Cooperative Finance
Corporation
$600,000,000 Extendible Collateral
Trust Bonds
J.P. Morgan
Securities Inc.
270 Park Avenue
New York, NY 10017
Credit Suisse
Securities (USA) LLC
11 Madison Avenue
New York, NY 10010
Scotia Capital
(USA) Inc.
1 Liberty Plaza, 25th Floor
165 Broadway
New York, NY 10006
As Representatives
of the several Underwriters
National
Rural Utilities Cooperative Finance Corporation, a District of
Columbia cooperative association (the “Company”),
proposes to issue $600,000,000 principal amount of its Extendible
Collateral Trust Bonds (the “Bonds”), to be issued
under and secured by an Indenture dated as of February 15,
1994, between the Company and U.S. Bank National Association, as
successor trustee (the “Trustee”). Such Indenture, as
amended by any supplemental indenture, is hereinafter called the
“Indenture”. The Bonds are more fully described in the
Registration Statement and in the Prospectus hereinafter mentioned.
The Bonds will be issued in fully registered form only, in
denominations of $1,000 and any integral multiple
thereof.
You
have advised us (i) that you and any other firms and
corporations named in Schedule I attached hereto (you and such
firms and corporations being hereinafter called the Underwriters,
which term shall also include any underwriter substituted as
provided in Section 14 hereof), acting severally and not
jointly, are willing to purchase, on the terms and conditions
hereinafter set forth, the principal amount of the Bonds specified
in such Schedule I, and (ii) that you are authorized, on
behalf of yourselves and the other Underwriters, to enter into this
Agreement. The final prospectus and the final prospectus supplement
relating to the offering of the Bonds, in the forms first furnished
to the Underwriters by the Company dated the date hereof and that
will be filed with the SEC under Rule 424(b), are collectively
referred to herein as the
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“Prospectus”. The term
“Pricing Prospectus” shall mean the prospectus, as
amended or supplemented, relating to the Bonds that is included in
the Registration Statement immediately prior to the Applicable
Time, including any document incorporated by reference therein at
the Applicable Time. Terms used but not otherwise defined herein
shall have the meanings assigned to them in the
Indenture.
1.
Certain Representations and Warranties by the Company. The
Company represents and warrants to each Underwriter as
follows:
(a)
Registration Statement and Prospectus. The Company has filed
with the Securities and Exchange Commission (the
“Commission”) Registration Statement
No. 333-109365 for the registration under the Securities Act
of 1933, as amended (the “Securities Act”), of the
Bonds (including a prospectus relating thereto) and may have filed
one or more amendments thereto (including one or more amended or
supplemental prospectuses) and such registration statements and any
such amendments have become effective. The Prospectus has been
prepared and will be filed pursuant to and within the time period
required under Rule 424, Rule 430A, Rule 430B or
Rule 430C, as applicable, under the Securities Act. A final
term sheet, containing solely a description of the terms of the
Bonds, substantially in the form of Schedule II attached
hereto and approved by you (the “Pricing Term Sheet”),
has been prepared and will be filed pursuant to Rule 433(d),
and all other material, if any, required to be filed by the Company
pursuant to Rule 433(d) in connection with the offer and sale of
the Bonds has been or will be so filed, in each case within the
time period required under such Rule. The Company will not file any
other amendment of such registration statements or such prospectus
or any supplement to such prospectus on or after the Applicable
Time and prior to the date and time of delivery of and payment for
the Bonds referred to in Section 3 hereof (the “Closing
Date”), except with your approval. Such registration
statements, including any amendments thereto, the financial
statements and exhibits and any information contained or
incorporated by reference in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, to the extent such
information is deemed pursuant to Rule 430B or Rule 430C under
the Act to be included in the Registration Statement at the time it
became effective, are hereinafter called the “Registration
Statement”. Any reference in this Agreement to the Prospectus
as amended or supplemented (including any preliminary prospectus
supplement relating to the Bonds) shall include, without
limitation, any prospectus or prospectus supplement filed with the
Commission pursuant to Rule 424 of the Commission under the
Securities Act which amends or supplements the Prospectus. Any
reference herein to the Registration Statement or the Prospectus
shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934 (the
“Exchange Act”) on or before the effective date of the
Registration Statement or the date of such Prospectus, as the case
may be; and any reference herein to the terms “amend”,
“amendment” or “supplement” with respect to
the Registration Statement or the Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange
Act after the effective date of the Registration Statement, or the
date of any Prospectus, as the case may be, and deemed to be
incorporated therein by reference; provided that any statement in a
document incorporated or deemed to be incorporated in the
Registration
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Statement or
the Prospectus shall be deemed not to be contained in the
Registration Statement or the Prospectus if such statement has been
modified or superseded by any statement in the Registration
Statement or the Prospectus when such documents became effective or
were filed with the Commission, or in the Pricing Prospectus at the
Applicable Time.
(b)
Accuracy of Registration Statement and Prospectuses. The
Pricing Prospectus, together with the Pricing Term Sheet and any
other Issuer Free Writing Prospectus (collectively, the
“Disclosure Package”), as of 4:30 p.m. on
December 5, 2006 (the “Applicable Time”), did not
contain any untrue statement of a material fact and did not omit to
state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made not
misleading; at all times subsequent to the date of this Agreement
up to and including the Closing Date, and when any post-effective
amendment thereof shall become effective, the Registration
Statement (and the Registration Statement as amended if any
post-effective amendment thereof shall have become effective) will
comply in all material respects with the provisions of the
Securities Act and the Exchange Act and the rules and regulations
of the Commission thereunder and will not contain an untrue
statement of a material fact and will not omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; and, at all times subsequent to
the date of this Agreement up to and including the Closing Date,
the Prospectus (and the Prospectus as amended or supplemented, if
the Company shall have filed with the Commission any amendment
thereof or supplement thereto) and the Disclosure Package, will
fully comply with the provisions of the Securities Act and the
Exchange Act and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material
fact and will not omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided , however , that none of the
representations and warranties in this paragraph (b) shall
apply to (i) that part of the Registration Statement which
shall constitute the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of 1939 (the “Trust
Indenture Act”) of the Trustee or (ii) statements in, or
omissions from, the Disclosure Package or the Prospectus or any
amendment thereof or supplement thereto made in reliance upon and
in conformity with information furnished as herein stated or
otherwise furnished in writing to the Company by or on behalf of
any Underwriter through you for use in connection with the
preparation of the Registration Statement or the Prospectus or any
such amendment or supplement.
(c)
Issuer Free Writing Prospectuses. The Company has not made,
and will not make (other than the Pricing Term Sheet and any other
documents listed on Schedule III attached hereto), any offer
relating to the Bonds that would constitute a “free writing
prospectus” (as defined in Rule 405 under the Securities
Act), any such free writing prospectus an “Issuer Free
Writing Prospectus”, without the prior consent of the
Representatives; the Company will comply with the requirements of
Rule 433 under the Securities Act with respect to any such
Issuer Free Writing Prospectus; any such Issuer Free Writing
Prospectus did not and will not, as of its issue date and through
the Closing Date, include any information that conflicts with the
information contained in
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the
Registration Statement and the Prospectus; any such Issuer Free
Writing Prospectus, when taken together with the information
contained in the Registration Statement and the Prospectus, did
not, when issued or filed pursuant to Rule 433 under the
Securities Act, and will not through the Closing Date contain an
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the
Company is not an “ineligible issuer” (as defined in
Rule 405 under the Act) as of the eligibility determination
date for purposes of Rules 164 and 433 under the Act with
respect to the offering of the Bonds contemplated by the
Registration Statement.
(d)
Accountants. The accountants who have certified or shall
certify the financial statements filed and to be filed with the
Commission as parts of the Registration Statement and the
Prospectus are independent with respect to the Company as required
by the Securities Act and rules and regulations of the Commission
thereunder.
(e)
Due Incorporation. The Company has been duly incorporated
and is now, and on the Closing Date will be, a validly existing
cooperative association in good standing under the laws of the
District of Columbia, duly qualified and in good standing in each
jurisdiction in which the ownership or leasing of properties or the
conduct of its business requires it to be qualified (or the failure
to be so qualified will not have a material adverse effect upon the
business or condition of the Company), and the Company has the
corporate power and holds all valid permits and other required
authorizations from governmental authorities necessary to carry on
its business as now conducted and as to be conducted on the Closing
Date and as contemplated by the Prospectus.
(f)
Material Changes. Since the respective dates as of which
information is given in the Registration Statement, the Disclosure
Package and the Prospectus, and except as set forth therein, there
has not been any material adverse change in the financial condition
or the results of operations of the Company, whether or not arising
from transactions in the ordinary course of business.
(g)
Litigation. On the date hereof, except as set forth in the
Disclosure Package and the Prospectus, the Company does not have
any litigation pending of a character which in the opinion of
counsel for the Company referred to in Section 13(c) hereof could
result in a judgment or decree having a material adverse effect on
the condition, financial or other, or the results of operations of
the Company.
(h)
Legality. On the Closing Date, the Bonds will be duly and
validly authorized, and no further authorization, consent or
approval of the members and no further authorization or approval of
the Board of Directors of the Company or any committee thereof will
be required for the issuance and sale of the Bonds as contemplated
herein; and neither such issuance or sale of the Bonds nor the
consummation of any other of the transactions herein contemplated
will result in a breach by the Company of any terms of, or
constitute a default under, any other agreement or undertaking of
the Company.
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(i)
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).
(j)
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.
(k)
Compliance with the Sarbanes-Oxley Act. The Company and its
directors and officers, in their capacities as such, are in
compliance in all material respects with (i) the applicable
provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the
“Sarbanes-Oxley Act”) and (ii) the applicable
regulations of the New York Stock Exchange.
2.
Agreement to Purchase. Subject to the terms and conditions
and upon the representations and warranties herein set forth, the
Company agrees to sell to you and any other Underwriters, severally
and not jointly, and you and such other Underwriters, severally and
not jointly, agree to purchase from the Company, at a purchase
price of 99.75% of the principal amount, the principal amount of
Bonds set forth opposite the names of the Underwriters in Schedule
I hereto.
3.
Closing. Delivery of and payment for the Bonds shall be made
at the offices of Cravath, Swaine & Moore LLP, Worldwide Plaza,
825 Eighth Avenue, New York, New York 10019 at 9:00 a.m., New York
City time, on December 12, 2006, or such later date (not later
than December 15, 2006) as you, as the Representatives of the
Underwriters, shall designate, which date and time may be postponed
by agreement between you, as the Representatives, and the Company
or as provided in Section 14 hereof. Delivery of the Bonds
shall be made to you, for the respective accounts of the several
Underwriters, against payment by the several Underwriters through
you of the purchase price thereof, to or upon the order of the
Company by certified or official bank check or checks payable, or
wire transfers, in immediately available funds. The Bonds shall be
delivered in definitive global form through the facilities of The
Depository Trust Company (“DTC”).
4.
Prospectuses. The Company has caused to be delivered to you,
as the Representatives of the Underwriters, copies of the
Prospectus and the Disclosure Package and has consented to the use
of such copies for the purposes permitted by the Securities Act.
The Company agrees to deliver to you, as the Representatives of the
Underwriters, without charge, from time to time during such period
as in the opinion of Cravath, Swaine & Moore LLP, counsel for
the Underwriters, the Prospectus as required by law to be delivered
in connection with sales by an Underwriter or dealer, as many
copies of the Prospectus (and, in the event of any amendment of or
supplement to the Prospectus, of such amended or supplemented
Prospectus) as you, as the Representatives of the Underwriters, may
reasonably request. If, at any time during the period in which the
Company is (or but for the exemption in Rule 172 would be)
required to deliver copies of the Prospectus, as provided in this
Section 4, any event known to the Company relating
to
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or affecting
the Company shall occur which should be set forth in an amendment
of or supplement to the Disclosure Package or the Prospectus in
order to make the statements in the Disclosure Package or the
Prospectus not misleading in the light of the circumstances at the
time it is delivered to the purchaser, or it shall be necessary to
amend or supplement the Disclosure Package or the Prospectus to
comply with law or with the rules and regulations of the
Commission, the Company, at its expense, will forthwith prepare and
furnish to you for distribution to the Underwriters and dealers a
reasonable number of copies of an amendment or amendments of or a
supplement or supplements to the Disclosure Package or the
Prospectus which will so amend or supplement the Disclosure Package
or the Prospectus that, as amended or supplemented, it will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements in the Disclosure Package or the Prospectus
not misleading in the light of the circumstances when it is
delivered to a purchaser, and will comply with law and with such
rules and regulations. The Company authorizes the Underwriters and
all dealers effecting sales of the Bonds to use the Disclosure
Package and the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Bonds in
accordance with applicable provisions of the Securities Act and the
applicable rules and regulations thereunder for the period during
which the Company is required to deliver copies of the Prospectus
as provided in this Section 4.
5.
Commission Proceedings as to Registration Statement. The
Company agrees to advise you promptly, as the Representatives of
the Underwriters, and to confirm such advice in writing (a) when
any post-effective amendment of the Registration Statement shall
have become effective and when any further amendment of or
supplement to the Prospectus shall be filed with the Commission,
(b) of any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for additional
information and (c) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement or of the initiation of any proceedings for that purpose.
The Company will use every reasonable effort to prevent the
issuance of such a stop order and, if any such order shall at any
time be issued, to obtain the withdrawal thereof at the earliest
possible moment.
6.
Blue Sky. The Company will diligently endeavor, when and as
requested by you, to qualify the Bonds, or such portion thereof as
you may request, for offering and sale under the securities or blue
sky laws of any jurisdictions which you shall designate.
7.
Earnings Statement. The Company agrees to make generally
available to its security holders, in accordance with Section 11(a)
of the Securities Act and Rule 158 thereunder, an earnings
statement of the Company (which need not be audited) in reasonable
detail and covering a period of at least 12 months beginning
after the effective date of the Registration Statement.
8.
No fiduciary duty. The Company acknowledges and agrees that
in connection with this offering, sale of the Bonds or any other
services the Underwriters may be deemed to be providing hereunder,
notwithstanding any preexisting relationship,
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advisory or
otherwise, between the parties or any oral representations or
assurances previously or subsequently made by the Underwriters:
(i) no fiduciary or agency relationship between the Company,
on the one hand, and the Underwriters, on the other, exists;
(ii) the Underwriters are not acting as advisors, expert or
otherwise, to the Company, including, without limitation, with
respect to the determination of the public offering price of the
Bonds, and such relationship between the Company, on the one hand,
and the Underwriters, on the other, is entirely and solely
commercial, based on arms-length negotiations; (iii) any
duties and obligations that the Underwriters may have to the
Company shall be limited to those duties and obligations
specifically stated herein; and (iv) the Underwriters and
their respective affiliates may have interests that differ from
those of the Company. The Company hereby waives any claims that the
Company may have against the Underwriters with respect to any
breach of fiduciary duty in connection with the foregoing matters
in this Section 8.
9.
Clearance and Settlement. The Company will cooperate with
the Underwriters to permit the Bonds to be eligible for clearance
and settlement through DTC.
10.
Expenses. The Company agrees to pay all fees and expenses in
connection with (a) the preparation, printing and filing of the
Registration Statement (including all exhibits to the Registration
Statement), the Prospectus and any amendments thereof and
supplements thereto, including any Issuer Free Writing Prospectus,
and the furnishing of copies of each thereof to the Underwriters
(including costs of mailing and shipment), (b) the issuance of
the Bonds, (c) the rating of the Bonds by rating agencies,
(d) the delivery of the Bonds to you in New York City for the
respective accounts of the several Underwriters, (e) the
qualifying of the Bonds as provided in Sect
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