EXHIBIT 1.1
EXECUTION COPY
U.S. $500,000,000
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
CFC InterNotes(R)
AGENCY AGREEMENT
November 9, 0000
Xxxx xx Xxxxxxx Securities LLC
Incapital LLC
A.G. Xxxxxxx
Xxxxxxx Xxxxxx & Co., Inc.
Comerica Securities, Inc.
Xxxxxx X. Xxxxx & Co., L.P.
J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
UBS Financial Services Inc.
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
------------------------
InterNotes(R) is a registered trademark of Incapital Holdings LLC.
National Rural Utilities Cooperative Finance Corporation, a District
of Columbia cooperative association (the "Company"), confirms its agreement with
each of you (individually, an "Agent" and, collectively, the "Agents") with
respect to the issue and sale by the Company of up to U.S. $500,000,000
aggregate principal amount of its CFC InterNotes(R) (such CFC InterNotes(R),
together with such additional CFC InterNotes(R) of the Company as are added to
this Agreement pursuant to an Amendment, the "Securities"). The Securities are
to be issued from time to time pursuant to an Indenture, dated as of December
15, 1987 (as supplemented by a First Supplemental Indenture dated as of October
1, 1990, and as it may be supplemented or amended from time to time, the
"Indenture"), between the Company and U.S. Bank Trust National Association, as
successor trustee (the "Trustee").
Subject to the terms and conditions stated herein, the Company
hereby (1) appoints the Agents as the exclusive agents of the Company for the
purpose of soliciting offers to purchase Securities and each Agent hereby agrees
to use its reasonable best efforts to solicit offers to purchase Securities upon
terms acceptable to the Company at such times and in such amounts as the Company
shall from time to time specify and in accordance with the terms hereof, and
after consultation with Incapital LLC (the "Purchasing Agent") and (2) agrees
that whenever the Company determines to sell Securities pursuant to this
Agreement, such Securities shall be sold pursuant to a Terms Agreement (as
defined herein) relating to such sale in accordance with the provisions of
Section 2 hereof between the Company and the Purchasing Agent, with the
Purchasing Agent purchasing such Securities as principal for resale to other
Agents or dealers (the "Selected Dealers"), each of whom will purchase as
principal. This Agreement shall only apply to sales of the Securities on
original issuance and not to sales of any other securities or evidences of
indebtedness of the Company and only on the specific terms set forth herein.
SECTION 1. Representations and Warranties. The Company represents
and warrants to each Agent as of the date hereof, as of each Closing Date (as
defined in Section 2(g) hereof), as of each delivery date of Securities to the
Purchasing Agent (a "Settlement Date") in respect of any principal purchase by
it (whether pursuant to a Terms Agreement or otherwise) and as of the times
referred to in Sections 6(a) and 6(b) hereof (each Closing Date, each Settlement
Date and each such time referred to in Sections 6(a) and 6(b) being hereinafter
sometimes referred to as a "Representation Date"), as follows:
(a) Registration Statement and Prospectus. The Company has filed
with the Securities and Exchange Commission (the "Commission") a Registration
Statement on Form S-3 No. 333-109310 (and any registration statements referred
to in any Amendment (as defined in Section 10 hereof)) for the registration
under the Securities Act of 1933 (the "Act") of the Securities (including a
prospectus relating to the registration statements) and has filed and may file
one or more amendments thereto (including one or more amended or supplemental
prospectuses) and such registration statements and any such amendments have
become effective. Each such registration statement, including financial
statements and exhibits, at the time it became effective under the Act, as
amended and supplemented (including all documents incorporated therein by
reference), is hereinafter referred to as a "Registration Statement". A
prospectus supplement dated November 8, 2004, relating to the Securities and to
Registration Statement No. 333-109310, including a prospectus, has been
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prepared and will be filed pursuant to Rule 424 of the rules and regulations of
the Commission (the "Rules and Regulations") under the Act (such prospectus and
prospectus supplement (or, in the case of any Amendment, the prospectus and
prospectus supplement referred to therein) are herein referred to as the
"Prospectus"). 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 Rules and Regulations which amends or
supplements the Prospectus, including, as to any Security, any related Pricing
Supplement (as defined herein). Any reference herein to a 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 such Registration Statement or the date of the
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to a 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 such Registration Statement,
or the date of the Prospectus, as the case may be, and deemed to be incorporated
therein by reference.
(b) Accuracy of Registration Statements. Each Registration Statement
(and such Registration Statement as amended if any post-effective amendment
thereof shall have become effective) complies in all material respects with the
provisions of the Act and the Exchange Act and the Rules and Regulations and
does not contain an untrue statement of a material fact and does not omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus (and the Prospectus as
amended or supplemented, if the Company shall have filed with the Commission any
amendment thereof or supplement thereto) fully complies with the provisions of
the Act and the Exchange Act and the Rules and Regulations and does not contain
any untrue statement of a material fact or 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 any Registration Statement which
shall constitute the Statement of Eligibility (Form T-1) under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the Trustee or
(ii) statements in, or omissions from, any Registration Statement or the
Prospectus or any amendment thereof or supplement thereto made in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of an Agent for use in connection with the preparation of such
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
any Registration Statement and the Prospectus are independent with respect to
the Company as required by the Act and the Rules and Regulations.
(d) Due Incorporation. The Company has been duly incorporated and is
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
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leasing of properties or the conduct of its business requires it to be qualified
(or the failure to be so qualified will not have a material adverse effect upon
the business or condition of the Company), and the Company has the corporate
power and holds all valid permits and other required authorizations from
governmental authorities necessary to carry on its business as now conducted and
as to be conducted on the Closing Date and any Representation Date, and as
contemplated by the Prospectus.
(e) Material Changes. Since the respective dates as of which
information is given in each Registration Statement and the Prospectus, and
except as set forth in the Prospectus, 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. 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 5(f) 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. This Agreement, the Securities and the Indenture are
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 is required for the issuance
and sale of the Securities as contemplated herein and in the Indenture. The
Securities and the Indenture conform in all material respects to the
descriptions thereof contained in the Prospectus. The Indenture is a legal,
valid and binding agreement of the Company enforceable against the Company in
accordance with its terms and each Security delivered or sold hereunder will
constitute, as of such delivery or sale, the legal, valid and binding obligation
of the Company enforceable in accordance with its terms and will be entitled to
the benefits of the Indenture and the terms of such Security will have been
approved by the appropriate officers 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.
(j) No Conflicts. The execution and delivery of this Agreement, any
applicable Terms Agreement (as defined in Section 2), the Indenture and the
Securities, the consummation of the transactions contemplated herein and therein
and compliance by the Company with its obligations hereunder and thereunder, as
the case may be, will not (i) conflict with, or result in a breach or violation
of, any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound
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or to which any of the property or assets of the Company is subject, (ii) result
in any violation of the provisions of the Amended and Restated Certificate of
Incorporation or By-Laws of the Company or (iii) result in any violation of any
law, statute or any order, rule or regulation of any court or other governmental
agency or body having jurisdiction over the Company or any of its properties,
except, with respect to (i) and (iii) above, to the extent that such a conflict,
breach, default or violation would not have, individually or in the aggregate, a
material adverse effect on the condition, financial or other, or the results of
operations of the Company.
(k) No Defaults. The Company will not at any time of delivery of the
Securities be in violation of its Amended and Restated Certificate of
Incorporation or By-Laws or other organizational documents or instruments or in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound, which violation or default would
have, individually or in the aggregate, a material adverse effect on the
condition, financial or other or the results of operations of the Company.
(l) No Consents. No consent or action of, or filing or registration
with, any governmental or public regulatory body or authority, is required to be
obtained by the Company in connection with the execution, delivery or
performance by the Company of this Agreement, any applicable Terms Agreement,
the Indenture or the Securities, except such as have been obtained and made
under the Securities Act and the Trust Indenture Act and such as may be required
under the securities or Blue Sky laws of the various states in connection with
the offer and sale of the Securities.
SECTION 2. Solicitations as Agent; Purchases as Principal.
(a) Securities shall be purchased by each Agent from the Purchasing
Agent (or in the case of the Purchasing Agent, from the Company) as principal.
The Agents shall offer the Securities upon the terms and conditions set forth
herein and in the Prospectus and upon the terms communicated to the Agents from
time to time by the Company or the Purchasing Agent, as the case may be (which
terms, unless otherwise agreed, may be agreed upon orally, with written
confirmation prepared by such Agent or Agents and sent by telecopier to the
Company). For the purpose of such sales the Agents will use the Prospectus, as
then amended or supplemented, which has been most recently distributed to the
Agents by the Company, and the Agents will offer and sell the Securities only as
permitted or contemplated thereby and herein and will offer and sell the
Securities only as permitted by the Securities Act and the applicable securities
laws or regulations of any jurisdiction. An Agent's commitment to purchase
Securities as principal shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth.
(b) The Company agrees to sell the Securities to the Purchasing
Agent at a discount from the public offering price of each such Security
equivalent to the applicable commission set forth in Exhibit A hereto; provided,
however, that the Company and the Purchasing Agent may agree instead to a
discount greater than or less than the percentages
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set forth on Exhibit A hereto. The actual aggregate discount with respect to
each sale of Securities will be set forth in the related pricing supplement, in
substantially the form attached as Exhibit D, that sets forth the terms or a
description of particular Securities (the "Pricing Supplement"). The Purchasing
Agent and the other Agents or Selected Dealers will share the above-mentioned
discount in such proportions as they may agree.
(c) The Company reserves the right, in its sole discretion, to
suspend solicitation by the Agents in their capacities as Agents of offers to
purchase the Securities commencing at any time for any period of time or
permanently. Upon receipt of at least one business day's prior notice from the
Company, the Agents will forthwith suspend solicitation of offers to purchase
Securities until such time as the Company has advised the Agents that such
solicitation may be resumed.
(d) Each sale of Securities shall be made in accordance with the
terms of this Agreement, the Procedures (as defined below) and a separate
agreement in substantially the form attached as Exhibit C (a "Terms Agreement")
to be entered into which will provide for the sale of such Securities to, and
the purchase and reoffering thereof by, the Purchasing Agent as principal. A
Terms Agreement may also specify certain provisions relating to the reoffering
of such Securities by the Purchasing Agent. The offering of Securities by the
Company hereunder and the Purchasing Agent's agreement to purchase Securities
pursuant to any Terms Agreement shall be deemed to have been made on the basis
of the representations, warranties and agreements of the Company herein
contained and shall be subject to the terms and conditions herein set forth.
Each Terms Agreement shall describe the Securities to be purchased pursuant
thereto by the Purchasing Agent as principal, and may specify, among other
things, the principal amount of Securities to be purchased, the interest rate or
interest rate basis (and whether such interest rate shall be fixed or floating)
and maturity date or dates of such Securities, the interest payment dates, if
any, the net proceeds to the Company, the initial public offering price at which
the Securities are proposed to be reoffered, and the Settlement Date and place
of delivery of and payment for such Securities, whether the Securities provide
for a Survivor's Option (as such term is defined in the Prospectus), whether the
Securities are redeemable or repayable and on what terms and conditions, and any
other relevant terms. In connection with the resale of the Securities purchased,
without the consent of the Company and the Purchasing Agent, the Agents are not
authorized to appoint subagents or to engage the service of any other broker or
dealer, other than the Selected Dealers, nor may any Agent reallow any portion
of the discount paid to it.
(e) The Purchasing Agent may, and, upon the request of an Agent with
respect to any Securities being purchased by such Agent shall, terminate any
agreement hereunder by the Purchasing Agent to purchase such Securities,
immediately upon notice to the Company at any time at or prior to the Settlement
Date relating thereto, if there shall have come to the attention of the
Purchasing Agent or such Agent or Agents any facts that would cause them to
believe that the Prospectus, at the time it was required to be delivered to a
purchaser of Securities, included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at the time of such delivery,
not misleading.
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(f) Administrative procedures respecting the sale of Securities (the
"Procedures") shall be agreed upon from time to time by the appropriate
representatives of each Agent and the Company. The Procedures initially shall
include those procedures set forth in Exhibit B hereto. Each Agent and the
Company agree to perform the respective duties and obligations specifically
provided to be performed by each of them herein and in the Procedures. The
Procedures may be amended only by written agreement of the Company and the
Agents.
(g) The documents initially required to be delivered by Section 5
hereof and the documents required to be delivered by Section 5 hereof in
connection with each Amendment shall be delivered at the office of Milbank,
Tweed, Xxxxxx & XxXxxx LLP, Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
not later than 10:00 A.M., New York City time, on the date of this Agreement, or
such Amendment, or at such later time as may be mutually agreed upon by the
Company and the Agents (each a "Closing Date").
SECTION 3. Covenants of the Company. The Company covenants and
agrees:
(a) to furnish promptly to each Agent and to counsel for the Agents,
without charge, a signed copy of each Registration Statement as filed with the
Commission and each amendment or supplement thereto (other than pricing
supplements which need only be furnished to the Agents for the Securities
covered thereby), and a copy of each Prospectus thereafter filed with the
Commission, including all supplements thereto (other than pricing supplements)
and, upon request of such Agent, all documents incorporated therein by reference
and all consents and exhibits filed therewith;
(b) to deliver promptly to the Agents such number of the following
documents as they may request:
(i) conformed copies of each Registration Statement (excluding
exhibits other than the computation of the ratio of earnings to fixed
charges, the Indenture and this Agreement);
(ii) each Prospectus; and
(iii) any documents incorporated by reference in the Prospectus;
and the Company authorizes each Agent to use such documents during the period
referred to in (c) below (subject to the limitations set forth therein) in
connection with the sale of the Securities in accordance with the applicable
provisions of the Act and the Rules and Regulations;
(c) if, during any period in which, in the opinion of counsel for
the Agents (provided, if the Agents are no longer soliciting (or have been
instructed to stop soliciting) purchases of Securities, such opinion is known to
the Company), a prospectus relating to the Securities is required to be
delivered under the Act, any event known to the Company occurs as a result of
which the Prospectus would include an untrue statement of a material fact or
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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
is necessary at any time to amend the Prospectus to comply with the Act or the
Rules and Regulations, to notify the Agents promptly to suspend solicitation of
purchases of the Securities (and the Agents will do so); and, except as
otherwise provided in any relevant Terms Agreement, to promptly prepare and file
with the Commission an amendment or supplement, whether by filing such documents
pursuant to the Act or the Exchange Act, as may be necessary to correct such
untrue statement or omission or to make such Registration Statement or the
Prospectus comply with such requirements and to prepare and furnish to the
Agents at its own expense such amendment or supplement to such Registration
Statement or the Prospectus as will correct such Registration Statement or the
Prospectus; provided, however, that the Company shall in any event promptly
prepare, file and furnish an Agent with such an amendment or supplement if such
Agent shall then hold any Securities acquired from the Company as principal
(other than such Securities as such Agent shall have held for a period of six
months or more);
(d) to timely file with the Commission during the period referred to
in the proviso to (c) above and during any time the Agents are permitted to
solicit offers as Agents as provided hereunder (i) any amendment or supplement
to a Registration Statement or any Prospectus that may, in the judgment of the
Company, be required by the Act or requested by the Commission and (ii) all
documents (and any amendments to previously filed documents) required to be
filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act;
(e) prior to filing with the Commission, during the period referred
to in the proviso to (c) above and during any time the Agents are permitted to
solicit offers as Agents as provided hereunder, (i) any amendment or supplement
to a Registration Statement, (ii) any amendment or supplement to the Prospectus
or (iii) upon request of any Agent, any document incorporated by reference in
any Registration Statement or any amendment of or supplement to any such
incorporated document, to furnish a copy thereof to the Agents and counsel for
the Agents;
(f) to advise the Agents immediately (i) when any post-effective
amendment to any Registration Statement relating to or covering the Securities
becomes effective and when any further amendment of or supplement to the
Prospectus shall be filed with the Commission, (ii) of any request or proposed
request by the Commission for an amendment or supplement to any Registration
Statement, to the Prospectus, to any document incorporated by reference in any
of the foregoing or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of any Registration
Statement or any order directed to the Prospectus or any document incorporated
therein by reference or the initiation or threat of any stop order proceeding or
of any challenge to the accuracy or adequacy of any document incorporated by
reference in the Prospectus, (iv) of receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for sale
in any jurisdiction or the initiation or threat of any proceeding for that
purpose and (v) of the happening of any event which makes untrue any statement
of a material fact made in any Registration Statement or the Prospectus as
amended or supplemented or which requires the making of a change in any such
Registration Statement
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or the Prospectus as amended or supplemented in order to make any material
statement therein not misleading;
(g) if, during the period referred to in the proviso to (c) above
and during any time the Agents are permitted to solicit offers as Agents as
provided hereunder, the Commission shall issue a stop order suspending the
effectiveness of a Registration Statement, to make every reasonable effort to
obtain the lifting of that order at the earliest possible time;
(h) as soon as practicable, but not later than 18 months, after the
date of each acceptance by the Company of an offer to purchase Securities
hereunder, to make generally available to its securityholders an earnings
statement covering a period of at least 12 months beginning after the later of
(i) the effective date of the most recent Registration Statement, (ii) the
effective date of the most recent post-effective amendment to the most recent
Registration Statement to become effective prior to the date of such acceptance
and (iii) the date of the Company's most recent Annual Report on Form 10-K filed
with the Commission prior to the date of such acceptance which will satisfy the
provisions of Section 11(a) of the Act (including, at the option of the Company,
Rule 158 of the Rules and Regulations under the Act);
(i) so long as any of the Securities are outstanding, to make
available (including by way of posting on its website) to the Agents, not later
than the time the Company makes the same available to others, copies of all
public reports or releases and all reports and financial statements furnished by
the Company to any securities exchange on which the Securities are listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder;
(j) on or prior to the date on which the Company shall release to
the general public interim financial information, if any, with respect to each
of the first three quarters of any fiscal year, to make available such
information to each Agent and, except as otherwise provided in any relevant
Terms Agreement, to cause the Prospectus to be amended or supplemented to set
forth or incorporate by reference such information, as well as such other
information and explanations as shall be necessary for an understanding of such
amounts or as shall be required by the Act or the Rules and Regulations;
provided, however, that if on the date of such release the Agents shall not be
engaged or shall have been instructed not to engage in solicitation of purchases
of the Securities and shall not then hold any Securities acquired from the
Company as principal (other than such Securities as shall have been held for a
period of six months or more), the Company shall not be obligated to amend or
supplement the Prospectus until such time as solicitation of purchases of the
Securities shall with the Company's consent be resumed or the Company shall
subsequently enter into a new Terms Agreement with one of you;
(k) on or prior to the date on which the Company shall release to
the general public financial information included in or derived from the audited
financial statements of the Company for the preceding fiscal year, to make
available such information to each Agent and to cause each Registration
Statement and the Prospectus to be amended or supplemented, initially to set
forth capsule financial information with respect to the results of operations of
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the Company for such year and corresponding information for the prior year, as
well as such other information and explanations as shall be necessary for an
understanding of such amounts or as shall be required by the Act or the Rules
and Regulations, and, on or before the date that the Company's Annual Report on
Form 10-K is filed with the Commission, to cause each Registration Statement and
the Prospectus to be amended to set forth or incorporate such audited financial
statements and the report or reports of independent accountants with respect
thereto, as well as such other information and explanations as shall be
necessary for an understanding of such financial statements or as shall be
required by the Act or the Rules and Regulations; provided, however, that if on
the date of such release the Agents shall not be engaged or shall have been
instructed not to engage in solicitation of purchases of the Securities, and
shall not then hold any Securities acquired from the Company as principal (other
than such Securities as shall have been held for a period of six months or
more), the Company shall not be obligated so to amend or supplement the
Prospectus until such time as solicitation of purchases of the Securities shall
with the Company's consent be resumed or the Company shall subsequently enter
into a new Terms Agreement with one of you; and
(l) to endeavor, in cooperation with the Agents, to qualify the
Securities for offering and sale under the securities laws of such jurisdictions
as any Agent may designate, and to maintain such qualifications in effect for as
long as may be required for the distribution of the Securities; and to file such
statements and reports as may be required by the laws of each jurisdiction in
which the Securities have been qualified as above provided; provided that the
Company shall not be required to register or qualify as a foreign corporation
nor, except as to matters relating to the offer and sale of the Securities, take
any action which would subject it to service of process generally in any
jurisdiction.
SECTION 4. Payment of Expenses. The Company will pay (i) the costs
incident to the authorization, issuance and delivery of the Securities and any
taxes (other than transfer taxes) payable in that connection, (ii) the costs
incident to the preparation, printing and filing under the Act of each
Registration Statement and any amendments and exhibits thereto, (iii) the costs
incident to the preparation, printing and filing of any document and any
amendments and exhibits thereto required to be filed by the Company under the
Exchange Act, (iv) the costs of preparing, printing and mailing the Prospectus
and any amendment or supplement to the Prospectus, (v) the costs of distributing
each Registration Statement, as originally filed, and each amendment and
post-effective amendment thereof (including exhibits), the Prospectus, any
supplement or amendment to the Prospectus and any documents incorporated by
reference in any of the foregoing documents, (vi) the fees and disbursements of
the Trustee and its counsel, (vii) the costs and fees in connection with the
listing of the Securities on any securities exchange, (viii) the cost of any
filings with the National Association of Securities Dealers, Inc., (ix) the fees
and disbursements of counsel to the Company, (x) the fees paid to rating
agencies in connection with the rating of the Securities, (xi) the fees and
expenses of qualifying the Securities under the securities laws of the several
jurisdictions as provided in Section 3(l) hereof and of preparing and printing a
Blue Sky Memorandum and a memorandum concerning the legality of the Securities
as an investment (including fees and expenses of counsel for the Agents in
connection therewith), (xii) the cost of any advertising expenses agreed to by
the Company and the Agents in connection with the solicitation of offers to
purchase Securities, (xiii) the fees and disbursements of the Company's auditors
and (xiv) all other costs and expenses incident to
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the performance of the Company's obligations under this Agreement (including any
Terms Agreement). In addition, subject to the provisions of Section 7, the
Company agrees to reimburse the Agents for the fees and disbursements of their
legal counsel (except that the Company shall not be liable for the fees and
disbursements of more than one separate firm of attorneys).
Except as specifically provided in this Section and herein, the
Agents agree to pay all their costs and expenses.
SECTION 5. Conditions of Obligations. The obligation of the Agents,
as agents of the Company, under this Agreement to solicit offers to purchase the
Securities, as well as the obligation of each Agent to purchase Securities
pursuant to any Terms Agreement or otherwise, is subject to the accuracy, on
each Representation Date, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company's officers
made in any certificate furnished pursuant to the provisions hereof to the
extent then relevant, to the performance by the Company in all material respects
of its obligations hereunder and to each of the following additional terms and
conditions:
(a) No stop order suspending the effectiveness of any Registration
Statement, or any part thereof, nor any order directed to any document
incorporated by reference in the Prospectus shall have been issued and no stop
order proceeding shall have been initiated or threatened by the Commission and
no challenge by the Commission shall be pending to the accuracy or adequacy of
any document incorporated by reference in the Prospectus; any request of the
Commission for inclusion of additional information in any Registration Statement
or the Prospectus or otherwise shall have been withdrawn or complied with; and
after the date of any Terms Agreement (and prior to the Settlement Date for the
Securities referred to therein) the Company shall not have filed with the
Commission any amendment or supplement to any Registration Statement or the
Prospectus (or any document incorporated by reference therein) without the
consent of the Agent or Agents party thereto.
(b) No order suspending the sale of the Securities in any
jurisdiction designated by an Agent pursuant to Section 3(l) hereof shall have
been issued, and no proceeding for that purpose shall have been initiated or
threatened.
(c) The Agents shall not have discovered and disclosed to the
Company that any Registration Statement or the Prospectus, as amended or
supplemented, contains an untrue statement of a fact which, in the opinion of
counsel for the Agents, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(d) At each Closing Date, the Agents shall have received from
Cravath, Swaine & Xxxxx LLP, counsel for the Agents, such opinion and letter,
dated such Closing Date, with respect to the issuance and sale of the
Securities, the Indenture, each Registration Statement and the Prospectus, as
amended or supplemented, and other related matters as the Agents 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.
11
(e) At each Closing Date, the Agents shall have received the
opinion, addressed to the Agents and dated such Closing Date, of Xxxx Xxx List,
Esq., General Counsel of the Company, in form and scope satisfactory to the
Agents and their counsel, to the effect that:
(i) the Company has been duly incorporated and is validly existing
as a cooperative association under the laws of the District of Columbia
with corporate power to conduct its business as described in each
Registration Statement;
(ii) the issuance and sale of the Securities by the Company pursuant
to this Agreement (and, if the opinion is being given pursuant to Section
6(c) hereof on account of the Company having entered into a Terms
Agreement, the applicable Terms Agreement) have been duly and validly
authorized by all necessary corporate action (subject to the approval of
the terms of each Security by the Governor or the Chief Financial Officer
of the Company); and no authorization, consent, order or approval of, or
filing or registration with, or exemption by, any government or public
body or authority of the District of Columbia or any department or
subdivision thereof is required for the validity of the Securities or for
the issuance, sale and delivery of the Securities by the Company pursuant
to this Agreement and any Terms Agreement or for the execution and
delivery of this Agreement, any Terms Agreement and the Indenture by the
Company (except that such counsel need not express an opinion as to
whether offers or sales by Agents require qualification or registration
under the securities laws of the District of Columbia);
(iii) the Indenture has been duly authorized by the Company and
constitutes an instrument valid and binding on the Company and enforceable
in accordance with its terms;
(iv) the Securities, assuming they are in a form conforming to the
specimens thereof examined by such counsel, and assuming due execution of
the Securities on behalf of the Company and authentication thereof by the
Trustee and issuance thereof in accordance with the terms of the Indenture
and delivery thereof against payment therefor in accordance with the terms
of this Agreement (and any Terms Agreement) and subject to the approval of
the terms of each Security by the Governor or the Chief Financial Officer
of the Company, will constitute valid and binding obligations of the
Company enforceable in accordance with their terms and will be entitled to
the benefits of the Indenture;
(v) this Agreement (and, if the opinion is being given pursuant to
Section 6(c) hereof on account of the Company having entered into a Terms
Agreement, the applicable Terms Agreement) has been duly authorized,
executed, and delivered by the Company and the performance of this
Agreement (or applicable Terms Agreement) and the consummation of the
transactions herein (or therein) contemplated will not (i) result in a
breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, note, loan 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 is bound or to which
any
12
of the property or assets of the Company is subject, (ii) result in any
violation of the provisions of the Amended and Restated Certificate of
Incorporation or By-Laws of the Company or (iii) result in any violation
of any District of Columbia law or statute or any rule or regulation of
any District of Columbia governmental agency or body having jurisdiction
over the Company or any of its properties which, in the experience of
General Counsel of the Company, is of a type generally applicable to
transactions like the ones contemplated herein, except, with respect to
(i) and (iii) above, to the extent that such a breach, default or
violation would not have, individually or in the aggregate, a material
adverse effect on the condition, financial or other, or the results of
operation of the Company;
(vi) no consent, approval, authorization or order of any court or
governmental agency, authority or body of the District of Columbia is
required for the consummation of the transactions contemplated in this
Agreement (including any Terms Agreement) (except that such counsel need
not express an opinion as to whether offers or sales by Agents require
qualification or registration under the securities laws of the District of
Columbia); and
(vii) there is no tax of the District of Columbia or the
Commonwealth of Virginia applicable to the execution of the Indenture.
Such counsel shall state that nothing has come to the attention of
such counsel causing him to believe, based upon such counsel's participation in
the preparation of each Registration Statement or otherwise, that any
Registration Statement (or any post-effective amendment thereof), at the time
such Registration Statement became effective and at the effective time of any
such amendment or supplement, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make statements therein not misleading, or that the Prospectus (as amended or
supplemented, if amended or supplemented), as of the Closing Date, 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, in light of
the circumstances under which they were made, 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 any Registration
Statement or the Prospectus and which is not disclosed therein.
Insofar as such opinion relates to the enforceability of the
Securities and the Indenture, such counsel may state that the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of creditors generally
and may be limited by general principles 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, and by laws with respect to or affecting the remedies
provided for in the Securities and the Indenture (provided that such laws do
not, in the opinion of such counsel, make inadequate the remedies afforded
thereby for the realization of the benefits provided for in the Securities and
the Indenture).
13
(f) At each Closing Date, the Agents shall have received the
opinion, addressed to the Agents and dated such Closing Date, of Milbank, Tweed,
Xxxxxx & XxXxxx LLP, counsel to the Company, in form and scope satisfactory to
the Agents and their counsel, to the effect that:
(i) the Company has been duly incorporated and is validly existing
as a cooperative association in good standing under the laws of the
District of Columbia with corporate power to conduct its business as
described in the Prospectus;
(ii) the issuance and sale of the Securities by the Company pursuant
to this Agreement (and, if the opinion is being given pursuant to Section
6(d) hereof on account of the Company having entered into a Terms
Agreement, the applicable Terms Agreement) have been duly and validly
authorized by all necessary corporate action (subject to the approval of
the terms of each Security by the Governor or the Chief Financial Officer
of the Company); and no authorization, consent, order or approval of, or
filing or registration with, or exemption by, any governmental or public
body or authority (including, without limitation, the Rural Utilities
Service) of the United States or of the State of New York or any
department or subdivision thereof, or, to the best knowledge of such
counsel, any court, other than such as may be required under State
securities or blue sky laws and other than registration of the Securities
under the Act and qualification of the Indenture under the Trust Indenture
Act, is required for the validity of the Securities or for the issuance,
sale and delivery of the Securities by the Company pursuant to this
Agreement (including any Terms Agreement) or for the execution and
delivery of this Agreement (including any Terms Agreement) and the
Indenture 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 Securities, assuming they are in a form conforming to the
specimens thereof examined by such counsel, and assuming due execution of
the Securities on behalf of the Company and authentication thereof by the
Trustee and issuance thereof in accordance with the terms of the Indenture
and delivery thereof against payment therefor in accordance with the terms
of this Agreement (and any Terms Agreement) and subject to the approval of
the terms of each Security by the Governor or the Chief Financial Officer
of the Company, will constitute valid and binding obligations of the
Company enforceable in accordance with their terms and will be entitled to
the benefits of the Indenture;
(v) this Agreement (and, if the opinion is being given pursuant to
Section 6(d) hereof on account of the Company having entered into a Terms
Agreement, the applicable Terms Agreement) has been duly authorized,
executed, and delivered by the Company and the performance of this
Agreement (or applicable Terms Agreement) and the consummation of the
transactions herein (or therein) contemplated will not (i) result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust,
14
note, loan 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 is bound or to which any of the property or assets of the
Company is subject, (ii) result in any violation of the provisions of the
Amended and Restated Certificate of Incorporation or By-Laws of the
Company or (iii) result in any violation of any law or statute of the
United States or of the State of New York or any department or subdivision
thereof or any rule or regulation of a type which, in the experience of
counsel to the Company, is generally applicable to transactions like the
ones contemplated herein, except, with respect to (i) and (iii) above, to
the extent that such a breach, default or violation would not have,
individually or in the aggregate, a material adverse effect on the
condition, financial or other, or the results of operation of the Company;
(vi) the Securities and the Indenture conform in all material
respects to the descriptions thereof contained in each Registration
Statement; the statements made in the Prospectus under the caption
"Description of Debt Securities" and in the prospectus supplement dated
November 8, 2004, under the caption "Description of Notes" (and the
comparable provisions of any supplement to the Prospectus approved by the
Agents), insofar as they purport to summarize the provisions of documents
or agreements specifically referred to therein, fairly present the
information called for with respect thereto by Form S-3; and the legal
conclusions contained in the Prospectus under the captions "Certain U.S.
Federal Income Tax Considerations" and "Certain Employee Retirement Income
Security Act Matters" are correct in all material respects and the
discussion thereunder does not omit any material provision with respect to
the matters covered;
(vii) each Registration Statement (and any posteffective amendment
thereof) has become and is effective under the Act and the Securities have
become registered under the Act, and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated, and each Registration Statement
(and any post-effective amendment thereof) and 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 Securities and Exchange Commission complied as to form in all
material respects with the requirements of the Act, the Exchange Act, the
Trust Indenture Act and the rules and regulations issued thereunder;
(viii) each document incorporated by reference in the Prospectus
which was filed pursuant to the Exchange Act (except for the financial
statements and schedules and other financial and statistical material
included therein or omitted therefrom, as to which such counsel need not
express any opinion) complied when so filed as to form in all material
respects with the Exchange Act and the applicable rules and regulations of
the Commission thereunder.
(ix) the Company is not required to be registered as an investment
company under the Investment Company Act of 1940;
15
(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.
Such counsel shall state that based upon such counsel's
participation in the preparation of each 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, nothing has come to the attention
of such counsel causing it to believe that such Registration Statement (or any
post-effective amendment thereof), at the time such Registration Statement
became effective and at the effective time of any such amendment or supplement,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make statements therein not
misleading, or that the Prospectus (as amended or supplemented, if amended or
supplemented), as of the Closing Date, 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, in light of the circumstances under
which they were made, not misleading (it being understood that such counsel need
express no opinion concerning financial or statistical data included therein)
and such counsel does not know of any litigation or any governmental proceeding
instituted or threatened against the Company required to be disclosed in any
Registration Statement or the Prospectus and which is not disclosed therein.
Such counsel shall also state that to the best knowledge of such
counsel, no order directed to any document incorporated by reference in the
Prospectus has been issued and no challenge has been made by any regulatory
agency to the accuracy or adequacy of any such document.
Insofar as such opinion relates to the enforceability of the
Securities and the Indenture, such counsel may state that the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of creditors generally
and may be limited by general principles 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, and by laws with respect to or affecting the remedies
provided for in the Securities and the Indenture (provided that such laws do
not, in the opinion of such counsel, make inadequate the remedies afforded
thereby for the realization of the benefits provided for in the Securities and
the Indenture).
In rendering the foregoing opinion, Milbank, Tweed, Xxxxxx & XxXxxx
LLP may rely as to matters of the law of the District of Columbia upon the
opinion of Xxxx Xxx List, Esq., General Counsel of the Company, addressed to the
Agents and dated such Closing Date, satisfactory in form and scope to counsel
for the Agents. If Milbank, Tweed, Xxxxxx & XxXxxx LLP shall so rely upon the
opinion of Xxxx Xxx List, Esq., (i) copies of the opinion so relied upon (to the
extent such opinion is different than the opinion required by Section 5(e))
16
shall be delivered to you and to counsel for the Agents and (ii) the opinion
required by this Section 5(f) shall also state that Milbank, Tweed, Xxxxxx &
XxXxxx LLP has made an independent investigation of the matters in its opinion
covered by the opinion so relied upon and that the Agents are justified in
relying upon such opinion.
(g) The Company shall have furnished to the Agents on each Closing
Date a certificate, dated such Closing Date, of its President, Governor, Vice
President or Chief Financial Officer stating that: (i) the representations,
warranties and agreements of the Company in Section 1 hereof are true and
correct as of such Closing Date; the Company has complied in all material
respects with all its agreements contained herein; and the conditions set forth
in Sections 5(a) and 5(b) hereof have been fulfilled, (ii) in his opinion, as of
the effective date of each Registration Statement, such 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, as of such Closing Date, the Prospectus
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 in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (iii) since the effective date of the most recent
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, (iv) since the respective dates as of which information is given in the
most recent 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, (v) the Company has no material contingent obligations which are
required to be disclosed in any Registration Statement or the Prospectus and are
not disclosed therein, (vi) no stop order suspending the effectiveness of any
Registration Statement is in effect on such 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 on or prior to such Closing Date, (vii) 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 in any
Registration Statement or the Prospectus and are not disclosed therein and
(viii) there are no material contracts to which the Company is a party which are
required to be disclosed in the Registration Statement or the Prospectus and are
not disclosed therein.
(h) Ernst & Young LLP and Deloitte & Touche LLP (or successor
independent registered public accounting firm with respect to the Company within
the meaning of the Act and the Rules and Regulations) each shall have furnished
to the Agents, at or prior to each Closing Date, a letter, addressed to the
Agents and dated such Closing Date, confirming that they are an independent
registered public accounting firm with respect to the Company within the meaning
of the 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 three business 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 the Agents concurrently with the
execution of this Agreement and confirming in all material respects the
conclusions and
17
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 the Agents with respect to such financial information
and other matters as the Agents shall reasonably request.
(i) 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, (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 by 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 be such) the effect of which is, in any case described in clause (iv) or
(v), in the judgment of the Purchasing Agent, to make it impracticable or
inadvisable to proceed with the solicitation of offers to purchase or the
purchase or delivery of the Securities on the terms and in the manner
contemplated in the Prospectus; provided, however, that in the event that any
Agent agrees to purchase Securities as a principal (whether pursuant to a Terms
Agreement or otherwise) there shall not have occurred any of the foregoing
subsequent to the date of such agreement.
(j) Prior to each Closing Date, the Company shall have furnished to
the Agents and to Cravath, Swaine & Xxxxx LLP, counsel to the Agents, such
further certificates and documents as the Agents or counsel to the Agents may
have reasonably requested prior to such Closing Date.
(k) Subsequent to the execution of any Terms Agreement and prior to
the Settlement Date: (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 the 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.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement (or applicable Terms Agreement) and all obligations of any Agent
hereunder (or thereunder) may be canceled by such Agent on, or at any time prior
to, any Closing Date (or Settlement Date related to such Terms Agreement).
Notice of such cancellation shall be given to the Company in writing, or by
facsimile, telephone or telex confirmed in writing.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are on the date of delivery in the form and scope
satisfactory to counsel for the Agents.
18
SECTION 6. Additional Covenants of the Company. The Company
covenants and agrees that:
(a) Each acceptance by it of an offer for the purchase of Securities
shall be deemed to be an affirmation to the Agent which procured the offer that
the representations and warranties of the Company contained in this Agreement
and in any certificate theretofore given to the Agents pursuant hereto are true
and correct at the time of such acceptance, and an undertaking that such
representations and warranties will be true and correct at the time for delivery
to the Purchasing Agent of the Securities relating to such acceptance as though
made at and as of each such time (and it is understood that such representations
and warranties shall relate to each Registration Statement and the Prospectus as
amended or supplemented to each such time).
(b) Each time that (i) any Registration Statement or the Prospectus
shall be amended or supplemented (other than by a pricing supplement or an
amendment or supplement providing solely for a change in the interest rates or
maturities of the Securities (or other securities programs covered by any
Registration Statement) or a change in the principal amount of Securities (or
other securities covered by any Registration Statement) remaining to be sold, a
change in payment dates or similar changes), (ii) the Company files with the
Commission its Annual Report on Form 10-K or its Quarterly Report on Form 10-Q
pursuant to the Exchange Act, (iii) the Company files with the Commission a
Current Report on Form 8-K (except in all cases by filing a report on Form 8-K,
pursuant to the Exchange Act, solely to add exhibits to documents previously
filed) or (iv) the Company accepts a Terms Agreement requiring such delivery
(and, in the case of (iv), upon request by any Agent prior to the offering of
the Securities covered by such Terms Agreement), the Company shall, within
fifteen days of such amendment, supplement or filing (or such other time as
specified in the applicable Terms Agreement), furnish the Agents with a
certificate of the President, Governor or Chief Financial Officer of the Company
dated as of the date of delivery of such certificate and in form satisfactory to
the Agents to the effect that the statements contained in the certificate
referred to in Section 5(g) hereof which was last furnished to the Agents are
true and correct at the time of such amendment, supplement or filing, as the
case may be, as though made at and as of such time (except that such statements
shall be deemed to relate to such Registration Statement and the Prospectus as
amended and supplemented to such time) or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in said Section
5(g) modified as necessary to relate to such Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such
certificate; provided, however, that the Agents shall have no obligation to
solicit offers to purchase the Securities until such certificate has been
furnished to the Agents; and provided, further, that, except if the Agents shall
then hold any Securities acquired from the Company or from the Purchasing Agent
as principal (other than such Securities as shall have been held for a period of
six months or more), no certificate need be given during any period in which the
Agents have been instructed to or have suspended the solicitation and receipt of
offers to purchase Securities but shall be required to be given before the
Agents shall again be obligated to solicit offers to purchase the Securities.
(c) Each time that (i) any Registration Statement or the Prospectus
shall be amended or supplemented (other than by a pricing supplement or an
amendment or
19
supplement providing solely for a change in the interest rates or maturities of
the Securities (or other securities programs covered by any Registration
Statement) or a change in the principal amount of Securities (or other
securities programs covered by any Registration Statement) remaining to be sold,
a change in payment dates or similar changes), (ii) the Company files with the
Commission its Annual Report on Form 10-K or its Quarterly Report on Form 10-Q
pursuant to the Exchange Act, (iii) the Company files with the Commission a
Current Report on Form 8-K (except in all cases by filing a report on Form 8-K,
pursuant to the Exchange Act, solely to add exhibits to documents previously
filed) or (iv) the Company accepts a Terms Agreement requiring such delivery
(and, in the case of (iv), upon request by any Agent prior to the offering of
the Securities covered by such Terms Agreement), the Company shall, within
fifteen days of such amendment, supplement or filing (or such other time as
specified in the applicable Terms Agreement), furnish the Agents and their
counsel with a written opinion of the General Counsel of the Company, addressed
to the Agents and dated the date of delivery of such opinion, in form
satisfactory to the Agents, of the same tenor as the opinion referred to in
Section 5(e) hereof, but modified, as necessary, to relate to such Registration
Statement and the Prospectus as amended or supplemented to the time of delivery
of such opinion; provided, however, that in lieu of such opinion, such counsel
may furnish the Agents with a letter to the effect that the Agents may rely on
such prior opinion to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in such prior opinion shall
be deemed to relate to such Registration Statement and the Prospectus as amended
or supplemented to the time of delivery of such letter authorizing reliance);
provided, further, that the Agents shall have no obligation to solicit offers to
purchase the Securities until such opinion letter, as applicable, has been
furnished to the Agents; and provided, further, that, except if the Agents shall
then hold any Securities acquired from the Company or from the Purchasing Agent
as principal (other than such Securities as each Agent shall have held for a
period of six months or more), no opinion or letter need be given during any
period in which the Agents have been instructed to or have suspended the
solicitation and receipt of offers to purchase Securities but shall be required
to be given before the Agents shall again be obligated to solicit offers to
purchase the Securities.
(d) Each time that (i) any Registration Statement or the Prospectus
shall be amended or supplemented (other than a pricing supplement or an
amendment or supplement providing solely for a change in the interest rates or
maturities of the Securities (or other securities programs covered by any
Registration Statement) or a change in the principal amount of Securities (or
other securities programs covered by any Registration Statement) remaining to be
sold, a change in payment dates or similar changes) and any Agent requests such
delivery, (ii) the Company files with the Commission its Annual Report on Form
10-K or its Quarterly Report on Form 10-Q pursuant to the Exchange Act, (iii)
the Company files with the Commission a Current Report on Form 8-K pursuant to
the Exchange Act (except in all cases by filing a report on Form 8-K, pursuant
to the Exchange Act, solely to add exhibits to documents previously filed) and
any Agent requests such delivery or (iv) the Company accepts a Terms Agreement
requiring such delivery and any Agent requests such delivery (which request, in
the case of (iv), has been made prior to the offering of the Securities covered
by such Terms Agreement), the Company shall cause Milbank, Tweed, Xxxxxx &
XxXxxx LLP, counsel to the Company, within fifteen days of such amendment,
supplement or filing (or such other time specified in the applicable Terms
Agreement), to furnish the Agents and their counsel with its written opinion
addressed to the Agents and dated the date
20
of delivery of such opinion, in form satisfactory to the Agents, of the same
tenor as the opinion referred to in Section 5(f) hereof, but modified, as
necessary, to relate to such Registration Statement or Prospectus as amended or
supplemented to the time of delivery of such opinion; provided, however, that in
lieu of such opinion, such counsel may furnish the Agents with a letter to the
effect that the Agents may rely on such prior opinion to the same extent as
though it was dated the date of such letter authorizing reliance (except that
the statements in such prior opinion shall be deemed to relate to such
Registration Statement or Prospectus as amended or supplemented to the time of
delivery of such letter reauthorizing reliance); provided, further, that the
Agents shall have no obligation to solicit offers to purchase the Securities
until such opinion letter, as applicable, has been furnished to the Agents; and
provided, further, that, except if the Agents shall then hold any Securities
acquired from the Company or from the Purchasing Agent as principal (other than
such Securities as shall have been held for a period of six months or more), no
opinion or letter need be given during any period in which the Agents have been
instructed to or have suspended the solicitation and receipt of offers to
purchase Securities but shall be required to be given before the Agents shall
again be obligated to solicit offers to purchase the Securities.
(e) Each time that (i) any Registration Statement or the Prospectus
shall be amended or supplemented (other than a pricing supplement or an
amendment or supplement providing solely for a change in the interest rates or
maturities of the Securities (or other securities programs covered by any
Registration Statement) or a change in the principal amount of Securities (or
other securities programs covered by any Registration Statement) remaining to be
sold, a change in payment dates or similar changes) and any Agent requests such
delivery, (ii) the Company files with the Commission its Annual Report on Form
10-K or its Quarterly Report on Form 10-Q pursuant to the Exchange Act, (iii)
the Company files with the Commission a Current Report on Form 8-K pursuant to
the Exchange Act (except in all cases by filing a report on Form 8-K, pursuant
to the Exchange Act, solely to add exhibits to documents previously filed) and
any Agent requests such delivery or (iv) the Company accepts a Terms Agreement
requiring such delivery and any Agent requests such delivery (which request, in
the case of (iv), has been made prior to the offering of the Securities covered
by such Terms Agreement), the Company shall cause Deloitte & Touche LLP (or
successor independent registered public accounting firm with respect to the
Company within the meaning of the Act and the Rules and Regulations), within
fifteen days of such amendment, supplement or filing (or such other time
specified in the applicable Terms Agreement), to furnish the Agents a letter,
addressed jointly to the Company and the Agents and dated the date of delivery
of such letter, in form and substance reasonably satisfactory to the Agents, of
the same tenor as the letter referred to in Section 5(h) hereof but modified to
relate to such Registration Statement or Prospectus, as amended or supplemented
to the date of such letter, with such changes as may be necessary to reflect
changes in the financial statements and other information derived from the
accounting records of the Company; provided, however, that the Agents shall have
no obligation to solicit offers to purchase the Securities until such letter has
been furnished to the Agents; and provided, further, that except if the Agents
shall then hold any Securities acquired from the Company or from the Purchasing
Agent as principal (other than such Securities as shall have been held for a
period of six months or more), no letter need be given during any period in
which the Agents have been instructed to or have suspended the solicitation and
receipt of offers to purchase Securities but shall be required to be given
before the Agents shall again be obligated to
21
solicit offers to purchase the Securities. If any Registration Statement or the
Prospectus is amended or supplemented solely to include financial information
with respect to the Company as of and for a fiscal quarter, Deloitte & Touche
LLP (or successor independent registered public accounting firm with respect to
the Company within the meaning of the Act and the Rules and Regulations) may
limit the scope of such letter to the unaudited financial statements included in
such amendment or supplement unless there is contained therein any other
accounting, financial or statistical information with respect to the Company
that, in the reasonable judgment of the Agents, should be covered by such
letter, in which event such letter shall also cover such other information.
(f) On request from time to time by any Agent, the Company will
advise the Agents of the amount of Securities sold and the amount remaining
registered under the Securities Act and authorized for issuance and sale
hereunder.
SECTION 7. Indemnification and Contribution. (a) The Company shall
indemnify and hold harmless the Agents (for purposes of this Section 7, the
"Agents" shall be deemed to include the Agents and all subsidiaries and
affiliates of the Agents to the extent such subsidiaries and affiliates are
agents of the Company in accordance with the provisions of Section 2(a)) and
each director or officer of an Agent and each person, if any, who controls an
Agent within the meaning of the Act from and against any loss, claim, damage or
liability, joint or several, to which such Agent or controlling person may
become subject, under the Act, the Exchange Act or other federal or state
statutory law or regulation or common law, and to reimburse the Agents and such
directors, officers and controlling persons for any legal or other expenses
incurred by them in connection with investigating any claims and defending any
actions, insofar as such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or any post-effective amendment
thereof or 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 Agent claiming indemnification is authorized
to use the Prospectus as provided hereunder, or arises out of, or is based upon,
the omission or alleged omission to state therein (if so used, in the case of
such Prospectus) a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement or any post-effective amendment thereof or the
Prospectus (as amended and supplemented) in reliance upon and in conformity with
written information furnished through the Purchasing Agent as herein stated in
Section 7(e) to the Company by the Agent claiming indemnification specifically
for inclusion therein or contained in that part of such Registration Statement
constituting the Statement of Eligibility (Form T-1) under the Trust Indenture
Act of the Trustee; and provided, further, that as to any Prospectus (as amended
or supplemented) this indemnity agreement shall not inure to the benefit of an
Agent or any of its directors or officers or any person controlling such Agent
on account of any loss, claim, damage, liability or action arising from the sale
of Securities to any person by such Agent if such Agent failed to send or give,
if legally required to be sent or given, a copy of the Prospectus (as amended or
supplemented) (if such amended or supplemented Prospectus was furnished to such
Agent
22
prior to the time of the below-written confirmation) to that person at or prior
to the time written confirmation of the sale of such Securities was sent to such
person, and the untrue statement or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact in such Prospectus was
corrected in such amendment or supplement, unless such failure resulted from
non-compliance by the Company with Section 3(b) hereof. For purposes of the
second proviso to the immediately preceding sentence, the term "Prospectus (as
amended or supplemented)" shall not be deemed to include the documents
incorporated therein by reference and under no circumstances shall any Agent be
obligated to send or give any document incorporated by reference or any
supplement or amendment to any document incorporated by reference in the
Prospectus to any person. The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to an Agent or any director,
officer or any controlling person.
(b) Each Agent, severally and not jointly, shall indemnify and hold
harmless the Company, each of its directors, each of its officers who signed any
Registration Statement and any person who controls the Company within the
meaning of the Act from and against any loss, claim, damage or liability, joint
or several, and any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Act, the
Exchange Act or federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in such Registration Statement or any post-effective
amendment thereof or the Prospectus (or any amendment thereof or supplement
thereto), or arises out of, or is 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, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Agent specifically for inclusion therein, and
shall reimburse the Company or any such director, officer or controlling person
for any legal and other expenses reasonably incurred by such indemnified party
in investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action. The foregoing indemnity agreement is in
addition to any liability which an Agent may otherwise have to the Company or
any of its directors, officers or controlling persons.
(c) Each indemnified party will, promptly 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 7, 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 (to the extent not prejudiced by such
delay) which it may have to such indemnified party on account of the indemnity
agreement contained in this Section 7 or otherwise; provided, however, that,
notwithstanding any prejudice caused by such delay, the indemnifying party's
liability with respect to contribution as set forth in Section 7(d) shall not be
relieved. 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
23
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 7 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. Such indemnified party
shall have the right to employ its own counsel in any such action, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of such counsel has been authorized in writing by the
indemnifying party in connection with the defense of such action, (ii) such
indemnified party shall have been advised by such counsel that there are
material legal defenses available to it which are different from or additional
to those available to the indemnifying party (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf of
such indemnified party) or (iii) the indemnifying party shall not have assumed
the defense of such action and employed counsel therefor satisfactory to such
indemnified party within a reasonable time after notice of commencement of such
action, in any of which events such fees and expenses shall be borne by the
indemnifying party, provided that (x) the indemnifying party shall not, in
connection with any one such action, or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses with respect
to any period during the pendency of such action or similar or related actions
of more than one separate firm of attorneys (except where local counsel is
necessary in connection with such action or similar or related actions) for all
indemnified parties so named, designated in writing by such Agent or the Agents
if the indemnifying party is the Company or by the Company if the indemnifying
party is an Agent or the Agents, and (y) the firm of attorneys so designated may
be changed from time to time with respect to different periods during the
pendency of such action or similar or related actions. The indemnifying party
shall not be liable for any settlement of any action or claim effected without
its consent, which consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 7 shall for
any reason be unavailable to, or insufficient to hold harmless, an indemnified
party under Section 7(a) or 7(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 indemnified or indemnifying
Agent or Agents on the other from the offering of the Securities 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 indemnified or indemnifying Agent or Agents on the other
with respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and an Agent 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
Securities (before deducting expenses) received by the Company bears to the
total commissions received by such Agent with respect to such offering. The
relative fault shall be
24
determined by reference to 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 such Agent, 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 Agents agree that it
would not be just and equitable if contributions pursuant to this Section 7(d)
were to be determined by pro rata allocation 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 7(d) shall be deemed to include, for purposes
of this Section 7(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 7(d), no Agent shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities sold through such Agent and distributed to the
public were offered to the public exceeds the amount of any damages which such
Agent 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. No person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such person's consent, which consent shall not be unreasonably
withheld.
(e) The Company acknowledges that (i) the first sentence of the
second paragraph of text under the caption "Plan of Distribution" and (ii) the
sixth paragraph of text under the caption "Plan of Distribution", constitute the
only information furnished in writing by you, as Agents, for inclusion therein,
and you, as Agents, confirm that such statements are correct.
SECTION 8. Representations and Warranties to Survive Delivery. All
representations and warranties of the Company contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of the
termination or cancellation of this Agreement or any investigation made by or on
behalf of an Agent or any person controlling such Agent or by or on behalf of
the Company, and shall survive each delivery of and payment for any of the
Securities.
SECTION 9. Termination. This Agreement and any Terms Agreement may
be terminated for any reason, at any time, by any party hereto upon the giving
of one day's written notice of such termination to the other parties hereto,
provided, however, if such terminating party is an Agent, such termination shall
be effective only with respect to such terminating party. The termination of any
Terms Agreement shall not require termination of this Agreement. The provisions
of Sections 3(c), 3(h), 4, 7, 8, 11, 12 and 14 hereof shall survive any
termination; provided, however, that if at the time of termination of this
Agreement an offer to purchase Securities has been accepted by the Company but
the time of delivery to the Purchasing Agent of such Securities has not
occurred, the provisions of all of Section 1, Section 2, Section 3 and Section 5
shall also survive until the applicable Settlement Date. In the event a proposed
offering is not completed according to the terms of
25
any Terms Agreement, an Agent will be reimbursed by the Company only for
reasonable out-of-pocket accountable expenses actually incurred.
SECTION 10. Amendments to Add Securities. From time to time, the
Company and the Agents may enter into amendments to this Agreement (any such
amendment shall be herein referred to as an "Amendment") for the purpose of
increasing the aggregate principal amount of Securities to which this Agreement
shall relate.
SECTION 11. Notices. Except as otherwise specifically provided
herein, all statements, requests, notices and advices hereunder shall be in
writing, or by telephone and promptly confirmed in writing, and if to an Agent
shall be sufficient in all respects if delivered in person or sent by telex,
facsimile, e-mail transmission (confirmed in writing), or registered mail to
such Agent at its address, telex or facsimile number set forth on Annex A hereto
and if to the Company shall be sufficient in all respects if delivered or sent
by telex, facsimile, e-mail transmission (confirmed in writing) or registered
mail to the Company at the address specified below. All such notices shall be
effective on receipt.
Notices to the Company shall be directed to it as follows:
National Rural Utilities Cooperative
Finance Corporation
Woodland Park
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
SECTION 12. Binding Effect; Benefits. This Agreement shall be
binding upon each Agent, the Company and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (a) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also be deemed to be
for the benefit of any entity or entities deemed to be an "Agent" for the
purposes of Section 7 and each director and officer of an Agent and each person,
if any, who control an Agent within the meaning of Section 15 of the Act, and
(b) the indemnity agreements of the Agents contained in Section 7 hereof shall
be deemed to be for the benefit of directors of the Company, officers of the
Company who have signed a Registration Statement and any persons controlling the
Company. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein. No purchaser of Securities shall be deemed to be a
successor by reason merely of such purchase.
26
SECTION 13. Miscellaneous. (a) The term "business day" as used in
this Agreement shall mean any day which is not a Saturday or Sunday, which in
New York City is not a day on which banking institutions are generally
authorized or obligated by law to close and on which the New York Stock
Exchange, Inc. is open for trading.
(a) 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.
SECTION 14. Governing Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of New York. This
Agreement may be executed in counterparts and the executed counterparts shall
together constitute a single instrument.
27
If the foregoing correctly sets forth our agreement, please indicate
your acceptance hereof in the space provided for that purpose below.
Very truly yours,
NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION,
By /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
and Chief Financial
Officer; Assistant
Secretary-Treasurer
CONFIRMED AND ACCEPTED as of the date
first above written:
BANC OF AMERICA SECURITIES LLC,
by /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
INCAPITAL LLC,
by /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Treasurer and Chief Operating
Officer
X.X. XXXXXXX,
by /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
XXXXXXX XXXXXX & CO., INC.,
by /s/ Xxxxx X. X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. X. Xxxxxxxxx
Title: VP - Fixed Income
COMERICA SECURITIES, INC.,
by /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
XXXXXX X. XXXXX & CO., L.P.,
by /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: General Principal
J.J.B. XXXXXXXX, X.X. XXXXX, INC.,
by /s/ Xxxx Calebrezze
-------------------------------
Name: Xxxx Calebrezze
Title: VP Taxable Fixed Income
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED,
by /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Signatory
XXXXXX XXXXXXX & CO. INCORPORATED,
by /s/ Xxxxxx X. Xxxxxxxxxx III
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxx III
Title: Executive Director
UBS FINANCIAL SERVICES INC.,
by /s/ Xxxxx XxXxxxx
-------------------------------
Name: Xxxxx XxXxxxx
Title: Senior Vice President
by /s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
ANNEX A
AGENT CONTACT INFORMATION
Banc of America Securities LLC
00 Xxxx 00xx Xxxxxx
XX0-000-00-00
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Tel: (000) 000-0000
Incapital LLC
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
X.X. Xxxxxxx
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxxx
Tel: (000) 000-0000
Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
000-00-000 - 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Tel: (000) 000-0000
Comerica Securities, Inc.
000 Xxxx Xxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
A-1
Xxxxxx X. Xxxxx & Co., L.P.
00000 Xxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Eshing
Tel: (000) 000-0000
J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc.
000 Xxxxx 0xx Xxxxxx
0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxxxxxx
Tel: (000) 000-0000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
4 World Financial Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Tel: (000) 000-0000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Tel: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Financing Services Group
Tel: (000) 000-0000
UBS Financial Services Inc.
000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
A-2
EXHIBIT A
DEALER AGENT AGREEMENT
Except as otherwise agreed by the Company and the Purchasing Agent, the
following Discounts are payable as a percentage of the non-discounted Price to
Public of each Security sold through the Purchasing Agent.
9 months to less than 18 months..................... 0.200%
18 months to less than 23 months.................... 0.300%
23 months to less than 35 months.................... 0.400%
35 months to less than 47 months.................... 0.625%
47 months to less than 59 months.................... 0.750%
59 months to less than 71 months.................... 1.000%
71 months to less than 83 months.................... 1.100%
83 months to less than 95 months.................... 1.200%
95 months to less than 107 months................... 1.300%
107 months to less than 119 months.................. 1.400%
119 months to less than 131 months.................. 1.500%
131 months to less than 143 months.................. 1.600%
143 months to less than 179 months.................. 1.750%
179 months to less than 239 months.................. 2.000%
239 months to less than 359 months.................. 2.500%
359 months or greater............................... 3.150%
Exh-A-1
EXHIBIT B
National Rural Utilities
Cooperative Finance Corporation
$500,000,000
CFC INTERNOTES(R)
DUE MORE THAN NINE MONTHS FROM DATE OF ISSUE
ADMINISTRATIVE PROCEDURES
CFC InterNotes(R), due more than nine months from date of issue (the
"Securities") may be offered on a continuing basis by National Rural Utilities
Cooperative Finance Corporation (the "Company"). The Securities will be offered
by Incapital LLC (the "Purchasing Agent"), Banc of America Securities LLC, A.G.
Xxxxxxx, Xxxxxxx Xxxxxx & Co., Inc., Comerica Securities, Inc., Xxxxxx X. Xxxxx
& Co., L.P., J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, Xxxxxx Xxxxxxx & Co. Incorporated and UBS Financial Services
Inc. (collectively, the "Agents") pursuant to a Agency Agreement among the
Company and the Agents dated as of the date hereof (the "Agency Agreement") and
one or more terms agreements substantially in the form attached to the Agency
Agreement as Exhibit C (each a "Terms Agreement"). The Securities are being
resold by the Purchasing Agent (and by any Agent that purchases them from the
Purchasing Agent) (i) directly to customers of the Agents or (ii) to selected
broker-dealers (the "Selected Dealers") for distribution to their customers
pursuant to a Master Selected Dealer Agreement (a "Dealers Agreement") attached
to the Agency Agreement as Exhibit E. The Securities have been registered with
the Securities and Exchange Commission (the "Commission"). The Securities are to
be issued from time to time pursuant to an Indenture, dated as of December 15,
1987 (as supplemented by a First Supplemental Indenture dated as of October 1,
1990, and as it may be supplemented or amended from time to time, the
"Indenture"), between the Company and U.S. Bank Trust National Association, as
successor trustee (the "Trustee"). Pursuant to the terms of the Indenture, U.S.
Bank Trust National Association also will serve as authenticating agent, issuing
agent and paying agent.
Unless otherwise agreed by the Agents and the Company, Securities will be
purchased by the Purchasing Agent as principal as set forth herein. Such
purchases will be made in accordance with terms agreed upon by the Purchasing
Agent and the Company (which terms, unless otherwise agreed, shall be agreed
upon orally, with written confirmation prepared by the Agents and mailed, faxed
or e-mailed to the Company).
Each tranche of Securities will be issued in book-entry form only and
represented by one or more fully registered global securities without coupons
(each, a "Global Security") held by the Trustee, as agent for The Depository
Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC.
Each Global Security will have the annual interest rate, maturity and other
terms set forth in the relevant Pricing Supplement (as defined in the Agency
Agreement). Owners of beneficial interests in a Global Security will be entitled
to
Exh-B-1
physical delivery of Securities issued in certificated form equal in principal
amount to their respective beneficial interests only upon certain limited
circumstances described in the Indenture.
Administrative procedures and specific terms of the offering are explained
below. Administrative and record-keeping responsibilities will be handled for
the Company by its Treasury Department. The Company will advise the Agents and
the Trustee in writing of those persons handling administrative responsibilities
with whom the Agents and the Trustee are to communicate regarding offers to
purchase Securities and the details of their delivery.
Securities will be issued in accordance with the administrative procedures set
forth herein. To the extent the procedures set forth below conflict with or omit
certain of the provisions of the Securities, the Indenture, the Agency Agreement
or information set forth in the Prospectus (as defined in the Agency Agreement)
and the Pricing Supplement (together referred to herein as the "Prospectus"),
the relevant provisions of the Securities, the Indenture, the Agency Agreement
and the information set forth in Prospectus shall control. Capitalized terms
used herein that are not otherwise defined shall have the meanings ascribed
thereto in the Agency Agreement, the Prospectus in the form most recently filed
with the Commission pursuant to Rule 424 of the Securities Act of 1933, as
amended, (the "Securities Act"), or in the Indenture.
Administrative Procedures for Securities
In connection with the qualification of Securities for eligibility in the
book-entry system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with its obligations under a Letter of Representations from the Company and the
Trustee to DTC, dated November 8, 2004 and a Medium-Term Security Certificate
Agreement between the Trustee and DTC (the "Certificate Agreement") dated
November 6, 2003 and its obligations as a participant in DTC, including DTC's
Same-Day Funds Settlement System ("SDFS"). The procedures set forth below may be
modified in compliance with DTC's then-applicable procedures and upon agreement
by the Company, the Trustee and the Purchasing Agent. Securities for which
interest is calculated on the basis of a fixed interest rate, which may be zero,
are referred to herein as "Fixed Rate Securities." Securities for which interest
is calculated on the basis of a floating interest rate are referred to herein as
"Floating Rate Securities."
Maturities: Each Security will mature on a date (the "Maturity
Date") more than nine months after the date of delivery
by the Company of such Security. Securities will mature
on any date selected by the initial purchaser and agreed
to by the Company. "Maturity" when used with respect to
any Security means the date on which the outstanding
principal amount of such Security becomes due and
payable in full in accordance with its terms, whether at
its Maturity Date or by declaration of acceleration,
call for redemption, repayment or otherwise.
Issuance: All Securities having the same terms will be represented
initially by a single Global Security. Each Global
Security will
Exh-B-2
be dated and issued as of the date of its authentication
by the Trustee.
Each Global Security will bear an original issue date
(the "Original Issue Date"). The Original Issue Date
shall remain the same for all Securities subsequently
issued upon transfer, exchange or substitution of an
original Security regardless of their dates of
authentication.
Identification The Trustee, on behalf of the Company, has received from
Numbers: the CUSIP Service Bureau (the "CUSIP Service Bureau") of
Standard & Poor's Corporation ("Standard & Poor's") one
series of CUSIP numbers consisting of approximately 900
CUSIP numbers for future assignment to Global
Securities. The Trustee, on behalf of the Company, will
provide the Purchasing Agent and DTC with a list of such
CUSIP numbers. On behalf of the Company, the Purchasing
Agent will assign CUSIP numbers as described below under
Settlement Procedure "B". DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that
the Company has assigned to Global Securities. The
Trustee, on behalf of the Company, will reserve
additional CUSIP numbers when necessary for assignment
to Global Securities and will provide the Purchasing
Agent and DTC with the list of additional CUSIP numbers
so obtained.
Registration: Unless otherwise specified by DTC, Global Securities
will be issued only in fully registered form without
coupons. Each Global Security will be registered in the
name of Cede & Co., as nominee for DTC, on the Security
Register maintained under the Indenture by the Trustee.
The beneficial owner of a Security (or one or more
indirect participants in DTC designated by such owner)
will designate one or more participants in DTC (with
respect to such Security, the "Participants") to act as
agent or agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will record
in book-entry form, in accordance with instructions
provided by such Participants, a credit balance with
respect to such beneficial owner of such Security in the
account of such Participants. The ownership interest of
such beneficial owner in such Security will be recorded
through the records of such Participants or through the
separate records of such Participants and one or more
indirect participants in DTC.
Transfers: Transfers of interests in a Global Security will be
accomplished by book entries made by DTC and, in turn,
by Participants (and
Exh-B-3
in certain cases, one or more indirect participants in
DTC) acting on behalf of beneficial transferors and
transferees of such interests.
Exchanges: The Trustee, at the Company's request, may deliver to
DTC and the CUSIP Service Bureau at any time a written
notice of consolidation specifying (a) the CUSIP numbers
of two or more Global Securities outstanding on such
date that represent Securities having the same terms
(except that Issue Dates need not be the same) and for
which interest, if any, has been paid to the same date
and which otherwise constitute Securities of the same
series and tenor under the Indenture, (b) a date,
occurring at least 30 days after such written notice is
delivered and at least 30 days before the next Interest
Payment Date, if any, for the related Securities, on
which such Global Securities shall be exchanged for a
single replacement Global Security; and (c) a new CUSIP
number, obtained from the Company, to be assigned to
such replacement Global Security. Upon receipt of such a
notice, DTC will send to its participants (including the
Issuing Agent) and the Trustee a written reorganization
notice to the effect that such exchange will occur on
such date. Prior to the specified exchange date, the
Trustee will deliver to the CUSIP Service Bureau written
notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange date,
the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Global
Securities for a single Global Security bearing the new
CUSIP number and the CUSIP numbers of the exchanged
Global Securities will, in accordance with CUSIP Service
Bureau procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed $500,000,000 in
aggregate principal or face amount, one replacement
Global Security will be authenticated and issued to
represent each $500,000,000 of principal or face amount
of the exchanged Global Securities and an additional
Global Security will be authenticated and issued to
represent any remaining principal amount of such Global
Securities (See "Denominations" below).
Denominations: Unless otherwise agreed by the Company, Securities will
be issued in denominations of $1,000 or more (in
multiples of $1,000). Global Securities will be
denominated in principal or face amounts not in excess
of $500,000,000 or any other limit set by the DTC (the
"Permitted Amount"). If one or more Securities having an
aggregate principal or face amount in excess of the
Permitted Amount would, but for the preceding
Exh-B-4
sentence, be represented by a single Global Security,
then one Global Security will be issued to represent
each Permitted Amount principal or face amount of such
Security or Securities and an additional Global Security
will be Issued to represent any remaining principal
amount of such Security or Securities. In such case,
each of the Global Securities representing such Security
or Securities shall be assigned the same CUSIP number.
Issue Price: Unless otherwise specified in an applicable Pricing
Supplement, each Security will be issued at the
percentage of principal amount specified in the
Prospectus relating to such Security.
Interest: General. Each Security will bear interest at either a
fixed rate or a floating rate. Interest on each Security
will accrue from the Issue Date of such Security for the
first interest period and from the most recent Interest
Payment Date to which interest has been paid for all
subsequent interest periods. Except as set forth
hereafter, each payment of interest on a Security will
include interest accrued to, but excluding, as the case
may be, the Interest Payment Date (provided that, in the
case of Floating Rate Securities which reset daily or
weekly, interest payments will include accrued interest
to and including the Regular Record Date immediately
preceding the Interest Payment Date) or the date of
Maturity (other than a Maturity Date of a Fixed Rate
Security occurring on the 31st day of a month in which
case such payment of interest will include interest
accrued to but excluding the 30th day of such month) or
on the date of redemption or repayment if a Security is
repurchased by the Company prior to maturity pursuant to
mandatory or optional redemption or repayment provisions
or the Survivor's Option. Any payment of principal,
premium or interest required to be made on a day that is
not a Business Day (as defined below) may be made on the
next succeeding Business Day, except that in the case of
a Floating Rate Security for which the interest rate
basis is LIBOR, if such business day is in the next
succeeding calendar month, such Interest Payment Date
will be the immediately preceding business day, and no
interest shall accrue as a result of any such delayed
payment; provided however, that the full amount due on
such Interest Payment Date shall be paid on the
immediately preceding business day.
Each pending deposit message described under Settlement
Procedure "C" below will be routed to Standard & Poor's
Corporation, which will use the message to include
certain information regarding the related Securities in
the appropriate daily bond report published by Standard
& Poor's Corporation.
Exh-B-5
Each Security will bear interest from, and including,
its Issue Date at the rate, or in accordance with the
interest rate basis, set forth thereon and in the
applicable Pricing Supplement until the principal amount
thereof is paid[, or made available for payment,] in
full.
Unless otherwise specified in the applicable Pricing
Supplement, interest on each Security will be payable
either monthly, quarterly, semi-annually or annually on
each Interest Payment Date and at Maturity (or on the
date of redemption or repayment if a Security is
repurchased by the Company prior to maturity pursuant to
mandatory or optional redemption or repayment provisions
or the Survivor's Option). Interest will be payable to
the person in whose name a Security is registered at the
close of business on the Regular Record Date next
preceding each Interest Payment Date; provided, however,
interest payable at Maturity, on a date of redemption or
repayment or in connection with the exercise of the
Survivor's Option will be payable to the person to whom
principal shall be payable.
The interest rates the Company will agree to pay on
newly-issued Securities are subject to change without
notice by the Company from time to time, but no such
change will affect any Securities already issued or as
to which an offer to purchase has been accepted by the
Company.
Unless otherwise specified in the applicable Pricing
Supplement, the Interest Payment Dates for a Security
that provides for monthly interest payments shall be the
fifteenth day of each calendar month, commencing in the
calendar month that next succeeds the month in which the
Security is issued; in the case of a Security that
provides for quarterly interest payments, the Interest
Payment Dates shall be the fifteenth day of each third
month, commencing in the third succeeding calendar month
following the month in which the Security is issued; in
the case of a Security that provides for semi-annual
interest payments, the Interest Payment dates shall be
the fifteenth day of each sixth month, commencing in the
sixth succeeding calendar month following the month in
which the Security is issued; in the case of a Security
that provides for annual interest payments, the Interest
Payment Date shall be the fifteenth day of every twelfth
month, commencing in the twelfth succeeding calendar
month following the month in which the Security is
issued. Unless otherwise specified in the applicable
Pricing Supplement, the Regular Record Date with respect
to
Exh-B-6
any Interest Payment Date shall be the first day of the
calendar month in which such Interest Payment Date
occurred, except that the Regular Record Date with
respect to the final Interest Payment Date shall be the
final Interest Payment Date.
Each payment of interest on a Security shall include
accrued interest from and including the Issue Date or
from and including the last day in respect of which
interest has been paid (or duly provided for), as the
case may be, to, but excluding, the Interest Payment
Date, Maturity Date or date of redemption or repayment,
as the case may be.
Calculation of Fixed Rate Securities. Unless otherwise specified in the
Interest: applicable Pricing Supplement, interest on Fixed Rate
Securities (including interest for partial periods) will
be calculated on the basis of a 360-day year of twelve
30-day months.
Floating Rate Securities. Interest rates on Floating
Rate Securities will be determined as set forth therein
and in the applicable Pricing Supplement. Interest on
Floating Rate Securities, except as otherwise set forth
therein, will be calculated on the basis of actual days
elapsed and a year of 360 days, except that in the case
of a CMT Rate Security, a Treasury Rate Security, or a
floating rate security for which the CMT Rate or the
Treasury Rate is an applicable base rate, interest will
be calculated on the basis of the actual number of days
in the year.
Business Day: "Business Day" means, unless otherwise specified in the
applicable Pricing Supplement, any day other than a
Saturday or Sunday, that is neither a legal holiday nor
a day on which commercial banks are authorized or
required by law, regulation or executive order to close
in The City of New York.
Payments of Principal Payments of Principal and Interest. Promptly after each
and Interest: Regular Record Date, the Trustee will deliver to the
Company and DTC a written notice specifying by CUSIP
number the amount of interest, if any, to be paid on
each Global Security on the following Interest Payment
Date (other than an Interest Payment Date coinciding
with a Maturity Date) and the total of such amounts. DTC
will confirm the amount payable on each Global Security
on such Interest Payment Date by reference to the daily
bond reports published by Standard & Poor's. On such
Interest Payment Date, the Company will pay to the
Trustee, and the Trustee in turn will pay to DTC, such
total
Exh-B-7
amount of interest due (other than on the Maturity
Date), at the times and in the manner set forth below
under "Manner of Payment".
Payments on the Maturity Date. On or about the first
Business Day of each month, the Trustee will deliver to
the Company and DTC a written list of principal,
premium, if any, and interest to be paid on each Global
Security representing Securities maturing or subject to
redemption (pursuant to a sinking fund or otherwise) or
repayment ("Maturity") in the following month. The
Trustee, the Company and DTC will confirm the amounts of
such principal, premium, if any, and interest payments
with respect to each Global Security on or about the
fifth Business Day preceding the Maturity Date of such
Global Security. On the Maturity Date, the Company will
pay to the Trustee, and the Trustee in turn will pay to
DTC, the principal amount of such Global Security,
together with interest and premium, if any, due on such
Maturity Date, at the times and in the manner set forth
below under "Manner of Payment". Promptly after payment
to DTC of the principal and interest due on the Maturity
Date of such Global Security and all other Securities
represented by such Global Security, the Trustee will
cancel and destroy such Global Security in accordance
with the Indenture and so advise the Company.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Global Securities
on any Interest Payment Date or at Maturity shall be
paid by the Company to the Trustee in immediately
available funds on such date. The Company will make such
payment on such Global Securities to an account
specified by the Trustee. Prior to 10:00 a.m., New York
City time, on the date of Maturity or as soon as
possible thereafter, the Trustee will make payment to
DTC in accordance with existing arrangements between DTC
and the Trustee, in funds available for immediate use by
DTC, each payment of interest, principal and premium, if
any, due on a Global Security on such date. On each
Interest Payment Date (other than on the Maturity Date)
the Trustee will pay DTC such interest payments in
same-day funds in accordance with existing arrangements
between the Trustee and DTC. Thereafter, on each such
date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
Participants with payments in amounts proportionate to
their respective holdings in principal amount of
beneficial interest in such Global Security as are
recorded in the book-entry system maintained by DTC.
Neither the Company nor the Trustee shall
Exh-B-8
have any direct responsibility or liability for the
payment by DTC of the principal of, or premium, if any,
or interest on, the Securities to such Participants.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Security will be determined and withheld by
the Participant, indirect participant in DTC or other
person responsible for forwarding payments and materials
directly to the beneficial owner of such Security.
Purchase of Securities Unless otherwise agreed by the Agents and the Company,
by the Purchasing Securities offered from time to time by the Company will
Agent: be purchased by the Purchasing Agent as principal for
subsequent resale to the Agents and Selected Dealers
party to the Master Selected Dealer Agreement in the
form attached as Exhibit E to the Agency Agreement.
Acceptance and Unless otherwise agreed by the Company and the
Rejection of Orders: Purchasing Agent, the Company has the sole right to
accept orders to purchase Securities and may reject any
such order in whole or in part. Unless otherwise
instructed by the Company, the Purchasing Agent will, at
the conclusion of the offering period, promptly advise
the Company by telephone of all offers to purchase
Securities received by it, other than those rejected by
it in whole or in part in the reasonable exercise of its
discretion. No order for less than $1,000 principal
amount of Securities will be accepted.
Upon receipt of a completed and executed Terms Agreement
from the Purchasing Agent, the Company will (i) promptly
execute and return such Terms Agreement to the
Purchasing Agent or (ii) inform the Purchasing Agent
that its offer to purchase the Securities of a
particular tranche has been rejected, in whole or in
part. The Purchasing Agent will thereafter promptly
inform the Agents and participating Selected Dealers of
the action taken by the Company.
Preparation of Pricing If any offer to purchase a Security is accepted by or on
Supplement: behalf of the Company, the Purchasing Agent will use its
reasonable best efforts to send by email or telecopy a
draft Pricing Supplement (substantially in the form
attached to the Agency Agreement as Exhibit D) to the
Company reflecting the terms of such Security by 2:00
p.m. (New York City time) on the applicable Trade Day.
The Company shall use its reasonable best efforts to
deliver any comments to such Pricing Supplement by email
or telecopy to the Purchasing Agent and the Trustee by
4:00 p.m.
Exh-B-9
(New York City Time) on the applicable Trade Day. The
Company will file such Pricing Supplement with the
Commission in accordance with the applicable paragraph
of Rule 424(b) under the Securities Act. The Purchasing
Agent shall use its reasonable best efforts to send such
Pricing Supplement and the Prospectus by email or
telecopy or overnight express (for delivery by the close
of business on the applicable Trade Day, but in no event
later than 11:00 a.m. New York City time on the Business
Day immediately following the applicable Trade Day and
no earlier than the earlier of (i) 5:00 p.m. (New York
City time) on the applicable Trade Date or (ii) such
time after which the Purchasing Agent shall have
incorporated the comments of the Company, if any, to the
Pricing Supplement), to each Agent (or other Selected
Dealer) which made or presented the offer to purchase
the applicable Security and the Trustee at the following
applicable address:
if to Banc of America Securities LLC, to:
Banc of America Securities LLC
00 Xxxx 00xx Xxxxxx
XX0-000-00-00
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Tel: (000) 000-0000
if to Incapital LLC, to:
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
if to X.X. Xxxxxxx, to:
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxxx
Tel: (000) 000-0000
if to Xxxxxxx Xxxxxx & Co., Inc., to:
000 Xxxxxxxxxx Xxxxxx
000-00-000 - 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Exh-B-10
Tel: (000) 000-0000
if to Comerica Securities, Inc., to:
000 Xxxx Xxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
if to Xxxxxx X. Xxxxx & Co., L.P., to:
00000 Xxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Eshing
Tel: (000) 000-0000
if to J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc., to:
000 Xxxxx 0xx Xxxxxx
0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxxxxxx
Tel: (000) 000-0000
if to Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, to:
4 World Financial Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Tel: (000) 000-0000
if to Xxxxxx Xxxxxxx & Co. Incorporated, to:
0000 Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Tel: (000) 000-0000
with a copy to:
ADP
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx Prospectuses
Exh-B-11
if to UBS Financial Services Inc., to:
000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
if to Wachovia Capital Markets, LLC, to:
000 X. Xxxx Xxxxxx
Xxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxx
Tel: (000) 000-0000
and if to the Trustee, to:
U.S. Bank Trust National Association
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
For record keeping purposes, one copy of each Pricing
Supplement, as so filed, shall also be mailed or
telecopied to:
Cravath, Swaine & Xxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Each such Agent (or Selected Dealer), in turn, pursuant
to the terms of the Agency Agreement and the Master
Selected Dealer Agreement, will cause to be timely
delivered a copy of the Prospectus and the applicable
Pricing Supplement to each purchaser of Securities from
such Agent or Selected Dealer.
Outdated Pricing Supplements and the Prospectuses to
which they are attached (other than those retained for
files) will be destroyed by those in possession thereof.
Delivery of The Agents will deliver a Prospectus and Pricing
Confirmation and Supplement herein described with respect to each
Prospectus to Security sold by it.
Purchaser by
Presenting Agent:
Exh-B-12
For each offer to purchase a Security accepted by or on
behalf of the Company, the Purchasing Agent will confirm
in writing with each Agent or Selected Dealer the terms
of such Security, the amount being purchased by such
Agent or Selected Dealer and other applicable details
described above and delivery and payment instructions,
with a copy to the Company.
In addition, the Purchasing Agent, other Agent or
Selected Dealer, as the case may be, will deliver to
investors purchasing the Securities the Prospectus
(including the Pricing Supplement) in relation to such
Securities prior to or simultaneously with delivery of
the confirmation of sale or delivery of the Security.
Settlement: The receipt of immediately available funds by the
Company in payment for Securities and the authentication
and issuance of the Global Security representing such
Securities shall constitute "Settlement" with respect to
such Security. All orders accepted by the Company will
be settled three Business Days thereafter pursuant to
the timetable for Settlement set forth below, unless the
Company and the purchaser agree to Settlement on another
specified date, and shall be specified upon acceptance
of such offer; provided, however, in all cases the
Company will notify the Trustee on the date issuance
instructions are given.
Settlement Procedures: Settlement Procedures with regard to each Security sold
by an Agent shall be as follows:
A. After the acceptance of an offer by the Company
with respect to a Security, the Purchasing Agent
will communicate the following details of the
terms of such offer (the "Security Sale
Information") to the Company in writing or by
facsimile transmission, email or other written
means acceptable to the Company:
1. Principal amount of the purchase;
Exh-B-13
2. In the case of a Fixed Rate Security, the
interest rate or, in the case of a Floating
Rate Security, the interest rate basis
(including, if LIBOR, the method for
determining LIBOR), initial interest rate
(if known at such time), Index Maturity,
Interest Reset Period and Interest Reset
Dates (if any), Spread and/or Spread
Multiplier (if any), minimum interest rate
(if any) and maximum interest rate (if any);
3. Interest Payment Frequency;
4. Settlement Date;
5. Maturity Date;
6. Price to Public;
7. Purchasing Agent's commission determined
pursuant to Section IV(a) of the Selling
Agent Agreement;
8. Net proceeds to the Company;
9. Trade Date;
10. If a Security is redeemable by the Company
or repayable at the request of the
Securityholder, such of the following as are
applicable:
11. (i) The date on and after which such
Security may be redeemed/repaid (the
"Redemption/Repayment Commencement
Date"),
(ii) Initial redemption/repayment price (%
of par), and
(iii) Amount (% of par) that the initial
redemption/repayment price shall
decline (but not below par) on each
anniversary of the Redemption/
Repayment Commencement Date;
12. Whether the Security has a Survivor's
Option;
Exh-B-14
13. DTC Participant Number of the institution
through which the customer will hold the
beneficial interest in the Global Security;
and
14. Such other terms as are necessary to
complete the applicable form of Security.
B. The Company will confirm the previously assigned
CUSIP number to the Global Security representing
such Security and then advise the Trustee and the
Purchasing Agent by telephone (confirmed in
writing at any time on the same date) or by
telecopier or other form of electronic
transmission of the information received in
accordance with Settlement Procedure "A" above,
the assigned CUSIP number and the name of the
Purchasing Agent. Each such communication by the
Company will be deemed to constitute a
representation and warranty by the Company to the
Trustee and the Agents that (i) such Security is
then, and at the time of issuance and sale thereof
will be, duly authorized for issuance and sale by
the Company; (ii) such Security, and the Global
Security representing such Security, will conform
with the terms of the Indenture; and (iii) upon
authentication and delivery of the Global Security
representing such Security, the aggregate
principal amount of all Securities issued under
the Indenture will not exceed the aggregate
principal amount of Securities authorized for
issuance at such time by the Company.
C. The Trustee will communicate to DTC and the
Purchasing Agent through DTC's Participant
Terminal System, a pending deposit message
specifying the following Settlement information:
1. The information received in accordance with
Settlement Procedure "A".
2. The numbers of the participant accounts
maintained by DTC on behalf of the Trustee
and the Purchasing Agent.
3. Identification as a Fixed Rate Security or a
Floating Rate Security.
Exh-B-15
4. The initial Interest Payment Date for such
Security, number of days by which such date
succeeds the related DTC record date (which
term means the Regular Record Date), and if
then calculated, the amount of interest
payable on such Initial Interest Payment
Date (which amount shall have been confirmed
by the Trustee).
5. The CUSIP number of the Global Security
representing such Securities.
6. The frequency of interest.
7. Whether such Global Security represents any
other Securities issued or to be issued (to
the extent then known).
D. DTC will credit such Security to the participant
account of the Trustee maintained by DTC.
E. The Trustee will complete and deliver a Global
Security representing such Security in a form that
has been approved by the Company, the Agents and
the Trustee.
F. The Trustee will authenticate the Global Security
representing such Security and maintain possession
of such Global Security.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Security to the
Trustee's participant account and credit such
Security to the participant account of the
Purchasing Agent maintained by DTC and (ii) debit
the settlement account of the Purchasing Agent and
credit the settlement account of the Trustee
maintained by DTC, in an amount equal to the price
of such Security less the Purchasing Agent's
commission. The entry of such a deliver order
shall be deemed to constitute a representation and
warranty by the Trustee to DTC that (a) the Global
Security representing such Security has been
issued and authenticated and (b) the Trustee is
holding such Global Security pursuant to the
Certificate Agreement.
Exh-B-16
H. The Purchasing Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC to (i) debit such Security to the
Purchasing Agent's participant account and credit
such Security to the participant accounts of the
Participants to whom such Security is to be
credited maintained by DTC and (ii) debit the
settlement accounts of such Participants and
credit the settlement account of the Purchasing
Agent maintained by DTC, in an amount equal to the
price of the Security less the agreed upon
commission so credited to their accounts.
I. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "G" and
"H" will be settled in accordance with SDFS
operating procedures in effect on the Settlement
Date.
J. The Trustee will credit to an account specified by
the Company funds available for immediate use in
an amount equal to the amount credited to the
Trustee's DTC participant account in accordance
with Settlement Procedure "G".
K. The Trustee will send a copy of the Global
Security representing such Security by first-class
mail to the Company.
L. Each Agent and Selected Dealer will confirm the
purchase of each Security to the purchaser thereof
either by transmitting to the Participant to whose
account such Security has been credited a
confirmation order through DTC's Participant
Terminal System or by mailing a written
confirmation to such purchaser. In all cases the
Prospectus as most recently amended or
supplemented (including the related Pricing
Supplement) must accompany or precede such
confirmation.
M. On a day that is a Business Day, the Trustee will
send, by facsimile or electronic transmission, to
the Company a statement setting forth the
principal amount of Securities outstanding as of
that date under the Indenture and setting forth
the CUSIP number(s) assigned to, and a brief
description of, any orders which the Company has
advised the Trustee but which have not yet been
settled.
Exh-B-17
Settlement Procedures In the event of a purchase of Securities by the
Timetable: Purchasing Agent, as principal, appropriate Settlement
details, if different from those set forth below will be
set forth in the applicable Terms Agreement to be
entered into between the Purchasing Agent and the
Company pursuant to the Agency Agreement.
Settlement Procedures "A" through "M" shall be completed
as soon as possible but not later than the respective
times (New York City time) set forth below:
Settlement Procedure Time
A 2:00 p.m. on the Trade Day.
B 12:00 p.m. on the Business Day following
the Trade Day.
C 2:00 p.m. on the Business Day before the
Settlement Date.
D 10:00 a.m. on the Settlement Date.
E 12:00 p.m. on the Settlement Date.
F 12:30 a.m. on the Settlement Date.
G-I 2:00 p.m. on the Settlement Date.
X-X 2:30 p.m. on the Settlement Date.
M Weekly or at the request of the Company.
The Prospectus as most recently amended or supplemented
(including the related Pricing Supplement) must
accompany or precede any written confirmation given to
the customer (Settlement Procedure "L"). Settlement
Procedure "I" is subject to extension in accordance with
any extension Fedwire closing deadlines and in the other
events specified in the SDFS operating procedures in
effect on the Settlement Date.
If Settlement of a Security is rescheduled or cancelled,
the Trustee will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m., New York City
time, on the Business Day immediately preceding the
scheduled Settlement Date.
Exh-B-18
Failure to Settle: If the Trustee fails to enter an SDFS deliver order with
respect to a Security pursuant to Settlement Procedure
"G", the Trustee may deliver to DTC, through DTC's
Participant Terminal System, as soon as practicable a
withdrawal message instructing DTC to debit such
Security to the participant account of the Trustee
maintained at DTC. DTC will process the withdrawal
message, provided that such participant account contains
Securities having the same terms and having a principal
amount that is at least equal to the principal amount of
such Security to be debited. If withdrawal messages are
processed with respect to all the Securities issued or
to be issued represented by a Global Security, the
Trustee will cancel such Global Security in accordance
with the Indenture, make appropriate entries in its
records and so advise the Company. The CUSIP number
assigned to such Global Security shall, in accordance
with CUSIP Service Bureau procedures, be cancelled and
not immediately reassigned. If withdrawal messages are
processed with respect to one or more, but not all, of
the Securities represented by a Global Security, the
Trustee will exchange such Global Security for two
Global Securities, one of which shall represent such
Securities and shall be cancelled immediately after
issuance, and the other of which shall represent the
remaining Securities previously represented by the
surrendered Global Security and shall bear the CUSIP
number of the surrendered Global Security. If the
purchase price for any Security is not timely paid to
the Participants with respect to such Security by the
beneficial purchaser thereof (or a person, including an
indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the related
Agent may enter SDFS deliver orders through DTC's
participant Terminal System reversing the orders entered
pursuant to Settlement Procedures "G" and "H",
respectively. Thereafter, the Trustee will deliver the
withdrawal message and take the related actions
described in the preceding paragraph. If such failure
shall have occurred for any reason other than default by
the Agent in the performance of its obligations
hereunder or under the Agency Agreement, the Company
will reimburse the Agent on an equitable basis for its
reasonable out-of-pocket accountable expenses actually
incurred and loss of the use of funds during the period
when they were credited to the account of the Company.
Exh-B-19
Notwithstanding the foregoing, upon any failure to
settle with respect to a Security, DTC may take any
actions in accordance with its SDFS operating procedures
then in effect. In the event of a failure to settle with
respect to one or more, but not all, of Securities that
were to have been represented by a Global Security, the
Trustee will provide, in accordance with Settlement
Procedures "D" and "E", for the authentication and
issuance of a Global Security representing the other
Securities to have been represented by such Global
Security and will make appropriate entries in its
records.
Exh-B-20
Suspension of Subject to the Company's representations, warranties and
Solicitation; covenants contained in the Selling Agreement as they
Amendment or relate to prior solicitations or sales of Securities,
Supplement: the Company may instruct the Purchasing Agent to
instruct the Agents to suspend at any time for any
period of time or permanently, the solicitation of
orders to purchase Securities. Upon receipt of such
instructions (which may be given orally), each Agent
will forthwith suspend solicitation until such time as
the Company has advised it that solicitation of
purchases may be resumed.
In the event that at the time the Company suspends
solicitation of purchases there shall be any orders
outstanding for settlement, the Company will promptly
advise the Purchasing Agent, the Agents and the Trustee
whether such orders may be settled and whether copies of
the Prospectus as in effect at the time of the
suspension may be delivered in connection with the
settlement of such orders. The Company will have the
sole responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such orders may not be settled
or that copies of such Prospectus may not be so
delivered.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus, it will
promptly advise the Purchasing Agent and the Agents and
furnish the Purchasing Agent and the Trustee with the
proposed amendment or supplement and with such
certificates and opinions as are required, all to the
extent required by and in accordance with the terms of
the Selling Agreement. Subject to the provisions of the
Selling Agreement, the Company may file with the
Commission any supplement to the Prospectus relating to
the Securities. The Company will provide the Purchasing
Agent and the Trustee with copies of any such
supplement, and confirm to the Purchasing Agent that
such supplement has been filed with the SEC.
Trustee Not to Risk Nothing herein shall be deemed to require the Trustee to
Funds: risk or expend its own funds in connection with any
payment to the Company, or the Agents or the purchasers,
it being understood by all parties that payments made by
the Trustee to either the Company or the Agents shall be
made only to the extent that funds are provided to the
Trustee for such purpose.
Exh-B-21
Advertising Costs: The Company shall have the sole right to approve the
form and substance of any advertising an Agent may
initiate in connection with such Agent's solicitation to
purchase the Securities. The expense of such advertising
will be solely the responsibility of such Agent, unless
otherwise agreed to by the Company.
Exh-B-22
APPENDIX TO EXHIBIT B
National Rural Utilities Cooperative Finance Corporation
Survivor's Option Checklist
CFC InterNotes ("note" or "notes") may contain a provision that permits
repayment of a note prior to its stated maturity, due to the death of the
beneficial owner of such note (the "Survivor's Option"). The exercise of the
Survivor's Option shall be conducted in the following manner:
1. The authorized representative of the deceased beneficial owner of the note
must provide the following to the appropriate broker or other entity
through which the beneficial interest in the note is held by the deceased
beneficial owner:
a. A written instruction to such broker or other entity to notify DTC
of the authorized representative's desire to obtain repayment
pursuant to exercise of the Survivor's Option;
b. Appropriate evidence satisfactory to the Company and the Trustee (i)
that the deceased was the beneficial owner of the note at the time
of death and his or her interest in the note was owned by the
deceased beneficial owner or his or her estate at least six months
prior to the request for repayment, (ii) that the death of the
beneficial owner has occurred, (iii) of the date of death of the
beneficial owner, and (iv) that the representative has authority to
act on behalf of the beneficial owner;
c. If the interest in the note is held by a nominee of the deceased
beneficial owner, a certificate satisfactory to the Company and the
Trustee from the nominee attesting to the deceased's beneficial
ownership of such note;
d. A written request for repayment signed by the authorized
representative of the deceased beneficial owner with the signature
guaranteed by a member of a registered national securities exchange
or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent
in the United States;
e. If applicable, a properly executed assignment or endorsement;
f. Tax waivers and any other instruments or documents that the Company
or the Trustee reasonably require in order to establish the validity
of the beneficial ownership of the note and the claimant's
entitlement to payment; and
g. Any additional information that the Company or the Trustee
reasonably require to evidence satisfaction of any conditions to the
exercise of the Survivor's Option or to document beneficial
ownership or authority to make an election and to cause the
repayment of the note.
Exh-B-App-1
2. In turn, the broker or other entity will deliver each of these items to
the Trustee, together with evidence satisfactory to the Company and the
Trustee from the broker or other entity stating that it represents the
deceased beneficial owner.
3. The broker or other entity will be responsible for disbursing payments
received from the Trustee to the authorized representative.
4. Forms for the exercise of the Survivor's Option ("Election Form"), may be
obtained from the Trustee at:
U.S. Bank Trust National Association
000 Xxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
(000) 000-0000
5. Upon receipt of an Election Form, the Trustee shall:
a. Verify that the documents listed in Section 1 above have been
received by the Trustee, and are in proper order;
b. Verify the Original Issue Date for the notes being submitted for
repayment;
c. Update its records to reflect that the notes have been repaid;
d. Submit a copy of the Election Form to the Company (to the attention
of Xxxx Xxxxxxxxx) by facsimile at (000) 000-0000; and
e. The Company will confirm its authorization of the redemption by
submitting a notice to the Trustee by facsimile. The Trustee in turn
will notify DTC that the Company has authorized the redemption of
the notes. Such notice should be sent to the attention of Xxx
Xxxxxxxx by facsimile at (000) 000-0000.
6. The exercise of the Survivor's Option is subject to the following
conditions:
a. The beneficial owner, or the estate of the beneficial owner, must
have owned the notes submitted for repayment at least six months
prior to the request to exercise the Survivor's Option;
b. The Company may limit the aggregate principal amount of notes as to
which the Survivor's Option may be exercised in any calendar year on
behalf of any individual deceased beneficial owner of notes to
$250,000;
c. The Company will permit the exercise of Survivor's Options only in
principal amounts of $1,000 and multiples of $1,000;
Exh-B-App-2
d. The Company may limit the aggregate principal amount of notes as to
which exercises of the Survivor's Option may be accepted by the
Company in any calendar year, to the greater of $2,000,000 or 2% of
the principal amount of all CFC InterNotes outstanding as of
December 31 of the most recently completed calendar year;
e. Notes accepted for repayment through the exercise of a Survivor's
Option will normally be repaid on the first interest payment date
that occurs 20 or more calendar days after the date of the
acceptance. For example, if interest pays monthly on January 15,
2005 and a Survivor Option is accepted on the January 2, 2005 the
holder will not get paid until the next interest payment date since
the acceptance is less than 20 days prior the payment date; and
f. An otherwise valid election to exercise the Survivor's Option may
not be withdrawn.
Exh-B-App-3
EXHIBIT C
TERMS AGREEMENT
_________, 20__
National Rural Utilities Cooperative Finance Corporation
Woodland Park
0000 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
Attention: [ ]
Subject in all respects to the terms and conditions of the Agency Agreement
dated [ ], 2004, among National Rural Utilities Cooperative Finance Corporation
and Banc of America Securities LLC, Incapital LLC, [ ], the undersigned agrees
to purchase the following aggregate principal amount of CFC InterNotes(R):
$_____________
The terms of such Securities shall be as follows:
CUSIP Number: _____________
Price to Public: __________%
Agent's Concession: _______%
Net Proceeds to Issuer: $___________
Maturity Date: ____________
Settlement Date, Time and Place: __________
Interest Rate or Method of Determining:
FIXED RATE SECURITY: __________
Interest Payment Frequency: __________
Regular Record Dates: __________
FLOATING RATE SECURITY: __________
If LIBOR:
(i) LIBOR Telerate [ ] or LIBOR Reuters [ ]
(ii) Designated LIBOR Page:
(iii) Designated LIBOR Currency:
If CMT Rate:
(i) Designated CMT Telerate Page:
(ii) Designated CMT Maturity Index:
Initial Interest Rates: __________
Spread, if any: __________
Spread Multiplier, if any: __________
Interest Reset Date(s): __________
Exh-C-1
Interest Payment Date(s): __________
Record Dates: __________
Index Maturity: __________
Maximum Interest Rate, if any: __________
Minimum Interest Rate, if any: __________
Calculation Agent: __________
Survivor's Option [ ] Yes [ ] No
Amortizing Securities: [ ] Yes [ ] No
Indexed Securities: [ ] Yes [ ] No
Optional Redemption/Repayment, if any: __________
Initial Redemption/Repayment Date[s]: __________
Redemption/Repayment Price: Initially ___% of Principal Amount and declining
by ___% of the Principal Amount on each anniversary of the Initial
Redemption/Repayment Date until the Redemption/Repayment Price is 100% of
the Principal Amount.
Other terms and conditions agreed to by the Purchasing Agent and the Company,
if any:
INCAPITAL LLC,
By: _____________________________
Title: _____________________________
ACCEPTED
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION,
By: _____________________________
Title: _____________________________
TERMS OF THE SECURITIES APPROVED
Exh-C-2
By: _________________________________________
[Governor or Chief Financial Officer]
Exh-C-3
EXHIBIT D
Form of Pricing Supplement
Pricing Supplement Dated: ______________ Rule 424(b)(3)
(To Prospectus Supplement Dated [ ], 2004 and File Nos. 333-109310
Prospectus Dated October 17, 2003
Pricing Supplement No. ________________________________
U.S. $
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
CFC INTERNOTES(R)
DUE MORE THAN NINE MONTHS FROM DATE OF ISSUE
Trade Date: __________________________________________________
Issue Date: __________________________________________________
Joint Lead Managers: _________________________________________
Agents: ______________________________________________________
INTEREST
RATE
NET OR
AGGREGATE PRICE PROCEEDS AMORTIZING INTEREST
PRINCIPAL TO TO SECURITY RATE
CUSIP AMOUNT PUBLIC CONCESSION ISSUER YES/NO BASIS
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
INITIAL INTEREST MAXIMUM MINIMUM DAY
INDEX INTEREST RESET INTEREST INTEREST COUNT
SPREAD MATURITY RATE DATES RATE RATE BASIS
(if floating (if floating (if floating (if floating (if floating (if floating (if floating
rate) rate) rate) rate) rate) rate) rate)
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Exh-D-1
INTEREST 1st INTEREST REDEMPTION REDEMPTION/
PAYMENT MATURITY PAYMENT SURVIVOR'S OR REPAYMENT REPAYMENT
FREQUENCY DATE DATE OPTION YES/NO TERMS
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Other Terms: ________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Exh-D-2
EXHIBIT E
Master Selected Dealer Agreement
[Name]
[Address1]
[Address2]
Dear Selected Dealer:
In connection with public offerings of securities after the date
hereof for which we are acting as manager of an underwriting syndicate or are
otherwise responsible for the distribution of securities to the public by means
of an offering of securities for sale to selected dealers, you may be offered
the right as such a selected dealer to purchase as principal a portion of such
securities. This will confirm our mutual agreement as to the general terms and
conditions applicable to your participation in any such selected dealer group
organized by us as follows.
1. Applicability of this Agreement. The terms and conditions of this
Agreement shall be applicable to any public offering of securities
("Securities"), pursuant to a registration statement filed under the
Securities Act of 1933 (the "Securities Act"), or exempt from registration
thereunder (other than a public offering of Securities effected wholly
outside the United States of America), wherein Incapital LLC clearing
through BNY Clearing Services, LLC (the "Account") (acting for its own
Account or for the account of any underwriting or similar group or
syndicate) is responsible for managing or otherwise implementing the sale
of the Securities to selected dealers ("Selected Dealers") and has
expressly informed you that such terms and conditions shall be applicable.
Any such offering of Securities to you as a Selected Dealer is hereinafter
called an "Offering". In the case of any Offering where we are acting for
the account of any underwriting or similar group or syndicate
("Underwriters"), the terms and conditions of this Agreement shall be for
the benefit of, and binding upon, such Underwriters, including, in the
case of any Offering where we are acting with others as representatives of
Underwriters, such other representatives.
2. Conditions of Offering; Acceptance and Purchases. Any Offering:
(i) will be subject to delivery of the Securities and their acceptance by
us and any other Underwriters; (ii) may be subject to the approval of all
legal matters by counsel and the satisfaction of other conditions, and
(iii) may be made on the basis of reservation of Securities or an
allotment against subscription. We will advise you by electronic mail,
facsimile or other form of written communication ("Written Communication",
which term, in the case of any Offering described in Section 3(a) or 3(b)
hereof, may include a prospectus or offering circular) of the particular
method and supplementary terms and conditions (including, without
limitation, the information as to prices and offering date referred to in
Section 3(c) hereof) of any Offering in which you are invited to
participate. To the extent such supplementary terms and conditions are
inconsistent with any provision herein, such terms and conditions shall
supersede any such provision. Unless otherwise indicated in any such
Written Communication, acceptances and other communications by you with
respect to an Offering should be sent to Incapital LLC, One
Xxx-X-0
Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, (Fax: (312)
000-0000). We reserve the right to reject any acceptance in whole or in
part. Unless notified otherwise by us, Securities purchased by you shall
be paid for on such date as we shall determine, on one day's prior notice
to you, by certified or official bank check, in an amount equal to the
Public Offering Prices (as hereinafter defined) or, if we shall so advise
you, at such Public Offering Price less the Concession (as hereinafter
defined), payable in New York Clearing House funds to the order of BNY
Clearing Services, LLC clearing for the account of Incapital LLC, against
delivery of the Securities. If Securities are purchased and paid for at
such Public Offering Price, such Concession will be paid after the
termination of the provisions of Section 3(c) hereof with respect to such
Securities. Notwithstanding the foregoing, unless notified otherwise by
us, payment for and delivery of Securities purchased by you shall be made
through the facilities of The Depository Trust Company, if you are a
member, unless you have otherwise notified us prior to the date specified
in a Written Communication to you from us or, if you are not a member,
settlement may be made through a correspondent who is a member pursuant to
instructions which you will send to us prior to such specified date.
3. Representations, Warranties and Agreements.
(a) Registered Offerings. In the case of any Offering of Securities
that are registered under the Securities Act ("Registered Offering"), we shall
provide you with such number of copies of each preliminary prospectus and of the
final prospectus relating thereto as you may reasonably request for the purposes
contemplated by the Securities Act and the Securities Exchange Act of 1934 (the
"Exchange Act") and the applicable rules and regulations of the Securities and
Exchange Commission thereunder. You represent and warrant that you are familiar
with Rule 15c2-8 under the Exchange Act relating to the distribution of
preliminary and final prospectuses and agree that you will comply therewith. You
agree to make a record of your distribution of each preliminary prospectus and,
when furnished with copies of any revised preliminary prospectus, you will, upon
our request, promptly forward copies thereof to each person to whom you have
theretofore distributed a preliminary prospectus. You agree that in purchasing
Securities in a Registered Offering you will rely upon no statement whatsoever,
written or oral, other than the statements in the final prospectus delivered to
you by us. You will not be authorized by the issuer or other seller of
Securities offered pursuant to a prospectus or by any Underwriter to give any
information or to make any representation not contained in the prospectus in
connection with the sale of such Securities.
(b) Offerings Pursuant to Offering Circular. In the case of any
Offering of Securities, other than a Registered Offering, which is made pursuant
to an offering circular or other document comparable to a prospectus in a
Registered Offering, we shall provide you with such number of copies of each
preliminary offering circular and of the final offering circular relating
thereto as you may reasonably request. You agree that you will comply with the
applicable Federal and state laws, and the applicable rules and regulations of
any regulatory body promulgated thereunder, governing the use and distribution
of offering circulars by brokers or dealers. You agree that in purchasing
Securities pursuant to an offering circular you will rely upon no statements
whatsoever, written or oral, other than the statements in the final offering
circular delivered to you by us. You will not be authorized by
Exh-E-2
the issuer or other seller of Securities offered pursuant to an offering
circular or by any Underwriter to give any information or to make any
representation not contained in the offering circular in connection with the
sale of such Securities.
(c) Offer and Sale to the Public. With respect to any Offering of
Securities, we will inform you by a Written Communication of the public offering
price, the selling concession, the reallowance (if any) to dealers and the time
when you may commence selling Securities to the public. After such public
offering has commenced, we may change the public offering price, the selling
concession and the reallowance to dealers. The offering price, selling
concession and reallowance (if any) to dealers at any time in effect with
respect to an Offering are hereinafter referred to, respectively, as the "Public
Offering Price", the "Concession" and the "Reallowance". With respect to each
Offering of Securities, until the provisions of this Section 3(c) shall be
terminated pursuant to Section 4 hereof, you agree to offer Securities to the
public at no more than the Public Offering Price. If so notified by us, you may
sell Securities to the public at a lesser negotiated price than the Public
Offering Price, but in an amount not to exceed the "Concession". If a
Reallowance is in effect, a reallowance from the Public Offering Price not in
excess of such Reallowance may be allowed as consideration for services rendered
in distribution to dealers who are actually engaged in the investment banking or
securities business, who execute the written agreement prescribed by Rule 2740
of the Conduct Rules of the National Association of Securities Dealers, Inc.
(the "NASD") and who are either members in good standing of the NASD or foreign
banks, dealers or institutions not eligible for membership in the NASD who
represent to you that they will promptly reoffer such Securities at the Public
Offering Price and will abide by the conditions with respect to foreign banks,
dealers and institutions set forth in Section 3(e) hereof.
(d) Over-allotment; Stabilization; Unsold Allotments. We may, with
respect to any Offering, be authorized to over-allot in arranging sales to
Selected Dealers, to purchase and sell Securities for long or short account and
to stabilize or maintain the market price of the Securities. You agree that,
upon our request at any time and from time to time prior to the termination of
the provisions of Section 3(c) hereof with respect to any Offering, you will
report to us the amount of Securities purchased by you pursuant to such Offering
which then remain unsold by you and will, upon our request at any such time,
sell to us for our account or the account of one or more Underwriters such
amount of such unsold Securities as we may designate at the Public Offering
Price less an amount to be determined by us not in excess of the Concession. If,
prior to the later of (i) the termination of the provisions of Section 3(c)
hereof with respect to any Offering or (ii) the covering by us of any short
position created by us in connection with such Offering for our account or the
account of one or more Underwriters, we purchase or contract to purchase for our
account or the account of one or more Underwriters in the open market or
otherwise any Securities purchased by you under this Agreement as part of such
Offering, you agree to pay us on demand an amount equal to the Concession with
respect to such Securities (unless you shall have purchased such Securities
pursuant to Section 2 hereof at the Public Offering Price in which case we shall
not be obligated to pay such Concession to you pursuant to Section 2) plus
transfer taxes and broker's commissions or dealer's xxxx-up, if any, paid in
connection with such purchase or contract to purchase.
Exh-E-3
(e) NASD. You represent and warrant that you are actually engaged in
the investment banking or securities business and either a member in good
standing of the NASD or, if you are not such a member, you are a foreign bank,
dealer or institution not eligible for membership in the NASD which agrees to
make no sales within the United States, its territories or its possessions or to
persons who are citizens thereof or residents therein, and in making other sales
to comply with the NASD's interpretation with respect to free riding and
withholding. You further represent, by your participation in an Offering, that
you have provided to us all documents and other information required to be filed
with respect to you, any related person or any person associated with you or any
such related person pursuant to the supplementary requirements of the NASD's
interpretation with respect to review of corporate financing as such
requirements relate to such Offering.
You agree that, in connection with any purchase or sale of the
Securities wherein a Concession, discount or other allowance is received or
granted, (1) you will comply with the provisions of Rule 2740 of the NASD's
Conduct Rules and (2) if you are a non-NASD member broker or dealer in a foreign
country, you will also comply (a), as though you were an NASD member, with the
provisions of IM-2110-1 and Rules 2730, 2740 and 2750 of the NASD's Conduct
Rules and (b) with Rule 2420 thereof as that Rule applies to a non-NASD member
broker or dealer in a foreign country.
You further agree that, in connection with any purchase of
securities from us that is not otherwise covered by the terms of this Agreement
(whether we are acting as manager, as a member of an underwriting syndicate or a
selling group or otherwise), if a Concession or other allowance is granted to
you, clauses (1) and (2) of the preceding paragraph will be applicable.
(f) Relationship among Underwriters and Selected Dealers. We may buy
Securities from or sell Securities to any Underwriter or Selected Dealer and,
without consent, the Underwriters (if any) and the Selected Dealers may purchase
Securities from and sell Securities to each other at the Public Offering Price
less all or any part of the Concession. Unless otherwise specified in a separate
agreement between you and us, this agreement does not authorize you to act as
agent for: (i) us; (ii) any Underwriter; (iii) the issuer; or (iv) other seller
of any Securities in offering Securities to the public or otherwise. Neither we
nor any Underwriter shall be under any obligation to you except for obligations
assumed hereby or in any Written Communication from us in connection with any
Offering. Nothing contained herein or in any Written Communication from us shall
constitute the Selected Dealers an association or partners with us or any
Underwriter or with one another. If the Selected Dealers, among themselves or
with the Underwriters, should be deemed to constitute a partnership for Federal
income tax purposes, then you elect to be excluded from the application of
Subchapter K, Chapter 1, Subtitle A of the Internal Revenue Code of 1986 and
agree not to take any position inconsistent with that election. You authorize
us, in our discretion, to execute and file on your behalf such evidence of that
election as may be required by the Internal Revenue Service. In connection with
any Offering, you shall be liable for your proportionate amount of any tax,
claim, demand or liability that may be asserted against you alone or against one
or more Selected Dealers participating in such Offering, or against us or the
Underwriters, based upon the claim that the Selected Dealers, or any of them,
constitute an association, an unincorporated business or other entity,
including,
Exh-E-4
in each case, your proportionate amount of any expense incurred in defending
against any such tax, claim, demand or liability.
(g) Blue Sky Laws. Upon application to us, we shall inform you as to
any advice we have received from counsel concerning the jurisdictions in which
Securities have been qualified for sale or are exempt under the securities or
blue sky laws of such jurisdictions, but we do not assume any obligation or
responsibility as to your right to sell Securities in any such jurisdiction.
(h) Compliance with Law. You agree that in selling Securities
pursuant to any Offering (which agreement shall also be for the benefit of the
issuer or other seller of such Securities) you will comply with all applicable
laws, rules and regulations, including the applicable provisions of the
Securities Act and the Exchange Act, the applicable rules and regulations of the
Securities and Exchange Commission thereunder, the applicable rules and
regulations of the NASD, the applicable rules and regulations of any securities
exchange having jurisdiction over the Offering and the applicable laws, rules
and regulations specified in Section 3(b) hereof.
4. Termination, Supplements and Amendments. This Agreement shall
continue in full force and effect until terminated by a written instrument
executed by each of the parties hereto. This Agreement may be supplemented or
amended by us by written notice thereof to you, and any such supplement or
amendment to this Agreement shall be effective with respect to any Offering to
which this Agreement applies after the date of such supplement or amendment.
Each reference to "this Agreement" herein shall, as appropriate, be to this
Agreement as so amended and supplemented. The terms and conditions set forth in
Section 3(c) hereof with regard to any Offering will terminate at the close of
business on the 30th day after the commencement of the public offering of the
Securities to which such Offering relates, but in our discretion may be extended
by us for a further period not exceeding 30 days and in our discretion, whether
or not extended, may be terminated at any earlier time.
5. Successors and Assigns. This Agreement shall be binding on, and
inure to the benefit of, the parties hereto and other persons specified in
Section 1 hereof, and the respective successors and assigns of each of them.
6. Governing Law. This Agreement and the terms and conditions set
forth herein with respect to any Offering together with such supplementary terms
and conditions with respect to such Offering as may be contained in any Written
Communication from us to you in connection therewith shall be governed by, and
construed in accordance with, the laws of the State of New York.
Please confirm by signing and returning to us the enclosed copy of
this Agreement that your subscription to, or your acceptance of any reservation
of, any Securities pursuant to an Offering shall constitute (i) acceptance of
and agreement to the terms and conditions of this Agreement (as supplemented and
amended pursuant to Section 4 hereof) together with and subject to any
supplementary terms and conditions contained in any Written Communication from
us in connection with such Offering, all of which shall
Exh-E-5
constitute a binding agreement between you and us, individually or as
representative of any Underwriters, (ii) confirmation that your representations
and warranties set forth in Section 3 hereof are true and correct at that time,
(iii) confirmation that your agreements set forth in Sections 2 and 3 hereof
have been and will be fully performed by you to the extent and at the times
required thereby and (iv) in the case of any Offering described in Section 3(a)
and 3(b) hereof, acknowledgment that you will request and have received from us
sufficient copies of the final prospectus or offering circular, as the case may
be, with respect to such Offering in order to comply with your undertakings in
Section 3(a) or 3(b) hereof.
Very truly yours,
INCAPITAL LLC
By: __________________________________
________________________________________________________________________________
CONFIRMED: __________________, 20__
{Company}
By: __________________________________
Name: ________________________________
(Print name)
Title: _______________________________
Exh-E-6
