EXHIBIT 5.C.
EXHIBIT ▇.▇
▇▇▇▇▇ FINANCE CORPORATION FOR MUNICIPAL ENTERPRISES
JPY 70,000,000,000
Debt Securities
Unconditionally and Irrevocably Guaranteed as to
Payment of Principal and Interest by
JAPAN
UNDERWRITING AGREEMENT
November 27, 2002
To the Representatives named in Schedule I
hereto of the Underwriters named in
Schedule II hereto.
Dear Sirs:
1. Introductory. Japan Finance Corporation for Municipal Enterprises
("Issuer") proposes to sell to the underwriters named in Schedule II hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of its debt securities identified in
Schedule I hereto (the "Securities"), to be unconditionally and irrevocably
guaranteed as to payment of principal thereof and interest thereon by Japan, as
Guarantor of the Securities ("Japan"), and to be issued under an amended and
restated fiscal agency agreement (the "Fiscal Agency Agreement") to be dated as
provided in Schedule I hereto among, inter alios, Issuer, Japan and the fiscal
and principal paying agent identified in Schedule I hereto (the "Fiscal Agent").
If the firm or firms listed in Schedule II hereto include only the firm or firms
listed in Schedule I hereto, then the terms "Underwriters" and "Representatives"
as used herein shall each be deemed to refer to such firm or firms.
2. Representations and Warranties of Issuer and Japan. Issuer and Japan
severally represent and warrant to and agree with the several Underwriters that:
(a) Issuer and Japan have filed with the Securities and Exchange
Commission (the "Commission") Registration Statements No. 333-9696
and No. 333-12942, each of which has become effective, for the
registration under the Securities Act of 1933 (the "Act") of the
Securities. Issuer and Japan propose to file with the Commission pursuant
to Rule 424 under the Act a supplement to the form of prospectus included
in Registration Statement No. 333-12942, relating to the Securities and the
plan of distribution thereof, a copy of the proposed form of which has been
furnished to the Representatives. Registration Statements No. 333-9696
and No. 333-12942, including the exhibits thereto and the information
incorporated by reference therein, as amended at the date of this
Agreement, are hereinafter collectively called the "Registration
Statement". The prospectus included in the Registration Statement No.
333-12942, including all information incorporated by reference therein, is
hereinafter called the "Basic Prospectus". The supplemented form of
prospectus relating to the Securities, in the form in which it shall be
filed with the Commission pursuant to Rule 424 (including
the Basic Prospectus as so supplemented) is hereinafter called the "Final
Prospectus". Any preliminary form of the Final Prospectus which has
heretofore been filed pursuant to Rule 424 is hereinafter called the
"Preliminary Final Prospectus". Any reference herein to the Registration
Statement, Basic Prospectus, the Final Prospectus, any Preliminary Final
Prospectus, or any amendment or supplement thereto, shall be deemed to
refer to and include the information contained in any annual report (an
"Annual Report") on Form 18-K or amendment thereto of Issuer or Japan under
the Securities Exchange Act of 1934 (the "Exchange Act") which is
incorporated therein by reference.
(b) The Registration Statement, the Final Prospectus and each
amendment or supplement thereto relevant to the Securities, as of their
respective effective or issue dates, conformed or will conform, as the case
may be, in all respects with the applicable requirements of the Act,
including the rules and regulations of the Commission thereunder (the
"Rules and Regulations"), and neither such Registration Statement nor the
Final Prospectus nor any amendment or supplement thereto, as of their
respective effective or issue dates, contained or will contain, as the case
may be, any untrue statement of a material fact or omitted or will omit, as
the case may be, to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading;
provided, however, that neither Issuer nor Japan makes any representations
or warranties as to the information contained in or omitted from the
Registration Statement or the Final Prospectus or any amendment thereof or
supplement thereto relevant to the Securities in reliance upon and in
conformity with information furnished in writing to Issuer or Japan by or
on behalf of any Underwriter through the Representatives specifically for
use in connection with the preparation of the Registration Statement and
the Final Prospectus. Each Underwriter, in addition to other information
furnished to Issuer or Japan as aforesaid, hereby furnishes to Issuer and
Japan in writing through the Representatives specifically for use with
reference to such Underwriter in the preparation of the Registration
Statement and the Final Prospectus, or any amendment thereof or supplement
thereto relevant to the Securities, the statements in the Final Prospectus
specified in Schedule I hereto.
(c) Issuer was informed, prior to any public announcement of the issue
and sale of the Securities, of the existence of the Financial Services
Authority's informational guidance referred to in MAR 2.3.2R(4) of the
price stabilizing rules made under section 144(1) of the Financial Services
and Markets ▇▇▇ ▇▇▇▇ and each of Issuer and Japan represents, warrants and
undertakes to the Underwriters that it has not issued and will not issue,
without the prior consent of the stabilization agent, any communication to
which MAR 2.3.2R (1) of those rules applies unless that communication
adequately discloses that stabilizing action may take place in relation to
such issue and complies with MAR 2.3.3E of those rules.
It is agreed that the foregoing representations, warranties and agreements of
Issuer shall not extend to the information set forth in the portions of the
Basic Prospectus under the caption "Japan" and, if so specified in Schedule I
hereto, the portions of the Final Prospectus under the additional caption or
captions specified in Schedule I hereto, or to information incorporated by
reference from Japan's Annual Report on Form 18-K.
3. Purchase, Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, Issuer agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from Issuer, at the purchase price set forth in Schedule I hereto, the
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respective principal amounts of Securities set forth opposite the names of the
Underwriters in Schedule II hereto.
Issuer will deliver the Securities to the Representatives for the accounts
of the Underwriters, against payment of the purchase price set forth in Schedule
I hereto, either by wire transfer to an account or accounts designated by Issuer
or by certified or official bank check or checks drawn to the order of Issuer,
in each case in the settlement funds specified in Schedule I hereto, at the
office (in the case of payment by bank check(s)), on the date and at the time
specified in Schedule I hereto, or at such other time not later than seven full
business days thereafter as the Representatives, Issuer and Japan determine,
such date and time being herein referred to as the "Closing Date". Certificates
for the Securities will be in fully registered form, in the authorized
denominations specified in Schedule I hereto. Certificates for Securities issued
in registered form will be registered in such names and in such authorized
denominations as the Representatives request. Securities will be made available
for checking and packaging by the Representatives at the office specified in
Schedule I hereto of the Fiscal Agent at least twenty-four hours prior to the
Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Securities for sale to the public as set forth in the Final
Prospectus. The Securities are exempt from the requirement for registration
under the Securities and Exchange Law of Japan (Law No. 25 of 1948), as amended
(the "Securities and Exchange Law"), and are subject to the Special Taxation
Measures Law of Japan (Law No. 26 of 1957), as amended (the "Law"). Each
Underwriter represents and agrees that: (i) it has not, directly or indirectly,
offered or sold and will not, directly or indirectly, offer or sell Securities
in Japan or to any person resident in Japan (including any corporation or other
entity organized under the laws of Japan); and (ii) it has not, directly or
indirectly, offered or sold and will not, as part of its initial distribution,
directly or indirectly, offer or sell Securities to any person other than a
Gross Recipient (as hereinafter defined). A "Gross Recipient" is (i) a
beneficial owner that is not an individual resident of Japan or a Japanese
corporation for Japanese tax purposes, (ii) a Japanese financial institution,
designated in Article 3-2, paragraph (19) of the Cabinet Order (Cabinet Order
No. 43 of 1957), as amended (the "Cabinet Order") relating to the Law that will
hold Securities for its own proprietary account, or (iii) an individual resident
of Japan or a Japanese corporation whose receipt of interest on the Securities
will be made through a payment handling agent in Japan as defined in Article
2-2, paragraph (2) of the Cabinet Order.
5. Covenants of Issuer and Japan. (a) Issuer and Japan severally covenant
and agree with the several Underwriters that:
(i) Issuer and Japan will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the Basic
Prospectus, so long as delivery of a prospectus relating to the Securities
by an Underwriter or dealer may be required under the Act, and will not
effect such amendment or supplementation, whether by filing an amendment
pursuant to the Act, the Exchange Act or otherwise, without the consent of
the Representatives. Subject to the foregoing sentence, Issuer and Japan
(A) will cause the Final Prospectus to be promptly transmitted for filing
with the Commission pursuant to Rule 424 or will otherwise cause the Final
Prospectus to be promptly filed with the Commission pursuant to said Rule
and (B) will cause an amendment to the most recent Annual Report of Issuer
to be filed with the Commission containing any exhibits required, in
connection with the Securities, pursuant to the Act, including but not
limited to an opinion of counsel for Issuer and Japan as to the validity of
the Securities and guarantee thereof and a list of
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the Underwriters' names and addresses. Issuer and Japan will promptly
advise the Representatives (A) when the Final Prospectus shall have been
mailed for filing to, or filed with, the Commission pursuant to Rule 424,
(B) when such amendment to the most recent Annual Report shall have been
mailed for filing to, or filed with, the Commission, (C) when any amendment
to the Registration Statement relating to the Securities shall have become
effective, (D) of any request by the Commission for any amendment (relevant
to the Securities) of the Registration Statement, or amendment of or
supplement to the Final Prospectus, or for any additional information and
(E) of the institution by the Commission of any stop order proceedings in
respect of the Registration Statement. Issuer and Japan will use their best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(ii) If at any time when a prospectus relating to the Securities is
required to be delivered under the Act any event occurs as a result of
which the Final Prospectus as then amended or supplemented would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend or supplement the Final Prospectus to comply with the Act,
Issuer and Japan promptly will prepare and file with the Commission,
subject to the first sentence of subparagraph (i) of this paragraph (a),
whether by filing documents pursuant to the Act, the Exchange Act or
otherwise, an amendment or supplement, which will correct such statement or
omission or an amendment or supplement which will effect such compliance.
(iii) Issuer and Japan will furnish to the Representatives copies of
the Registration Statement and each amendment thereto which shall become
effective on or prior to the Closing Date (one of which will include all
exhibits), and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, any Preliminary Final Prospectus and the
Final Prospectus, and all amendments and supplements to such documents, in
each case as soon as available and in such reasonable quantities as the
Representatives request.
(iv) Issuer and Japan will use their best efforts to arrange for the
qualification of the Securities, including the guarantee thereof, for sale
under the laws of such jurisdictions as the Representatives may reasonably
designate and to continue such qualifications in effect so long as required
for the distribution of the Securities; provided, however, that in
connection therewith Issuer shall not be required to qualify as a foreign
corporation and neither Issuer nor Japan shall be required to file a
general consent to the service of process in any such jurisdiction.
(v) If specified in Schedule I hereto, Issuer and Japan will make
prompt application for the listing of the Securities on the New York Stock
Exchange and for the registration thereof under the Exchange Act, or for
the listing of the Securities on the London Stock Exchange or on the
Luxembourg Stock Exchange, and will use their best efforts to cause such
listing and/or registration to become effective.
(b) Issuer covenants and agrees with the several Underwriters that:
(i) Issuer will pay all expenses in connection with the preparation,
issuance, execution, authentication and delivery of the Securities, the
printing of this Agreement and the Fiscal Agency Agreement, the
preparation, printing and filing of the Registration Statement, any
Preliminary Final Prospectus, the Final Prospectus
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and any amendments or supplements thereto, and the furnishing of copies of
each thereof to the Underwriters, if New York Stock Exchange, London Stock
Exchange and/or Luxembourg Stock Exchange listing is specified in Schedule
I hereto, any listing of the Securities on the New York Stock Exchange,
London Stock Exchange and/or Luxembourg Stock Exchange and any registration
thereof under the Exchange Act, and any rating of the Securities made upon
the request of Issuer by investment rating agencies (including any fees
charged for such rating). Issuer will pay all expenses authorized by it
(including reasonable fees and disbursements of counsel) incurred in
connection with the qualification of the Securities for sale and the
determination of their eligibility for investment under the laws of such
jurisdictions as the Representatives may reasonably designate and the
printing of memoranda relating thereto. Issuer will pay all fees and
expenses of the legal counsels for Issuer and the Underwriters in
connection with the issuance and offering of the Securities, the fees and
expenses of the Fiscal Agent and other agents named in the Fiscal Agency
Agreement and the cost and expenses in connection with tombstone
advertisement (if any).
(ii) Issuer will make generally available to the holders of its
securities payable in Japanese Yen an earnings statement for its first full
fiscal year commencing after the date of this Agreement, as soon as
practicable after the termination of such fiscal year, such statement to
satisfy the provisions of Section 11(a) of the Act.
(iii) Issuer will pay to the Representatives, on behalf of the
Underwriters, on the Closing Date, the sum specified in Schedule I, in lieu
of reimbursement of any of the Underwriters' expenses (including any costs
and expenses mentioned in Section 5(b)(i) paid by Underwriters and
Underwriters' out-of-pocket expenses, if any).
(c) Japan covenants and agrees with the several Underwriters that:
(i) It will guarantee unconditionally and irrevocably the payment of
the principal of and interest on the Securities, and it will cause its
guarantee in substantially the form set forth as an exhibit to the Fiscal
Agency Agreement to be endorsed on each Security and to be validly executed
on behalf of Japan.
(ii) It will make generally available to the holders of its securities
payable in Japanese Yen a statement of revenues and expenditures of Japan
for its first full fiscal year commencing after the date of this Agreement,
as soon as practicable after the termination of such fiscal year, such
statement to satisfy the provisions of Section 11(a) of the Act.
6. Conditions of Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Securities will be subject to
the accuracy of the representations and warranties on the part of Issuer and
Japan herein, to the accuracy of the statements of officials of Issuer and Japan
made pursuant to the provisions hereof, to the performance by Issuer and Japan
of their obligations hereunder and to the following additional conditions
precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted, or to the
knowledge of Issuer, Japan or the Representatives, shall be contemplated by
the Commission; and the Final Prospectus shall have been filed or
transmitted for filing with the Commission in accordance
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with Section 5(a)(i) hereof not later than 5:00 P.M. New York City time on
the business day following the date of this Agreement.
(b) Subsequent to the date hereof, there shall not have occurred (i)
any change, or any development involving a prospective change, in or
affecting particularly the business or properties of Issuer or the
financial, political or economic condition of Japan which, in the judgment
of the Representatives, materially impairs the investment quality of the
Securities, or (ii) (a) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, (b) a general
moratorium on commercial banking activities in the United States, New York
or Japan declared by either Federal or New York State authorities or by
Japanese authorities, or (c) the engagement by the United States in
hostilities which have resulted in the declaration, on or after the date
hereof, of a national emergency or war; provided that the effect of any
such event specified in this subsection (ii), in the judgment of a majority
in interest of the Underwriters, including the Representatives, after
consultation with Issuer and Japan, would materially adversely affect the
marketing of the Securities.
(c) The Representatives shall have received an opinion of Nagashima
Ohno & Tsunematsu, Japanese counsel for Issuer and Japan, dated the Closing
Date, to the effect that:
(i) Issuer is a public corporation validly existing under the
laws of Japan, with power and authority to own its properties and
conduct its business as described in the Final Prospectus;
(ii) All Japanese governmental approvals have been obtained which
are required for the valid authorization, issue and sale of the
Securities and for the performance of Issuer's obligations hereunder
and under the Securities and the Fiscal Agency Agreement;
(iii) The Fiscal Agency Agreement has been duly authorized,
executed and delivered by Issuer and Japan, and constitutes a valid
and legally binding obligation of Issuer and Japan in accordance with
its terms;
(iv) The Securities have been duly authorized, and, assuming that
they have been executed on behalf of Issuer by the facsimile signature
of the individual specified in the Fiscal Agency Agreement to act on
behalf of Issuer, and assuming that they have been duly authenticated
by the Fiscal Agent, have been duly issued and delivered by Issuer and
constitute valid and legally binding obligations of Issuer in
accordance with their terms entitled to the benefits provided by the
Fiscal Agency Agreement;
(v) The guarantee of the Securities by Japan has been duly
authorized and validly made in accordance with The Constitution and
laws of Japan, and constitutes the valid, binding and unconditional
general obligation of Japan in accordance with its terms, for the
payment and performance of which the full faith and credit of Japan
has been pledged; and such guarantee ranks pari passu in right of
payment with all other general obligations of Japan without any
preference one above the other by reason of priority of date of issue,
currency of payment or otherwise;
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(vi) This Agreement has been duly authorized, executed and
delivered by Issuer and Japan;
(vii) The statements in the Final Prospectus and any amendment or
supplement thereto relating to the Securities and the guarantee
thereof by Japan and to the Fiscal Agency Agreement are correct
insofar as matters of Japanese law are concerned; and
(viii) All matters of Japanese law relating to Issuer and its
business and all other statements with respect to or involving
Japanese law set forth in the Registration Statement, the Final
Prospectus and any amendment or supplement thereto, are correctly set
forth therein.
In rendering such opinion, such counsel may rely as to all matters
governed by United States or New York law upon the opinion of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, United States counsel for the Underwriters referred to below. And
with respect to the matters referred to in paragraph (iii) through (v)
above, such counsel may state they are expressing no opinion as to the
enforceability of the obligations.
In addition, the Representatives shall have received a letter of such
counsel, dated the Closing Date, to the effect that, based on a review of
documents and their participation in the preparation of the Registration
Statement, the Final Prospectus and any amendment or supplement thereto
relevant to the Securities, they have no reason to believe that the
Registration Statement or the Final Prospectus, or any amendment or
supplement thereto, (i) as of its respective effective or issue date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) as of the Closing Date, contains
any untrue statement of a material fact or omits to state a material fact
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 view with respect to the financial statements or
any financial or statistical data included therein.
(d) The Representatives shall have received an opinion of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, United States counsel for the Underwriters, dated the Closing
Date, with respect to the validity of the Securities, the guarantee thereof
by Japan, the Fiscal Agency Agreement, the Registration Statement, the
Final Prospectus or any amendment or supplement thereto and other related
matters as the Representatives may reasonably require, and Issuer and Japan
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In rendering such
opinion or opinions, such counsel may rely as to all matters governed by
Japanese law upon the opinion of Japanese counsel for Issuer and Japan
referred to above.
(e) The Representatives shall have received a certificate of the
Governor or an Executive Director of Issuer, dated the Closing Date, in
which such officer, to the best of his knowledge after reasonable
investigation, shall state that:
(i) The representations and warranties of Issuer in this
Agreement are true and correct, and Issuer has complied with all
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; and
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(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted and are pending or are contemplated by
the Commission.
(f) The Representatives shall have received a certificate of the
Minister of Finance or Acting Minister of Finance or any Vice Minister of
Finance of Japan, dated the Closing Date, in which he, to the best of his
knowledge after reasonable investigation, shall state that:
(i) The representations and warranties of Japan in this Agreement
are true and correct, and Japan has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date; and
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been instituted and are pending or are contemplated by
the Commission.
Issuer and Japan will furnish the Representatives with such conformed
copies of such opinions, certificates, letters and documents as the
Representatives reasonably request.
7. Limitation of Liability. If the sale of the Securities provided for
herein is not consummated because any condition to the Underwriters' obligations
hereunder is not satisfied or because of any refusal, inability or failure on
the part of Issuer or Japan to perform any agreement herein or comply with any
provision hereof, Issuer shall have no liability to the Representatives and the
other Underwriters except that (i) Issuer shall reimburse the Representatives
and the other Underwriters upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of United States counsel) that shall have been
incurred by the Representatives and the other Underwriters in connection with
the proposed purchase and sale of the Securities and (ii) the respective
obligations of Issuer, Japan and the Underwriters pursuant to Section 8 hereof
shall remain in effect.
8. Indemnification. (a) Issuer and Japan each will indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus, the Final Prospectus, or any amendment or
supplement thereto relevant to the Securities, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
will reimburse each Underwriter and each such controlling person for any legal
or other expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that neither Issuer nor Japan
will be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any of such documents
in reliance upon and in conformity with written information furnished to either
Issuer or Japan by any Underwriter through the Representatives specifically for
use therein. This indemnity agreement will be in addition to any liability which
Issuer or Japan may otherwise have.
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(b) Each Underwriter severally will indemnify and hold harmless Issuer,
each of its officers who have signed the Registration Statement and Japan
against any losses, claims, damages or liabilities to which Issuer, any such
officer or Japan may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus, the Final Prospectus, or any amendment or
supplement thereto relevant to the Securities, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to Issuer or Japan by
such Underwriter through the Representatives specifically for use therein; and
will reimburse Issuer or Japan for any legal or other expenses reasonably
incurred by Issuer, any such officer or Japan in connection with investigating
or defending any such loss, claim, damage, liability or action. Each
Underwriter, in addition to other information furnished to Issuer or Japan as
aforesaid, hereby furnishes to Issuer and Japan in writing through the
Representatives specifically for use with reference to such Underwriter in the
preparation of the Registration Statement and the Final Prospectus, or any
amendment thereof or supplement thereto relevant to the Securities, the
statements in the Final Prospectus specified in Schedule I hereto. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs of
investigation. The indemnifying party shall not be liable for any settlement of
any such action effected without its consent, but if settlement is made with the
consent of the indemnifying party, such indemnifying party shall indemnify and
hold harmless the indemnified party against any loss or liability by reason of
such settlement. In any such action brought against Japan, the defense of which
shall be assumed by any Underwriter or Underwriters, Japan may, at its option,
elect by notice to such Underwriter or Underwriters to direct that any defense
based on sovereign immunity, which would otherwise be available to it, shall not
be asserted in such action, and each Underwriter agrees, upon receipt of any
such notice, not to assert such defense. Such an election not to have such
defense asserted shall not release any Underwriter from the indemnity agreement
on the part of such Underwriter contained in this Section.
(d) If recovery is not available under the foregoing indemnification
provisions of this Section, for any reason other than as specified therein, the
parties entitled to indemnification by the terms thereof shall be entitled to
contribution to liabilities and expenses, except to the
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extent that contribution is not permitted under Section 11(f) of the Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by each party
from the offering of the Securities (taking into account the portion of the
proceeds of the offering realized by each), the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or omission, and
any other equitable considerations appropriate under the circumstances. Issuer
and Japan, on the one hand, and the Underwriters, on the other hand, agree that
it would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose). No Underwriter or person controlling such Underwriter
shall be obligated to make contribution hereunder which in the aggregate exceeds
the total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages which such
Underwriter and its controlling persons have otherwise been required to pay in
respect of the same claim or any substantially similar claim. The Underwriters'
obligations to contribute are several in proportion to their respective
underwriting obligations and not joint.
9. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Securities hereunder and the aggregate principal
amount of Securities which such defaulting Underwriter or Underwriters agreed
but failed to purchase does not exceed 10% of the total principal amount of the
Securities, as set forth in Schedule II hereto, the Representatives may make
arrangements satisfactory to Issuer and Japan for the purchase of such
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder,
as set forth in Schedule II hereto, to purchase the Securities which such
defaulting Underwriter or Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters so default and the aggregate principal amount of the
Securities with respect to which such default or defaults occur is more than 10%
of the total principal amount of Securities, as set forth in Schedule II hereto,
and arrangements satisfactory to the Representatives and to Issuer and Japan for
the purchase of such Securities by other persons shall not be made within
thirty-six hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or Issuer or Japan,
except for the expenses to be paid by Issuer pursuant to Section 5(b)(i) hereof
and the continuation of the respective obligations of Issuer, Japan and the
Underwriters pursuant to Section 8 hereof. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
10. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of
Issuer, its officers and Japan and of the several Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation, or statement as to the results thereof, made by or on
behalf of any Underwriter or Issuer, its officers or Japan or any controlling
person of any Underwriter, and will survive delivery of and payment for the
Securities.
11. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered, telexed, or telegraphed and
confirmed to the Representatives at the address specified in Schedule I hereto;
or, if sent to Issuer or Japan, will be addressed to the Authorized Agent in the
United States for Issuer, as specified in Schedule I hereto and to the
Authorized Agent in the United States for Japan, as specified in Schedule I
hereto; provided, however, that any notice to an Underwriter pursuant to Section
8
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will be mailed, delivered, telexed, or telegraphed to such Underwriter at its
address appearing in the list of Underwriters' names and addresses furnished to
Issuer and Japan for the purpose of communications hereunder.
12. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons and officers referred to in Section 8 hereof, and no other person will
have any right or obligation hereunder.
13. Representation of Underwriters. The Representatives will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by the firm first listed
in Schedule I hereto as being one of the Representatives will be binding upon
all the Underwriters.
14. Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of New York except with respect to its
authorization and execution by Issuer and Japan and any other matters required
to be governed by the laws of Japan.
15. Jurisdiction of Courts of New York and Japan. Issuer hereby appoints
the Fiscal Agent, at its corporate trust office in The City of New York, as its
authorized agent (the "Process Agent") upon which process may be served in any
action by any Underwriter, or by any person controlling such Underwriter,
arising out of or based upon this Agreement which may be instituted in any State
or Federal court in The City of New York, and Issuer expressly accepts the
jurisdiction of any such court in respect of any such action. Such appointment
shall be irrevocable as long as any of the Securities remain outstanding unless
and until the appointment of a successor Fiscal Agent as Issuer's Process Agent
and such successor's acceptance of such appointment shall have occurred. Issuer
will take any and all action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment or appointments
in full force and effect as aforesaid. Service of process upon the Process Agent
and written notice of such service mailed or delivered to Issuer, in Tokyo,
Japan shall be deemed in every respect effective service of process upon Issuer.
Notwithstanding the foregoing, any action by an Underwriter arising out of or
based upon this Agreement may be instituted by any Underwriter in any competent
court in Japan. Issuer hereby waives irrevocably any immunity to which it might
otherwise be entitled in any action arising out of or based upon this Agreement
which may be instituted as provided in this Section in any State or Federal
court in The City of New York or in any competent court in Japan. This waiver is
intended to be effective upon execution of this Agreement without any further
act by Issuer before any such court and introduction of a true copy of this
Agreement into evidence shall be conclusive and final evidence of such waiver.
-11-
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement among Issuer, Japan and the several Underwriters in
accordance with its terms.
Very truly yours,
JAPAN FINANCE CORPORATION FOR JAPAN
MUNICIPAL ENTERPRISES
By /s/ Michihiko Urakami By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------- --------------------------------------
Michihiko Urakami Etsuro Honda
Executive Director Duly Authorized Representative of Japan
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
SALOMON BROTHERS INTERNATIONAL LIMITED
For themselves and for each of the Representatives and the Underwriters
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Authorized Signatory
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SCHEDULE I
Representative(s): Salomon Brothers International Limited
UBS AG, acting through its business group UBS Warburg
Title, Purchase Price and Description of Securities:
Title: 1.55% Japanese Yen Guaranteed Bonds due February 21, 2012
Principal amount: 70,000,000,000 yen
Purchase price (include accrued interest or amortization if applicable):
74,150,720,000 yen
Selling concession: 0.20%
Combined management and underwriting commission: 0.125%
Redemption provisions: At the option of Issuer if Additional Amounts are
payable pursuant to the Fiscal Agency Agreement.
Forms and denominations: Fully registered form in denominations of
1,000,000 yen and integral multiples thereof.
Other provisions: Not applicable.
Date of Fiscal Agency Agreement: November 27, 2002
Fiscal Agent and Principal Paying Agent: The Bank of Tokyo-Mitsubishi, Ltd.,
London Branch
U.S. Representative of the Fiscal Agent: Bank of Tokyo-Mitsubishi Trust Company
Paying Agent: Bank of Tokyo-Mitsubishi (Luxembourg) S.A.
Statements in the Registration Statement and the Final Prospectus furnished by
the Underwriters for purposes of Section 2(b) and Section 8(b): Last paragraph
of text on the cover page of Final Prospectus, the Fourth and Fifth paragraphs
under the caption "Underwriting" and the paragraph on page S-35 in the Final
Prospectus.
Representations, warranties and agreements of Issuer pursuant to Section 2 also
shall not extend to the information set forth in the portions of the Final
Prospectus under the following additional caption(s):
"Recent Developments - Japan"
Type of settlement funds: Same-day Funds
Closing Date, Time and Location: December 3, 2002, 10:00 a.m. New York City
time at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and Otemachi First Square, East ▇▇▇, ▇-▇, ▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇,
▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇-▇▇▇▇.
Office of Fiscal Agent for checking and packaging of Securities: 1251 Avenue of
the Americas, New York, New York, 10020
New York Stock Exchange listing: Not applicable
London Stock Exchange listing: Not applicable
Luxembourg Stock Exchange listing: Yes
Underwriters' expense reimbursement pursuant to Section 5(b)(iii): 30,650,000
yen
Notices to Representatives or Underwriters: Fixed Income Syndicate Desk Salomon
Brothers International Limited, Citigroup Centre, Canada Square, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Authorized Agent in the United States for Issuer: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
Associates, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇.▇. ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Authorized Agents in the United States for Japan: Etsuro Honda and ▇▇▇▇▇▇▇
▇▇▇▇▇, Consulate General of Japan in New York, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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SCHEDULE II
Principal Amount
Underwriters of Securities
------------ ----------------
Salomon Brothers International Limited. ............................................... 33,250,000,000
UBS AG, acting through its business group UBS Warburg.................................. 33,250,000,000
Nomura International plc............................................................... 1,000,000,000
Daiwa Securities SMBC Europe Limited................................................... 500,000,000
Deutsche Bank AG London................................................................ 500,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ International............................................................ 500,000,000
Mizuho International plc............................................................... 500,000,000
Tokyo-Mitsubishi International plc..................................................... 500,000,000
--------------
Total 70,000,000,000 Yen
==============
