent or transfer agent.
11. Offering Restrictions. Each of the Underwriters agrees that
it will not offer, sell or deliver any of the Notes being underwritten or sold
by it, directly or indirectly, or distribute the Prospectus or any other
offering material relating to the Notes, in or from any jurisdiction except
under circumstances that will, to the best of such Underwriter's knowledge and
belief, result in compliance with the applicable laws and regulations and which
will not impose any obligations on the Company except as set forth herein, and
further represents and agrees as follows:
(a) United Kingdom. It:
(i) has not offered or sold and, prior to the expiry of a
period of six months from the issue date of the Notes, will not
offer or sell any Notes to persons 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 businesses or otherwise 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;
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(ii) has only communicated or caused to be communicated
and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within
the meaning of the Financial Services and Markets Act of 2000
("FSMA")) received by it in connection with the issue or sale of
any Notes in circumstances in which section 21(1) of the FSMA
does not apply to the issuer; and
(iii) has complied with and will comply with all
applicable provisions of the FSMA with respect to anything done
by it in relation to the Notes in, from or otherwise involving
the United Kingdom.
(b) The Netherlands. It and each of its affiliates has not
publicly promoted and will not publicly promote the offer or sale of the
Notes 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 Notes 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
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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 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 Notes 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 Notes 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).
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(b) By the Underwriters. Each Underwriter severally and not
jointly 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 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
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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 indemnified party. No indemnified party shall
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 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 Notes
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
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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
Notes (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters with respect
to such offering, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault of the Company on the one hand and the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 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 Notes 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
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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
Notes, 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.
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 Notes, the form of the Registration Statement and of the Prospectus
(other than the financial statements and other information of a
statistical, accounting or financial nature included therein) 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
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conduct its business as described in the Registration Statement;
(ii) the issuance and sale of the Notes by the Company
pursuant to this Agreement have been duly and validly authorized
by all necessary corporate action; and no authorization, consent,
order or approval of, or filing or registration with, or
exemption by, any government or public body or authority
(including, without limitation, the Rural Utilities Service) of
the United States, 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
Notes under the Securities Act and qualification of the Indenture
under the Trust Indenture Act, is required for the validity of
the Notes or for the issuance, sale and delivery of the Notes 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
and constitutes an instrument valid and binding on the Company
and enforceable in accordance with its terms;
(iv) the Notes are in the forms provided for in the
Indenture, and, assuming due execution of the Notes on behalf of
the Company and authentication thereof by the Trustee, the Notes
constitute valid and binding obligations of the Company
enforceable in accordance with their terms and are entitled to
the benefits of the Indenture;
(v) this Agreement has been duly authorized, executed and
delivered by the Company and the performance of this Agreement
and the consummation of the transactions herein contemplated will
not result in a breach of any terms or provisions of, or
constitute a default under, the Articles of Incorporation or
By-laws of the Company or any indenture, deed of trust, note,
note agreement or other agreement or instrument known to such
counsel, after due inquiry, to which the Company is a party or by
which the Company or any of its properties is bound or affected;
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(vi) the Notes 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 Notes 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
thereto (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
Commission complied as to form in all material respects with the
requirements of the Securities Act, the Exchange Act, the Trust
Indenture Act and the rules and regulations issued thereunder;
(viii) based upon such counsel's participation in the
preparation of the Registration Statement, the Prospectus and
documents incorporated by reference therein, such counsel's
discussions with certain officers and employees of the Company,
such counsel's conferences with representatives of the Company's
independent Certified Public Accountants and such counsel's
representation of the Company, and while such counsel does not
pass on or assume any responsibility for the accuracy,
completeness or fairness thereof, nothing has come to such
counsel's attention that causes it to believe that either the
Registration Statement (or any post-effective amendment thereof)
as of the date it became effective, or the Prospectus and each
supplement thereto as of the Closing Date (except in each case
for the financial or statistical data included therein, as to
which such counsel expresses no view) contains an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and such counsel does not know of any
litigation or any governmental proceeding instituted or
threatened against the Company required to be disclosed in the
Registration
16
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.
Insofar as the foregoing opinion relates to the enforceability of
the Notes 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 holders of the Notes 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 Notes and the Indenture).
In rendering the foregoing opinion, Milbank, Xxxxx, Xxxxxx &
XxXxxx LLP may rely as to matters of the law of the District of Columbia
upon the opinion of Xxxx Xxx Xxxx, 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 Xxxx,
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
17
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 "United States
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. Xxxxx & Young LLP shall have furnished
to you, as Representatives of the Underwriters, at or prior to the
Closing Date, a letter, addressed to the Underwriters and dated the
Closing Date, confirming that they are independent public accountants
with respect to the Company within the meaning of the Securities Act and
are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission; and stating, as of the date of such letter (or, with respect
to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Prospectus,
as of a date not more than five days prior to the date of such letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by its letter delivered to you, as
Representatives of the Underwriters, concurrently with the execution of
this Agreement and confirming in all material respects the conclusions
and findings set forth in such prior letter or, if no such letter shall
have been delivered to you, the conclusions and findings of such firm,
in form and substance satisfactory to you, as Representatives of the
Underwriters, with respect to such financial information and other
matters as you, as Representatives of the Underwriters, shall reasonably
request.
(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
18
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 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 and (viii) the
representations and warranties of the Company herein are true and
correct as of the Closing Date and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date.
(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
19
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 Notes 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 or material limitation in trading
in securities of the Company or 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) any outbreak of hostilities involving the United
States, any escalation of hostilities involving the United States, any
attack on the United States or any act of terrorism in which the United
States is involved, (iv) any major disruption in the settlement of
securities in the United States or any other relevant jurisdiction or a
declaration of a national emergency or war by the United States or (v)
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
20
be such) the effect of which, in any such case described in clause (iii)
or (iv), is, in your judgment, to make it impracticable or inadvisable
to proceed with the public offering or delivery of the Notes on the
terms and in the manner contemplated in the Prospectus.
(j) 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 Notes, 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.
(k) 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.
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 Notes which it or they have agreed to purchase hereunder, then (a) if the
aggregate principal amount of the Notes which the defaulting Underwriter or
Underwriters so agreed to purchase shall not exceed $125,000,000, the
nondefaulting Underwriters shall be obligated to purchase the Notes 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 Notes
which the defaulting Underwriter or Underwriters so agreed to purchase shall
exceed $125,000,000 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 Notes from the Company, in
such amounts as may be agreed upon and upon the terms herein set forth. If
within such
21
specified time neither you, as such Representatives, nor the Company shall have
procured such other Underwriters or any others to purchase the Notes 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 Representatives, 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 Notes, (ii) the first paragraph under the table
of underwriters related to offering price, concessions and reallowances and
(iii) the third 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.
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
Notes, 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 both the office of Banc of
America Securities LLC, Bank of America Corporate Center, 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxx,
22
North Carolina 28255, Attention of the Transaction Execution Group (fax:
(000)000-0000) and the office of Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention of the Fixed Income Syndicate (with a copy to
the General Counsel) (fax: (000)000-0000).
(b) The Company agrees to furnish to you and to Cravath, Xxxxxx &
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 Notes.
(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 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.
23
(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/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Sr. 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:
BANC OF AMERICA SECURITIES LLC,
by /s/ Xxxx Xxxxx
---------------------------
Name: Xxxx Xxxxx
Title: Principal
XXXXXX BROTHERS INC.,
by /s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
SCHEDULE I
Underwriting Agreement dated August 23, 2002
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
Principal Amount of 5.75%
Notes
due 2009
Underwriter To Be Purchased
----------- ---------------
Banc of America Securities
LLC............................................ $500,000,000
Xxxxxx Brothers Inc............................ 500,000,000
Banc One Capital Markets,
Inc............................................ 41,750,000
Credit Lyonnais Securities (USA) Inc........... 41,625,000
Scotia Capital (USA) Inc....................... 41,625,000
ABN AMRO Incorporated.......................... 12,500,000
BMO Xxxxxxx Xxxxx.............................. 12,500,000
Comerica Securities, Inc....................... 12,500,000
X.X. Xxxxxx Securities Inc..................... 12,500,000
Mizuho International plc....................... 12,500,000
NORDDEUTSCHE LANDESBANK GIROZENTRALE.......... 12,500,000
PNC Capital Markets, Inc....................... 12,500,000
Tokyo-Mitsubishi International plc............. 12,500,000
TD Securities (USA) Inc........................ 12,500,000
UBS Warburg LLC................................ 12,500,000
----------
Total..................................... $1,250,000,000
==============
