SERIES A BOND GUARANTEE AGREEMENT - Exhibit 4.13













SERIES A BOND GUARANTEE AGREEMENT

dated as of June 14, 2005

between

UNITED STATES OF AMERICA

acting through the

Rural Utilities Service

as guarantor,

and

NATIONAL RURAL UTILITIES

COOPERATIVE FINANCE CORPORATION,

as the Borrower.



 

 












	
      TABLE OF CONTENTS

		
      Page
	
	RECITALS	..................................................................................................................................................	1
			
	
      ARTICLE I

	
      
	
      
	
      

	
      DEFINITIONS

	
      
	
      
	
      

	
      SECTION 1.1.
	
      Definitions...............................................................................................................................
	
      2

	 	 	 
	
      SECTION 1.2
	
      Principles of
      Construction.....................................................................................................
	
      6

	 	 	 
	
      ARTICLE II

	 	 	 
	
      THE GUARANTEE

	
      SECTION 2.1.
	
      Execution of
      Guarantee..........................................................................................................
	
      6

	 	 	 
	
      SECTION 2.2.
	
      Coverage of
      Guarantee...........................................................................................................
	
      6

	 	 	 
	
      SECTION 2.3.
	
      Payment on the
      Guarantee.....................................................................................................
	
      6

	 	 	 
	
      ARTICLE III

	 	 	 
	
      CONDITIONS PRECEDENT

	 	 	 
	
      SECTION 3.1.
	
      Conditions Precedent to Issuance of the
      Guarantee..............................................................
	
      7

	 	 	 
	
      SECTION 3.2.
	
      Conditions Precedent to each Advance..................................................................................
	
      8

	 	 	 
	
      ARTICLE IV

	 	 	 
	
      GUARANTEE FEE

	 	 	 
	
      SECTION 4.1.
	
      Guarantee
      Fee.........................................................................................................................
	
      9

	  	 	 
	
      SECTION 4.2.
	
      Amount of Guarantee Fee; Dates of Payment........................................................................
	
      9

	 	 	 
	
      i







	
      ARTICLE V

	 	 	 
	
      SERVICING OF THE GUARANTEED BOND

	 	 	 
	
      SECTION 5.1.
	
      Servicing....................................................................................................................................
	
      9

	 	 	 
	
      ARTICLE VI

	 	 	 
	
      REPORTING REQUIREMENTS

	 	 	 
	
      SECTION 6.1.
	
      Annual Reporting
      Requirements.............................................................................................
	
      10

	 	 	 
	
      SECTION 6.2.
	
      Rating Trigger Event
      Notices...................................................................................................
	
      10

	 	 	 
	
      SECTION 6.3.
	
      Default
      Notices.........................................................................................................................
	
      11

	 	 	 
	
      ARTICLE VII

	 	 	 
	
      LIMITATIONS ON AMENDMENTS TO THE GUARANTEED BOND

	 	 	 
	
      SECTION 7.1
	
      Limitations on Amendments to the Guaranteed
      Bond.............................................................
	
      11

	 	 	 
	
      ARTICLE VIII

	 	 	 
	
      REPRESENTATIONS OF THE PARTIES

	 	 	 
	
      SECTION 8.1.
	
      Representation of RUS.............................................................................................................
	
      11

	 	 	 
	
      SECTION 8.2.
	
      Representations of the
      Borrower...............................................................................................
	
      11

	 	 	 
	
      ARTICLE IX

	 	 	 
	
      AGREEMENTS OF THE BORROWER

	 	 	 
	
      SECTION 9.1.
	
      Patronage
      Refunds...................................................................................................................
	
      13

	 	 	 
	
      SECTION 9.2.
	
      Security and
      Collateral.............................................................................................................
	
      13

	 	 	 
	
      SECTION 9.3.
	
      Use of
      Savings..........................................................................................................................
	
      14

	 	 	 
	
      SECTION 9.4.
	
      Subrogation................................................................................................................................
	
      14

	 	 	 
	
      SECTION 9.5.
	
      Use of
      Proceeds........................................................................................................................
	
      14

			
		
      ii
	






	
      SECTION 9.6.
	
      Compliance with Covenants in Other
      Agreements.....................................................................
	
      14

	 	 	 
	
      SECTION 9.7.
	
      Ratings..........................................................................................................................................
	
      14

	 	 	 
	
      SECTION 9.8.
	
      Acknowledgement of
      Borrower...................................................................................................
	
      15

	 	 	 
	
      ARTICLE X

	 	 	 
	
      EVENTS OF DEFAULT

	 	 	 
	
      SECTION 10.1.
	
      Events of
      Default........................................................................................................................
	
      15

	 	 	 
	
      SECTION 10.2.
	
      Compulsory
      Redemption............................................................................................................
	
      15

	 	 	 
	
      SECTION 10.3.
	
      Acceleration by RUS's Purchase of the
      Bond...........................................................................
	
      15

	 	 	 
	
      SECTION 10.4.
	
      Effect of Payments by RUS pursuant to the RUS
      Guarantee.....................................................
	
      16

	 	 	 
	
      SECTION 10.5.
	
      Remedies Not
      Exclusive............................................................................................................
	
      16

	 	 	 
	
      ARTICLE XI

	 	 	 
	
      MISCELLANEOUS

	 	 	 
	
      SECTION 11.1.
	
      GOVERNING
      LAW..................................................................................................................
	
      16

	 	 	 
	
      SECTION 11.2.
	
      WAIVER OF JURY
      TRIAL.....................................................................................................
	
      16

	 	 	 
	
      SECTION 11.3.
	
      Method of
      Payment.................................................................................................................
	
      16

	 	 	 
	
      SECTION 11.4.
	
      Notices......................................................................................................................................
	
      16

	 	 	 
	
      SECTION 11.5.
	
      Benefit of
      Agreement...............................................................................................................
	
      17

	 	 	 
	
      SECTION 11.6
	
      Entire
      Agreement......................................................................................................................
	
      17

	 	 	 
	
      SECTION 11.7.
	
      Amendments and
      Waivers........................................................................................................
	
      17

	 	 	 
	
      SECTION 11.8.
	
      Counterparts...............................................................................................................................
	
      17

	 	 	 
	
      SECTION 11.9.
	
      Termination of
      Agreement........................................................................................................
	
      17

	 	 	 
	
      SECTION 11.10.
	
      Survival.......................................................................................................................................
	
      17

	 	 	 
	
      SECTION 11.11.
	
      Severability..................................................................................................................................
	
      18

	 	 	 
		
      iii
	





Schedule I - Addresses for Notices

Annex A - Form of Bond Purchase Agreement

Annex B - Form of Pledge Agreement

Annex C - Form of Reimbursement Note

Annex D - Opinion of Counsel to the Borrower

Annex E - Officers' Closing Certificate

Annex F - Officers' Advance Certificate

Annex G - Auditors' Letter
iv



                                                    

              SERIES A BOND GUARANTEE AGREEMENT dated of 

                                                   
June 14, 2005, between the UNITED STATES OF AMERICA 

                                                   
(the "Government"), acting through the Rural Utilities Service, a Rural

                                                   
Development agency of the United States Department of Agriculture, and its

                                                   
successors and assigns ("RUS");
and NATIONAL RURAL UTILITIES

                                                   
COOPERATIVE FINANCE CORPORATION, a cooperative association 

                                                   
existing
under the laws of the District of Columbia (the "Borrower").


RECITALS

              
1. On November 29, 2004, the Borrower applied to RUS (the "Application"),
in accordance with Section 313A of the Rural Electrification Act of 1936, as
amended (the "RE Act") and the regulations promulgated
thereunder (as set forth in Section 1720 of Part 7 of the Code of Federal
Regulations (the "Regulations")), for RUS to guarantee loans
from the Federal Financing Bank, a body corporate and instrumentality of the
Government under the general supervision of the Secretary of the Treasury, and
its permitted successors and assigns, ("FFB"), to the Borrower,
the proceeds of which would be used by the Borrower to fund new Eligible Loans
(as defined herein) or to refinance existing debt instruments of the Borrower
used to fund Eligible Loans.

              
2. RUS has determined that the Borrower is eligible for guarantees under
Section 313A of the RE Act.

              
3. FFB is willing to make a loan to the Borrower in the aggregate principal
amount of up to $1,000,000,000 upon the terms and subject to the conditions set
out in the Series A Bond Purchase Agreement between FFB and the Borrower dated
as of the date hereof (such agreement being in the form of Annex A attached
hereto, as the same may be amended, supplemented, consolidated or restated from
time to time in accordance with the terms thereof and hereof being hereinafter
called the "Bond Purchase Agreement"), and upon the terms and
subject to the conditions set out in the Series A Future Advance Bond issued by
the Borrower to FFB and dated as of the date hereof (such bond being in the form
attached to the Bond Purchase Agreement, as the same may be amended,
supplemented, consolidated or restated from time to time in accordance with the
terms thereof and hereof being hereinafter called the "Bond").

              
4. RUS is willing to issue its guarantee of the Bond, as contemplated by
Section 313A of the RE Act, upon the terms and subject to the conditions
hereinafter provided.

              
NOW, THEREFORE, in consideration of the mutual agreements herein contained, RUS
and the Borrower agree as follows:

1



Series A Bond Guarantee Agreement

ARTICLE I



DEFINITIONS

              
SECTION 1.1. Definitions. As used in this
Agreement, the following terms shall have the following meanings:

              
"91-day Treasury-Bill Rate" shall mean, for any date, the rate
equal to the weighted average per annum discount rate (expressed as a bond
equivalent yield and applied on a daily basis) for direct obligations of the
United States with a maturity of thirteen weeks ("91-day Treasury-Bills")
sold at the applicable 91-day Treasury-Bill auction on or most recently prior to
such date, as published on the website http://wwws.publicdebt.treas.gov/AI/OFBills
or otherwise as reported by the U.S. Department of the Treasury. In the event
that the results of the auctions of 91-day Treasury Bills cease to be published
or reported as provided above, or that no 91-day Treasury Bill auction is held
in a particular week, then the 91-day Treasury-Bill Rate in effect as a result
of the last such publication or report will remain in effect until such time, if
any, as the results of auctions of 91-day Treasury-Bills will again be so
published or reported or such auction is held, as the case may be.

              
"Administrator" shall mean the Administrator of RUS.

              
"Advance" shall have the meaning given to that term in the
Bond.

              
"Agreement" shall mean this Series A Bond Guarantee
Agreement, as the same may be amended, supplemented, consolidated or restated
from time to time.

              
"Application" shall have the meaning given to that term in
Recital 1.

              
"Bond" shall have the meaning given to that term in Recital 3.

              
"Bond Fee" shall mean the fee applicable to each Advance as
calculated in accordance with paragraph 9(b) of the Bond.

              
"Bond Purchase Agreement" shall have the meaning given to that
term in Recital 3.

              
"Bond Documents" shall mean the Bond, the Bond Purchase
Agreement, the Guarantee, this Agreement, the Pledge Agreement and the
Reimbursement Note.

              
"Borrower" shall have the meaning given to that term in the
Preamble.

              
"Borrower Notice" shall have the meaning given to that term in
the Pledge Agreement.

              
"Business Day" shall mean any day other than a Saturday, a
Sunday, a legal public holiday under 5 U.S.C. section 6103 for the purpose of
statutes relating to pay and leave of employees or any other day declared to be
a legal holiday for the purpose of

2



Series A Bond Guarantee Agreement

statutes relating to pay and leave of employees by Federal statute or Federal
Executive Order.

              
"Certificate of Available Securities" shall have the meaning
given to that term in the Pledge Agreement.

              
"Certificate of Pledged Collateral" shall have the meaning
given to that term in the Pledge Agreement.

              
"Closing Date" shall mean June 14, 2005.

              
"Concurrent Loan" shall mean a Loan that the Borrower has
extended or extends for the cost of an eligible electrification or telephone
purpose under the RE Act, concurrently with an insured loan made by the
Secretary, as provided in Section 307 of the RE Act.

              
"Consolidated Subsidiary" means at any date any Subsidiary and
any other entity the accounts of which would be combined or consolidated with
those of the Borrower in its combined or consolidated financial statements if
such statements were prepared as of such date.

              
"Eligible Loan" shall mean all or part of any Loan that the
Borrower has made for any electrification or telephone purpose eligible under
the RE Act, to the extent the Loan is not used directly or indirectly to fund
projects for the generation of electricity.

              
"Event of Default" shall have the meaning given to that term in
Section 10.1.

              
"FFB" shall have the meaning given to that term in Recital 1.

              
"Financial Statements", in respect of a Fiscal Year, shall mean
the consolidated financial statements (including footnotes) of the Borrower for
that Fiscal Year as audited by independent certified public accountants
appointed by the Borrower.

              
"Fiscal Year" shall mean the fiscal year of the Borrower, 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.

              
"Government" shall have the meaning given to that term in the
Preamble.

              
"Guarantee" shall mean the guarantee to be executed by the
Secretary, in the form attached to the Bond.

              
"Guarantee Fee" shall have the meaning given to that term in
Section 4.1.

              
"Guaranteed Bond" shall mean the Bond with the executed
Guarantee attached thereto.

              
"Indebtedness" with respect to any Person shall mean without
duplication:

3



Series A Bond Guarantee Agreement

              
(a) all indebtedness which would appear as indebtedness on a balance sheet of
such Person prepared in accordance with generally accepted accounting principles
(i) for money borrowed, (ii) which is evidenced by securities sold for money or
(iii) which constitutes purchase money indebtedness;

              
(b) all indebtedness of others guaranteed by such Person (not including
endorsements for collection or deposit in the ordinary course of business);

              
(c) all indebtedness secured by any mortgage, lien, pledge, charge or
encumbrance upon property owned by such Person, even though such Person has not
assumed or become liable for the payment of such indebtedness; and

              
(d) all indebtedness of such Person created or arising under any conditional
sale or other title retention agreement (including any lease in the nature of a
title retention agreement) with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession of such property),
but only if such property is included as an asset on the balance sheet of such
Person,

              
provided that, in computing the "Indebtedness" of such Person,
there shall be excluded any particular indebtedness if, upon or prior to the
maturity thereof, there shall have been deposited with the proper depositary in
trust money (or evidences of such indebtedness) in the amount necessary to pay,
redeem or satisfy such indebtedness; and provided further that no
provision of this definition shall be construed to include as "Indebtedness" of the Borrower or its Consolidated Subsidiaries any
indebtedness by virtue of any agreement by the Borrower or its Consolidated
Subsidiaries to advance or supply funds to Members or Consolidated Subsidiary
members.

              
"Investment Grade Rating" shall mean, in respect of any ratable
instrument, a rating for that instrument in one of the four highest rating
categories (within which there may be subcategories or gradations which are to
be ignored for the purposes of this definition) of a Rating Agency. At the date
hereof, this would require the following: (i) a BBB- rating or higher from
Standard & Poor's, a division of The McGraw-Hill Companies, Inc.; (ii) a
Baa3 rating or higher from Moody's Investors Service, Inc.; or (iii) a BBB-
rating or higher from Fitch, Inc.

              
"Loan" shall mean a loan that the Borrower has or will have
outstanding to any of its Members or associates.

              
"Member" shall mean any Person who is member or patron of the
Borrower, as the case may be.

              
"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" shall mean the pledge agreement to be
entered into by the Borrower, RUS and U.S. Bank Trust National Association, in
the form of Annex B

4



Series A Bond Guarantee Agreement

attached hereto, as the same may be amended, supplemented, consolidated or
restated from time to time in accordance with the terms thereof and hereof.

              
"Program" shall mean the guarantee program for bonds and notes
issued for electrification or telephone purposes authorized by Section 313A of
the RE Act.

              
"Rating Agency" shall mean (i) Standard & Poor's, a
division of The McGraw-Hill Companies, Inc., Moody's Investors Service, Inc.,
Fitch, Inc; and (ii) their respective successor rating agencies.

              
A "Rating Trigger Event" shall exist at any time when the
Borrower has any Senior Secured Debt (without regard to the Guarantee or any
other third party credit support) that does not have at least two of the
following ratings: (i) A- or higher from Standard & Poor's, a division of
The McGraw-Hill Companies, Inc.; (ii) A3 or higher from Moody's Investors
Service, Inc.; (iii) A- or higher from Fitch, Inc.; and (iv) an equivalent
rating from a successor rating agency to any of those Rating Agencies.

              
"RE Act" shall have the meaning given to that term in Recital
1.

              
"Regulations" shall have the meaning given to that term in
Recital 1.

              
"Reimbursement Note" shall mean the Series A Reimbursement Note
issued by the Borrower to RUS, in the form of Annex C attached hereto, as the
same may be amended, supplemented, consolidated or restated from time to time in
accordance with the terms thereof and hereof.

              
"Requested Advance Date" shall have the meaning given to that
term in the Bond.

              
"RUS" shall have the meaning given to that term in the
Preamble.

              
"Secretary" shall mean the Secretary of Agriculture acting
through the Administrator.

              
"Senior Secured Debt" of the Borrower means non-subordinated
secured bonds or notes of the Borrower having an aggregate principal amount of
at least $100,000,000 which, at the date hereof, means the Borrower's collateral
trust bonds, provided, however, that "Senior Secured
Debt" shall not include (i) up to $500,000,000 of debt designated by
the Borrower as not being "Senior Secured Debt"; and (ii) any
other debt of the Borrower that RUS agrees shall not be "Senior Secured
Debt".

              
"Subrogation Claim" shall have the meaning given to that term
in Section 9.4(a).

              
"Subsidiary" of any Person means (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such

5




Series A Bond Guarantee Agreement

Person directly or indirectly through its Subsidiaries; and (ii) any other
Person in which such Person directly or indirectly through Subsidiaries has more
than a 50% voting and equity interest; provided that no Person shall be
deemed a Subsidiary whose only assets are (A) loans guaranteed, in whole or in
part, as to principal and interest by the Government through RUS pursuant to a
guarantee; and (B) investments incidental thereto.

              
"Termination Date" shall mean the date upon which this
Agreement terminates in accordance with Section 11.9.

              
SECTION 1.2. Principles of Construction. Unless
the context shall otherwise indicate, the terms defined in Section 1.1
hereof 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.

ARTICLE II



THE GUARANTEE

              
SECTION 2.1. Execution of Guarantee. Upon
presentation to RUS of the Bond, and upon satisfaction of the conditions set
forth in Section 3.1 of this Agreement, and subject to Section 2.2, the
Secretary shall execute, pursuant to the RE Act, the Guarantee.

              
SECTION 2.2. Coverage of Guarantee. The Guarantee
shall be an obligation supported by the full faith and credit of the Government
and incontestable except for fraud or misrepresentation of which FFB had actual
knowledge at the time it extended the loan represented by the Guaranteed Bond.

              
SECTION 2.3. Payment on the Guarantee. RUS
guarantees the full repayment of the principal, interest, late payment charges,
Bond Fees and discount or prepayment premiums, if any, when and as due on the
Guaranteed Bond in accordance with the terms of the Guarantee, provided, however,
that any payment by RUS under the Guarantee does not relieve the Borrower of any
of its obligations or liabilities under or in respect of this Agreement or any
of the Bond Documents.

6



Series A Bond Guarantee Agreement

ARTICLE III



CONDITIONS PRECEDENT

              
SECTION 3.1. Conditions Precedent to Issuance of the
Guarantee. RUS shall be under no obligation to execute and deliver the
Guarantee unless and until the following conditions have been satisfied or
waived in writing:

              
(a) Bond Documents. RUS shall have received originals of: (i) the
Bond (with an unexecuted Guarantee attached thereto) duly executed on behalf of
the Borrower, identical in all respects to the form of Bond attached to the Bond
Purchase Agreement except to the extent that RUS may have approved changes
therein, (ii) the Bond Purchase Agreement duly executed on behalf of the
Borrower and FFB, identical in all respects to the form of Bond Purchase
Agreement in Annex A attached hereto except to the extent that RUS may have
approved changes therein, (iii) the Pledge Agreement duly executed on behalf of
the Borrower and the Collateral Agent (as defined therein), identical in all
respects to the form of Pledge Agreement in Annex B attached hereto except to
the extent that RUS may have approved changes therein, and (iv) the
Reimbursement Note duly executed on behalf of the Borrower, identical in all
respects to the form of Reimbursement Note in Annex C attached hereto except to
the extent that RUS may have approved changes therein.

              
(b) Amount of Concurrent Loans. (i) The Borrower shall have
provided a certified list of Concurrent Loans and their outstanding principal
balances as of the last day of the month immediately preceding the Closing Date;
and (ii) on the Closing Date the maximum principal amount of the Guaranteed Bond
shall not exceed the total principal amount of Concurrent Loans outstanding on
the last day of the month immediately preceding the Closing Date as certified
pursuant to paragraph (i) of this subsection.

              
(c) Opinion of Counsel. Counsel to the Borrower shall have
furnished an opinion substantially as to each of the matters listed in Annex D
attached hereto.

              
(d) No material adverse change. The Borrower shall have certified
to the Secretary (in the manner specified in paragraph (g) of this Section 3.1),
and the Secretary shall be satisfied, that no material adverse change shall have
occurred in the financial condition of the Borrower between the date of the
Application and the date of execution of the Guarantee.

              
(e) Investment Grade Rating of Bond. The Borrower shall have
provided evidence of an Investment Grade Rating from a Rating Agency for the
Bond, without regard to the Guarantee.

              
(f) Rating of Senior Secured Debt. The Borrower shall have
provided evidence satisfactory to the Secretary of a credit rating on its Senior
Secured Debt, without regard to the Guarantee and without regard to any third
party credit support.

7



Series A Bond Guarantee Agreement

              
(g) Certification of Senior Management. The Borrower shall have
provided RUS a certification by its Governor and its Chief Financial Officer (or
other senior management acceptable to the Secretary), substantially in the form
attached of Annex E attached hereto, of the following: (i) that the Borrower is
a lending institution organized as a private, not-for-profit, cooperative
association with the appropriate expertise, experience and qualifications to
make loans for electrification or telephone purposes; (ii) the matter to be
certified under paragraph (d) of this Section 3.1; (iii) acknowledgment of the
Borrower's commitment to comply with the reporting requirements specified in
Article VI; and (iv) to the effect that no Rating Trigger Event exists.

              
(h) UCC Filing. The Borrower shall have provided RUS with evidence
that the Borrower has filed the financing statement required pursuant to Section
2.05(i) of the Pledge Agreement.

              
SECTION 3.2. Conditions Precedent to each Advance.
The following conditions shall be fulfilled to the satisfaction of RUS or waived
in writing by RUS prior to the drawdown of each Advance under the Guaranteed
Bond:

                   
(a) Existing Loans. The Borrower shall have certified to the
Secretary (in the manner specified in paragraph (d) of this Section 3.2): (i)
the total aggregate principal amount of outstanding Eligible Loans as at the
last day of the month immediately preceding the Requested Advance Date;
(ii) the total aggregate principal amount of outstanding Loans as at the
last day of the month immediately preceding the Requested Advance Date; and
(iii) the percentage the amount in subparagraph (i) comprises of the amount
in subparagraph (ii).

                   
(b) Use of Proceeds. The Borrower shall have certified to the
Secretary (in the manner specified in paragraph (d) of this Section 3.2) that
the Advance will be applied: (i) to fund new Eligible Loans under the RE Act;
and/or (ii) to refinance existing debt instruments of the Borrower, in the case
of each such debt instrument up to the percentage certified by the Borrower in
accordance with Section 3.2(a)(iii) hereof.

                   
(c) No material adverse change. The Borrower shall have certified
to the Secretary (in the manner specified in paragraph (d) of this Section 3.2),
and the Secretary shall be satisfied, that no material adverse change shall have
occurred in the financial condition of the Borrower between the Closing Date and
the applicable Requested Advance Date.

                   
(d) Certification of Senior Management. The Borrower shall have
provided RUS a certification by its Governor and its Chief Financial Officer (or
other senior management acceptable to the Secretary), substantially in the form
attached of Annex F attached hereto, of the matters to be certified under
paragraphs (a), (b) and (c) of this Section 3.2.

                  
(e) Certificate of Available Securities/Pledged Collateral. The
Borrower shall have provided RUS a copy of a Certificate of Available Securities
or 

8



Series A Bond Guarantee Agreement

Certificate of Pledged Collateral, as applicable, in accordance with the
terms of the Pledge Agreement.

ARTICLE IV



GUARANTEE FEE

              
SECTION 4.1. Guarantee Fee. The Borrower shall
pay a guarantee fee (the "Guarantee Fee"), to the RUS for
deposit into the Rural Economic Development Subaccount maintained under Section
313(b)(2)(A) of the RE Act.

              
SECTION 4.2. Amount of Guarantee Fee; Dates of
Payment. (a) The Guarantee Fee will be in the amount of 30 basis points
(0.30 percent) of the unpaid principal amount of the Bond, payable as provided
in paragraph (b) of this Section 4.2.

              
(b) The Guarantee Fee will be payable, in advance, on each January 15 and
July 15 in the amount of 15 basis points (0.15 percent) of the outstanding
principal amount of the Bond on that date. In addition, on the date of each
Advance under the Bond, the Borrower will pay to RUS the Guarantee Fee on the
principal amount of such advance in the amount of (i) 30 basis points (0.30
percent) of the principal amount of such advance multiplied by (ii) the ratio of
(x) the actual amount of days from the date of such advance until the next
January 15 or July 15, whichever comes first, to (y) 365 (except in calendar
years including February 29, when the number shall be 366).

              
(c) payments of the Guarantee Fee are non-refundable as of the date and
in the amount required to be paid hereunder, without regard to any reduction in
the principal amount of the Bond after that date.

ARTICLE V



SERVICING OF THE GUARANTEED BOND

              
SECTION 5.1. Servicing. The Secretary, or other
agent of the Secretary on his or her behalf, shall have the right to service the
Guaranteed Bond, and periodically inspect the books and accounts of the Borrower
to ascertain compliance with the provisions of the RE Act with respect to the
guarantees under Section 313A thereof and the Bond Documents. The Secretary, or
agent thereof, shall endeavor to give the Borrower at least five Business Days'
notice of any intention to inspect the Borrower's books and accounts. Such
inspection shall be made only during regular office hours of the Borrower or at
any time the Borrower and Secretary, or agent thereof, find mutually convenient.

9



Series A Bond Guarantee Agreement

ARTICLE VI



REPORTING REQUIREMENTS

              
SECTION 6.1. Annual Reporting Requirements. Until
the Termination Date, the Borrower shall provide the Secretary with the
following items within 90 days of the end of each Fiscal Year, in each case, in
form and substance satisfactory to the Secretary:

              
(a) the Financial Statements for such Fiscal Year;

              
(b) a Certificate of Available Securities or Certificate of Pledged
Collateral, as applicable, as of the end of such Fiscal Year;

              
(c) a letter substantially in the form of Annex G attached hereto,
by Deloitte & Touche LLP or by such other reputable, independent certified
public accountants proposed by the Borrower, who in the judgment of the
Secretary have the requisite skills, knowledge, reputation and experience to
provide such letter, such letter to be based upon Schedule A to the applicable
certificate delivered under paragraph (b) of this Section 6.1;

              
(d) a receipt from the Collateral Agent (as defined in the Pledge
Agreement), or such other evidence as is satisfactory to the Secretary, as to
the Available Securities or Pledged Collateral, as applicable, held by the
Collateral Agent at the end of such Fiscal Year, such Available Securities or
Pledged Collateral, as applicable, to agree with Schedule A to the applicable
certificate delivered under paragraph (b) of this Section 6.1;

              
(e) a projection of the Borrower's balance sheet, income statement and
statement of cash flows over the ensuing five years, pro forma assuming the full
principal amount of the Bond is advanced;

              
(f) the most recent credit assessment of the Borrower issued by a Rating
Agency;

              
(g) a credit rating, issued by a Rating Agency, of the Senior Secured
Debt, without regard to the Guarantee and without regard to third party credit
support; and

              
(h) such other information as is reasonably requested by the Secretary.

              
SECTION 6.2. Rating Trigger Event Notices. If the
Borrower becomes aware that a Rating Trigger Event has occurred, the Borrower
shall deliver a Borrower Notice of such event to RUS and to the Collateral Agent
(as defined in the Pledge Agreement) before 4:00 p.m. District of Columbia time
on the Business Day following the date the Borrower has become aware of such
event, specifying the existence of such event.

10




Series A Bond Guarantee Agreement

              
SECTION 6.3. 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, the Borrower shall deliver a Borrower Notice
of such action, occurrence or event to RUS before 4:00 p.m. District of
Columbia time on the Business Day following the date the Borrower becomes aware
of such action, occurrence or event, and, if such Event of Default should occur,
shall submit to RUS, as soon as possible thereafter, a report setting forth its
views as to the reasons for the Event of Default, the anticipated duration of
the Event of Default and what corrective actions the Borrower is taking to cure
such Event of Default.

ARTICLE VII



LIMITATIONS ON AMENDMENTS TO THE GUARANTEED BOND

              
SECTION 7.1. Limitations on Amendments to the
Guaranteed Bond. No amendment or supplement to, and no modification or
rescission of, the Guaranteed Bond shall be effective unless approved in writing
by RUS, nor shall any waiver of any rights of RUS under the Guaranteed Bond be
effective against RUS unless such waiver has been approved in writing by RUS. No
amendment or supplement to, and no modification of, any of the other Bond
Documents, which materially adversely affects RUS, shall be effective unless
approved in writing by RUS, nor shall any waiver of any rights of RUS under any
of the Bond Documents be effective against RUS unless such waiver has been
approved in writing by RUS.

ARTICLE VIII



REPRESENTATIONS OF THE PARTIES

              
SECTION 8.1. Representation of RUS. RUS
represents that the Guarantee endorsed on the original of the Guaranteed Bond
constitutes a legal, valid and binding obligation supported by the full faith
and credit of the Government, incontestable except for fraud or
misrepresentation of which FFB had actual knowledge at the time it extended the
loan represented by the Guaranteed Bond.

              
SECTION 8.2. Representations of the Borrower. The
Borrower hereby represents to RUS that on the date hereof, the Closing Date, and
each Requested Advance Date:


                
  (a) the Borrower 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) the Borrower has the corporate power and authority to execute and
deliver this Agreement and each of the other Bond Documents to which the 

11






Series A Bond Guarantee Agreement

Borrower is a party, to consummate the transactions contemplated hereby and
thereby and to perform its obligations hereunder and thereunder;

              
(c) the Borrower has taken all necessary corporate action to authorize
the execution and delivery of this Agreement and each of the other Bond
Documents to which the Borrower is a party, the consummation by the Borrower of
the transactions contemplated hereby and thereby and the performance by the
Borrower of its obligations hereunder and thereunder;

              
(d) this Agreement and each of the other Bond Documents to which the
Borrower is a party have been duly authorized, executed and delivered by the
Borrower and constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower 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;

              
(e) 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 the Borrower to authorize the execution and delivery by the
Borrower of this Agreement or any of the other Bond Documents to which the
Borrower is a party, or the consummation by the Borrower of the transactions
contemplated hereby or thereby or the performance by the Borrower of its
obligations hereunder or thereunder;

              
(f) neither the execution or delivery by the Borrower of this Agreement
or any of the other Bond Documents to which the Borrower is a party nor the
consummation by the Borrower of any of the transactions contemplated hereby or
thereby nor the performance by the Borrower of its obligations hereunder or
thereunder, including, without limitation, the pledge of the Pledged Securities
(as such term is defined in the Pledge Agreement) to RUS if required, 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 pursuant to any term or
provision of the articles of incorporation or the bylaws of the Borrower or any
provision of any existing law or any rule or regulation currently applicable to
the Borrower or any judgment, order or decree of any court or any regulatory
body, administrative agency or governmental authority having jurisdiction over
the Borrower or the terms of any mortgage, indenture, contract or other
agreement to which the Borrower is a party or by which the Borrower or any of
its properties is bound;

              
(g) there is no action, suit, proceeding or investigation before or by
any court or any regulatory body, administrative agency or governmental
authority 

12




  







Series A Bond Guarantee Agreement

presently pending or, to the knowledge of the Borrower, threatened with
respect to the Borrower, this Agreement or any of the other Bond Documents to
which the Borrower is a party challenging the validity or enforceability of this
Agreement or any of the other Bond Documents to which the Borrower is a party or
seeking to restrain, enjoin or otherwise prevent the consummation by the
Borrower of the transactions contemplated by this Agreement or any of the other
Bond Documents to which the Borrower is a party or which, if adversely
determined, would have a material adverse effect on the Borrower's financial
condition or its ability to perform its obligations under this Agreement or any
of the other Bond Documents to which the Borrower is a party;

              
(h) the Borrower is a lending institution organized as a private,
not-for-profit, cooperative association with the appropriate expertise,
experience and qualifications to make loans for electrification or telephone
purposes;

              
(i) the total principal amount of the Guaranteed Bond plus the
outstanding amount of any other guaranteed bonds issued by the Borrower under
the Program does not exceed the total principal amount of Concurrent Loans
outstanding on the last day of the month immediately preceding the Closing Date;
and

              
(j) no material adverse change has occurred in the financial condition of
the Borrower between the date of the Application and the date this
representation is given.

ARTICLE IX



AGREEMENTS OF THE BORROWER

              
SECTION 9.1. Patronage Refunds. During any
portion of a Fiscal Year when a Rating Trigger Event exists, the Borrower shall
not make cash patronage refunds in excess of five percent of its total patronage
capital, as disclosed in its most recent Financial Statements. While the
Borrower is subject to such restriction, equity securities issued as part of a
patronage refund shall not be redeemed in cash, and, if the Borrower shall have
outstanding any common stock or preferred stock, the Borrower shall not issue
any dividends on any such stock.

              
SECTION 9.2. Security and Collateral. (a) If a
Rating Trigger Event exists, the Pledged Securities (as such term is defined in
the Pledge Agreement) shall be pledged in accordance with the terms and
conditions of the Pledge Agreement to secure the payment obligations of the
Borrower under this Agreement and under the Reimbursement Note.

              
(b) Until the Termination Date, the Borrower shall cause the Available
Securities or Pledged Collateral (as such terms are defined in the Pledge
Agreement), as the case may be, to be at all times not less than 100% of the
aggregate principal amount of the Guaranteed Bond and any other guaranteed bonds
issued by the Borrower under 

13





Series A Bond Guarantee Agreement

the Program and, except as provided for in paragraph (a) of this Section
9.2 or otherwise permitted by the Pledge Agreement, 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 Available Securities or Pledged Collateral, as the case may
be, without the prior written consent of RUS.

              
SECTION 9.3. Use of Savings. The Borrower will
not use any amounts obtained from the reduction in funding costs provided by the
Program to reduce the interest rates the Borrower's Members or associates are
paying on new or outstanding Loans, other than new Concurrent Loans as provided
for in Part 1710 of the Regulations.

              
SECTION 9.4. Subrogation. (a) The Borrower agrees
that RUS shall be subrogated to the rights of FFB to the extent of any and all
payments made by RUS under the Guarantee (herein called the "Subrogation
Claim"). The Borrower agrees to pay directly to RUS all amounts due on
the Guaranteed Bond as to which RUS is so subrogated, together with interest
thereon (to the extent permitted by applicable law) at a rate determined by the
following paragraph, and such payments shall satisfy the obligations of the
Borrower hereunder with respect to such amounts paid by RUS.

              
(b) The Subrogation Claim of RUS shall bear interest from the date of
payment by RUS under the Guarantee until the date such claim is satisfied.
Interest shall accrue at an annual rate of the greater of 1.5 times the 91-day
Treasury-Bill Rate or 200 basis points (2.00%) above the interest rate on the
Guaranteed Bond.

              
SECTION 9.5. Use of Proceeds. (a) The Borrower
shall only apply the proceeds of the Guaranteed Bond to finance new Eligible
Loans or, subject to paragraph (b), to refinance existing debt instruments
of the Borrower.

              
(b) The Borrower may only apply the proceeds of each Advance to refinance
any of the Borrower's indebtedness up to the percentage certified by the
Borrower under Section 3.2(a)(iii) hereof of the amount of such
indebtedness being refinanced.

              
SECTION 9.6. Compliance with Covenants in Other
Agreements. The Borrower and each of its Subsidiaries will observe and
perform within any applicable grace period all covenants and agreements (as the
same may be from time to time amended or waived) contained in any agreement or
instrument relating to any Indebtedness of the Borrower or any of its
Subsidiaries, aggregating for the Borrower and its Subsidiaries in excess of
$50,000,000, if the effect of the failure to observe or perform such covenant or
agreement is to accelerate, or to permit the holder of such Indebtedness or any
other Person to accelerate, the maturity of such Indebtedness.

              
SECTION 9.7. Ratings. For the term of the Bond,
the Borrower shall request, and do all things reasonably within its power to
obtain (including paying all fees incidental thereto), credit ratings on its
Senior Secured Debt from at least two Rating Agencies on at least an annual
basis.

14




Series A Bond Guarantee Agreement

              
SECTION 9.8. Acknowledgement of Borrower. The
Borrower acknowledges and agrees that failure by the Borrower to receive any
repayment under a Loan, does not affect the Borrower's obligations to make
payments under this Agreement or any other Bond Document.

ARTICLE X



EVENTS OF DEFAULT

              
SECTION 10.1. Events of Default. Each of the
following actions, occurrences or events shall, but only (except in the case of
subsections (a), (c) and (e) below) if the Borrower does not cure such
action, occurrence or event within 30 days of notice from RUS requesting
that it be cured, constitute an "Event of Default" under the
terms of this Agreement:


                
  (a) A failure by the Borrower to make a payment of principal, interest
  or a Bond Fee when due on the Guaranteed Bond;

              
(b) The issuance of the Guaranteed Bond in violation of the terms and
conditions of this Agreement or any of the other Bond Documents;

              
(c) A failure by the Borrower to make payment of the Guarantee Fee
required by Article IV when due;

              
(d) A misrepresentation by the Borrower to the Secretary in any material
respect in connection with this Agreement, the Guaranteed Bond or the
information reported pursuant to Article VI;

              
(e) A failure by the Borrower to comply with the covenant contained in
Section 9.6 hereof; or

              
(f) A failure by the Borrower to comply with any other material covenant
or provision contained in this Agreement or any of the other Bond Documents.



              
SECTION 10.2. Compulsory Redemption. If an Event
of Default occurs, the Secretary may demand that the Borrower redeem the
Guaranteed Bond in accordance with its terms.

              
SECTION 10.3. Acceleration by RUS's Purchase of the
Bond. If an Event of Default occurs, and RUS purchases from FFB the Bond in
its entirety in the manner provided in Section 13.5 of the Bond Purchase
Agreement, then the entire purchase price shall be included in the Principal
Amount of the Reimbursement Note as defined therein and shall be immediately due
and payable to RUS. Payment to RUS of all amounts due under the Reimbursement
Note after such an acceleration shall satisfy in full all obligations of the
Borrower under the Bond and Reimbursement Note and all 

15



Series A Bond Guarantee Agreement

corresponding obligations under the other Bond
Documents, including any obligations to reimburse RUS for any payments
thereafter made by RUS under the RUS Guarantee.

              
SECTION 10.4. Effect of Payments by RUS pursuant to
the RUS Guarantee. No payment by RUS pursuant to the RUS Guarantee shall (i)
be considered a payment for purposes of determining the existence of a failure
of the Borrower to perform its obligations to RUS under the Bond Documents, or
(ii) relieve the Borrower of its obligations to reimburse RUS for payments made
by RUS pursuant to the RUS Guarantee. Payment by the Borrower to RUS of amounts
due under the Reimbursement Note shall satisfy pro tonto the
corresponding obligations of the Borrower under the Bond.

              
SECTION 10.5. Remedies Not Exclusive. Upon the
occurrence of an Event of Default, the Secretary shall be entitled to take such
other action as is provided for by law, in this Agreement, or in any of the
other Bond Documents, including injunctive or other equitable relief.

ARTICLE XI



MISCELLANEOUS

              
SECTION 11.1. GOVERNING LAW. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
UNITED STATES OF AMERICA, TO THE EXTENT APPLICABLE, AND OTHERWISE THE LAWS OF
THE DISTRICT OF COLUMBIA.

              
SECTION 11.2. 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 PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 11.2.

              
SECTION 11.3. Method of Payment. All payments to
be made by the Borrower to RUS hereunder, shall be made in the manner notified
to the Borrower by RUS from time to time in accordance with Section 11.4.

              
SECTION 11.4. 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. The
address, telephone number, or facsimile 

16



Series A Bond Guarantee Agreement

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 to the
Borrower shall be deemed to have been delivered at the time it is sent by
facsimile (fax) transmission. A properly addressed notice or other communication
to RUS shall be deemed to have been delivered at the time it is sent by
facsimile (fax) transmission, provided that the original of such faxed notice or
other communication shall have been received by RUS within five Business Days.

              
SECTION 11.5. Benefit of Agreement. This
Agreement shall become effective when it shall have been executed by RUS and the
Borrower, and thereafter shall be binding upon and inure to the respective
benefit of the parties and their permitted successors and assigns.

              
SECTION 11.6. Entire Agreement. This Agreement,
including Schedule I hereto and Annexes A to G hereto, and the other
Bond Documents, constitutes the entire agreement between the parties hereto
concerning the matters contained herein and supersedes all prior oral and
written agreements and understandings between the parties.

              
SECTION 11.7. Amendments and Waivers. (a) No
failure or delay of RUS or the Borrower 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 the Borrower therefrom shall in
any event be effective unless the same shall be authorized as provided in
paragraph (b) of this Section 11.7, 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 the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.

              
(b) No provision of this Agreement may be amended or modified except
pursuant to an agreement in writing entered into by RUS and the Borrower. No
provision of this Agreement may be waived except in writing by the party or
parties receiving the benefit of and under such provision.

              
SECTION 11.8. 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 11.9. Termination of Agreement. This
Agreement shall terminate upon the indefeasible payment in full of all amounts
payable hereunder, under the Reimbursement Note and under the Guaranteed Bond.

              
SECTION 11.10. Survival. The representations and
warranties of each of the parties hereto contained in this Agreement and
contained in each of the other Bond Documents to which such party hereto is a
party thereto, and the parties' obligations under any and all thereof, shall
survive and shall continue in effect following the execution and 

17



Series A Bond Guarantee Agreement

delivery of this Agreement, any disposition of the
Guaranteed Bond and the expiration or other termination of any of the other Bond
Documents, but, in the case of each Bond Document, shall not survive the
expiration or the earlier termination of such Bond Document, except to the
extent expressly set forth in such Bond Document.

              
SECTION 11.11. Severability. If any term or
provision of this Agreement or any Bond Document 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 of
such Bond Document or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.

18



              
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.


 



	
      UNITED STATES OF AMERICA,

      acting through the Acting Administrator of the Rural Utilities Service
      


	
      By: 
	/s/  Curtis M. Anderson            
       
	
            
            Title:
      
	
      Acting Administrator of the Rural Utilities Service
      






 


 



	
      NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, as the
      Borrower
      
 

	
      By:
	 _______________________________
	
      Title:
	   




 


[Signature Page to Series A Bond Guarantee Agreement]




              
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.

 



	
      UNITED STATES OF AMERICA,

      acting through the Acting Administrator of the Rural Utilities Service
      


	
      By: 
	 _____________________________
	
            
            Title:
      
	
      Acting Administrator of the Rural Utilities Service
      







 


 



	
      NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, as the
      Borrower


       

	
      By:
	 /s/  Sheldon C.
      Peterson                       
	
      Title:
	 CEO




 


[Signature Page to Series A Bond Guarantee Agreement]




SCHEDULE I

TO

SERIES A BOND GUARANTEE AGREEMENT

Addresses for Notices


    1. The addresses referred to in Section 11.4 hereof, for purposes of
    delivering communications and notices, are as follows:


  
    
        If to RUS:

        
            Rural Utilities Service

            United States Department of Agriculture

            1400 Independence Avenue, SW

            Washington, DC 20250

            Fax: 202-720-1725

            Attention of: The Administrator

            Subject: REDLG Program

        

        If to the Borrower:

      
            National Rural Utilities Cooperative Finance Corporation

            2201 Cooperative Way

            Herndon, VA 20171-3025

            Telephone: 703-709-6718

            Fax: 703-709-6819

            Attention of: Steven L. Lilly, Chief Financial Officer

            With a copy 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., General Counsel

      

    

  



1


    





Annex A


Form of Bond Purchase Agreement



 


A-1



Annex B


Form of Pledge Agreement


 


B-1




Annex C


Form of Reimbursement Note



 


C-1



Annex D


Opinion of Counsel to the Borrower


              
(1) The Borrower has been duly incorporated and is validly existing as a
not-for-profit corporation in good standing under the laws of the District of
Columbia with corporate power and authority to execute and perform its
obligations under the Bond Documents.



              
(2) The Bond Documents have been duly authorized, executed and
delivered by the Borrower, and such documents constitute the legal, valid and
binding agreements of the Borrower, enforceable against the Borrower in
accordance with their respective terms subject to (a) applicable bankruptcy,
reorganization, insolvency, moratorium and other laws of general applicability
relating to or affecting creditors' rights generally, and (b) the application of
general principles of equity regardless of whether such enforceability is
considered in a proceeding in equity or at law.

              
(3) Neither the execution nor the delivery by the Borrower of any of the Bond
Documents nor the consummation by the Borrower 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 RUS if required,
nor the fulfillment by the Borrower of the terms of any of the Bond Documents
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 the
Borrower or any law or any regulation or any order known to Counsel currently
applicable to the Borrower of any court, regulatory body, administrative agency
or governmental body having jurisdiction over the Borrower or the terms of any
indenture, deed of trust, note, note agreement or instrument to which the
Borrower is a party or by which the Borrower 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 including, without limitation, RUS, having
jurisdiction over the Borrower is required for any consummation by the Borrower
of the transactions contemplated by the Bond Documents except such as have been
obtained from RUS; 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 Guaranteed Bond after the date hereof.

              
(5) There is no pending or, to the best of Counsel's knowledge, threatened
action, suit or proceeding before any court or governmental agency, authority or
body or any arbitrator with respect to the Borrower, or any of the Bond
Documents, or which, if adversely determined, would have a material adverse
effect on the Borrower's financial condition or its ability to perform its
obligations under any of the Bond Documents.


 


D-1



Annex E


Officers' Closing Certificate


TO:         The United States of America acting through the Rural Utilities Service.

              
We,
[                           ],
Governor, and
[                           ],
Chief Financial Officer, of National Rural Utilities Cooperative Finance
Corporation (the "Borrower"), pursuant to the Series A
Bond Guarantee Agreement dated as of June 14, 2005, between the Borrower
and the United States of America acting through Rural Utilities Service (the "Bond Guarantee Agreement"), hereby certify on behalf of the
Borrower that as at the date hereof:

              
(1) the Borrower is a lending institution organized as a private,
not-for-profit, cooperative association with the appropriate expertise,
experience and qualifications to make loans for electrification or telephone
purposes;

              
(2) no material adverse change has occurred in the financial condition of the
Borrower between the date of the Application and the date hereof;

              
(3) we acknowledge the commitment of the Borrower to submit to the Secretary
the documents required under Article VI of the Bond Guarantee Agreement in
accordance with the terms thereof;

              
(4) all of the representations contained in Section 8.2 of the Bond Guarantee
Agreement remain true and correct in all respects; and

              
(5) no Rating Trigger Event exists.

Capitalized terms used in this certificate shall have the meanings given to
those terms in the Bond Guarantee Agreement.

DATED as of this 14th day of June, 2005.


	
      NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

	     
	_____________________________

      Governor
	
            
             
      
            
            
_____________________________

            Chief Financial Officer
      





E-1




Annex F


Officers' Advance Certificate


TO:         The United States of America acting through the Rural Utilities Service.

              
We,
[                           ],
Governor, and
[                           ],
Chief Financial Officer, of National Rural Utilities Cooperative Finance
Corporation (the "Borrower"), pursuant to the Series A
Bond Guarantee Agreement dated as of June 14, 2005, between the Borrower
and the United States of America acting through Rural Utilities Service (the "Bond Guarantee Agreement"), hereby certify on behalf of the
Borrower that:




    
    
(1) (i) as at the last day of the month immediately preceding the date
hereof, the total aggregate principal amount of outstanding Eligible Loans is:
$                        ;

    

                  
    (ii) as at the last day of the month immediately preceding the date
    hereof, the total 

                  
    aggregate principal amount of outstanding Loans is:
    $                        ;

                  
    (iii) the percentage the amount under (i) comprises of the amount under
    (ii)
    is:               %;

    
    
    (2) the Advance will be applied to: (i) fund new Eligible Loans under the
    RE Act; or (ii) to refinance existing debt instruments of the Borrower, in
    the case of each such debt instrument up to the percentage set forth in
    clause (1)(iii) above;

(3) as at the date hereof, no material adverse change has occurred in the
financial condition of the Borrower between the between the Closing Date and the
applicable Requested Advance Date; and

(4) as at the date hereof, all of the representations contained in Section
8.2 of the Bond Guarantee Agreement remain true and correct in all respects.

    

F-1

    

    




    
Capitalized terms used in this certificate shall have the meanings given to
those terms in the Bond Guarantee Agreement.

DATED as of this         day of
                     ,
20     .


	
      NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
 

	_____________________________

      Governor

      

      _____________________________

      Chief Financial Officer




F-2



Annex G


Auditors' Letter


To the Board of Directors of

National Rural Utilities Cooperative Finance Corporation

Herndon, Virginia

We have performed the procedures enumerated below, which were agreed to by
National Rural Utilities Cooperative Finance Corporation (the "Company") and the Rural Utilities Service (the
"RUS"),
solely to assist in evaluating the Company's compliance with Section 6.1(b) of
the Series A Bond Guarantee Agreement between the Company and the United States
of America, acting through the RUS, dated June 14, 2005 (the "Bond
Guarantee Agreement"), as of [last day of preceding fiscal year]. The
Company's management is responsible for the Company's compliance with those
requirements. This agreed-upon procedures engagement was conducted in accordance
with attestation standards established by the American Institute of Certified
Public Accountants. The sufficiency of these procedures is solely the
responsibility of those parties specified in this report. Consequently, we make
no representation regarding the sufficiency of the procedures described below
either for the purpose for which this report has been requested or for any other
purpose.

The procedures that we performed and our findings are as follows:


1.      We obtained the attached schedule of the total aggregate unpaid principal
amount of the securities identified by the Company as comprising [the Available
Securities][the Pledged Securities], as defined in the Bond Guarantee Agreement,
as of [last day of preceding fiscal year] from Company management and compared
the total aggregate unpaid principal amount shown on such schedule ($ ____) to
the Company's underlying accounting records as of the same date and found them
to be in agreement.



2.      We obtained the attached schedule of the total aggregate amount of all
amounts outstanding under the Guaranteed Bond, as defined in the Bond Guarantee
Agreement, as of [last day of preceding fiscal year] from Company management and
compared the amount shown on such schedule ($_____) to the Company's underlying
accounting records as of the same date and found them to be in agreement.



We were not engaged to, and did not, conduct an examination, the objective of
which would be the expression of an opinion on compliance. Accordingly, we do
not express such an opinion. Had we performed additional procedures, other
matters might have come to our attention that would have been reported to you.

This report is intended solely for the information and use of the Company and
the RUS and is not intended to be and should not be used by anyone other than
these specified parties.

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July   , 20

Yours truly,

_____________________________

DELOITTE & TOUCHE LLP

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