EXHIBIT 10.38
 

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$28,908,000
CLEAN RENEWABLE ENERGY BONDS
SECURED TAX CREDIT SERIES 2009A

NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
as Issuer

FEDERAL AGRICULTURAL MORTGAGE CORPORATION
as Guarantor
 

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CREDIT SUPPORT AGREEMENT
 

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Dated as of September 1, 2009
 

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CREDIT SUPPORT AGREEMENT, dated as of September 1, 2009, between FEDERAL
AGRICULTURAL MORTGAGE CORPORATION, a federally-chartered instrumentality of the
United States and an institution of the Farm Credit System, as guarantor,
(“Farmer Mac” or the “Guarantor”) and NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION, a cooperative association existing under the laws of the
District of Columbia, as issuer (“National Rural”).
 
RECITALS
 
WHEREAS National Rural is a non-profit cooperative association whose primary
business is making rural utilities loans; and
 
WHEREAS National Rural wishes to fund certain rural utilities loans for clean
renewable energy projects by issuing $28,908,000 of Clean Renewable Energy
Bonds, Secured Tax Credit Series 2009A (the “2009A Bonds”); and
 
WHEREAS Farmer Mac is an instrumentality of the United States formed to provide
for a secondary market for agricultural real estate and rural housing mortgage
loans,  rural utilities loans, and USDA-guaranteed farm program and rural
development loans; and
 
WHEREAS at National Rural’s request, Farmer Mac has agreed to issue its
guarantee of the timely payment of interest (if any) on the Series 2009A Bonds
and, in the case of principal, an amount equal to the amount of outstanding
principal of the Series 2009A Bonds less any amounts in the Series 2009A Project
Account (the “Guarantee”), subject to the limitations set forth herein and in
the Indenture; and
 
WHEREAS, Farmer Mac’s agreement to provide its guarantee on the 2009A Bonds is
subject to the condition that National Rural pledge Eligible Loans to the
Trustee such that the sum of (i) the aggregate outstanding principal balance of
the Eligible Loans and (ii) any amounts in the Borrower Repayments Fund or the
Bond Fund shall at all times be at least equal to the amount of the Guarantee.
 
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
Farmer Mac and National Rural agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
SECTION 1.01.            Definitions.  As used in this Agreement, the following
terms shall have the following meanings:
 
“Agreement” means this Credit Support Agreement, as the same may be amended from
time to time.
 
“Bond Fund” has the meaning given to that term in the Indenture.

 
 

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“Borrower Repayments Fund” has the meaning given to that term in the Indenture.
 
“Business Day” has the meaning given to that term in the Indenture.
 
“Certificate of Pledged Collateral” has the meaning given to that term in the
Pledge Agreement.
 
“Closing Date” means the issuance date of the 2009A Bonds.
 
“Eligible Loan” is defined in Annex F hereto.
 
“Event of Default” has the meaning given to that term in Section 7.01.
 
“Farmer Mac Series C Preferred Stock” means shares of Non-Voting Cumulative
Preferred Stock, Series C issued by Farmer Mac.
 
“Financial Statements”, in respect of a Fiscal Year, means the consolidated
financial statements (including footnotes) of National Rural for that Fiscal
Year as audited by an independent registered public accounting firm selected by
National Rural.
 
“Fiscal Year” means the fiscal year of National Rural, as such may be changed
from time to time, which at the date hereof commences on June 1 of each calendar
year and ends on May 31 of the following calendar year.
 
“Guarantor Default” has the meaning given to that term in the Indenture.
 
 “Indenture” means that certain indenture dated as of September 1, 2009 between
National Rural, U.S. Bank National Association, a national banking association,
as Trustee, and Farmer Mac, as guarantor.
 
“Indenture Event of Default” means an “Event of Default” as such term is defined
in the Indenture.
 
“Member” shall mean any Person who is member of National Rural.
 
“National Rural Notice” has the meaning given to that term in the Pledge
Agreement.
 
“Payment Date” means any date upon which the payment of principal and, if
applicable, interest on the Series 2009A Bonds is due to the holders thereof.
 
“Person” means an individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
 
“Pledge Agreement” means the Pledge and Security Agreement dated as of the date
hereof between National Rural and the Trustee for the benefit and security of
the holders of the 2009A Bonds and Farmer Mac, as guarantor, to the extent
Farmer Mac is subrogated to the rights of the holders of the 2009A Bonds.

 
 

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“Pledged Collateral” has the meaning given to that term in the Pledge Agreement.
 
“Purchase Agreement” means the Securities Purchase Agreement between National
Rural and Farmer Mac, substantially in the form of Annex C hereto, pursuant to
which National Rural agrees to purchase Farmer Mac Series C Preferred Stock in
an amount equal to 2% of the outstanding principal amount of the Series 2009A
Bonds as of the Closing Date.
 
“Series 2009A Project Account” has the meaning given to that term in the
Indenture.
 
“Transaction Documents” means this Agreement, the Indenture, the Pledge
Agreement, and the Purchase Agreement.
 
“Trustee” means U.S. Bank National Association, or its successor, as Trustee
under the Indenture.
 
SECTION 1.02.            Principles of Construction.  As used in this Agreement,
the terms defined in Section 1.01 include the plural as well as the singular and
the singular as well as the plural.  The words “hereafter”, “herein”, “hereof”,
“hereto” and “hereunder”, and words of similar import, refer to this Agreement
as a whole.  The descriptive headings of the various articles and sections of
this Agreement were formulated and inserted for convenience only and shall not
be deemed to affect the meaning or construction of the provisions
hereof.  Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Indenture, as supplemented by the First
Supplemental Indenture.
 
ARTICLE II
 
GUARANTEE
 
SECTION 2.01. Guarantee.  Farmer Mac shall issue the Guarantee in accordance
with the terms, conditions and provisions of the Indenture and this
Agreement.  No reference herein shall alter or impair the Guarantee.

 
 

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SECTION 2.02. Payment of Guarantee and Administrative Fee.
 
(a)  In consideration of the Guarantee and subject to the terms and conditions
of this Agreement, National Rural shall pay to Farmer Mac a nonrefundable
guarantee fee quarterly in arrears in an amount equal to the product of (i) the
outstanding principal balance of the Series 2009A Bonds less any amounts in the
Series 2009A Project Account as of the last calendar day of each February, May,
August and November through and including the final maturity date of the Series
2009A Bonds, and (ii) a rate equal to one fourth of the per annum fee of
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH SECURITIES AND EXCHANGE
COMMISSION], computed on the basis of a 360-day year comprised of twelve 30-day
months (the “Guarantee Fee”).  National Rural shall also pay to Farmer Mac a
nonrefundable administrative fee quarterly in arrears in an amount equal to the
product of (i) the outstanding principal balance of the Series 2009A Bonds less
any amounts in the Series 2009A Project Account as of the last calendar day of
each February, May, August and November through and including the final maturity
date of the Series 2009A Bonds, and (ii) a rate equal to one fourth of the per
annum fee of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH SECURITIES
AND EXCHANGE COMMISSION], computed on the basis of a 360-day year comprised of
twelve 30-day months (the “Administrative Fee”).  Upon the occurrence, and
during the continuance, of an Event of Default by National Rural set forth in
Section 7.01(d), the rate used to calculate the quarterly Administrative Fee
shall be one fourth of the per annum fee of [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH SECURITIES AND EXCHANGE COMMISSION].  Payments of the
Guarantee Fee and the Administrative Fee will be rounded to the nearest cent.
 
(b)  The first quarterly Guarantee Fee and the Administrative Fee shall be paid
on the first Farmer Mac Payment Date (as defined below) occurring after the
Closing Date and then subsequently on each succeeding Farmer Mac Payment Date
(as defined below) through and including the final maturity date of the Series
2009A Bonds.  National Rural shall pay the Guarantee Fee and the Administrative
Fee to Farmer Mac by 11 a.m. New York City time on the 20th day of each March,
June, September and December (each, a “Farmer Mac Payment Date”), in United
States dollars, by wire transfer of immediately available funds to such account
as Farmer Mac shall specify to National Rural.  If a specified Farmer Mac
Payment Date is not a Business Day, the Guarantee Fee and the Administrative Fee
will be paid on the next Business Day with the same force and effect as if made
on the applicable Farmer Mac Payment Date.
 
(c)  Payment of the Guarantee Fee and the Administrative Fee by National Rural
shall be suspended during any period in which a Guarantor Default shall have
occurred and be continuing; provided that at the time the Guarantor Default is
cured all accrued and unpaid Guarantee Fees and Administrative Fees shall then
become due and payable.
 
(d)  All payments in respect of the Guarantee Fee and the Administrative Fee
will be made without any withholding or deduction for or on account of any
present or future taxes, duties, levies, assessments or other governmental
charges of whatever nature imposed or levied on behalf of any governmental
authority in the United States having the power to tax, unless National Rural,
based on an opinion of counsel acceptable to the Guarantor, determines that it
is required by law to make such withholding or deduction.
 
(e)  Payment of the Guarantee Fee and the Administrative Fee will not be subject
to counterclaim or setoff for any claim or dispute of National Rural.

 
 

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SECTION 2.03. Invest to Participate.  In further consideration of the Guarantee,
National Rural shall enter into the Purchase Agreement and purchase Farmer Mac
Series C Preferred Stock in an amount equal to 2% of the outstanding principal
amount of the Series 2009A Bonds as of the Closing Date.
 
SECTION 2.04. Payment on the Series 2009A Bonds.  In accordance with the
Indenture, at least two (2) Business Days prior to each Payment Date, National
Rural shall remit to the Trustee, in immediately available funds, an amount
sufficient to make a full payment of all principal and interest (if any) on the
Series 2009A Bonds due on such Payment Date.  Beginning with the day that Farmer
Mac makes an advance under the Guarantee, National Rural agrees to pay to the
Guarantor all amounts necessary to reimburse Farmer Mac for any payments made to
holders of Series 2009A Bonds under the Guarantee to the extent to which the
Guarantor has not already been reimbursed through the liquidation of Pledged
Collateral.
 
ARTICLE III
 
CONDITIONS PRECEDENT
 
SECTION 3.01.            Conditions Precedent to Famer Mac’s Obligation.  Farmer
Mac’s obligation to issue its Guarantee on the Closing Date is subject to the
following conditions precedent:
 
(a)  Bond Issuance.  The Series 2009A Bonds shall have been issued pursuant to
and in accordance with the terms, conditions and provisions of the Indenture.
 
(b)  Opinion of Counsel.  Farmer Mac shall have received an opinion of counsel
to National Rural substantially in the form of Annex A attached hereto, and such
other opinions as provided for in the Indenture.
 
(c)  Financial and Other Information.  National Rural shall have provided Farmer
Mac with its most recent Financial Statements and such other information
concerning National Rural as Farmer Mac shall have reasonably requested.
 
(d)  No Material Adverse Change.  National Rural shall have certified to Farmer
Mac (in the manner specified in paragraph (g) of this Section 3.01), and Farmer
Mac shall be satisfied, that no material adverse change shall have occurred in
the financial condition or business of National Rural between the end of
National Rural’s most recently completed Fiscal Year for which Financial
Statements have been made publicly available and the Closing Date, which has not
been set forth in documents, certificates or financial information furnished to
Farmer Mac or publicly filed.
 
(e)  No Event of Default.  National Rural shall have certified to Farmer Mac and
Farmer Mac shall be satisfied that no Event of Default or Indenture Event of
Default shall have occurred and be continuing.

 
 

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(f)  Securities Purchase.  National Rural shall have entered into the Purchase
Agreement pursuant to Section 2.03.
 
(g)  Certification of Senior Management.  National Rural shall have provided
Farmer Mac a certification by any vice president of National Rural,
substantially in the form of Annex B attached hereto, as to the following: (i)
that National Rural is a lending institution organized as a private,
not-for-profit, cooperative association with the appropriate expertise,
experience and qualifications to make loans to its Members for rural
electrification and related purposes; (ii) the matters to be certified under
paragraphs (d) and (e) of this Section 3.01; and (iii) the representations and
warranties of National Rural.
 
ARTICLE IV
 
REPORTING REQUIREMENTS
 
SECTION 4.01.            Annual Reporting Requirements.  So long as any 2009A
Bond remains outstanding, National Rural shall provide Farmer Mac with the
following items within 90 days of the end of each Fiscal Year, in each case, in
form and substance satisfactory to Farmer Mac:
 
(a)  the Financial Statements for such Fiscal Year;
 
(b)  a Certificate of Pledged Collateral; and
 
(c)  a receipt from the Trustee, or such other evidence as is satisfactory to
Farmer Mac, as to the Pledged Collateral held by the Trustee at the end of such
Fiscal Year.
 
SECTION 4.02.            Other Reporting Requirements.  So long as any Series
2009A Bond remains outstanding, National Rural shall provide Farmer Mac with the
following items, which items may be included on a consolidated report of other
loans serviced by National Rural on behalf of Farmer Mac:
 
(a)  within 30 days of the end of each calendar quarter ending March 31st, June
30th, September 30th, and December 31st, a report substantially in the form of
Annex D hereto that identifies each Eligible Loan that constitutes Pledged
Collateral, which report shall include the outstanding principal balance of such
Eligible Loan, the related facility rating assigned by National Rural and the
related borrower rating assigned by National Rural, in each case as of the end
of such quarter;
 
(b)  within 30 days following the end of the calendar quarter ending December
31st, a report substantially in the form of Annex E hereto that identifies each
Eligible Loan that constitutes Pledged Collateral, which report shall include
the appropriate financial data (as described in Annex E) from the most recent
year end unaudited financial statements, which may be on a Form 7 (the financial
and statistical report used by National Rural for a distribution system Member)
or Form 12 (the financial and statistical report used by National Rural for a
power supply Member); and

 
 

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(c)  National Rural shall provide written notice to Farmer Mac within 30 days
after the occurrence of any of the following material changes to National
Rural’s current internal risk rating methodology for determining facility
ratings or borrower ratings:  (1) any material change to the weighting of the
risk rating criteria; and (2) any material change in the criteria in the risk
rating; and
 
(d)  such other information concerning National Rural or the Eligible Loans that
constitute Pledged Collateral as is reasonably requested by Farmer Mac.
 
SECTION 4.03.            Default Notices.  If an action, occurrence or event
shall happen that is, or with notice and the passage of time would become, an
Event of Default or an Indenture Event of Default, National Rural shall deliver
a National Rural Notice of such action, occurrence or event to Farmer Mac before
4:00 p.m. (District of Columbia time) on the Business Day following the date
National Rural becomes aware of such action, occurrence or event, and, if such
Event of Default or Indenture Event of Default should occur, shall promptly
submit to Farmer Mac, within five days of such occurrence, a report setting
forth its views as to the reasons for the Event of Default or Indenture Event of
Default (as applicable), the anticipated duration of the Event of Default or
Indenture Event of Default and what corrective actions National Rural is taking
to cure such Event of Default or Indenture Event of Default.
 
SECTION 4.04.            Access to Information by Farmer Mac.  Upon 30 days
prior written request and identification of specific Eligible Loans by Farmer
Mac, which shall not exceed 40% of the total amount of Eligible Loans that
constitute Pledged Collateral (“Identified Loans”), National Rural shall provide
to representatives of Farmer Mac access to the following documentation related
to each Identified Loan: (1) credit recommendation associated with the Eligible
Loan; (2) three most recent calendar year end unaudited financial statements of
the Member, which may be on a Form 7 or Form 12; (3) most recent borrower rating
by National Rural; (4) most recent facility rating by National rural; (5) most
recent key ratio trend analysis (the annual report generated by National Rural
containing key financial and operating ratios and other growth indicators for
each Class A Member); (6) most recent annual certification by an officer of a
Member to National Rural under the applicable loan agreement; (7) most recent
fiscal year-end certified independent audit of the Member; (8) most recent
mortgage of the Member, if applicable; (9) loan agreement associated with the
Eligible Loan; (10) opinion of counsel associated with the Eligible Loan, if
applicable; and (11) most recent rating on the Member issued by a nationally
recognized statistical rating organization, if applicable.  All such access
shall occur during normal business hours at the offices of National Rural, and
the information disclosed shall be treated by the representatives of Farmer Mac
as confidential and proprietary to National Rural for so long as National Rural
is the owner of the Eligible Loans and to the extent that such information has
not otherwise been made public by National Rural.

 
 

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ARTICLE V
 
REPRESENTATIONS OF THE PARTIES
 
SECTION 5.01.            Representations of Farmer Mac. Farmer Mac represents to
National Rural as of the Closing Date that it has all necessary authority and
has taken all necessary corporate action, and obtained all necessary approvals,
in order for it to guarantee the 2009A Bonds, to execute and deliver this
Agreement and all other documents executed or to be executed by Farmer Mac in
connection with the issuance of the 2009A Bonds, and that such documents
constitute valid and binding obligations of Farmer Mac; and the actions taken by
Farmer Mac in connection with the issuance of the 2009A Bonds are in compliance
with and in satisfaction of the requirements of the Farm Credit Administration,
as amended or waived by the Farm Credit Administration,
 
SECTION 5.02.            Representations of National Rural.  National Rural
hereby represents to Farmer Mac that as of the Closing Date:
 
(a)  National Rural has been duly organized and is validly existing and in good
standing as a cooperative association under the laws of the District of
Columbia;
 
(b)  National Rural has the corporate power and authority, and has taken all
necessary corporate and other action to (i) issue the 2009A Bonds, (ii) execute
and deliver this Agreement, (iii) consummate the transactions contemplated
hereby and in the other Transaction Documents, and (iv) perform its obligations
hereunder and under the other Transaction Documents;
 
(c)  this Agreement, the other Transaction Documents, and each other document to
National Rural has executed in connection with the issuance of the 2009A Bonds
have been duly authorized, executed and delivered by National Rural and
constitute the legal, valid and binding obligations of National Rural,
enforceable against National Rural in accordance with their respective terms,
subject to: (i) applicable bankruptcy, reorganization, insolvency, moratorium
and other laws of general applicability relating to or affecting creditors’
rights generally; and (ii) the application of general principles of equity
regardless of whether such enforceability is considered in a proceeding in
equity or at law;
 
(d)  no approval, consent, authorization, order, waiver, exemption, variance,
registration, filing, notification, qualification, license, permit or other
action is now, or under existing law in the future will be, required to be
obtained, given, made or taken, as the case may be, with, from or by any
regulatory body, administrative agency or governmental authority having
jurisdiction over National Rural or any third party under any agreement to which
National Rural is a party to authorize the execution and delivery by National
Rural of this Agreement, the other Transaction Documents, and each other
document National Rural has executed in connection with the issuance of the
2009A Bonds, or the consummation by National Rural of the transactions
contemplated hereby or by the other Transaction Documents;

 
 

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(e)  neither the execution nor delivery by National Rural of this Agreement, the
other Transaction Documents, and each other document National Rural has executed
in connection with the issuance of the 2009A Bonds, nor the consummation by
National Rural of the transactions contemplated hereby or by the other
Transaction Documents, conflicts with or will conflict with, violates or will
violate, results in or will result in a breach of, constitutes or will
constitute a default under, or results in or will result in the imposition of
any lien or encumbrance (other than the lien on the Pledged Collateral as
contemplated by the Indenture) prohibited by, any term or provision of the
articles of incorporation or the bylaws of National Rural or any provision of
any existing law or any rule or regulation currently applicable to National
Rural or any judgment, order or decree of any court or any regulatory body,
administrative agency or governmental authority having jurisdiction over
National Rural or the terms of any mortgage, indenture, contract or other
agreement to which National Rural is a party or by which National Rural or any
of its properties is bound;
 
(f)  there is no action, suit, proceeding or investigation before or by any
court or any regulatory body, administrative agency or governmental authority
presently pending or, to the knowledge of National Rural, threatened with
respect to National Rural, this Agreement or any other Transaction Documents, or
challenging the validity or enforceability of this Agreement or any other
Transaction Documents, or seeking to restrain, enjoin or otherwise prevent
National Rural from engaging in its business as currently conducted or the
consummation by National Rural of the transactions contemplated by this
Agreement or any other Transaction Documents, if any, or which, if adversely
determined, would have a material adverse effect on National Rural’s financial
condition or its ability to perform its obligations under this Agreement or any
other Transaction Documents;
 
(g)  National Rural is a lending institution organized as a private,
not-for-profit, cooperative association with the appropriate expertise,
experience and qualifications to make loans to its Members for rural
electrification purposes;
 
(h)  no material adverse change has occurred in the financial condition or
business of National Rural between the end of National Rural’s most recently
completed Fiscal Year for which Financial Statements have been made publicly
available and the date this representation is given which has not been set forth
in documents, certificates or financial information furnished to Farmer Mac or
publicly filed; and
 
(i)  Each Member whose notes are Eligible Loans that constitute Pledged
Collateral has received, or is eligible to receive, a loan or commitment for a
loan from the Rural Utilities Service of the United States Department of
Agriculture or any successor agency.

 
 

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ARTICLE VI
 
SECURITY AND COLLATERAL
 
SECTION 6.01.            Security and Collateral.
 
(a)  National Rural shall cause the amount of Eligible Loans that constitute
Pledged Collateral to be maintained such that the sum of (i) the aggregate
outstanding principal balance of the Eligible Loans and (ii) any amounts in the
Borrower Repayments Fund or the Bond Fund shall at all times be at least equal
to the amount of the Guarantee.
 
(b)  National Rural shall not create, or permit to exist, any pledge, lien,
charge, mortgage, encumbrance, debenture, hypothecation or other similar
security instrument that secures, or in any way attaches to, such Pledged
Collateral, other than the lien of the Pledge Agreement and the Indenture,
without the prior written consent of Farmer Mac and the Trustee.
 
ARTICLE VII
 
EVENTS OF DEFAULT
 
SECTION 7.01.            Events of Default.  Each of the following actions,
occurrences or events shall constitute an “Event of Default” under the terms of
this Agreement:
 
(a)  a failure by National Rural to make any payment required to be made under
Section 2.04;
 
(b)  the Trustee has declared the 2009A Bonds immediately due and payable;
 
(c)  an Insolvency Event, as defined in the Indenture, shall have occurred and
be continuing with respect to National Rural; or
 
(d)  a failure of National Rural to observe or perform the covenant set forth in
Section 6.01(a) hereof, which shall remain unremedied for five (5) Business Days
after National Rural Shall have become aware of such failure or shall have been
given notice thereof, whichever occurs earlier.
 
SECTION 7.02.            Exercise of Remedies.
 
(a)  Any remedies provided to Farmer Mac under this Agreement shall be in
addition to its remedies under the Indenture, Pledge Agreement and Securities
Purchase Agreement.
 
(b)  In addition to the provisions regarding an increase in the fee payable to
Farmer Mac under Section 2.02, upon the occurrence, and during the continuance,
of an Event of Default set forth in Section 7.01(d), Farmer Mac may institute
one or more legal proceedings against National Rural seeking, individually or in
the aggregate, (i) recovery of actual monetary damages, and (ii) injunctive
relief or specific performance, in each case without proof of actual damages.

 
 

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ARTICLE VIII
 
MISCELLANEOUS
 
SECTION 8.01.            GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, FEDERAL LAW.  TO THE EXTENT FEDERAL LAW
INCORPORATES STATE LAW, THAT STATE LAW SHALL BE THE LAWS OF THE DISTRICT OF
COLUMBIA APPLICABLE TO CONTRACTS MADE AND PERFORMED THEREIN.
 
SECTION 8.02.            WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.02.
 
SECTION 8.03.            Notices.  All notices and other communications
hereunder to be made to any party shall be in writing and shall be addressed as
specified in Schedule I attached hereto as appropriate except as otherwise
provided herein.  The address, telephone number, or facsimile number for any
party may be changed at any time and from time to time upon written notice given
by such changing party to the other parties hereto.  A properly addressed notice
or other communication shall be deemed to have been delivered at the time it is
sent by facsimile (fax) transmission to the party or parties to which it is
given.
 
SECTION 8.04.            Benefit of Agreement.  This Agreement shall become
effective when it shall have been executed by Farmer Mac and National Rural, and
thereafter shall be binding upon and inure to the respective benefit of the
parties and their permitted successors and assigns.
 
SECTION 8.05.            Entire Agreement.  This Agreement, including the
Schedules and Annexes hereto, constitute the entire agreement between the
parties hereto concerning the matters contained herein and supersede all prior
oral and written agreements and understandings between the parties.

 
 

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SECTION 8.06.            Amendments and Waivers; Assignment.
 
(a)  No provision of this Agreement may be amended or modified except pursuant
to an agreement in writing entered into by Farmer Mac and National Rural.  No
provision of this Agreement may be waived except in writing by the party or
parties receiving the benefit of and under such provision.
 
(b)  Neither party may assign this Agreement without the prior consent of the
other party.
 
(c)  No failure or delay of Farmer Mac or National Rural in exercising any power
or right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.  No waiver
of any provision of this Agreement or consent to any departure by National Rural
therefrom shall in any event be effective unless the same shall be authorized as
provided in paragraph (a) of this Section 8.06, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.  No notice or demand on National Rural in any case shall entitle National
Rural to any other or further notice or demand in similar or other
circumstances.
 
SECTION 8.07.            Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
 
SECTION 8.08.            Termination of Agreement.  This Agreement shall
terminate upon the indefeasible payment in full of all amounts payable on the
2009A Bonds.
 
SECTION 8.09.            Survival.  The representations and warranties of each
of the parties hereto contained in this Agreement and the parties’ obligations
hereunder shall survive and shall continue in effect following the execution and
delivery of this Agreement.
 
SECTION 8.10.            Severability.  If any term or provision of this
Agreement or the application thereof to any circumstance shall, in any
jurisdiction and to any extent, be invalid or unenforceable, such term or such
provision shall be ineffective as to such jurisdiction to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
any remaining terms or provisions hereof or the application of such term or
provision to circumstances other than those as to which it is held invalid or
unenforceable.

 
 

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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed
by an authorized officer as of the day and year first above written.
 
FEDERAL AGRICULTURAL
MORTGAGE CORPORATION
   
By:
  
       
Name:
  
       
Title:
  
     
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
   
By:
  
       
Name:
  
       
Title:
  
 

 
 
 

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SCHEDULE I
TO
CREDIT SUPPORT AGREEMENT
 
Addresses for Notices
 
1.
The addresses referred to in Section 8.03 hereof, for purposes of delivering
communications and notices, are as follows:

 
If to Farmer Mac:
 
Federal Agricultural Mortgage Corporation
1133 21st Street, N.W., Suite 600
Washington, DC 20036
Fax:  202-872-7713
Attention of: Chief Financial Officer
 
With a copy to:
Federal Agricultural Mortgage Corporation
1133 21st Street, N.W., Suite 600
Washington, DC 20036
Fax:  202-872-7713
Attention of: Chief Operating Officer
 
With a copy also to:
Federal Agricultural Mortgage Corporation
1133 21st Street, N.W., Suite 600
Washington, DC 20036
Fax:  202-872-7713
Attention of: General Counsel

If to National Rural:
 
National Rural Utilities Cooperative Finance Corporation
2201 Cooperative Way
Herndon, VA 20171-3025
Telephone:  703-709-6718
Fax:  703-709-6779
Attention of: Steven L. Lilly, Senior Vice President &
Chief Financial Officer

 
 

--------------------------------------------------------------------------------

 

With a copy to:
 
National Rural Utilities Cooperative Finance Corporation
2201 Cooperative Way
Herndon, VA 20171-3025
Telephone:  703-709-6748
Fax:  703-709-6779
Attention of: John Suter, Vice President, Capital Market Funding

With a copy also to:
 
National Rural Utilities Cooperative Finance Corporation
2201 Cooperative Way
Herndon, VA 20171-3025
Telephone:  703-709-6712
Fax:  703-709-6811
Attention of: John J. List, Esq., Senior Vice President &
General Counsel

 
 

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ANNEX A
[FORM OF OPINION OF COUNSEL TO NATIONAL RURAL]
 
__________________, 2009

Federal Agricultural Mortgage Corporation
1133 Twenty-First Street, NW
Suite 600
Washington, DC 20036

Gentlemen:

I am delivering this opinion as general counsel of National Rural Utilities
Cooperative Finance Corporation, a District of Columbia cooperative association
(“National Rural”).

I am familiar with matters pertaining to the issuance of $28,908,000 of Clean
Renewable Energy Bonds, Secured Tax Credit Series 2009A (the “2009A Bonds”).  I,
or attorneys under my supervision, have examined such corporate records and
proceedings of National Rural, and such other documents as I have deemed
necessary as a basis for the opinions hereinafter expressed.

I, or attorneys under my supervision, have also examined the Credit Support
Agreement dated as of September 1 (“Credit Support Agreement"), between National
Rural and Federal Agricultural Mortgage Corporation (“Farmer Mac”).

Based on the foregoing, but subject to the assumptions, exceptions,
qualifications and limitations hereinafter expressed, I am of the opinion that:

(1)           National Rural has been duly incorporated and is validly existing
as a cooperative association in good standing under the laws of the District of
Columbia with corporate power and authority to execute and perform its
obligations under the Credit Support Agreement.

(2)           The Credit Support Agreement has been duly authorized, executed
and delivered by National Rural, and constitutes the legal, valid and binding
agreement of National Rural, enforceable against National Rural in accordance
with its terms.

(3)           Neither the execution nor the delivery by National Rural of any of
the Credit Support Agreement nor the consummation by National Rural of any of
the transactions contemplated therein, including, without limitation, the pledge
of the Pledged Securities (as such term is defined in the Pledge Agreement) to
Farmer Mac, nor the fulfillment by National Rural of the terms of any of the
Credit Support Agreement will conflict with or violate, result in a breach of or
constitute a default under any term or provision of the Articles of
Incorporation or By-laws of National Rural or any law or any regulation or any
order known to me currently applicable to National Rural of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over National Rural or the terms of any indenture, deed of trust, note, note
agreement or instrument to which National Rural is a party or by which National
Rural or any of its properties is bound.

 
 

--------------------------------------------------------------------------------

 

(4)           No approval, authorization, consent, order, registration, filing,
qualification, license or permit of or with any state or Federal court or
governmental agency or body having jurisdiction over National Rural is required
for any consummation by National Rural of the transactions contemplated by the
Credit Support Agreement; provided, however, no opinion is expressed as to the
applicability of any Federal or state securities law to any sale, transfer or
other disposition of the Bonds after the date hereof.

(5)           Except as set forth in writing and previously delivered to Farmer
Mac, there is no pending or, to my knowledge, threatened action, suit or
proceeding before any court or governmental agency, authority or body or any
arbitrator with respect to National Rural, or the Credit Support Agreement,
which, if adversely determined, would have a material adverse effect on National
Rural’s financial condition or its ability to perform its obligations under any
of the Credit Support Agreement.

The foregoing opinions are subject to the following assumptions, exceptions,
qualifications and limitations:
 
A.           I am a member of the Bar of the District of Columbia and render no
opinion on the laws of any jurisdiction other than the laws of the District of
Columbia, the federal laws of the United States of America and the General
Corporation Law of the District of Columbia.

B.           My opinions are limited to the present laws and to the facts, as
they presently exist.  I assume no obligation to revise or supplement this
opinion should the present laws of the jurisdictions referred to in paragraph A
above be changed by legislative action, judicial decision or otherwise.

C.           The opinions expressed in paragraph 2 above shall be understood to
mean only that if there is a default in performance of an obligation, (i) if a
failure to pay or other damage can be shown and (ii) if the defaulting party can
be brought into a court which will hear the case and apply the governing law,
then, subject to the availability of defenses, and to the exceptions set forth
in the next paragraph, the court will provide a money damage (or perhaps
injunctive or specific performance) remedy.

D.           My opinions are also subject to the effect of:  (1) bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws affecting
creditors’ rights (including, without limitation, the effect of statutory and
other law regarding fraudulent conveyances, fraudulent transfers and
preferential transfers); and (2) the exercise of judicial discretion and the
application of principles of equity, good faith, fair dealing, reasonableness,
conscionability and materiality (regardless of whether the applicable agreements
are considered in proceeding in equity or at law).

 
 

--------------------------------------------------------------------------------

 

E.           This letter is rendered to you in connection with the Credit
Support Agreement, and may not be relied upon by any other person or by you in
any other context or for any other purpose.

F.           I have assumed with your permission (i) the genuineness of all
signatures by each party other than National Rural, (ii) the authenticity of
documents submitted to me as originals and the conformity to authentic original
documents of all documents submitted to me as copies, and (iii) the due
execution and delivery, pursuant to due authorization, of the Credit Support
Agreement by each party other than National Rural.

Yours sincerely,

John J. List
General Counsel

 
 

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ANNEX B
 
[FORM OF OFFICERS’ CERTIFICATE]
 
Officers’ Certificate
 
TO:                      Federal Agricultural Mortgage Corporation.
 
The undersigned, _________________, _____________________, of National Rural
Utilities Cooperative Finance Corporation (“National Rural”), pursuant to the
Credit Support Agreement dated as of September 1, 2009, among National Rural and
Federal Agricultural Mortgage Corporation (the “Credit Support Agreement”),
hereby certifies on behalf of National Rural that as at the date hereof:
 
(1)           National Rural is a lending institution organized as a private,
not-for-profit, cooperative association with the appropriate expertise,
experience and qualifications to make loans to its Members for rural
electrification and related purposes;
 
(2)           no material adverse change has occurred in the financial condition
of National Rural between the date of the end of National Rural’s most recently
completed Fiscal Year for which Financial Statements have been made publicly
available and the date hereof, which has not been set forth in documents,
certificates, or financial information furnished to Farmer Mac or publicly
filed;
 
(3)          all of the representations contained in Section 5.02 of the Credit
Support Agreement remain true and correct in all material respects on and as of
the date hereof; and
 
(4)           no Event of Default or Indenture Event of Default exists.
 
Capitalized terms used in this certificate shall have the meanings given to
those terms in the Credit Support Agreement.
 
DATED as of this _____ day of ______________, _________.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

By:
  
       
Name:
  
       
Title:
  
 

 
 

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ANNEX C
 
[FORM OF SERIES C PREFERRED STOCK PURCHASE AGREEMENT]
 
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
 
BETWEEN
 
[●]
 
AND
 
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
 
DATED AS OF [●]

 
 

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TABLE OF CONTENTS
 

   
Page
   
Article I DEFINITIONS
2
1.1
Certain Terms
2
1.2
Additional Terms
4
1.3
Terms Generally
5
   
Article II SALE AND PURCHASE OF THE SECURITIES; CLOSING
5
2.1
Authorization of Securities
5
2.2
Closing
6
   
Article III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
6
3.1
Organization and Standing
6
3.2
Corporate Power; Authorization
6
3.3
Issuance of Preferred Stock
7
3.4
Consents; No Conflicts
7
3.5
Compliance with Laws; Permits
7
3.6
Exempt Securities
8
   
Article IV ADDITIONAL AGREEMENTS
8
4.1
Further Assurances
8
4.2
Tax Treatment
8
   
Article V MISCELLANEOUS
8
5.1
Notices
8
5.2
Severability
9
5.3
Entire Agreement; Assignment
9
5.4
Specific Performance
9
5.5
Burden and Benefit
10
5.6
Governing Law; Forum
10
5.7
Waiver of Jury Trial
10
5.8
Headings
11
5.9
Counterparts
11
5.10
Waiver
11

 
 

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SERIES C PREFERRED STOCK SECURITIES PURCHASE AGREEMENT
THIS SERIES C PREFERRED STOCK SECURITIES PURCHASE AGREEMENT (this “Agreement”)
is made as of [●], between [●], a [●] (the “Purchaser”), and Federal
Agricultural Mortgage Corporation, a federally chartered instrumentality of the
United States of America (the “Company”).
 
RECITALS
WHEREAS, the Company has authorized the issuance and sale of up to 100,000
shares of Preferred Stock (as defined herein) to be sold from time to time; and
 
WHEREAS, the Company and the Purchaser desire to set forth herein the terms and
conditions of such issuance and sale of shares of Preferred Stock by the Company
to the Purchaser.
 
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
 
ARTICLE IX
 
DEFINITIONS
 
SECTION 9.01. Certain Terms.  Whenever used in this Agreement, the following
terms shall have the respective meanings given to them below:
 
“Act” means the Farm Credit Act of 1971, as amended.
 
“Affiliate” means any Person that, directly or indirectly, controls, is
controlled by or is under common control with another Person.  As used in this
definition, “control” (including its correlative meanings, “controlled by” and
“under common control with”) shall mean the possession, directly or indirectly,
of power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise).  To the extent that any such term is used in relation
to, or in connection with, any statute, and the definition of such term in such
statute is broader or different, then, in such context, such term shall have the
meaning set forth in such statute.
 
“Board” means the Board of Directors of the Company.
 
“Bylaws” means the By-Laws of the Company.
 
“Charter” means Title VIII of the Act.
 
“Company Reports” means all registration statements, prospectuses, forms,
reports, schedules, statements and other documents filed by the Company and the
Subsidiary with the SEC.

 
 

--------------------------------------------------------------------------------

 

“Contract” means, whether written or oral, any note, bond, mortgage, indenture,
contract, agreement, permit, license, lease, purchase order, sales order,
arrangement or other commitment, obligation or understanding (including any
understanding with respect to pricing) to which a Person is a party or by which
a Person or its assets or properties are bound.
 
“Encumbrance” means any liens, pledges, hypothecations, mortgages, deeds of
trust, charges, claims, security interests, options, restrictions, encumbrances,
rights, warrants, licenses, burdens, Title defects, Title retention agreements,
voting trust agreements, proxy or other similar interests, restrictions or
limitations.
 
“FCA” means the Farm Credit Administration.
 
“Governmental Entity” means any court or tribunal or administrative,
governmental or regulatory body, agency, commission, board, legislature,
instrumentality, division, department, public body or other authority of any
nation or government or any political subdivision thereof, whether foreign or
domestic and whether national, supranational, state or local and any industry
self-regulatory organization.
 
“Law” means any foreign, national, state, provincial, municipal or local
statute, law, ordinance, regulation, treaty, rule, code, injunction, decree,
judgment, writ, order, determination, award or decree, other order or applicable
regulations.
 
“Material Adverse Effect” means any fact, circumstance, event, change,
violation, development, effect, condition or occurrence, either individually or
in the aggregate with any other fact, circumstance, event, change, violation,
development, effect, condition or occurrence, that is, or would reasonably be
expected to be, materially adverse to the business, operations (including
results of operations), assets, liabilities, properties or condition (financial
or otherwise) of the Company and the Subsidiary, taken as a whole, excluding any
such fact, circumstance, event, change, violation, development, effect,
condition or occurrence arising out of, in connection with or resulting from, in
whole or in part (a) general economic conditions or changes therein, (b) changes
in or events affecting the industries in which the Company or the Subsidiary
participate generally, (c) any effect arising out of a change in U.S. GAAP or
applicable Law, (d) national or international political conditions, including
any engagement in hostilities, whether or not pursuant to the declaration of a
national emergency or war, or the occurrence of any military or terrorist
attack, (e) any change in the market price or trading volume of the Company’s
outstanding securities, in and of itself, (f) announcement of the transactions
contemplated by this Agreement or (g) actions or omissions by the Company or the
Subsidiary pursuant to this Agreement or with the prior written consent of the
Purchaser, to the extent that any such fact, circumstance, event, change,
violation, development, effect, condition or occurrence described in the
foregoing clauses (a) through (e) does not have a disproportionate impact on the
Company or the Subsidiary as compared to other Persons participating in
businesses or industries in which the Company or the Subsidiary operates.
 
“NYSE” means the New York Stock Exchange.

 
 

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“Per Share Purchase Price” means $1,000 per share of Preferred Stock.
 
“Person” means any individual, corporation (including not-for-profit), general
or limited partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity or other entity of any kind or
nature.
 
“SEC” means the United States Securities and Exchange Commission.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
“Tax” or “Taxes” means all federal, state, local, foreign and other taxes,
charges, fees, duties, imposts, levies, penalties or other assessments or other
similar charges imposed by any Taxing Authority, including, but not limited to,
income, excise, property, sales and use, franchise, payroll, withholding, social
security profits, capital gains, capital stock, transfer, gross receipts,
production, customs, goods and services, service, state guarantee fund
assessment, occupation, ad valorem, excise, severance, windfall profits,
premium, stamp, license, employment, workers compensation, unemployment,
disability, alternative minimum, add-on, value-added, capital, or other taxes,
duties or assessments including any interest, penalties or additions
attributable thereto.  For purposes of this Agreement, “Taxes” also includes any
liability pursuant to section 1.1502-6 of the Treasury Regulations or comparable
provisions of state, local or foreign Law, any obligations under any Contract
with any Person with respect to the liability for, or sharing of, Taxes
(including pursuant to section 1.1502-6 of the Treasury Regulations or
comparable provisions of state, local or foreign Tax Law) and any liability for
Taxes as a transferee or successor, by contract or otherwise.
 
“Taxing Authority” shall mean any federal, national, provincial, foreign, state
or local government, or any subdivision, agency, commission or authority thereof
exercising Tax regulatory, enforcement, collection or other authority.
 
SECTION 9.02. Additional Terms.  The following terms are defined in the
corresponding Sections of this Agreement:
 
Term
 
Section
     
Agreement
 
Preamble
Certificate of Designation
 
Section 2.1
Closing
 
Section 5.1
Closing Date
 
Section 2.2
Company
 
Preamble
Issue Date
 
Section 2.1
Letter Agreement
 
Recitals
New York Courts
 
Section 7.6(b)
Observers
 
Section 5.3
Order
 
Section 3.5
Preferred Stock
 
Section 2.1
Purchaser
 
Preamble
Subsidiary
 
Section 3.1

 
 
 

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SECTION 9.03. Terms Generally.  For the purposes of this Agreement, (a) words
(including capitalized terms defined herein) in the singular shall be held to
include the plural and vice versa and words (including capitalized terms defined
herein) of one gender shall be held to include the other gender as the context
requires; (b) the terms “hereof,” “herein” and “herewith” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole (including all of the Exhibits) and not to any particular provision
of this Agreement, and Article, Section, paragraph and Exhibit references are to
the Articles, Sections, paragraphs and Exhibits to this Agreement, unless
otherwise specified; (c) the word “including” and words of similar import when
used in this Agreement shall mean “including, without limitation”; (d) the
phrase “ordinary course of business” and phrases of similar import when used in
this Agreement shall mean “ordinary course of business consistent with past
practice”; (e) the word “liability” and words of similar import when used in
this Agreement shall be deemed to include any liabilities, whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated and whether due or to
become due; (f) all references to any period of days shall be deemed to be to
the relevant number of calendar days unless otherwise specified; (g) references
to any statute, rule or regulation are to the statute, rule or regulation as
amended, modified, supplemented or replaced from time to time (and, in the case
of statutes, include any rules and regulations promulgated under said statutes)
and to any section of any statute, rule or regulation include any successor to
said section; (h) the word “or” shall not be interpreted to be exclusive or
disjunctive; and (i) all references herein to “$” or dollars shall refer to
United States dollars, unless otherwise specified.
 
ARTICLE X
 
SALE AND PURCHASE OF THE SECURITIES; CLOSING
 
SECTION 10.01. Authorization of Securities.
 
The Company hereby agrees to issue and sell to the Purchaser, and the Purchaser
agrees to purchase from the Company, [●] shares of the Company’s Non-Voting
Cumulative Preferred Stock, Series C, par value $1,000 per share (“Preferred
Stock”), free and clear of all Encumbrances, each of which shares of Preferred
Stock will have the designations, powers, preferences, rights, privileges,
qualifications, limitations, restrictions, terms and conditions set forth in the
Amended and Restated Certificate of Designation of Terms and Conditions of
Non-Voting Cumulative Preferred Stock, Series C previously provided to the
Purchaser (the “Certificate of Designation”), for a purchase price per share of
Preferred Stock equal to the Per Share Purchase Price.  The Company and the
Purchaser hereby agree that, for the purposes of the Certificate of Designation,
the “Issue Date” with respect to the shares of Preferred Stock being purchased
by the Purchaser pursuant to this Agreement shall be [●].

 
 

--------------------------------------------------------------------------------

 

SECTION 10.02. Closing.  On [●] (the “Closing Date”), (a) the Company will
deliver to the Purchaser a certificate representing [●] shares of Preferred
Stock, registered in the name of the Purchaser, (b) the Purchaser, in full
payment for the Preferred Stock being purchased by it, will deliver to the
Company by wire transfer of immediately available funds to such account as the
Company shall specify, an amount equal to $[●] and (c) each party shall take or
cause to happen such other actions, and shall execute and deliver such other
instruments or documents, as shall be required pursuant to this Agreement.
 
ARTICLE XI
 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
Except as set forth in the Company Reports filed prior to the date of this
Agreement (excluding any disclosures set forth in any section of any such
Company Report entitled “Risk Factors” or “Forward-Looking Statements”), the
Company hereby represents and warrants to the Purchaser as follows:
 
SECTION 11.01. Organization and Standing.  The Company is a federally chartered
instrumentality of the United States, duly organized, validly existing and in
good standing under the Act.  The Company’s wholly-owned subsidiary, Farmer Mac
Mortgage Securities Corporation, a Delaware corporation (the “Subsidiary”), is
duly organized, validly existing and in good standing under the laws of the
State of Delaware.  Each of the Company and the Subsidiary has full corporate
power and authority to own, lease, use and operate its properties and to carry
on its business as currently conducted where now owned, leased, used, operated
and conducted.  Each of the Company and the Subsidiary is duly qualified to do
business in all jurisdictions in which the character of the business conducted
by it or the property it owns, leases or operates requires it to so qualify,
except where the failure to be so qualified or in good standing in such
jurisdiction would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.  The Company is not in default in the
performance, observance or fulfillment of any provision of the Charter or
Bylaws.  The Subsidiary is not in default in the performance, observance or
fulfillment of any provision of its organizational or corporate governance
Contracts (including any federal statutes similar to the Charter).
 
SECTION 11.02. Corporate Power; Authorization.  The Company has all requisite
corporate power and has taken all necessary corporate action required for the
due authorization, execution, delivery and performance by the Company of this
Agreement, the execution and filing (if necessary) of the Certificate of
Designation and the consummation of the transactions contemplated hereby and
thereby.  The issuance and delivery of Preferred Stock have been duly authorized
by all necessary corporate action on the part of the Company, and no further
corporate proceedings are required by the Company, the Board or the Company’s
stockholders.  This Agreement has been duly executed and delivered by the
Company and constitutes the valid and binding obligation of the Company
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance or other similar laws affecting creditors’
rights generally and to general equitable principles.

 
 

--------------------------------------------------------------------------------

 

SECTION 11.03. Issuance of Preferred Stock.  The Preferred Stock being purchased
by the Purchaser pursuant to this Agreement, upon payment of the Per Share
Purchase Price therefore, will be (a) duly authorized, validly issued, fully
paid and nonassessable, (b) will not be subject to any preemptive or similar
rights of any other Person and (c) will be delivered to the Purchaser (or the
Purchaser’s transferee) free and clear of all Encumbrances.  When issued, the
Purchaser will be the sole record and beneficial owner of each share of
Preferred Stock.
 
SECTION 11.04. Consents; No Conflicts.
 
(a)  The Company has obtained all consents and approvals, and has taken all
actions necessary, in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
(including the issuance of Preferred Stock in connection therewith) such that
the execution and delivery of this Agreement and the consummation of such
transactions do not and will not:
 
(i) conflict, or result in a breach or violation of any provision of, or
constitute a default under, the Charter or the Bylaws;
 
(ii) conflict with, or result in a breach or violation of any provision of, or
constitute a default (or an event that, with the giving of notice, the passage
of time or otherwise, would constitute a default) under, or entitle any Person
(with the giving of notice, the passage of time or otherwise) to terminate,
accelerate, modify or call a default under, or result in the creation of any
Encumbrances upon any of the properties or assets of the Company or the
Subsidiary under, any of the terms, conditions or provisions of any Contract to
which the Company or the Subsidiary is a party or to which any of their
respective properties or assets are bound;
 
(iii) materially violate any Law applicable to the Company or the Subsidiary or
any of their respective properties or assets; or
 
(iv) require any further action or consent or approval of, or review by, or any
registration or filing by the Company or any of its Affiliates with, any third
party or any Governmental Entity, including (A) approval of this Agreement and
the other transactions contemplated hereby by the FCA, (B) registrations or
other actions required under United States federal and state securities laws and
(C) compliance with any applicable requirements of the NYSE,
 
except, in the case of clause (ii) above, as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.  Without
limiting the generality of the foregoing, the Company has obtained from the FCA
and any other regulatory Governmental Entity written assurances that the
proceeds from the sale of shares of Preferred Stock pursuant to this Agreement
will be treated as capital for minimum capital purposes under the Charter.

 
 

--------------------------------------------------------------------------------

 

SECTION 11.05. Compliance with Laws; Permits.  Neither the Company nor the
Subsidiary, nor the conduct of their respective businesses, is in material
violation of or material default under any judicial or administrative judgment,
decision, decree, order, settlement, injunction, writ, stipulation,
determination, award or permit (each, an “Order”) or any Law (including the
Sarbanes-Oxley Act).  No investigation or review by any Governmental Entity with
respect to the Company or the Subsidiary is pending or, to the knowledge of the
Company, threatened, nor has any Governmental Entity indicated in writing an
intention to conduct any such investigation or review.
 
SECTION 11.06. Exempt Securities.  The shares of Preferred Stock are being
issued and are properly exempt under Section 3(a)(2) of the Securities Act from
the registration and prospectus delivery requirements of the Securities Act and
such registration or prospectus delivery is not required in connection with the
issuance, sale, resale or delivery of such securities as contemplated herein.
 
ARTICLE XII
 
ADDITIONAL AGREEMENTS
 
SECTION 12.01. Further Assurances.  Following the closing of the transactions
contemplated by this Agreement (the “Closing”), the Purchaser, on the one hand,
and the Company, on the other hand, shall execute all such further certificates,
agreements, instruments and other documents and take all such other actions as
are reasonably required in order to more effectively consummate or implement the
transactions contemplated by this Agreement or the Certificate of Designation or
otherwise carry out, and comply with its obligations under, the terms and
conditions of this Agreement and the Certificate of Designation.
 
SECTION 12.02. Tax Treatment.  The parties agree to treat the Preferred Stock as
equity for all Tax purposes.
 
ARTICLE XIII
 
MISCELLANEOUS
 
SECTION 13.01. Notices.  All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by prepaid
overnight courier (providing proof of delivery), by facsimile or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses or facsimile numbers (or at such other
address for a party as shall be specified in a notice given in accordance with
this Section 5.1):

 
 

--------------------------------------------------------------------------------

 

if to the Purchaser:
 
[●]
 
if to the Company:
 
Federal Agricultural Mortgage Corporation
1133 Twenty-First Street, N.W.
Suite 600
Washington, D.C. 20036
Telecopier No:  (202) 872-7713
Attention:  General Counsel
 
with a copy to:
 
Shearman & Sterling LLP
801 Pennsylvania Avenue, N.W.
Suite 900
Washington, D.C. 20004
Telecopier No:  (202) 508-8100
Attention:  Abigail Arms, Esq.
 
SECTION 13.02. Severability.  If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy or the application of this Agreement to any person or circumstance is
invalid or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated by this Agreement is not affected in any manner
materially adverse to any party.  To such end, the provisions of this Agreement
are agreed to be severable.  Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated by this Agreement be
consummated as originally contemplated to the fullest extent possible.
 
SECTION 13.03. Entire Agreement; Assignment.  This Agreement, including any
Exhibits hereto and the other documents delivered pursuant hereto constitute the
full and entire understanding and agreement among the parties with respect to
the subject matter hereof, and supersede and preempt all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof.  Neither this Agreement nor any of the
rights or obligations hereunder may be assigned by any party without the prior
written consent of the other parties; provided, that in the event of any such
assignment, such assignee shall be required to execute a joinder to and agree to
be bound by this Agreement.  No such assignment shall release the assignor from
any of its obligations hereunder.
 
SECTION 13.04. Specific Performance.  The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement were not
performed in accordance with the terms hereof and that money damages would not
be a sufficient remedy for any breach of this Agreement, and accordingly, the
parties hereto shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.

 
 

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SECTION 13.05. Burden and Benefit.  This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.  This Agreement and all of its conditions and
provisions are for the sole and exclusive benefit of the parties hereto and
their respective successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to confer upon any Person other than
the parties hereto any rights or remedies of any nature whatsoever under or by
reason of this Agreement or any provision hereof.
 
SECTION 13.06. Governing Law; Forum.
 
(a)  All disputes, claims or controversies arising out of or relating to this
Agreement, or the negotiation, validity or performance of this Agreement or the
transactions contemplated by this Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to its rules
of conflict of laws.
 
(b)  Except as set out below, the Company and the Purchaser hereby irrevocably
and unconditionally consent to submit to the sole and exclusive jurisdiction of
the United States District Court for the Southern District of New York (the “New
York Courts”) for any litigation arising out of or relating to this Agreement,
or the negotiation, validity or performance of this Agreement or the
transactions contemplated by this Agreement (and agree not to commence any
litigation relating thereto except in such courts), waive any objection to the
laying of venue of any such litigation in the New York Courts and agree not to
plead or claim in any New York Court that such litigation brought therein has
been brought in any inconvenient forum.  Each of the parties hereto agrees
(i) to the extent such party is not otherwise subject to service of process in
the State of New York, to appoint and maintain an agent in the State of New York
as such party’s agent for acceptance of legal process and (ii) that service of
process may also be made on such party by prepaid certified mail with a proof of
mailing receipt validated by the United States Postal Service constituting
evidence of valid service.  Service made pursuant to (i) or (ii) above shall
have the same legal force and effect as if served upon such party personally
within the State of New York.
 
SECTION 13.07. Waiver of Jury Trial.  Each of the parties hereto hereby waives
to the fullest extent permitted by applicable Law any right it may have to a
trial by jury with respect to any litigation directly or indirectly arising out
of, under or in connection with this Agreement or the transactions contemplated
by this Agreement.  Each of the parties hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce that foregoing waiver and (b) acknowledges that it and the other
hereto have been induced to enter into this Agreement and the transactions
contemplated by this Agreement, as applicable, by, among other things, the
mutual waivers and certifications in this Section 5.7.

 
 

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SECTION 13.08. Headings.  The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
 
SECTION 13.09. Counterparts.  This Agreement may be executed and delivered,
including by facsimile transmission, in two or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
 
SECTION 13.10. Waiver.  Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement.  The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
 
IN WITNESS WHEREOF, each party has caused this Agreement to be duly executed on
its behalf by an authorized officer as of the date first above written.
 

 
FEDERAL AGRICULTURAL
 
MORTGAGE CORPORATION
 
By:
   
 
Name:
   
Title:
         
[COUNTERPARTY NAME]
 
By:
   
 
Name:
   
Title:
 

 
 
 

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ANNEX D
 
SAMPLE

Coopid
 
Facilityid
 
Indenture
 
Name
 
Class
   
Facility Risk Rating
   
Coop Risk Rating
   
Facility O/s Balance
 
AK002
    9033  
FMCT
 
Matanuska Electric Association, Inc.
 
A
      2.5       3     $ 3,250,000.00  
AK002
    9034  
FMCT
 
Matanuska Electric Association, Inc.
 
A
      2.5       3     $ 3,350,000.00  
AK002
    9035  
FMCT
 
Matanuska Electric Association, Inc.
 
A
      2.5       3     $ 3,470,000.00  

NOTE:  The “Indenture” designation may not be changed in subsequent reporting
periods once established with respect to an Eligible Loan.

 
 

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ANNEX E
 
SAMPLE

COOP IDS
 
year
   
dep_amort_exp
   
interest_ltd_exp
   
patcap_op_margins
   
non_op_margins_interest
   
g_and_t_capital_credits
   
other_capital_credits_pat_div
   
net_utility_plant
 
MN048
 
2008
     
8417985
     
6310184
     
-3177921
     
174637
     
6333697
     
993039
     
192833241
                                                                 
tot_assets_other_debits
 
tot_margins_equities
   
tot_ltd
   
long_term_lease_rental_tot
   
tot_pmt_ltd_bc
   
tot_pmt_ltd_ffb
   
tot_pmt_ltd_rus_edl
   
tot_pmt_ltd_other1
   
tot_pmt_ltd_other2
 
311655261
   
127968457
     
112263396
                                                                               
                                   
payee_ltd_other4
 
payee_ltd_other5
   
tot_pmt_ltd_other6
   
tot_pmt_ltd_other7
   
tot_pmt_ltd_other8
   
tot_pmt_ltd_other9
   
tot_pmt_ltd_other10
   
cfc_bill_debt_service_tot
   
rus_bill_debt_service_tot
                                                       
11079647
         

 
 

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ANNEX F
 
Eligible Loan Criteria

“Eligible Member” means any Class A Member or Class B Member of Nat Rural as
described in Nat Rural’s Bylaws currently in effect.

“Eligible Loan” means a note or bond of any Eligible Member payable or
registered to, or to the order of, Nat Rural, (A) in respect of which (i) the
outstanding principal amount under such note or bond, together with the
outstanding principal amount of any other notes or bonds of such Eligible Member
pledged hereunder or pledged to secure any other notes or bonds issued by Nat
Rural to Farmer Mac or any affiliate or sold by Nat Rural or any affiliate to
any trust whose beneficial ownership is owned or controlled by Farmer Mac, does
not aggregate more than $35 million; (ii) no default has occurred in the payment
of principal or interest in accordance with the terms of such note or bond that
is continuing beyond the contractual grace period (if any) provided in such note
or bond for such payment and (iii) no “event of default” as defined in such note
or bond (or in any instrument creating a security interest in favor of Nat Rural
in respect of such note or bond), shall exist that has resulted in the exercise
of any right or remedy described in such note or bond (or in any such
instrument); (B) which is not classified by Nat Rural as a non-performing loan
under generally accepted accounting principles in the United States; and (C)
which otherwise satisfies the additional criteria set forth below.
 
Additional Criteria for Eligible Loan of Class A Eligible Member:  Each Class A
Eligible Member must satisfy the following criteria only on the date of the
pledge of such Eligible Loan:
 
·
Long-Term Debt to Net Utility Plant Ratio, as the average ratio of the most
recent three full calendar years for which financial information is available,
does not exceed 90%.

 
·
Modified Debt Service Coverage Ratio—Distribution, as the average ratio of the
most recent three full calendar years for which financial information is
available, is greater than or equal to 1.35.

 
·
Equity to Total Assets Ratio, as the average ratio of the most recent three full
calendar years for which financial information is available, is greater than or
equal to 20%.

 
·
The Eligible Loan has a Facility Rating by Nat Rural of “4.9” or lower.

Additional Criteria for Eligible Loan of Class B Eligible Member:  Each Class B
Eligible Member must satisfy the following criteria only on the date of the
pledge of such Eligible Loan:

 
 

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·
Equity to Total Capitalization Ratio, as the average ratio of the most recent
three full calendar years for which financial information is available, is
greater than or equal to 25%.

 
·
Modified Debt Service Coverage Ratio—G&T, as the average ratio of the most
recent three full calendar years for which financial information is available,
is greater than or equal to 1.10.

 
·
Equity to Total Assets Ratio, as the average ratio of the most recent three full
calendar years for which financial information is available, is greater than or
equal to 10%.

The Eligible Loan has a Facility Rating by Nat Rural of “4.9” or lower
 
 
 

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