fm_note.htm


     

    


     

    FARMER
MAC MORTGAGE SECURITIES CORPORATION

     

    as
Note Purchaser

     

    NATIONAL
RURAL UTILITIES

     

    COOPERATIVE
FINANCE CORPORATION

     

    as
Borrower

     

    FEDERAL
AGRICULTURAL MORTGAGE CORPORATION

     

    as
Guarantor

     

    _______________________________

     

    NOTE
PURCHASE AGREEMENT

     

    _______________________________

     

    Dated
as of December 15, 2008

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      TABLE OF
CONTENTS

      
 

    

    
      
        
          	 
      	
                  Page

                
	 
      	 
      
	
                  RECITALS

                	
                  1

                
	 
      	 
      
	
                  ARTICLE
      I DEFINITIONS

                	
                  1

                
	
                  SECTION
      1.01.  Definitions

                	
                  1

                
	
                  SECTION
      1.02.  Principles of
      Construction

                	
                  5

                
	 
      	 
      
	
                  ARTICLE
      II PURCHASE OF NOTES

                	
                  5

                
	
                  SECTION
      2.01.  Purchase of
      Notes; Minimum Denominations

                	
                  5

                
	
                  SECTION
      2.02.  Interest Rates
      and Payment

                	
                  5

                
	
                  SECTION
      2.03.  Maturity

                	
                  7

                
	 
      	 
      
	
                  ARTICLE
      III CONDITIONS PRECEDENT

                	
                  7

                
	
                  SECTION
      3.01.  Conditions
      Precedent to the Purchase of Each Note

                	
                  7

                
	
                  SECTION
      3.02.  Certificate of
      Pledged Collateral

                	
                  8

                
	 
      	 
      
	
                  ARTICLE
      IV REPORTING REQUIRMENTS

                	
                  8

                
	
                  SECTION
      4.01.  Annual Reporting
      Requirements

                	
                  8

                
	
                  SECTION
      4.02.  Default
      Notices

                	
                  9

                
	 
      	 
      
	
                  ARTICLE
      V REPRESENTATIONS OF THE PARTIES

                	
                  9

                
	
                  SECTION
      5.01.  Represenations
      of Farmer Mac and the Purchaser

                	
                  9

                
	
                  SECTION
      5.02.  Representations
      of National Rural

                	
                  9

                
	 
      	 
      
	
                  ARTICLE
      VI SECURITY AND COLLATERAL

                	
                  11

                
	
                  SECTION
      6.01.  Security and
      Collateral

                	
                  11

                
	 
      	 
      
	
                  ARTICLE
      VII EVENTS OF DEFAULT

                	
                  12

                
	
                  SECTION
      7.01.  Events of
      Default

                	
                  12

                
	
                  SECTION
      7.02.  Acceleration

                	
                  13

                
	
                  SECTION
      7.03.  Remedies Not
      Exclusive

                	
                  13

                
	 
      	 
      
	
                  ARTICLE
      VIII MISCELLANEOUS

                	
                  13

                
	
                  SECTION
      8.01.  GOVERNING
      LAW

                	
                  13

                
	
                  SECTION
      8.02.  WAIVER OF JURY TRIAL

                	
                  13

                
	
                  SECTION
      8.03.  Notices

                	
                  13

                
	
                  SECTION
      8.04.  Benefit of Agreement

                	
                  14

                
	
                  SECTION
      8.05.  Entire Agreement

                	
                  14

                
	
                  SECTION
      8.06.  Amendments and Waivers 

                	
                  14

                
	
                  SECTION
      8.07.  Counterparts

                	
                  14

                
	
                  SECTION
      8.08.  Termination of Agreement

                	
                  14

                
	
                  SECTION
      8.09.  Survival

                	
                  14

                
	
                  SECTION
      8.10.  Severability

                	
                  15

                
	 
      	 
      
	
                  ARTICLE
      IX GUARANTEE

                	
                  15

                


        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                SECTION
      9.01  Guarantee

              	
                15

              
	
                SECTION
      9.02  Control by Guarantor

              	
                16

              
	 
      	 
      


      

       

    

    


    Schedule
I – Addresses for Notices

    Schedule
II – Form of Applicable Margin Notice

    Schedule
III – Form of Pricing Agreement

    


    Annex A-1
– Form of Fixed Rate Note-5/1

    Annex A-2
– Form of Fixed Rate Note 5Y

    Annex A-3
– Form of Floating Rate Note

    Annex B –
Opinion of Counsel to National Rural

    Annex C –
Officers’ Certificate

    Annex D –
Form of Securities Purchase Agreement

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NOTE
PURCHASE AGREEMENT

     

    NOTE
PURCHASE AGREEMENT, dated as of December [15], 2008, among FARMER MAC MORTGAGE
SECURITIES CORPORATION (the “Purchaser”), a wholly
owned subsidiary of FEDERAL AGRICULTURAL MORTGAGE CORPORATION, a
federally-chartered instrumentality of the United States and an institution of
the Farm Credit System (“Farmer Mac” or the
“Guarantor”);
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, a cooperative
association existing under the laws of the District of Columbia (“National Rural”); and
Farmer Mac, as Guarantor.

     

    RECITALS

     

    WHEREAS
National Rural wishes from time to time to issue and sell Notes to the
Purchaser, and the Purchaser wishes from time to time to purchase such Notes
from National Rural, all on the terms and subject to the conditions herein
provided; and

     

    WHEREAS
Farmer Mac is an instrumentality of the United States formed to provide for
a secondary marketing arrangement for agricultural real estate mortgages;
National Rural is a non-profit cooperative and Farmer Mac, the Purchaser and
National Rural have agreed that the Notes will be secured by the pledge of notes
for borrowings from National Rural by members of National Rural, as provided
herein.

     

    NOW,
THEREFORE, in consideration of the mutual agreements herein contained, Farmer
Mac, the Purchaser 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
Note Purchase Agreement, as the same may be amended from time to
time.

     

    “Applicable Margin”
means the Applicable Margin (LIBOR) or the Applicable Margin (Treasury), as the
context may require.

     

    “Applicable Margin
(LIBOR)” means the margin to be added to the LIBOR Rate to determine the
rate of interest payable on the Floating Rate Notes from time to
time.  The Applicable Margin (LIBOR) shall be communicated in writing
by Farmer Mac to National Rural in accordance with Section 2.02(d) hereof and
calculated by Farmer Mac as follows: (i) Farmer Mac’s Cost of Funds (expressed
in relation to the LIBOR Rate), plus 0.75%, minus (ii) the LIBOR
Rate.  The Applicable Margin (LIBOR) for any Floating Rate Note shall
be set forth in the applicable Pricing Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Applicable Margin
(Treasury)” means the margin to be added to the Treasury Rate to
determine the rate of interest payable on the Fixed Rate Notes.  The
Applicable Margin (Treasury) shall be communicated in writing by Farmer Mac to
National Rural in accordance with Section 2.02(d) hereof and calculated by
Farmer Mac as follows: (i) Farmer Mac’s Cost of Funds (expressed in relation to
the Treasury Rate), plus 0.75%, minus (ii) the Treasury Rate.  The
Applicable Margin (Treasury) for any Fixed Rate Note shall be set forth in the
applicable Pricing Agreement.

     

    “Business Day” means
any day other than a Saturday, a Sunday, or a day on which any of the Federal
Reserve Bank of New York, Farmer Mac’s office in Washington, DC or National
Rural’s office in Virginia is not open for business.

     

    “Certificate of Pledged
Collateral” has the meaning given to that term in the Pledge
Agreement.

     

    “Closing Date” means
the date of the closing of each issuance of Notes hereunder.

     

    “Collateral Agent”
means U.S. Bank Trust National Association, or its successor, as collateral
agent under the Pledge Agreement.

     

    “Control Party” means
(i) the Guarantor, so long as no Guarantor Default has occurred and is
continuing, or (ii) the holders of the Notes for so long as a Guarantor Default
has occurred and is continuing.

     

    “Dollar” or “$” means the lawful
money of the United States of America.

     

    “Eligible Member” has
the meaning given to that term in the Pledge Agreement.

     

    “Event of Default” has
the meaning given to that term in Section 7.01.

     

    “Farmer Mac’s Cost of
Funds” means the cost of funds quoted by Farmer Mac to National Rural
based on Farmer Mac’s estimate of the economic cost to obtain cash funds from
the wholesale funding market by issuing unsecured medium – term notes to fully
fund to maturity the Note or Notes purchased by Farmer Mac from National
Rural.

     

    “Farmer Mac Series C
Preferred Stock” means the Non-Voting Cumulative Preferred Stock Series
C, of 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 independent certified public accountants 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.

     

    “Fixed Rate Notes”
means the Fixed Rate Notes-5/1 and the Fixed Rate Notes-5Y.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Fixed Rate Notes-5/1”
means one or more five-year fixed rate notes, callable after one year, of
National Rural payable to the Purchaser, having the terms provided for in
Article II of this Agreement and otherwise in the form of Annex A-1 attached
hereto, except to the extent Farmer Mac and National Rural may have approved
changes therein.

     

    “Fixed Rate Notes- 5Y”
means one or more five-year noncallable fixed rate notes of National Rural
payable to the Purchaser, having the terms provided for in Article II of this
Agreement and otherwise in the form of Annex A-2 attached hereto, except to the
extent Farmer Mac and National Rural may have approved changes
therein.

     

    “Floating Rate Notes”
means one or more two-year noncallable floating rate notes of National Rural
payable to the Purchaser, having the terms provided for in Article II of this
Agreement and otherwise in the form of Annex A-3 attached hereto, except to the
extent Farmer Mac and National Rural may have approved changes
therein.

     

    “Guarantor Default”
means a default by the Guarantor under its obligations pursuant to Article IX
which is existing and continuing.

     

    “Interest Payment
Date” means an Interest Payment Date (Fixed Rate Note) or an Interest
Payment Date (Floating Rate Note), as the context may require.

     

    “Interest Payment Date (Fixed
Rate Note)” means the dates set forth in the Pricing Agreement for fixed
rate notes as the interest payment dates therefor; provided, however, that if
any such date is not a Business Day, such Interest Payment Date that would
otherwise be such date will be the next Business Day following such
date.  The Interest Payment Dates (Fixed Rate Note) will be set forth
in the applicable Pricing Agreement.

     

    “Interest Payment Date
(Floating Rate Note)” means the first (1st) day of
each January, April, July and October, unless other dates are agreed by the
parties hereto provided, however, that if any such date is not a Business Day,
such Interest Payment Date that would otherwise be such date will be the next
Business Day following such date.  The Interest Payment Dates
(Floating Rate Note) will be set forth in the applicable Pricing
Agreement.

     

    “Interest Period (Floating
Rate Note)” means, until all
outstanding principal amount of the Floating Rate Notes and interest accrued
thereon have been paid in full, each 3-month period comprising a calendar
quarter from and including the first day of a calendar quarter (i.e., January
1st,
April 1st, July
1st
and October 1st)
(unless another period is agreed by the parties hereto and set forth in the
applicable Pricing Agreement) to and including the last day of the same calendar
quarter (i.e., March 31st, June
30th,
September 30th and
December 31st)
(unless otherwise agreed by the parties hereto and set forth in a Pricing
Agreement);
provided, that the initial Interest Period (Floating Rate Note) means the
period from and including the date of issuance to and excluding the first
Interest Payment Date (Floating Rate Note) following the date of issuance; provided, further,
that if any Interest Period (Floating Rate Note) would end on a day other than a
Business Day, then such Interest Period shall be extended to and include the
next succeeding Business Day and the next Interest Period shall commence on the
next succeeding day.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “LIBOR Rate” shall
mean, for any Interest Period, the rate appearing on Reuters Page LIBOR01 (or on
any successor or substitute page of such service, or if the Reuters service
ceases to be available, any successor to or substitute for such service
providing rate quotations comparable to those currently provided on such page of
such service, as mutually agreed by National Rural and Farmer Mac from time to
time for purposes of providing quotations of interest rates applicable to Dollar
deposits in the London interbank market) as of 11:00 a.m., London time, on the
day that is two London Banking Days prior to the commencement of such Interest
Period (Floating Rate Note), as the rate for the offering of Dollar deposits
with a maturity of three months.  Such rate shall apply for the
initial Interest Period (Floating Rate Note) for any advance notwithstanding
that such initial Interest Period (Floating Rate Note) for an advance may be
shorter than three months.

     

    “London Banking Day”
shall mean any day on which commercial banks and foreign exchange markets settle
payments and are open for general business (including dealings in foreign
exchange and foreign currency deposits) in the Dollar, in London,
England.

     

    “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.

     

    “Notes” means the
Fixed Rate Notes-5/1, the Fixed Rate Notes-5Y and the Floating Rate Notes, or
any one or more of them as the context may require.

     

    “Note Documents” means
the Notes, this Agreement, and the Pledge Agreement.

     

    “Notice of Borrowing”
has the meaning set forth in Section 2.01 hereof.

     

    “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 Agreement dated as of the date hereof, among National Rural,
the Purchaser, Farmer Mac and the Collateral Agent.

     

    “Pledged Collateral”
has the meaning given to that term in the Pledge Agreement.

     

    “Pledged Securities”
has the meaning given to that term in the Pledge Agreement.

     

    “Pricing Agreement”
means the Pricing Agreement for each issuance of Notes among Farmer Mac, the
Purchaser and National Rural in the form of Schedule III attached
hereto.

     

    “Securities Purchase
Agreement” means the Series C Preferred Stock Purchase Agreement, a form
of which is attached hereto as Annex D.

     

    “Treasury Rate” means
the applicable 5-year benchmark United States Treasury rate at the time of
pricing a Note, unless otherwise agreed to by the parties and set forth in the
applicable Pricing Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    SECTION
1.02. Principles of
Construction

     

    .  Unless
the context shall otherwise indicate, the terms defined in Section 1.01
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

     

    PURCHASE
OF NOTES

    SECTION
2.01.            Purchase of Notes; Minimum
Denominations

     

    .  The
Purchaser agrees to purchase Notes, at 100% of their principal amount, from time
to time, on or before December 31, 2010, as requested by National Rural by
written notice (each, a “Notice of Borrowing”)
to Farmer Mac in an aggregate principal amount, for all Notes purchased
hereunder, not in excess of $500 million, subject to satisfaction of the
conditions set forth herein.   Each advance under this Agreement
shall be disbursed in a minimum amount of $50 million and additional increments
of $25 million in excess thereof.  Each advance shall price within 3
Business Days of National Rural providing a Notice of Borrowing to Farmer Mac
and shall close and fund within 3 Business Days of pricing, subject to
satisfaction of the conditions set forth herein and in accordance with the
procedures set forth in Section 2.02(d) hereof.

     

    SECTION
2.02.            Interest Rates and
Payment

     

    .  

     

    (a) Floating Rate
Notes.  Each Floating Rate Note shall bear interest, payable
quarterly in arrears unless otherwise agreed by the parties hereto and set forth
in the applicable Pricing Agreement, on the outstanding principal amount thereof
(computed on the basis of a 360-day year and the actual number of days elapsed)
from its date of issuance until final payment on the maturity date thereof or
otherwise at a variable rate per annum equal to the LIBOR Rate for each Interest
Period (Floating Rate Note) plus the Applicable Margin (LIBOR).  The
LIBOR Rate shall reset as of the first day of each Interest
Period.  The (i) initial LIBOR Rate and (ii) Applicable Margin (LIBOR)
for the term of each Floating Rate Note shall be specified in the applicable
Pricing Agreement.  Interest only shall be payable on each Interest
Payment Date (Floating Rate Note).  The Interest Payment Dates
(Floating Rate Note) shall be determined at the time of an advance and set forth
in the applicable Pricing Agreement.  The principal amount of each
Floating Rate Note, together with any accrued but unpaid interest, shall be due
and payable on the maturity date.

     

    (b) Fixed Rate
Notes.  Each Fixed Rate Note-5/1 and Fixed Rate Note-5Y shall
bear interest, payable semi-annually in arrears unless otherwise agreed by the
parties hereto and set forth in the applicable Pricing Agreement on the
outstanding principal amount thereof (computed on the basis of a 30-day month
and a 360-day year) from its date of issuance until final payment on the
maturity 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    date
thereof or otherwise at a fixed rate per annum equal to the Treasury Rate plus
the Applicable Margin (Treasury), in each case as specified for the term of each
Fixed Rate Note in the applicable Pricing
Agreement.    Interest only shall be payable on each
Interest Payment Date (Fixed Rate Note).  The Interest Payment Dates
(Fixed Rate Note) shall be determined at the time of an advance and set forth in
the applicable Pricing Agreement.  The principal amount of each Fixed
Rate Note-5/1 and Fixed Rate Note-5Y, together with any accrued but unpaid
interest, shall be due and payable on the applicable maturity date.

     

    (c) Default
Interest.  To the extent any payment of interest or principal
is not paid when due, interest shall continue to accrue thereon at the
applicable rate per annum determined as provided above plus one
percent.

     

    (d) Notice of Borrowing;
Determination of Applicable Margin; Procedure
for Pricing.

     

    (i)  Each
Notice of Borrowing shall indicate the amount of Notes requested to be advanced
and the type of Note that National Rural wishes to advance.  A Notice
of Borrowing may request preliminary pricing indications for more than one type
of Note, with the understanding that only one type of Note will be issued on any
particular Closing Date, unless otherwise agreed by the parties hereto in a
Pricing Agreement.  Each Notice of Borrowing shall also provide name,
telephone and email contact information of an authorized representative of
National Rural.

     

    (ii) Upon
receipt of a Notice of Borrowing from National Rural, Farmer Mac shall, within 2
Business Days, provide to National Rural a preliminary indication of the
Applicable Margin (LIBOR) or Applicable Margin (Treasury), or both, as
applicable to any Notice of Borrowing.  Upon an acceptance of such
preliminary indication of pricing by National Rural, the applicable Note will
price within one Business Day (and may price on the day of the preliminary
pricing if the parties so agree) thereafter.  Farmer Mac shall provide
National Rural with written notice of the final Applicable Margin (LIBOR) or
Applicable Margin (Treasury) no later than the time of pricing of each
advance.  National Rural shall be deemed to approve of such pricing so
long as the Applicable Margin (LIBOR) or Applicable Margin (Treasury) shall not
exceed the preliminary indication by more than 5 basis points
(0.05%).  If the final pricing does exceed the preliminary indication
by more than 5 basis points (0.05%), an authorized representative of National
Rural must agree via email confirmation prior to or simultaneously with the
pricing to accept such margin.

     

    (e) Payments
and Prepayments.

     

    (i) Each
Floating Rate Note and Fixed Rate Note-5Y shall not be prepayable during the
term of such Note.

     

    (ii) National
Rural shall have the right, at its option, at any time and from time to time, to
repay or prepay the principal amount of any Fixed Rate Note-5/1, in whole or in
part, on or after the first (1st)
anniversary of the applicable Closing 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Date on
the scheduled call dates set forth in the applicable Pricing Agreement, upon at
least nine (9) days prior written notice to Farmer Mac.  In the event
that any such repayment or prepayment of the principal amount of any Note is
made on a day other than an Interest Payment Date (Fixed Rate Note), accrued
interest on the principal amount thereof shall be payable through and excluding
the call date on which such repayment or prepayment is made.

     

    (f) Payment
Notice.  Farmer Mac shall send to National Rural, not later
than the fifth Business Day prior to an Interest Payment Date for any Note, a
notice setting forth the amount of principal and interest, as applicable, due
and owing on the next Interest Payment Date for such Note.

     

    SECTION
2.03.            Maturity

     

    (a) Floating Rate
Notes.  The Floating Rate Notes will mature the earlier of: (i)
two years from the applicable Closing Date and (ii) December 31,
2012.

     

    (b) Fixed Rate
Notes-5/1.  The Fixed Rate Notes-5/1 will mature the earlier
of: (i) five years from the applicable Closing Date and (ii) December 31,
2015.

     

    (c) Fixed Rate
Notes-5Y.  The Fixed Rate Notes-5Y will mature the earlier of:
(i) five years from the applicable Closing Date and (ii) December 31,
2015.

     

     

    ARTICLE
III

     

    CONDITIONS
PRECEDENT

     

    SECTION
3.01.            Conditions Precedent to the
Purchase of Each Note

     

    .  On
each Closing Date, the Purchaser shall be under no obligation to purchase any
Note unless and until the following conditions have been satisfied:

     

    (a) The
Notes.  Farmer Mac shall have received the original of such
Notes, duly executed on behalf of National Rural, in the applicable form
attached as Annex A-1, A-2 or A-3 hereto.

     

    (b) The Pledge
Agreement.  Farmer Mac shall have received an original of the
Pledge Agreement duly executed on behalf of National Rural and the Collateral
Agent.

     

    (c) Opinion of
Counsel.  Farmer Mac shall have received an opinion of counsel
to National Rural substantially in the form of Annex B, attached
hereto.

     

    (d) 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.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (e) No Material Adverse
Change.  National Rural shall have certified to Farmer Mac (in
the manner specified in paragraph (i) 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 date of the purchase of such Note, which
has not been set forth in documents, certificates or financial information
furnished to Farmer Mac or publicly filed.

     

    (f) UCC
Filing.  National Rural shall have provided Farmer Mac with
evidence that National Rural has filed the financing statement required pursuant
to Section 2.02(i) of the Pledge Agreement.

     

    (g) No Event of
Default.  National Rural shall have certified to Farmer Mac and
Farmer Mac shall be satisfied that no Event of Default shall have occurred and
be continuing.

     

    (h) Invest to
Participate.  National Rural shall have entered into a
Securities Purchase Agreement to purchase Farmer Mac Series C Preferred Stock
such that National Rural shall own or have agreed to purchase at least 4% of the
aggregate principal amount of the Notes outstanding hereunder, taking into
account the advance made on the Closing Date.

     

    (i) 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 C 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 (e) and (g) of this
Section 3.01; and (iii) the representations and warranties of National
Rural.

     

    SECTION
3.02. Certificate of Pledged
Collateral

     

    .  No
later than three Business Days after each advance hereunder, National Rural
shall provide Farmer Mac a copy of a Certificate of Pledged Collateral, dated as
of the last day of the calendar month most recently ended at least 10 Business
Days prior to such authentication and delivery, in accordance with the terms of
the Pledge Agreement.

     

     

    ARTICLE
IV

     

    REPORTING
REQUIREMENTS

     

    SECTION
4.01.            Annual Reporting
Requirements

     

    .  So
long as any Notes remain 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:

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (a) the
Financial Statements for such Fiscal Year;

     

    (b) a
Certificate of Pledged Collateral;

     

    (c) a receipt
from the Collateral Agent, or such other evidence as is satisfactory to Farmer
Mac, as to the Pledged Collateral held by the Collateral Agent at the end of
such Fiscal Year; and

     

    (d) such
other information concerning National Rural as is reasonably requested by Farmer
Mac.

     

    SECTION
4.02.            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, 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 should occur, shall submit to Farmer Mac, within five days
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 National Rural is taking to cure such Event of Default.

     

     

    ARTICLE
V

     

    REPRESENTATIONS
OF THE PARTIES

     

    SECTION
5.01.            Representations of Farmer
Mac and the Purchaser

     

    .  Each
of Farmer Mac and the Purchaser jointly and severally represent to National
Rural that on the date hereof and on each date on which the Purchaser purchases
a Note from National Rural:

     

    (a) it has
all necessary authority and has taken all necessary corporate action, and
obtained all necessary approvals, in order for it to execute and deliver all
Note Documents to which it is a party and for its obligations and agreements
under the Note Documents to constitute valid and binding obligations of Farmer
Mac and the Purchaser; and in particular the terms of the transaction, and the
actions taken by Farmer Mac and the Purchaser, are in compliance with and in
satisfaction of the requirements of the Farm Credit Administration, as amended
or waived by the Farm Credit Administration; and

     

    (b) The
Purchaser is purchasing the Notes for its own account and not with a view to the
distribution thereof, provided that the disposition by Farmer Mac or the
Purchaser of their property shall at all times be within their
control.  Farmer Mac and the Purchaser each understands that the Notes
have not been registered under the Act and may be resold only if an exemption
from registration is available.

     

    SECTION
5.02.            Representations of National
Rural.

     

    .  National
Rural hereby represents to Farmer Mac and the Purchaser that on the date hereof
and on each date on which the Purchaser purchases a Note from National
Rural:

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (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 to execute and deliver this
Agreement, each of the other Note Documents and the applicable Pricing Agreement
and Securities Purchase Agreement, if any, to consummate the transactions
contemplated hereby and thereby and to perform its obligations hereunder and
thereunder;

     

    (c) National
Rural has taken all necessary corporate and other action to authorize the
execution and delivery of this Agreement, each of the other Note Documents and
the applicable Pricing Agreement and Securities Purchase Agreement, if any, the
consummation by National Rural of the transactions contemplated hereby and
thereby and the performance by National Rural of its obligations hereunder and
thereunder;

     

    (d) this
Agreement, each of the other Note Documents and the applicable Pricing Agreement
and Securities Purchase Agreement, if any, 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;

     

    (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 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, any of the other Note Documents or the applicable
Pricing Agreement and Securities Purchase Agreement, if any, or the consummation
by National Rural of the transactions contemplated hereby or thereby or the
performance by National Rural of its obligations hereunder or
thereunder;

     

    (f) neither
the execution or delivery by National Rural of this Agreement, any of the other
Note Documents or the applicable Pricing Agreement and Securities Purchase
Agreement, if any, nor the consummation by National Rural of any of the
transactions contemplated hereby or thereby nor the performance by National
Rural 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 Farmer Mac, conflicts with or will conflict with, violates or will
violate, results in or will result in a breach of, constitutes or will
constitute a 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    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 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;

     

    (g) 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, any of the other Note Documents or the
applicable Pricing Agreement and Securities Purchase Agreement, if any,
challenging the validity or enforceability of this Agreement, any of the other
Note Documents or the applicable Pricing Agreement and Securities Purchase
Agreement, if any, 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, any of the
other Note Documents or the applicable Pricing Agreement and Securities Purchase
Agreement, 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, any of the other Note Documents or the
applicable Pricing Agreement and Securities Purchase Agreement, if
any;

     

    (h) 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;
and

     

    (i) 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.

     

     

    ARTICLE
VI

     

    SECURITY
AND COLLATERAL

     

    SECTION
6.01. Security and
Collateral.

     

    (a) National
Rural shall cause the Allowable Amount of the Pledged Collateral (as such terms
are defined in the Pledge Agreement) to be at all times not less than 100% of
the aggregate outstanding principal amount of the Notes.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (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, without the prior written consent of Farmer
Mac.

     

    (c) The
Pledged Securities will at all times be notes issued to National Rural by
Eligible Members (as defined in the Pledge Agreement).

     

     

    ARTICLE
VII

     

    EVENTS OF
DEFAULT

     

    SECTION
7.01.            Events of
Default

     

    .  Each
of the following actions, occurrences or events shall, but only (except in the
case of subsections (a), (d) and (e) below) if National Rural does not cure such
action, occurrence or event within 30 days of notice from Farmer Mac
requesting that it be cured, constitute an “Event of Default”
under the terms of this Agreement:

     

    (a) a failure
by National Rural to make a payment of principal or interest on any Note for
more than ten days after the same becomes due and payable;

     

    (b) a
material representation by National Rural to Farmer Mac in connection with this
Agreement, any Note or the Pledge Agreement, or any material information
reported pursuant to Article V, shall prove to be incorrect or untrue in any
material respect when made or deemed made;

     

    (c) a failure
by National Rural to comply with any other material covenant or provision
contained in this Agreement or any of the other Note Documents;

     

    (d) the entry
of a decree or order by a court having jurisdiction in the premises adjudging
National Rural a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of or in
respect of National Rural under the Federal Bankruptcy Act or any other
applicable Federal or State law or law of the District of Columbia, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of National Rural or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60 consecutive
days; or

     

    (e) the
commencement by National Rural of proceedings to be adjudicated a bankrupt or
insolvent, or the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under the Federal Bankruptcy Act or any other
applicable Federal or State law or law of the District of 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Columbia,
or the consent by it to the filing of any such petition or to the appointment of
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
National Rural or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they become due, or the taking of
corporate action by National Rural in furtherance of any such
action.

     

    SECTION
7.02. Acceleration.

     

    Upon the
occurrence, and during the continuance, of an Event of Default, Farmer Mac may,
upon notice to that effect to National Rural, declare the entire principal
amount of, and accrued interest on, the Notes at the time outstanding to be
immediately due and payable.

     

    SECTION
7.03. Remedies Not
Exclusive.

     

    Upon the
occurrence, and during the continuance, of an Event of Default, Farmer Mac shall
be entitled to take such other action as is provided for by law, in this
Agreement, or in any of the other Note Documents, including injunctive or other
equitable relief.

     

     

    ARTICLE
VIII

     

    MISCELLANEOUS

     

    SECTION
8.01. GOVERNING
LAW.  EXCEPT
AS SET FORTH IN SECTION 9.01 HEREOF, 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 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    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, the Purchaser 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, and the other
Note Documents, 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.

     

    SECTION
8.06. Amendments and
Waivers.

     

    (a) No
provision of this Agreement may be amended or modified except pursuant to an
agreement in writing entered into by Farmer Mac, the Purchaser 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) No
failure or delay of Farmer Mac, the Purchaser 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 hereunder and under the Notes.

     

    SECTION
8.09. Survival.  The
representations and warranties of each of the parties hereto contained in this
Agreement and contained in each of the other Note Documents, and the parties’
obligations under any and all thereof, shall survive and shall continue in
effect following the execution and delivery of this Agreement, any disposition
of the Notes and the expiration or other termination of any of the other Note
Documents, but, in the case of each Note Document, shall not survive the
expiration or the earlier termination of such Note Document, except to the
extent expressly set forth in such Note Document.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

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

     

     

    ARTICLE
IX

     

    GUARANTEE

     

    SECTION
9.01. Guarantee.


     

    (a) The
Guarantor agrees to pay in full to the holder of each Note, the principal of,
and interest on, the Notes when due, whether at maturity, upon redemption or
otherwise (the “Guaranteed
Obligations”), on the applicable due date for such payment.

     

    (b) The
Guarantor’s obligations hereunder shall inure to the benefit of and shall be
enforceable by any holder of a Note if, for reason beyond the control of such
holder, such holder shall have failed to receive the interest or principal, as
applicable, payable to such holder any payment date, redemption date or stated
maturity date.  The Guarantor hereby irrevocably agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
legality or enforceability of, or any change in or amendment to, this Agreement,
the Pledge Agreement or any Note, the absence of any action to enforce the same,
the waiver or consent by the holder of any Note or by the Collateral Agent with
respect to any provisions of this Agreement or the Pledge Agreement, or any
action to enforce the same or any other circumstance that might otherwise
constitute a legal or equitable discharge or defense of a
guarantor.  The Guarantor hereby waives diligence, presentment, demand
of payment, protest or notice with respect to each Note or the interest
represented thereby, and all demands whatsoever, and covenants that the
guarantee will not be discharged except upon complete irrevocable payment of the
principal and interest obligations represented by the Notes.

     

    (c) The
Guarantor shall be subrogated to and is hereby assigned all rights of the holder
of the Notes against National Rural and the proceeds of the Pledged Collateral,
all in respect of any amounts paid by the Guarantor pursuant to the provisions
of the guarantee contained in this Article IX.  Each holder shall
execute and deliver to the Guarantor in each holder’s name such instruments and
documents as the Guarantor may reasonably request in writing confirming or
evidencing such subrogation and assignment.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (d) No
reference herein shall alter or impair the guarantee, which is absolute and
unconditional, of the due and punctual payment of principal of, and interest on,
the Notes, on the dates such payments are due.

     

    (e) The
guarantee is not an obligation of, and is not a guarantee as to principal or
interest by the Farm Credit Administration, the United States or any other
agency or instrumentality of the United States (other than the
Guarantor).

     

    (f) The
guarantee 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
9.02. Control by the
Guarantor.

     

    If the
Guarantor is the Control Party, the Guarantor shall be considered the holder of
all Notes outstanding for all purposes under the Pledge Agreement and shall be
permitted to take any and all actions permitted to be taken by the holder
thereunder.  The Control Party will have the sole right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Collateral Agent or any holder with respect to the Notes or exercising any
power conferred on the Collateral Agent with respect to the Notes provided
that:

     

    (i) such
direction shall not be in conflict with any rule of law or with the Pledge
Agreement;

     

    (ii) the
Collateral Agent shall have been provided with indemnity from the Control Party
reasonably satisfactory to it; and

     

    (iii) the
Collateral Agent may take any other action deemed proper by such Collateral
Agent that is not inconsistent with such direction, provided, however, that the
Collateral Agent need not take any action which it determines might expose it to
liability.

     

    


    


    [SIGNATURE
PAGE FOLLOWS]

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
          
            	
                    FARMER
      MAC MORTGAGE SECURITIES CORPORATION,

                  
	 
      	 
      
	
                    By:

                  	/s/
      JEROME G. OSLICK  
	
                    Title:

                  	VP
      and Secretary  


          

        

      

    

    


     

    
      
        
          
            	
                    FEDERAL
      AGRICULTURAL

                    MORTGAGE
      CORPORATION,

                  
	 
      	 
      
	
                    By:

                  	/s/
      TIMOTHY L. BUZBY
	
                    Title:

                  	VP
      - Controller  


          

        

      

    

    


    


    
      
        
          
            	
                    NATIONAL
      RURAL UTILITIES COOPERATIVE FINANCE CORPORATION,

                  
	 
      	 
      
	
                    By:

                  	/s/
      RICHARD LAROCHELLE  
	
                    Title:

                  	SVP,
      Corporate Relations 



          

        

      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
I

     

    TO

     

    NOTE
PURCHASE 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 the
Purchaser or Farmer Mac:

     

    Federal
Agricultural Mortgage Corporation

    1133 21st
Street, N.W., Suite 600

    Washington,
DC 20036

    Fax:  202-872-7713

    Attention
of: Timothy L. Buzby, Vice President and Controller

     

    With a
copy to:

    Federal
Agricultural Mortgage Corporation

    1133 21st
Street, N.W., Suite 600

    Washington,
DC 20036

    Fax:  202-872-7713

    Attention
of: Robert Owens/Jitin Singhal, Capital Markets Group

     

    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: Jerome G. Oslick, Vice President - 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

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    SCHEDULE
II

    TO

    NOTE
PURCHASE AGREEMENT

    


    FORM
OF

    APPLICABLE
MARGIN NOTICE

    


    


    Issuer Name: National Rural Utilities
Cooperative Finance Corporation

     

    Date
of Note(s):  __________________________

     

    Type
of Note: ____________________________

     

    Applicable
Margin:  ________________________

     

    Effective
Date of Applicable Margin:  _________________________

     

    


    This
Applicable Margin Notice is delivered pursuant to the Note Purchase Agreement,
dated as of December 15, 2008 between Federal Agricultural Mortgage Corporation,
Farmer Mac Mortgage Securities Corporation and National Rural Utilities
Cooperative Finance Corporation (the “Note Purchase
Agreement”).  Capitalized terms used but not defined herein shall have
the meanings given to them in the Note Purchase Agreement.

    


    


    FEDERAL
AGRICULTURAL MORTGAGE CORPORATION

    


    By:

    


    


    _______________________________                                                                                     __________________________________

    Signature                                           Date                                Title
of Authorized Officer

     

    Name:  _____________________

     

    PLEASE
FAX
TO:  ______________________   ATTN:  ________________________

    


    ACCEPTED
BY:

    


    NATIONAL
RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

    


    By:

    


    


    _______________________________                                                                                     __________________________________

    Signature                                           Date                                Title
of Authorized Officer

     

    Name:  _____________________

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    SCHEDULE
III

    TO

    NOTE
PURCHASE AGREEMENT

    


    FORM OF
PRICING AGREEMENT

    


    The
Federal Agricultural Mortgage Corporation, a federally chartered instrumentality
of the United States and an institution of the Farm Credit System (“Farmer
Mac”), Farmer Mac Mortgage Securities Corporation, a wholly owned subsidiary of
Farmer Mac (the “Purchaser”) and National Rural Utilities Cooperative Finance
Corporation, a cooperative association existing under the laws of the District
of Columbia (“National Rural”), agree that, on _______ __, 20__ (the “Closing
Date”), the Purchaser will purchase from National Rural and National Rural will
sell to the Purchaser $________________ aggregate principal amount of [Fixed
Rate Notes-5Y][Fixed Rate Notes-5/1 ][Floating Rate Notes] (the “Notes”) with
the following terms:

     

    [Initial
LIBOR Rate: _______]

     

    [Treasury
Rate:______]

     

    Applicable
Margin (LIBOR or Treasury):__________

     

    Interest
Payment Dates:___________

     

    Interest
Periods:_____________

     

    [The
Notes may not be prepaid at any time.]

     

    [The
Notes may be not be prepaid prior to __________ __, 20__ [one year from the date
of issuance].  On or after _____________ __, 20__ the Notes may be
prepaid on the scheduled call dates set forth herein, in whole or in part, at
the option of National Rural, according to the terms of the Note Purchase
Agreement (as defined below).]

     

    [Scheduled
call dates: __________________]

     

    The
issuance and sale of the Notes by National Rural to the Purchaser shall occur
under the terms and conditions of the Note Purchase Agreement, dated as of
December 15, 2008, among Farmer Mac, the Purchaser and National Rural (the “Note
Purchase Agreement”).  All of the provisions contained in the Note
Purchase Agreement are hereby incorporated by reference in their entirety and
shall be deemed to be a part of this Pricing Agreement to the same extent as if
such provisions had been set forth in full herein.  Capitalized terms
used herein and not defined herein shall have the meanings given to those terms
in the Note Purchase Agreement.  This Pricing Agreement may be
executed in two or more counterparts.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Agreed to
this __ day of _______, 20__.

     

    Federal
Agricultural Mortgage Corporation,

     

    By:
______________________

    Name:
____________________

    Title:
_____________________

    


    


     Farmer
Mac Mortgage Securities Corporation,

    


    By:
______________________

    Name:
____________________

    Title:
_____________________

    


    


    National
Rural Utilities Cooperative

    Finance
Corporation,

     

    By:                                           

    Name:  __________________

    Title:  ___________________

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

        ANNEX
A-1

      

    

    [FORM OF
FIXED RATE NOTE-5/1]

     

    NATIONAL
RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

     

    __% Fixed
Rate 5/1 Senior Note due _______

    Washington,
D.C.

     

    ____________,
20__

     

    FOR VALUE
RECEIVED, the undersigned, NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION (“National
Rural”), a District of Columbia cooperative association, hereby promises
to pay to FARMER MAC MORTGAGE SECURITIES CORPORATION, a wholly owned subsidiary
of Farmer Mac (as defined below) (“the Purchaser”), or
registered assigns, the principal sum of _______________ MILLION DOLLARS
($___,000,000.00) on __________________, together with interest computed from
the date hereof according to the terms of the Note Purchase Agreement (as
defined below).

     

    Payments
of principal and interest on this Note are to be made in lawful money of the
United States of America  at such place as shall have been designated
by written notice to National Rural from the registered holder of this Note as
provided in the Note Purchase Agreement referred to below.

     

    This Note
is issued pursuant to a Note Purchase Agreement, dated as of December 15, 2008
(as from time to time amended, the “Note Purchase
Agreement”), among National Rural, the Purchaser and Federal Agricultural
Mortgage Corporation (“Farmer Mac”), and is
entitled to the benefits thereof.  This Note is also entitled to the
benefits of the Pledge Agreement, dated as of December 15, 2008, among National
Rural, the Purchaser, Farmer Mac and the Collateral Agent named
therein.

     

    Capitalized
terms used herein and not defined herein shall have the meanings given to those
terms in the Note Purchase Agreement.

     

    This Note
is a registered Note and, upon surrender of this Note for registration of
transfer or exchange, accompanied by a written instrument of transfer duly
executed by the registered holder hereof or such holder’s attorney duly
authorized in writing, a new Note will be issued to, and registered in the name
of, the transferee.  Prior to due presentment for registration of
transfer, National Rural may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and National Rural will not be affected by any notice to the
contrary.

     

    This Note
may be not be prepaid prior to __________ __, 20__ [one year from the date of
issuance].  On or after _____________ __, 20__ this Note may be
prepaid at any time, in whole or in part, at the option of National Rural,
according to the terms of the Note Purchase Agreement and provided that, if such
optional prepayment is made on a date other than an 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Interest
Payment Date, accrued interest on the principal amount hereof that is being
prepaid shall be payable through and excluding the date such optional prepayment
is made.

     

    If an
Event of Default, as defined in the Note Purchase Agreement, occurs and is
continuing, the principal of this Note may be declared due and payable in the
manner, at the price and with the effect provided in the Note Purchase
Agreement.

     

    This Note
shall be construed and enforced in accordance with, and the rights of National
Rural and the holder hereof shall be governed by, the laws of the District of
Columbia, excluding choice-of-law principles of the law of the District of
Columbia that would require the application of the laws of another
jurisdiction.

     

    
      
        	
                NATIONAL
      RURAL UTILITIES COOPERATIVE FINANCE CORPORATION,

              
	
                By

              
	 
      	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        ANNEX
A-2

      

    

    [FORM OF
FIXED RATE  NOTE-5Y]

     

    NATIONAL
RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

     

    __% Fixed
Rate 5-Year Senior Note due _______

     

    Washington,
D.C.

     

    ____________,
20__

     

    FOR VALUE
RECEIVED, the undersigned, NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION (“National
Rural”), a District of Columbia cooperative association, hereby promises
to pay to FARMER MAC MORTGAGE SECURITIES CORPORATION, a wholly owned subsidiary
of Farmer Mac (as defined below)(the “Purchaser”), or
registered assigns, the principal sum of _______________ MILLION DOLLARS
($___,000,000.00) on __________________, together with interest computed from
the date hereof according to the terms of the Note Purchase Agreement (as
defined below).

     

    Payments
of principal and interest on this Note are to be made in lawful money of the
United States of America  at such place as shall have been designated
by written notice to National Rural from the registered holder of this Note as
provided in the Note Purchase Agreement referred to below.

     

    This Note
is issued pursuant to a Note Purchase Agreement, dated as of December 15, 2008
(as from time to time amended, the “Note Purchase
Agreement”), among National Rural, the Purchaser and Federal Agricultural
Mortgage Corporation (“Farmer Mac”) and is
entitled to the benefits thereof.  This Note is also entitled to the
benefits of the Pledge Agreement, dated as of December 15, 2008, among National
Rural, Farmer Mac, the Purchaser and the Collateral Agent named
therein.

     

    Capitalized
terms used herein and not defined herein shall have the meanings given to those
terms in the Note Purchase Agreement.

     

    This Note
is a registered Note and, upon surrender of this Note for registration of
transfer or exchange, accompanied by a written instrument of transfer duly
executed by the registered holder hereof or such holder’s attorney duly
authorized in writing, a new Note will be issued to, and registered in the name
of, the transferee.  Prior to due presentment for registration of
transfer, National Rural may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and National Rural will not be affected by any notice to the
contrary.

     

    This Note
may not be prepaid at any time.

     

    If an
Event of Default, as defined in the Note Purchase Agreement, occurs and is
continuing, the principal of this Note may be declared due and payable in the
manner, at the price and with the effect provided in the Note Purchase
Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    This Note
shall be construed and enforced in accordance with, and the rights of National
Rural and the holder hereof shall be governed by, the laws of the District of
Columbia, excluding choice-of-law principles of the law of the District of
Columbia that would require the application of the laws of another
jurisdiction.

     

    
      
        	
                NATIONAL
      RURAL UTILITIES COOPERATIVE FINANCE CORPORATION,

              
	
                By

              
	 
      	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        ANNEX
A-3

      

    

     

    [FORM OF
FLOATING RATE NOTE]

     

    NATIONAL
RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

     

    Variable
Rate 2-Year Senior Note due _______

    Washington,
D.C.

     

    ____________,
20__

     

    FOR VALUE
RECEIVED, the undersigned, NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION (“National
Rural”), a District of Columbia cooperative association, hereby promises
to pay to FARMER MAC MORTGAGE SECURITIES CORPORATION, a wholly owned subsidiary
of Farmer Mac (as defined below)(the “Purchaser”), or
registered assigns, the principal sum of _______________ MILLION DOLLARS
($___,000,000.00) on __________________, together with interest computed from
the date hereof according to the terms of the Note Purchase Agreement (as
defined below).

     

    Payments
of principal and interest on this Note are to be made in lawful money of the
United States of America  at such place as shall have been designated
by written notice to National Rural from the registered holder of this Note as
provided in the Note Purchase Agreement referred to below.

     

    This Note
is issued pursuant to a Note Purchase Agreement, dated as of December 15, 2008
(as from time to time amended, the “Note Purchase
Agreement”), among National Rural, the Purchaser and Federal Agricultural
Mortgage Corporation (“Farmer Mac”) and is
entitled to the benefits thereof.  This Note is also entitled to the
benefits of the Pledge Agreement, dated as of December 15, 2008, among National
Rural, Farmer Mac, the Purchaser and the Collateral Agent named
therein.

     

    Capitalized
terms used herein and not defined herein shall have the meanings given to those
terms in the Note Purchase Agreement.

     

    This Note
is a registered Note and, upon surrender of this Note for registration of
transfer or exchange, accompanied by a written instrument of transfer duly
executed by the registered holder hereof or such holder’s attorney duly
authorized in writing, a new Note will be issued to, and registered in the name
of, the transferee.  Prior to due presentment for registration of
transfer, National Rural may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and National Rural will not be affected by any notice to the
contrary.

     

    This Note
may not be prepaid at any time.

     

    If an
Event of Default, as defined in the Note Purchase Agreement, occurs and is
continuing, the principal of this Note may be declared due and payable in the
manner, at the price and with the effect provided in the Note Purchase
Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    This Note
shall be construed and enforced in accordance with, and the rights of National
Rural and the holder hereof shall be governed by, the laws of the District of
Columbia, excluding choice-of-law principles of the law of the District of
Columbia that would require the application of the laws of another
jurisdiction.

     

    
      
        	
                NATIONAL
      RURAL UTILITIES COOPERATIVE FINANCE CORPORATION,

              
	
                By

              
	 
      	 
      
	 
      	
                Name:                      

              
	 
      	
                Title:

              


      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ANNEX
B

     

    [FORM OF
OPINION OF COUNSEL TO NATIONAL RURAL]

    


    


    [•]

    


    Federal
Agricultural Mortgage Corporation

    1133
Twenty-First Street, NW

    Suite
600

    Washington,
DC 20036

    


    Gentlemen:

    


    I am
delivering this opinion as general counsel (“Counsel”) of National Rural
Utilities Cooperative Finance Corporation, a District of Columbia cooperative
association (the “Borrower”), and am familiar with matters pertaining to the
loan to Borrower in the principal amount of $500,000,000.00, provided for
in the Note Purchase Agreement, dated as of December 15, 2008 (“Note
Purchase Agreement"), among the Borrower, Farmer Mac Mortgage Securities
Corporation (the “Purchaser”) and Federal Agricultural Mortgage Corporation
(“Farmer Mac”).

    


    I have
examined such corporate records and proceedings of the Borrower, and such other
documents as I have deemed necessary as a basis for the opinions hereinafter
expressed.

    


    I have
also examined the following documents as executed and delivered: (a) the Note
Purchase Agreement; (b) the Note dated as of ____________, in the principal
amount of $____________ (“Note”), said Note payable to the Purchaser; and (c)
the Pledge Agreement, dated as of December 15, 2008, among the Borrower, the
Purchaser, Farmer Mac and U.S. Bank Trust National Association.  The
documents described in items (a) through (c) above are collectively referred to
herein as the "Note Documents."

    


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

    


    (1) The
Borrower 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
Note Documents.

    


    (2) The Note
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.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (3) Neither
the execution nor the delivery by the Borrower of any of the Note 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 Farmer Mac, nor the fulfillment
by the Borrower of the terms of any of the Note 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 having jurisdiction over the Borrower is required for any consummation
by the Borrower of the transactions contemplated by the Note Documents; 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 Note after the date
hereof.

    


    (5) Except as
set forth in writing and previously delivered to Farmer Mac, there is no pending
or, to 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 Note Documents, 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 Note
Documents.

    


    (6) With
respect to the Pledged Securities in the Certificate of Pledged Collateral, (x)
all action with respect to the recording, registering or filing of financing
statements in the jurisdiction of organization of National Rural has been taken
as is necessary to perfect the security interest intended to be created in such
items under the Uniform Commercial Code and (y) in the case of each Eligible
Security constituting a certificated security or instrument under the Uniform
Commercial Code, such Eligible Security has been delivered to the Collateral
Agent such that the taking and retention of the possession by the Collateral
Agent of such Eligible Security is sufficient to perfect the security interest
to be created under the Uniform Commercial Code.  For purposes of the
opinion set forth in this section (6), I have assumed that the Uniform
Commercial Code of the District of Columbia is the same as that of the State of
New York.

    


    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 Note Documents and the
transactions related thereto, 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 the Borrower, (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 Note Documents by each party other than
the Borrower.

    


    


    Yours
sincerely,

     

    


    John J.
List

    General
Counsel

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    ANNEX
C

     

    [FORM OF
OFFICERS’ CERTIFICATE]

     

    Officers’
Certificate

     

    TO:                      Federal
Agricultural Mortgage Corporation.

     

    We,
_________________, _________________, and ________________,
_____________________, of National Rural Utilities Cooperative Finance
Corporation (“National
Rural”), pursuant to the Note Purchase Agreement dated as of December 15,
2008, among National Rural, Farmer Mac Mortgage Securities Corporation, and
Federal Agricultural Mortgage Corporation (the “Note Purchase
Agreement”), hereby certify 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 Note Purchase Agreement
remain true and correct in all material respects on and as of the date hereof;
and

     

     (4)           no
Event of Default exists.

     

    Capitalized
terms used in this certificate shall have the meanings given to those terms in
the Note Purchase Agreement.

     

    DATED as
of this _____ day of ______________, _________.

     

    NATIONAL
RURAL UTILITIES

    COOPERATIVE
FINANCE

    CORPORATION,

     

    ______________________________

    Name:

    Title

     

    ______________________________

    Name:

    Title:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ANNEX
D

     

    [FORM OF
SERIES C PREFERRED STOCK PURCHASE AGREEMENT]