EXHIBIT 4
CONFORMED COPY
CANADA MORTGAGE AND HOUSING CORPORATION
UNDERWRITING AGREEMENT
March 4, 2003
To the Representatives named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto
Dear Sirs:
Canada Mortgage and Housing Corporation ("CMHC") proposes to sell to the
underwriters named in Schedule II hereto (the "UNDERWRITERS"), for whom you are
acting as representatives (the "REPRESENTATIVES"), the principal amount of its
securities identified in Schedule I hereto (the "SECURITIES"), to be issued
pursuant to a Fiscal Agency Agreement (the "FISCAL AGENCY AGREEMENT") to be
dated as provided in Schedule I hereto between CMHC and the banking institution
named therein, as Fiscal Agent (the "FISCAL AGENT"). The Securities to be sold
in the United States, as certified by the Underwriters in a report relating to
distribution of primary allotment substantially in the form of Schedule III
hereto, are referred to herein as the "REGISTERED SECURITIES" and all other
Securities are referred to herein as the "OFFSHORE SECURITIES". The Securities
are direct unconditional obligations of CMHC and as such carry the full faith
and credit of Canada and constitute direct unconditional obligations of and by
Canada and the payment of the principal of and interest on the Securities is a
charge on and payable out of the Consolidated Revenue Fund of Canada. If the
firm or firms listed in Schedule II hereto include only the firm or firms listed
in Schedule I hereto, then the terms "UNDERWRITERS" and "REPRESENTATIVES", as
used herein shall each be deemed to refer to such firm or firms.
1. REPRESENTATIONS AND WARRANTIES. CMHC represents and warrants to, and
agrees with, each Underwriter that:
(a) CMHC has filed with the Securities and Exchange Commission (the
"COMMISSION") one or more registration statements, which have become
effective, for the registration of the Registered Securities under the
Securities Act of 1933, as amended (the "ACT"). Such registration
statements, as amended at the date of this Agreement, meet the requirements
set forth in Release No. 33-6424 under the Act and comply in all other
material respects with said Release. The form of prospectus included in
the registration statement indicated in Schedule I is the most recent form
of prospectus relating to the Securities and the plan of distribution
thereof filed by CMHC with the Commission. CMHC proposes to file with the
Commission pursuant to Rule 424(b) under the Act a supplement to such form
of prospectus and has previously advised you of all further information
(financial and other) with respect to CMHC and Canada to be set forth
therein. Such registration statements, including the exhibits thereto, as
amended at the date of this Agreement, hereinafter are called the
"REGISTRATION STATEMENT"; such prospectus is hereinafter called the "BASIC
PROSPECTUS"; and such supplemented form of prospectus, in the form in which
it shall be filed with the Commission pursuant to Rule 424(b) (including
the Basic Prospectus as so supplemented) is hereinafter called the "FINAL
PROSPECTUS". Any preliminary form of the Final Prospectus which has
heretofore been filed pursuant to Rule 424 is hereinafter called the
"PRELIMINARY FINAL PROSPECTUS". As used herein, the terms "REGISTRATION
STATEMENT", "BASIC PROSPECTUS", "FINAL PROSPECTUS" and "PRELIMINARY FINAL
PROSPECTUS" shall include in each case the documents, if any, incorporated
by reference therein. The terms "SUPPLEMENT" and "AMENDMENT" or "AMEND" as
used herein shall include all documents deemed to be incorporated by
reference in the Final Prospectus that are filed subsequent to the date of
the Basic Prospectus by CMHC with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT").
(b) As of the date hereof, when the Final Prospectus is first filed
pursuant to Rule 424(b) under the Act, when, prior to the Closing Date (as
hereinafter defined), any amendment to the Registration Statement becomes
effective, when any supplement to the Final Prospectus is filed with the
Commission and at the Closing Date (as hereinafter defined), (i) the
Registration Statement, as amended as of any such time, will fully comply
in all material respects with the provisions of the Act and the Rules under
the Act and will not contain any untrue statement of a material fact and
will not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and
(ii) the Final Prospectus, as amended or supplemented as
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of any such time, will fully comply with the provisions of the Act and the
Rules under the Act 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 in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that CMHC makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the
Final Prospectus or any amendment thereof or supplement thereto in reliance
upon and in conformity with information furnished in writing to CMHC by or
on behalf of any Underwriter through the Representatives specifically for
use in connection with the preparation thereof.
(c) No authorizations, approvals, waivers or consents of any agency or
official of Canada or the Province of Ontario thereof are required to
permit the execution and delivery of the Fiscal Agency Agreement and this
Agreement by CMHC, the issuance of the Securities and the performance by
CMHC of the respective obligations thereunder and hereunder, except for the
approval of the Minister of Finance as required by the Financial
Administration Act, which has been obtained.
(d) None of CMHC, its affiliates or any person acting on its or their
behalf has engaged in any directed selling efforts (as that term is defined
in Regulation S under the Act ("REGULATION S")) with respect to the
Offshore Securities.
2. PURCHASE AND SALE. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, CMHC agrees to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from CMHC, at the issue price set forth in Schedule I hereto the
principal amount of the Securities set forth opposite such Underwriter's name in
Schedule II hereto. CMHC agrees to pay to the Underwriters the amount set forth
in Schedule I hereto as selling, management and underwriting commissions, (the
"UNDERWRITING COMMISSIONS") and further agrees that the aggregate amount of the
Underwriting Commissions may be set-off against the aggregate issue price of the
Securities.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Securities shall
be made at the office, on the date and at the time specified in Schedule I
hereto, which date and time may be postponed by agreement between the
Representatives and CMHC or as provided in Section 10 hereof (such date and time
of delivery and payment for the Securities being herein called the "CLOSING
DATE"). The Securities will be issued in the form of a registered global
security (the "GLOBAL SECURITY"), which shall be registered in the name of Cede
& Co., as
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the nominee of The Depository Trust Company ("DTC"). Delivery of the Global
Security shall be made to the Representatives or to their order for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the issue price thereof to CMHC in
immediately available (same day) funds by transfer to a U.S. dollar account
specified by CMHC. The Underwriters through the Representatives shall be
entitled to set-off against the payment of the issue price the Underwriting
Commissions and reimbursement for expenses referred to in Section 5(g) hereof.
The Global Security shall be substantially in the forms annexed to the Fiscal
Agency Agreement.
The Global Security shall be made available for inspection and checking by
the Representatives in New York City not later than 3:00 P.M., local time, on
the business day prior to the Closing Date.
4. LISTING. CMHC agrees with the Underwriters to cooperate in the filing
of an application to list the Securities on the Luxembourg Stock Exchange (the
"STOCK EXCHANGE") prior to the Closing Date. CMHC further agrees to furnish to
the Stock Exchange all documents, instruments, information and undertakings and
to publish all advertisements or other material that may be necessary in order
to effect the listing of the Securities and to cause such listing to be
continued for so long as any of the Securities remain outstanding; provided,
however, that if in the opinion of CMHC, the continuation of such listing shall
become unduly onerous, then CMHC shall use its best efforts to obtain, as
promptly as possible, the listing of the Securities on some other securities
exchange reasonably acceptable to the Representatives.
5. AGREEMENTS. CMHC agrees with the several Underwriters, and the several
Underwriters agree with CMHC, as the case may be, that:
(a) Prior to the termination of the offering of the Securities, CMHC
will not file any amendment of the Registration Statement or supplement
(including the Final Prospectus) to the Basic Prospectus unless CMHC has
furnished you a copy for your review prior to filing and will not file any
such proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, CMHC will cause the Final Prospectus to
be delivered to the Commission for filing pursuant to Rule 424(b) via the
Commission's Electronic Data Gathering, Analysis, and Retrieval system
("XXXXX") and will cause the Final Prospectus to be filed with the
Commission pursuant to said Rule. CMHC will promptly advise the
Representatives (i) when the Final Prospectus shall have been delivered to
the Commission for filing pursuant to Rule 424(b), (ii) when any amendment
to the Registration Statement relating to the Securities shall have become
effective, (iii) of any request by the Commission for
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any amendment of the Registration Statement or amendment of or supplement
to the Final Prospectus or for any additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by CMHC of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. CMHC will use its best efforts to prevent
the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend or supplement the Final Prospectus to comply with the Act or the
rules thereunder, CMHC promptly will prepare and file with the Commission,
subject to the first sentence of paragraph (a) of this Section 5, an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance.
(c) CMHC will make generally available to the holders of the
Securities a statement of its income and retained earnings for its fiscal
year commencing after the date hereof as soon as practicable after the
close of such fiscal year and a statement of revenues and expenditures of
Canada for Canada's fiscal year commencing after the date hereof as soon as
practicable after the close of such fiscal year, which in each case shall
satisfy the provisions of Section 11 (a) of the Act.
(d) CMHC will furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and each amendment thereto which shall become
effective on or prior to the Closing Date and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so long
as delivery of a prospectus by an Underwriter or dealer may be required by
the Act, as many copies of any Preliminary Final Prospectus and the Final
Prospectus and any amendments thereof and supplements thereto as the
Representatives may reasonably request.
(e) CMHC will arrange for the qualification of the Securities for
offer and sale under the laws of such jurisdictions as the Representatives
may designate, will maintain such qualifications in effect so long as
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required for the distribution of the Securities; provided that CMHC shall
not be obligated to qualify as a foreign corporation in, or consent to
general service of process under the laws of, any state or to meet other
requirements deemed by it to be unduly burdensome.
(f) CMHC will pay (i) all expenses in connection with (a) the
preparation, issue, execution and delivery of the Securities (including the
fees of the Fiscal Agent), (b) the fee incurred in filing the Registration
Statement (including all amendments thereto) with the Commission, (c) all
costs, expenses, or commissions, payable on or in connection with the
granting of listing for the Securities on the Stock Exchange, (d) any fee
payable to rating services in connection with the rating of the Securities,
and (e) the costs and fees (including fees of counsel for the Underwriters
and their disbursements) incurred in connection with any registration or
qualification mentioned in paragraph (e) above not exceeding U.S. $5,000,
(ii) all costs incurred in connection with the printing of the Registration
Statement, the Basic Prospectus, the Final Prospectus and each preliminary
prospectus (including all amendments thereof or supplements thereto) and
the cost of delivering the same to locations designated by the Underwriters
and satisfactory to CMHC in its reasonable judgement, (iii) the cost of
copying the documents incorporated by reference in the Final Prospectus in
such quantities as the Underwriters may reasonably request and the cost of
delivering the same to locations designated by the Underwriters and
satisfactory to CMHC in its reasonable judgement, (iv) all stamp duties or
other like taxes and duties or value added taxes payable under the laws of
the United Kingdom upon and in connection with the execution, issue and
subscription of the Securities or the execution and delivery of this
Agreement and the Fiscal Agency Agreement. Except as provided in Section
5(g), 8 and 9 hereof, CMHC shall not be required to pay or bear any fees or
expenses of the Underwriters.
(g) If the sale of the Securities is consummated hereunder, CMHC
agrees to pay to the Representatives on behalf of the Underwriters on the
Closing Date an amount of up to U.S.$90,000 to be applied in reimbursement
of the reasonable out-of-pocket expenses and costs of the Underwriters
(including any value added or equivalent tax on such expenses and costs)
directly attributable to the offering and sale of the Securities, as
specified below. The Representatives may apply said amount for (i) the
reimbursement of fees and disbursements of their legal counsel and
syndication expenses attributable to the Securities and (ii) for costs and
expenses relating to the marketing of the Securities (in Canada and abroad)
including travel, document production and presentation costs. The
Representatives shall be entitled to set-off the said sum of U.S.$90,000
from the payment of the issue price as provided in Section 3
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hereof. The Representatives shall supply CMHC with itemized accounts,
together with supporting information in a form satisfactory to CMHC, for
such expenses and shall repay to CMHC, in Canadian dollars and within 90
days of the Closing Date, any shortfall between the expenses so itemized
and U.S.$90,000.
(h) Until the business day following the Closing Date, CMHC will not,
without the consent of the Representatives, offer or sell, or announce the
offering of, any U.S. dollar denominated debt securities with a maturity of
five years or greater, provided, however, that nothing in this paragraph
(h) shall be construed to prevent CMHC from guaranteeing payment in respect
of any securities issued on the basis of housing loans or mortgage-backed
securities or borrowing from the Government of Canada.
(i) Each of the Underwriters severally agrees with CMHC to deliver (i)
an initial allotment distribution report, (ii) secondary market activity
reports showing sales volumes by major market (Asia, Canada, Europe and the
United States) up to and including the Closing Date and (iii) secondary
market activity reports showing sales volumes by such major markets within
thirty days after the end of each calendar quarter for the first two years
after the date of this Agreement. The reports specified in (i) and (ii)
above will be due within one week of the Closing Date. The initial
allotment distribution report and the secondary market activity reports
will be in the forms set forth in Schedule III hereof.
(j) CMHC has not issued and will not issue, without prior consent of
the stabilizing agent in the United Kingdom, any press or other public
announcement referring to the proposed issue of Securities unless the
announcement adequately discloses that stabilizing action may take place in
relation to the Securities to be issued. CMHC confirms that it has been
informed of the existence of the informational guidance published by the
Financial Services Authority in relation to the stabilization.
6. SELLING RESTRICTIONS. Each Underwriter, on behalf of itself and each of
its affiliates that participates in the initial distribution of the Securities,
severally represents to and agrees with CMHC that:
(a) It and each such affiliate has complied and will comply with all
applicable provisions of the Financial Services and Xxxxxx Xxx 0000, as
amended (the "FSMA"), with respect to anything done by it or them in
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relation to the Securities in, from or otherwise involving the United
Kingdom.
(b) The Securities have not been, and will not be, registered under
the Securities and Exchange Law of Japan (the "SECURITIES AND EXCHANGE
LAW") and it and each such affiliate has not offered or sold, and will not
offer or sell, directly or indirectly, any of the Securities in Japan or
to, or for the benefit of, any person resident in Japan (which term as used
herein means any person resident in Japan, including any corporation or
other entity organized under the laws of Japan) or to others 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, and
otherwise in compliance with, the Securities and Exchange Law and in
compliance with any other applicable laws and regulations of Japan.
(c) (i) It and each such affiliate has not offered or sold and will
not offer or sell, directly or indirectly, in Hong Kong by means of any
document, any Securities other than to persons whose ordinary business it
is to buy or sell shares or debentures, whether as principal or agent, or
in circumstances which do not constitute an offer to the public within the
meaning of the Companies Ordinance (Chap. 32) of Hong Kong and (ii) it and
each such affiliate has not issued and will not issue, directly or
indirectly, any invitation or advertisement relating to the Securities in
Hong Kong (except if permitted to do so under the securities laws of Hong
Kong) other than with respect to Securities intended to be disposed of to
persons outside Hong Kong or to be disposed of in Hong Kong only to persons
whose business involves the acquisition, disposal or holding of securities,
whether as principal or as agent.
(d) The Offshore Securities have not been and will not be registered
under the Act and may not be offered or sold within the United States or
its possessions or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S or pursuant to an exemption from the
registration requirements of the Act. Accordingly, neither it, nor any of
its affiliates or any persons acting on its behalf have engaged or will
engage in any directed selling efforts with respect to the Offshore
Securities in violation of Regulation S, and all offers and sales of the
Offshore Securities by it, any of its affiliates or any persons acting on
its or their behalf have occurred or will occur in offshore transactions,
as such term is defined in Regulation S.
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(e) It and each such affiliate will not sell any Securities in the
United States or in circumstances where registration of the Securities is
required under the Act in excess of U.S. $409,991,920.
(f) In addition to the provisions of Sections 6(a) to (e) above, it
and each such affiliate has not offered, sold or delivered and it and they
will not offer, sell or deliver, directly or indirectly, any of the
Securities or distribute the Final Prospectus, the Preliminary Final
Prospectus, the Basic Prospectus or any other offering material relating to
the Securities, in or from any jurisdiction except under circumstances that
will, to the best of its or their knowledge and belief, result in
compliance with the applicable laws and regulations thereof and which will
not impose any obligations on CMHC except as contained in this Agreement.
In addition, the Representatives agree with CMHC to cause each selling
group member to agree to comply with the restrictions on offers and sales
of the Securities set forth in this Section 6.
(g) Without prejudice to the provisions of Sections 6(a) to (f) and
except for the qualification of the Securities for offer and sale and the
determination of their eligibility for investment under the applicable
securities laws of such jurisdictions as the Representatives may designate
pursuant to Section 5(e), CMHC shall not have any responsibility for, and
each Underwriter severally agrees with CMHC that each such Underwriter and
its respective affiliates will obtain, any consent, approval or
authorization required by them for the offer, sale or delivery by them of
any of the Securities under the laws and regulations in force in any
jurisdiction to which they are subject or in or from which they make such
offer, sale or delivery of any of the Securities.
7. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Securities shall be subject to the accuracy of
the representations and warranties on the part of CMHC contained herein as of
the date hereof, as of the date of the effectiveness of any amendment to the
Registration Statement filed prior to the Closing Date and as of the Closing
Date, to the accuracy of the statements of CMHC made in any certificates
pursuant to the provisions hereof, to the performance by CMHC of its obligations
hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or shall be pending, or, to the knowledge of CMHC,
shall be threatened by the Commission; and you shall have received a
certificate from an officer of CMHC to such effect;
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(b) You shall have received on the Closing Date a written opinion,
dated the Closing Date, of Xxxxxx Rosentzveig, Assistant General Counsel of
CMHC (based on the advice of Ontario counsel), addressed to the
Underwriters to the effect that insofar as the laws of the Province of
Ontario and the federal laws of Canada are concerned:
(i) CMHC exists as a corporation created by the Parliament of
Canada pursuant to the Canada Mortgage and Housing Corporation Act and
is for all relevant purposes an agent of Canada with power and
authority to create, issue and sell the Securities; pursuant to the
provisions of the Financial Administration Act CMHC is named as a
Crown corporation.
(ii) The creation, execution and sale of the Securities have been
duly authorized by all necessary corporate action of CMHC and the
Securities have been duly signed by the duly appointed officers of
CMHC, and upon being duly authenticated pursuant to the Fiscal Agency
Agreement and upon delivery thereof and payment therefor in accordance
with the provisions of this Agreement, the Securities will constitute
legal, valid and binding direct and unconditional general obligations
of CMHC and as such of Canada enforceable in accordance with their
terms.
(iii) The Securities have been duly executed by CMHC, and when
authenticated, delivered and paid for in accordance with the
provisions of this Agreement, will constitute securities issued on
behalf of Canada with the authority of Parliament and as such the
payment of the principal thereof and interest thereon will be a charge
on and will be payable out of the Consolidated Revenue Fund of Canada.
(iv) No authorizations, approvals, waivers or consents of any
agency or official of Canada or of the Province of Ontario thereof are
required to permit the execution and delivery of the Fiscal Agency
Agreement and this Agreement by CMHC, the issuance of the Securities
and the performance by CMHC of the respective obligations thereunder
and hereunder, except for the approval of the Minister of Finance as
required by the Financial Administration Act which has been obtained.
(v) The Fiscal Agency Agreement has been duly authorized,
executed and delivered by CMHC and is a legal, valid
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and binding agreement of CMHC, enforceable in accordance with its
terms.
(vi) This Agreement has been duly authorized, executed and
delivered by CMHC and is a legal, valid and binding agreement of CMHC,
except as rights to indemnity hereunder may be limited under
applicable law, and any amounts which may become due in accordance
with the terms hereof to any Underwriter or any person who controls
any Underwriter will constitute obligations of CMHC and of Canada.
(vii) Neither the execution and delivery of the Fiscal Agency
Agreement, the Securities or this Agreement, nor the consummation of
the transactions therein or herein contemplated nor compliance with
the terms and provisions thereof or hereof will violate, conflict with
or result in a breach of any indenture, agreement or other instrument
to which CMHC is a party or contravene any existing law, governmental
rule, regulation or order of Canada or of the Province of Ontario
binding on CMHC.
(viii) The statements in the Final Prospectus under the captions
"Description of Bonds", "Description of Debt Securities" and
"Underwriting", insofar as such statements constitute a summary of the
legal matters or documents referred to therein, fairly present the
information called for with respect to such legal matters or
documents.
(ix) The statements in the Final Prospectus under the heading
"Description of Debt Securities - Canadian Taxation" and "Tax Matters
- Canadian Taxation" are accurate in all material respects, subject to
the qualifications therein stated.
(x) Although such counsel is not, except as stated above, passing
upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
the Final Prospectus, as amended or supplemented, based upon
participation by such counsel or counsel reporting to her in
conferences at which the contents of the Registration Statement and
the Final Prospectus and related matters were discussed, no facts have
come to such counsel's attention which lead such counsel to believe
that the Registration Statement, or any amendment thereof, at the time
it became effective, contained any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
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therein not misleading, or the Final Prospectus, as amended or
supplemented, on its issue date or on the date hereof, contained or
contains any untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(c) You shall have received on the Closing Date a written opinion,
dated the Closing Date, of Milbank, Tweed, Xxxxxx & XxXxxx LLP, United
States counsel for CMHC, addressed to the Underwriters, to the effect,
insofar as the laws of the State of New York or the federal laws of the
United States of America are concerned, (A) set forth above in paragraphs
(b) (viii) and (x), (B) that the Registration Statement and the Final
Prospectus and each amendment thereof or supplement thereto as of their
respective effective or issue dates (except as to financial statements
included therein as to which such counsel need express no opinion) complied
as to form in all material respects with the Act and the Rules thereunder,
and (C) that the statements in the Final Prospectus under the heading
"Description of Debt Securities - United States Taxation" and "Tax Matters
- United States Taxation" are accurate in all respects, subject to the
qualifications therein. In addition, such counsel shall state that in its
opinion, assuming the accuracy of the representations and warranties and
satisfaction of the agreements contained herein, no registration of the
Offshore Securities under the Act is required for the offer, sale or
issuance of the Offshore Securities in the manner contemplated by the Final
Prospectus and this Agreement, except that such counsel need express no
opinion as to when and under what circumstances the Offshore Securities may
be reoffered or resold in the United States or to U.S. persons. In giving
their opinion Milbank, Tweed, Xxxxxx & XxXxxx LLP may rely on the opinion
of Xxxxxx Rosentzveig, Assistant General Counsel of CMHC, as to matters of
Canadian and Ontario law.
(d) The Representatives shall have received from Xxxxx Xxxx &
Xxxxxxxx, United States counsel for the Underwriters, and Stikeman Elliott
LLP, Canadian counsel for the Underwriters, favorable opinions dated the
Closing Date, as to the form and validity of the Securities and as to the
proceedings and other related matters incident to the issuance and sale of
the Securities, and the Representatives shall have received from Xxxxx Xxxx
& Xxxxxxxx a favorable opinion dated the Closing Date with respect to the
Registration Statement and the Final Prospectus. In giving their opinion,
Xxxxx Xxxx & Xxxxxxxx may rely upon the opinion of Stikeman Elliott LLP as
to matters of Canadian and Ontario law and Stikeman Elliott LLP may rely
upon the opinion of Xxxxxx Rosentzveig,
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Assistant General Counsel of CMHC, as to certain matters relating to the
due authorization of the Securities.
(e) The representations and warranties of CMHC herein shall be true
and correct on the date hereof and on the Closing Date; CMHC shall not have
failed, on or prior to the Closing Date, to have performed all agreements
and satisfied all conditions herein contained which should have been
performed or satisfied by it at or prior to such time; there shall be no
material adverse change in the condition (financial or otherwise) or
results of operations or business or prospects of CMHC from that set forth
in the Registration Statement and the Final Prospectus other than changes
arising in the ordinary course of business that in the reasonable judgment
of CMHC or the Representatives would prevent or materially impair the
marketing, or enforcement of contracts for sale, of the Securities; there
shall be no material adverse change in the financial, economic or political
condition of Canada from that set forth in the Registration Statement and
the Final Prospectus other than changes arising in the ordinary and normal
course that in the reasonable judgment of CMHC or the Representatives would
prevent or materially impair the marketing, or enforcement of contracts for
sale, of the Securities; and the Representatives shall have received, at
the time of closing, a certificate to the foregoing effect dated the
Closing Date and signed by an executive officer of CMHC.
(f) On or prior to the Closing Date, CMHC shall have furnished to the
Representatives such further certificates and documents as they or their
counsel shall reasonably request.
(g) On or prior to the Closing Date, the Securities shall have been
approved for listing on the Stock Exchange.
If any of the conditions specified in this Section 7 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and their counsel, this Agreement and all
obligations of the Underwriters hereunder may be cancelled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation
shall be given to CMHC in writing or by telephone or telegraph confirmed in
writing.
8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 7 hereof is not satisfied or because of
any refusal, inability or failure on the part of CMHC to perform any agreement
herein or comply with any provision hereof other than by reason of a
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default by any of the Underwriters, CMHC will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
9. INDEMNIFICATION AND CONTRIBUTION. (a) CMHC agrees to indemnify and hold
harmless each Underwriter and each person who controls any Underwriter within
the meaning of the 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 Act, the Securities Exchange Act of 1934 or other United States
Federal or state or foreign law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in the Basic Prospectus, any Preliminary Final Prospectus, the Final
Prospectus, any agreed upon marketing brochure or the invitation or allotment
telexes, or in any amendment thereof or supplement thereto, or arise out of or
are based upon 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, and agrees, subject to the provisions of paragraph (d) below, to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by them (as such expenses are incurred) in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) CMHC will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to CMHC by or on behalf of any Underwriter through the
Representatives specifically for use in connection with the preparation thereof,
and (ii) such indemnity with respect to the Basic Prospectus or any Preliminary
Final Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any such
loss, claim, damage or liability purchased the Securities which are the subject
thereof if such person did not receive a copy of the Final Prospectus (or the
Final Prospectus as amended or supplemented) at or prior to the confirmation of
the sale of such Securities to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in the Basic Prospectus or any Preliminary Final Prospectus was
corrected in the Final Prospectus (or the Final Prospectus as amended or
supplemented). This indemnity agreement will be in addition to any liability
which CMHC may otherwise have.
14
(b) Each Underwriter severally agrees to indemnify and hold harmless
CMHC, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls CMHC within the
meaning of the Act to the same extent as the foregoing indemnity from CMHC
to each Underwriter, but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information relating to such
Underwriter furnished to CMHC by or on behalf of such Underwriter through
the Representatives specifically for use in the preparation of the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may otherwise
have. CMHC acknowledges for the purposes of this Section 9(b) that the
statements set forth under the heading "Underwriting" (except for the
statements in the paragraphs relating to the securities laws of the United
Kingdom, Japan and Hong Kong, the sentence relating to stamp taxes and
other charges, the paragraph relating to certain expenses of CMHC and the
paragraph relating to indemnification of certain liabilities and
reimbursement of certain expenses by CMHC) in the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the Final Prospectus, and you, as the
Representatives, confirm that such statements are correct.
(c) Each of CMHC and the Underwriters agrees that each Underwriter
shall have and hold the covenants of CMHC contained in this Section 9 in
respect of such Underwriter's controlling persons (as defined above)
interest for the benefit of their controlling persons. Each Underwriter
agrees to accept the trusts in this paragraph (c) declared and provided for
and agrees to enforce those covenants on behalf of such persons.
(d) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 9. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
15
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert
such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel, approved by the
Representatives in the case of subparagraph (a), representing the
indemnified parties under subparagraph (a) who are parties to such action),
(ii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party, and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
it be a final judgment for the plaintiff the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or
(b) of this Section 9 is due in accordance with its terms but is for any
reason held by a court to be unavailable from CMHC or the Underwriters, as
the case may be, on grounds of policy or otherwise, CMHC and the
Underwriters shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) to which CMHC and one or
more of the Underwriters may be subject in such proportion so that the
Underwriters are responsible for that portion represented by the percentage
that the Underwriting Commissions bears to the issue price of the
Securities set forth on Schedule I hereto and CMHC is responsible for
16
the balance; provided, however, that (y) in no case shall any Underwriter
(except as may be provided in any agreement among underwriters) be
responsible for any amount in excess of the Underwriting Commissions
applicable to the Securities purchased by such Underwriter hereunder and
(z) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11 (f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 9, each person who controls an Underwriter within
the meaning of the Act shall have the same rights to contribution as such
Underwriter, and each person who controls CMHC within the meaning of the
Act, each officer of CMHC who shall have signed the Registration Statement
and each director of CMHC shall have the same rights to contribution as
CMHC, subject in each case to clause (y) of this paragraph (e). Any party
entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party
or parties under this paragraph (e), notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may
be sought from any other obligation it or they may have hereunder or
otherwise than under this paragraph (e).
10. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obliged severally to take up and
pay for (in the respective proportions which the amount of Securities set forth
opposite their names in Schedule II hereto bear to the aggregate amount of
Securities set opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule II hereto, and arrangements satisfactory to the remaining Underwriters
and CMHC for the purchase of such Securities are not made within 48 hours after
such default, this Agreement will terminate without liability to any
non-defaulting Underwriter or CMHC. In the event of a default by any
Underwriter as set forth in this Section 10, which shall not cause this
Agreement to be terminated, either CMHC or the Representatives shall have the
right to postpone the Closing Date for such period, not exceeding seven days, as
the Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this
17
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
CMHC and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
11. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of CMHC or the Representatives, by notice given to CMHC or
the Representatives, as the case may be, prior to delivery and payment for the
Securities, if prior to that time, there shall have occurred such a change in
national or international financial, political or economic conditions or
currency exchange rates or exchange controls which, in the reasonable judgment
of the Representatives or CMHC, as the case may be, is material and adverse and
such changes, singly or together with any other such change, makes it, in the
reasonable judgment of the Representatives or CMHC, as the case may be,
impracticable to market the Securities on the terms and in the manner
contemplated in the Final Prospectus. Notwithstanding any such termination, the
provisions of Sections 8, 9, 12 and 16 hereof shall remain in effect.
12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities and other statements of CMHC or its
officers and of the Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any Underwriter or CMHC or any of the officers, directors or
controlling persons referred to in Section 9 hereof, and will survive delivery
of and payment for the Securities.
13. STABILIZATION AND OVER-ALLOTMENT. Any over-allotment or stabilization
transaction by the Underwriters in connection with the distribution of the
Securities shall be effected by them on their own behalf and not as agents of
CMHC, and any gain or loss arising therefrom shall be for their own account. The
Underwriters acknowledge that CMHC has not been authorized to issue Securities
in excess of the principal amount set forth in Schedule I hereto. The
Underwriters also acknowledge that CMHC has not authorized the carrying out by
the Underwriters of stabilization transactions other than in conformity with
applicable rules, including those made pursuant to the FSMA and Regulation M
promulgated by the Commission (if applicable).
14. NOTICES. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives or the Underwriters, will
be mailed, delivered or telegraphed and confirmed to them, at the address
specified in Schedule I hereto; or, if sent to CMHC, will be mailed, delivered
or telegraphed and confirmed to it at 000 Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxx,
Xxxxxx, X0X 0X0 attention of the Treasurer.
18
15. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 9 hereof, and no other
person will have any right or obligation hereunder.
16. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
17. ADVERTISEMENTS. All advertisements of the Securities shall be
published in a form or forms and manner to which CMHC consents in writing prior
to the date of publication. CMHC may withhold its consent in its discretion
regarding the use of any symbol in any such advertisement and the publication in
which such advertisement is to appear.
18. TIME OF THE ESSENCE. Time shall be of the essence in this Agreement.
19. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the several Underwriters.
Very truly yours,
CANADA MORTGAGE AND HOUSING CORPORATION
By /s/ Xxxxxx Xxxxx
-------------------------------------------
Name: Xxxxxx Xxxxx
Title: Treasurer
By /s/ Xxxxx Xxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxx
Title: Manager, Funding
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
RBC DOMINION SECURITIES CORPORATION
By: XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By /s/ X.X. Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Signatory
Acting severally on behalf of
themselves and the other several
Underwriters named in Schedule II
to the foregoing Agreement.
20
SCHEDULE I
Representatives: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
and RBC Dominion Securities Corporation
Title, Issue Price and Description of Securities:
Title: 2.95% United States Dollar Bonds due June 2, 2008
Principal amount: U.S.$500,000,000
Issue price: 99.863% of the principal amount (plus accrued
interest, if any, from March 11, 2003)
Underwriting Commissions: 0.10% of the principal amount
Sinking fund provisions: N/A
Redemption provisions: None, unless certain events occur involving
Canadian taxation
Interest Payment Dates: June 2 and December 2 of each year, commencing
June 2, 2003 (May 16 and November 16 record dates)
Fiscal Agency Agreement: Fiscal Agency Agreement dated as of March 11, 2003
between CMHC and Royal Bank of Canada, London Branch
Closing Date, Time and Location: March 11, 2003 at 9 a.m., Ottawa time, at the
offices of CMHC, 000 Xxxxxxxx Xxxx,
Xxxxxx, Xxxxxxx, X0X 0X0.
Notices to Representatives or Underwriters:
c/o Merrill Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated
World Financial Center
Xxxxx Xxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Method of Payment:Immediately available U.S. dollar funds
Registration Statement containing most recent form of Prospectus:
Registration Statement No. 33-69124
21
SCHEDULE II
Principal Amount of
Underwriter Address Securities to be Purchased
Xxxxxxx Lynch, Pierce, Xxxxxx 4 World Financial Center
& Xxxxx Incorporated Xxx Xxxx, Xxx Xxxx 00000 $200,000,000
RBC Dominion Securities Corporation Xxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 200,000,000
CIBC World Markets plc Xxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxxxxx XX0 0XX
Xxxxxxx 20,000,000
Deutsche Bank Securities Inc. 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 20,000,000
TD Securities (USA) Inc. 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 20,000,000
BMO Xxxxxxx Xxxxx Corp. 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 10,000,000
National Bank Financial Inc. 0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx X0X000
Xxxxxx 10,000,000
Scotia Capital (USA) Inc. Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 10,000,000
Casgrain & Company (USA) Limited 000 Xxxx Xxxxxxxx Xxxx. Xxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx X0X0X0 5,000,000
X.X. Xxxxxx Securities Inc. 000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 5,000,000
Total............................ U.S.$500,000,000
SCHEDULE III
CANADA MORTGAGE AND HOUSING CORPORATION
U.S. $500,000,000 2.95% BONDS DUE JUNE 2, 2008
INITIAL ALLOTMENT DISTRIBUTION REPORT
NORTH AMERICA EUROPE, MIDDLE EAST
ASIA AND AUSTRALIA LATIN AMERICA AND AFRICA TOTAL SALES
(INCLUDES JAPAN DOMESTIC) (INCLUDES CANADA DOMESTIC)
------------------------------------------------------------------------------------------------------------------------------------
Order Order Order Order
No. of Size No. of Size No. of Size No. of Size
Type of Investor Sales $ Amount Range Sales $ Amount Range Sales $ Amount Range Sales $ Amount Range
------------------------------------------------------------------------------------------------------------------------------------
Bank Portfolios
------------------------------------------------------------------------------------------------------------------------------------
Central Banks
------------------------------------------------------------------------------------------------------------------------------------
Government Funds
- Central/State
- Local
------------------------------------------------------------------------------------------------------------------------------------
Individuals
------------------------------------------------------------------------------------------------------------------------------------
Insurance Companies
- Life
- Casualty
------------------------------------------------------------------------------------------------------------------------------------
Investment Managers
- Bank/Trust
- Others
------------------------------------------------------------------------------------------------------------------------------------
Pension Funds
- Government
- Corporate
------------------------------------------------------------------------------------------------------------------------------------
Broker/Dealers
------------------------------------------------------------------------------------------------------------------------------------
Corporate
------------------------------------------------------------------------------------------------------------------------------------
CANADA MORTGAGE AND HOUSING CORPORATION
U.S. $500,000,000 2.95% BONDS DUE JUNE 2, 2008
INITIAL ALLOTMENT DISTRIBUTION REPORT (CONTINUED)
CANADA DOMESTIC JAPAN DOMESTIC
--------------------------------------------------------- -----------------------------------------------------
No. of Order Size No. of Order Size
Type of Investor Sales $ Amount Range Type of Investor Sales $ Amount Range
--------------------------------------------------------- -----------------------------------------------------
Bank Portfolios Bank Portfolios
-----------------------------------------------------
Central Bank
--------------------------------------------------------- -----------------------------------------------------
Government Funds Government Funds
- Provincial - Central/Prefecture
- Local - Local
--------------------------------------------------------- -----------------------------------------------------
Individuals Individuals
--------------------------------------------------------- -----------------------------------------------------
Insurance Companies Insurance Companies
- Life - Life
- Casualty - Casualty
--------------------------------------------------------- -----------------------------------------------------
Investment Managers Investment Managers
- Bank/Trust - Bank/Trust
- Others - Others
--------------------------------------------------------- -----------------------------------------------------
Pension Funds Pension Funds
- Government - Government
- Corporate - Corporate
--------------------------------------------------------- -----------------------------------------------------
Broker/Dealers Broker/Dealers
--------------------------------------------------------- -----------------------------------------------------
Corporate Corporate
--------------------------------------------------------- -----------------------------------------------------
