Cooperative Finance
Corporation
$250,000,000 2.625% Collateral Trust
Bonds due 2012
$250,000,000 3.875% Collateral Trust Bonds due 2015
UBS Securities
LLC
677 Washington Boulevard
Stamford, CT 06901
Deutsche Bank
Securities Inc.
60 Wall Street
New York, NY 10005
RBS Securities
Inc.
600 Washington Boulevard
Stamford, CT 06901
Mitsubishi UFJ
Securities (USA), Inc.
1633 Broadway, 29th Floor
New York, NY 10019-6708
Mizuho
Securities USA Inc.
1251 Avenue of the Americas, 33nd Floor
New York, NY 10020
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 $250,000,000 principal amount of its 2.625%
Collateral Trust Bonds due 2012 (the “ThreeYear Bonds”)
and $250,000,000 principal amount of its 3.875% Collateral Trust
Bonds due 2015 (the “Six Year Bonds” and, together with
the Three Year Bonds, the “Bonds”), to
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be issued under
and secured by an Indenture dated as of October 25, 2007,
between the Company and U.S. Bank National Association, as trustee
(the “Trustee”). Such Indenture, as amended by any
supplemental indenture, is hereinafter called the
“Indenture”. Certain terms used but not defined herein
are defined in 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 $2,000 and integral multiples of $1,000 in
excess 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.
1.
Certain Representations and Warranties by the Company. As of
the Applicable Time, as of the date hereof and as of the Closing
Date, the Company represents and warrants to each Underwriter as
follows:
(a)
Registration Statement and Prospectus. The Company meets the
requirements for the use of Form S-3 under the Securities Act of
1933, as amended (the “Securities Act”), and has filed
with the Securities and Exchange Commission (the
“Commission”) an automatic shelf registration statement
(No. 333-146960), as defined in Rule 405 under the
Securities Act, on Form S-3, including a basic prospectus (the
“Basic Prospectus”), for registration under the
Securities Act of the offering and sale of the Bonds. Such
registration statement, including any amendments thereto filed
prior to the date and time that this Agreement is executed and
delivered by the parties hereto (the “Execution Time”),
became effective upon filing. The Company may have filed with the
Commission, as part of an amendment to the registration statement
or pursuant to Rule 424(b) under the Securities Act, one or more
preliminary prospectus supplements, each of which has previously
been furnished to you (the preliminary prospectus supplement to the
Basic Prospectus relating to the Bonds used immediately prior to
the filing of the Prospectus (as defined below), together with the
Basic Prospectus, the “Preliminary Prospectus”). The
Company will file with the Commission the prospectus relating to
the Bonds in accordance with Rule 424(b) under the Securities Act
(the prospectus supplement to the Basic Prospectus relating to the
Bonds that is first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus, the
“Prospectus”). As filed, the Prospectus shall contain
all information required by the Securities Act and the rules
promulgated thereunder, and, except to the extent the
Representatives shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior to
the Execution Time. A three year final term sheet, containing
solely a description of the terms of the ThreeYear Bonds,
substantially in the form of the Three Year Collateral Trust Bond
Term Sheet set forth on Schedule II attached hereto and
approved by you, and a six year final term sheet,
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containing
solely a description of the terms of the Six Year Bonds,
substantially in the form of the Six Year Collateral Trust Bond
Term Sheet set forth on Schedule II attached hereto and
approved by you (together, the “Pricing Term Sheets”),
have been prepared and will be filed pursuant to Rule 433(d) under
the Securities Act, 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 statement or
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 statement, 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 Securities Act, to the extent
such information is deemed pursuant to Rule 430B or
Rule 430C under the Securities Act to be included in the
registration statement at the time it became effective, is
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 under the Securities Act which amends or
supplements the Prospectus.
All references in
this Agreement to the Registration Statement, the Basic Prospectus,
the Preliminary Prospectus or the Prospectus shall be deemed as of
the relevant time and date to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form
S-3; all references in this Agreement to financial statements and
schedules and other information that is “contained”,
“included”, “stated” or “set
forth” (and all other references of like import) in the
Registration Statement, the Basic Prospectus, the Preliminary
Prospectus or the Prospectus shall be deemed to mean and include
all such financial statements and schedules and other information
that are or are deemed to be incorporated by reference from time to
time in the Registration Statement, the Basic Prospectus, the
Preliminary Prospectus or the Prospectus, as the case may be; and
all references in this Agreement to amendments or supplements to
the Registration Statement, the Basic Prospectus, the Preliminary
Prospectus or the Prospectus shall be deemed to mean and include
any document filed under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), after each date that the
Registration Statement and any post-effective amendment or
amendments thereto became or become effective or the issue date of
the Basic Prospectus, the Preliminary Prospectus or the Prospectus,
as the case may be, deemed to be incorporated therein by reference;
provided , that any statement in a document incorporated or
deemed to be incorporated in the Registration 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
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such documents
became effective or were filed with the Commission, or in the
Preliminary Prospectus at the Applicable Time (as defined
below).
(b) Accuracy of
Registration Statement and Prospectuses. The Preliminary
Prospectus, together with the Pricing Term Sheets and any other
Issuer Free Writing Prospectus listed on Schedule III hereto
(collectively, the “Disclosure Package”), as of 2:30
p.m. on September 9, 2009 (the “Applicable Time”),
did not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; at all times at and subsequent to the Applicable Time
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
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 at and subsequent to the Applicable
Time 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 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 Sheets 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 the Registration
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Statement and
the Prospectus, including any document incorporated therein and any
prospectus supplement deemed to be a part thereof that has not been
superseded or modified; 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. The foregoing sentence does
not apply to statements in or omissions from the Disclosure Package
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 therein, it
being understood and agreed that the only such information
furnished by or on behalf of any Underwriter consists of the
information described as such in Section 15 hereof.
(d) WKSI
Status . (i) At the time of filing the Registration
Statement, (ii) at the time of the most recent amendment thereto
for the purposes of complying with Section 10(a)(3) of the
Securities Act (whether such amendment was by post-effective
amendment, incorporated reports filed pursuant to Section 13
or 15(d) of the Exchange Act or form of prospectus) and
(iii) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of
Rule 163(c)) made any offer relating to the Bonds in reliance
on the exemption in Rule 163, the Company was or is (as the
case may be) a “well-known seasoned issuer” as defined
in Rule 405.
(e) Not an
Ineligible Issuer. (i) At the earliest time after the
filing of the Registration Statement that the Company or another
offering participant made a bona fide offer (within the meaning of
Rule 164(h)(2)) under the Securities Act) with respect to the
Bonds and (ii) as of the Execution Time (with such date being
used as the determination date for purposes of this clause (ii)),
the Company was not and is not an “ineligible issuer”
(as defined in Rule 405 under the Securities Act), without
taking into account any determination by the Commission pursuant to
Rule 405 that it is not necessary that the Company be
considered an ineligible issuer.
(f)
Accountants. The accountant who has certified or shall
certify the financial statements filed and to be filed with the
Commission as parts of the Registration Statement and the
Prospectus is an independent registered public accounting firm with
respect to the Company as required by the Securities Act and rules
and regulations of the Commission thereunder and the rules and
regulations of the Public Company Accounting Oversight
Board.
(g) 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
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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.
(h) 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.
(i)
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
reasonably be expected to 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 or on the power or ability
of the Company to perform its obligations under this Agreement or
the Indenture.
(j)
Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(k)
Legality. The Indenture has been duly authorized by the
Company, has been duly qualified under the Trust Indenture Act, and
has been duly executed and delivered by the Company and, assuming
due authorization, execution and delivery by the Trustee,
constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors’
rights generally from time to time in effect and subject as to
enforceability to general principles of equity, regardless of
whether considered in a proceeding in equity or at law). On the
Closing Date, the Bonds will be duly and validly authorized, and
when issued, authenticated and paid for in accordance with the
terms of this Agreement and the Indenture, will be valid and
binding obligations of the Company, enforceable in accordance with
their terms, (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other laws
affecting creditors’ rights generally from time to time in
effect and subject as to enforceability to general principles of
equity, regardless of whether considered in a proceeding in equity
or at law), and will be entitled to the benefits of the Indenture,
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.
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(l) No
Conflicts. Neither the issuance or sale of the Bonds nor the
consummation of any other of the transactions herein contemplated
will result in a violation of the District of Columbia Cooperative
Association Act, as amended or the Articles of Incorporation or
Bylaws of the Company or any provision of applicable law or result
in a breach by the Company of any terms of, or constitute a default
under, any other agreement or undertaking of the
Company.
(m) 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, the Indenture or the Bonds, 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 Bonds.
(n)
Security. The Indenture is effective to create in favor of
the Trustee a security interest in the Mortgage Notes pledged
pursuant thereto and the identifiable cash proceeds thereof and any
other property, including cash and Permitted Investments, pledged
pursuant to the Indenture. Such security interest is perfected with
respect to such pledged Mortgage Notes in the Trustee’s
possession in New York, and with respect to such cash proceeds of
such Mortgage Notes and any other property pledged pursuant to the
Indenture, and has priority over any other security interest in
such Mortgage Notes and such cash proceeds thereof and such other
property created under the UCC, subject only to the exceptions
permitted by the Indenture.
(o) 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).
(p)
Regulation. The Company is not required to be registered as
an investment company under the Investment Company Act of
1940.
(q) Compliance
with the Exchange Act. The documents incorporated by reference
in the Basic Prospectus, and any amendment or supplement thereto,
as of the dates they were filed with the Commission, complied as to
form in all material respects with the requirements of the Exchange
Act.
(r) 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 and (ii) the applicable
regulations of the New York Stock Exchange.
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(s) Internal
Controls. The Company maintains a system of internal controls,
including, but not limited to, disclosure controls and procedures,
internal controls over accounting matters and financial reporting,
an internal audit function and legal and regulatory compliance
controls that comply with applicable securities laws and are
sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with
management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization and
(iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Since the most recent
management report on the effectiveness of the Company’s
internal controls over financial reporting, (i) the Company
has not identified any material weakness in the Company’s
internal controls over financial reporting (whether or not
remediated) and (ii) there has been no change in the
Company’s internal controls over financial reporting that has
materially adversely affected, or is reasonably likely to
materially adversely affect, the Company’s internal controls
over financial reporting.
2.
Agreement to Purchase. Subject to the terms and conditions
and in reliance 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 99.501% of the principal amount of
the Three Year Bonds and 98.962% of the principal amount of the Six
Year Bonds, the respective principal amounts 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 September 16, 2009 or such later date (not later
than September 21, 2009) or location 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, written or electronic
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,
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the Prospectus
as required by law to be delivered in connection with sales by an
Underwriter or dealer, as many copies of the Preliminary
Prospectus, the Prospectus and any Issuer Free Writing Prospectuses
(and, in the event of any amendments or supplements thereto, such
amended or supplemented Preliminary Prospectus, Prospectus or
Issuer Free Writing 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 a prospectus,
as provided in this Section 4, any event known to the Company
relating to or affecting the Company shall occur which should be
set forth in an amendment of or supplement to the 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
promptly 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
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