Document:

exhibit.htm

    Execution
Version

    

    TERM LOAN
CREDIT AGREEMENT

    

    dated as
of

    

    January
21, 2009

    

    among

    

    NATIONAL
RURAL UTILITIES

    COOPERATIVE
FINANCE CORPORATION,

    

    THE BANKS
LISTED HEREIN,

    

    THE BANK
OF NOVA SCOTIA,

    as
Administrative Agent,

    

    U.S.
BANK, N.A.,

    as
Syndication Agent,

    

    and

    

    KEYBANK
NATIONAL ASSOCIATION,

    as
Documentation Agent

     

    
      

    

    

    THE BANK
OF NOVA SCOTIA,

    as Lead
Arranger and Bookrunner

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE
OF CONTENTS

    
       

      
        
          
            	 
      	 
      
	 
      	
                    Page

                  
	
                    ARTICLE
      1

                  	 
      
	
                    DEFINITIONS

                  	 
      
	
                    Section
      1.01.  Definitions

                  	
                    1

                  
	
                    Section
      1.02.  Accounting Terms and
    Determinations

                  	
                    12

                  
	
                    Section
      1.03.  Types
      of Borrowings

                  	
                    12

                  
	 
      	 
      
	 
      	 
      
	
                    ARTICLE
      2

                  	 
      
	
                    THE
      CREDITS

                  	 
      
	 
      	 
      
	
                    Section
      2.01.  Commitments to
      Lend

                  	
                    12

                  
	
                    Section
      2.02.  Notice
      of Borrowings

                  	
                    13

                  
	
                    Section
      2.03.  Notice
      to Banks; Funding of Loans

                  	
                    13

                  
	
                    Section
      2.04.  Notes

                  	
                    14

                  
	
                    Section
      2.05.  Maturity of
      Loans

                  	
                    15

                  
	
                    Section
      2.06.  Interest
      Rates

                  	
                    15

                  
	
                    Section
      2.07.  Method
      of Electing Interest Rates

                  	
                    16

                  
	
                    Section
      2.08.  Fees

                  	
                    18

                  
	
                    Section
      2.09.  Optional Termination or
      Reduction of Commitments

                  	
                    18

                  
	
                    Section
      2.10.  Mandatory Termination of
      Commitments

                  	
                    18

                  
	
                    Section
      2.11.  Prepayments

                  	
                    18

                  
	
                    Section
      2.12.  General
      Provisions as to Payments

                  	
                    19

                  
	
                    Section
      2.13.  Funding
      Losses

                  	
                    19

                  
	
                    Section
      2.14.  Computation of Interest and
      Fees

                  	
                    20

                  
	
                    Section
      2.15.  Withholding Tax
      Exemption

                  	
                    20

                  
	
                    Section
      2.16.  Increase of
      Commitments

                  	
                    20

                  
	
                    Section
      2.17.  Replacement of
      Banks

                  	
                    22

                  
	
                    Section
      2.18.  Defaulting
      Banks

                  	
                    23

                  
	 
      	 
      
	
                    ARTICLE
      3

                  	 
      
	
                    CONDITIONS

                  	 
      
	 
      	 
      
	
                    Section
      3.01.  Effectiveness

                  	
                    24

                  
	
                    Section
      3.02.  Borrowings

                  	
                    25

                  
	 
      	 
      
	
                    ARTICLE
      4

                  	 
      
	
                    REPRESENTATIONS
      AND WARRANTIES

                  	 
      
	 
      	 
      
	
                    Section
      4.01.  Corporate Existence, Power and
      Authority

                  	
                    26

                  
	
                    Section
      4.02.  Financial
      Statements

                  	
                    27

                  
	
                    Section
      4.03.  Litigation

                  	
                    28

                  
	
                    Section
      4.04.  Governmental
      Authorizations

                  	
                    28

                  
	
                    Section
      4.05.  Members’ Subordinated
      Certificates

                  	
                    28

                  

          

        

         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

        

        
          	
                  Section
      4.06.  No
      Violation of Agreements

                	
                  28

                
	
                  Section
      4.07.  No
      Event of Default under the Indentures

                	
                  29

                
	
                  Section
      4.08.  Compliance with
      ERISA

                	
                  29

                
	
                  Section
      4.09.  Compliance with Other
      Laws

                	
                  29

                
	
                  Section
      4.10.  Tax
      Status

                	
                  29

                
	
                  Section
      4.11.  Investment Company
      Act

                	
                  30

                
	
                  Section
      4.12.  Disclosure

                	
                  30

                
	
                  Section
      4.13.  Subsidiaries

                	
                  30

                
	
                  Section
      4.14.  Environmental
      Matters

                	
                  30

                
	 
      	 
      
	
                  ARTICLE
      5

                	 
      
	
                  COVENANTS

                	 
      
	 
      	 
      
	
                  Section
      5.01.  Corporate
      Existence

                	
                  31

                
	
                  Section
      5.02.  Disposition of Assets, Merger,
      Character of Business, etc

                	
                  31

                
	
                  Section
      5.03.  Financial
      Information

                	
                  31

                
	
                  Section
      5.04.  Default
      Certificates

                	
                  33

                
	
                  Section
      5.05.  Notice
      of Litigation, Legislative Developments and
Defaults

                	
                  34

                
	
                  Section
      5.06.  ERISA

                	
                  34

                
	
                  Section
      5.07.  Payment
      of Charges

                	
                  35

                
	
                  Section
      5.08.  Inspection of Books and
      Assets

                	
                  35

                
	
                  Section
      5.09.  Indebtness

                	
                  35

                
	
                  Section
      5.10.  Liens

                	
                  36

                
	
                  Section
      5.11.  Maintenance of
      Insurance

                	
                  37

                
	
                  Section
      5.12.  Subsidiaries and Joint
      Ventures

                	
                  37

                
	
                  Section
      5.13.  Minimum
      TIER

                	
                  38

                
	
                  Section
      5.14.  Retirement of Patronage
      Capital

                	
                  38

                
	
                  Section
      5.15.  Use of
      Proceeds

                	
                  39

                
	 
      	 
      
	
                  ARTICLE
      6

                	 
      
	
                  DEFAULTS

                	 
      
	 
      	 
      
	
                  Section
      6.01.  Events
      of Defaults

                	
                  39

                
	
                  Section
      6.02.  Notice
      of Default

                	
                  41

                
	 
      	 
      
	
                  ARTICLE
      7

                	 
      
	
                  THE
      ADMINISTRATIVE AGENT

                	 
      
	 
      	 
      
	
                  Section
      7.01.  Appointment and
      Authorization

                	
                  41

                
	
                  Section
      7.02.  Administrative Agent and
      Affliates

                	
                  41

                
	
                  Section
      7.03.  Action
      by Admininstrative Agent

                	
                  42

                
	
                  Section
      7.04.  Consultation with
      Experts

                	
                  42

                
	
                  Section
      7.05.  Liability of Administrative
      Agent

                	
                  42

                
	
                  Section
      7.06.  Indemnification

                	
                  42

                
	
                  Section
      7.07.  Credit
      Decision

                	
                  42

                
	
                  Section
      7.08.  Successor
      Admininstrative

                	
                  43

                
	
                  Section
      7.09.  Documention Agent And
      Syndication Agent Not Liable

                	
                  43

                

        

         

        
          
            
            

          

          
            ii

            
              

            

          

          
            
            

          

        

         

        
          	 
      	 
      
	
                  ARTICLE
      8

                	 
      
	
                  CHANGE
      IN CIRCUMSTANCES

                	 
      
	 
      	 
      
	
                  Section
      8.01.  Basis
      for Determininig Interest Rate Inadequate or Unfair

                	
                  43

                
	
                  Section
      8.02  Illegality

                	
                  44

                
	
                  Section
      8.03  Increased Cost and Reduced Return

                	
                  44

                
	
                  Section
      8.04  Base Rate Loans Substituted for Affected Euro-Dollar
      Loans

                	
                  46

                
	 
      	 
      
	
                  ARTICLE
      9

                	 
      
	
                  MISCELLANEOUS

                	 
      
	 
      	 
      
	
                  Section
      9.01.  Notices

                	
                  47

                
	
                  Section
      9.02.  No
      Waivers

                	
                  47

                
	
                  Section
      9.03.  Expenses; Documentary Taxes;
      Indemnification

                	
                  48

                
	
                  Section
      9.04.  Sharing
      of Set-offs

                	
                  48

                
	
                  Section
      9.05.  Amendments and
      Waivers

                	
                  49

                
	
                  Section
      9.06.  Successors and
      Assigns

                	
                  49

                
	
                  Section
      9.07.  Collateral

                	
                  51

                
	
                  Section
      9.08.  Governing
      Law

                	
                  51

                
	
                  Section
      9.09.  Counterparts;
      Integration

                	
                  51

                
	
                  Section
      9.10.  Several
      Obligations

                	
                  52

                
	
                  Section
      9.11.  Severability

                	
                  52

                
	
                  Section
      9.12.  Confidentiality

                	
                  52

                
	
                  Section
      9.13.  WAIVER
      OF JURY TRIAL

                	
                  52

                
	
                  Section
      9.14.  USA
      Patriot Act

                	
                  53

                
	
                  Section
      9.15.  ICC
      Transactions

                	
                  53

                
	 
      	 
      
	 
      	 
      

        

        

        

        
          
            
            

          

          
            iii

            
              

            

          

          
            
            

          

        

        

        
          
            
              	
                      Schedules

                    	 
      
	 
      	 
      
	
                      Commitment
      Schedule

                    	 
      
	
                      Schedule
      5.03 (a)

                    	
                      Non-GAAP
      Subsidiaries

                    
	
                      Schedule
      9.15

                    	
                      ICC
      Transactions

                    
	 
      	 
      
	
                      Exhibits

                    	 
      
	 
      	 
      
	
                      Exhibit
      A

                    	
                      -  Form
      of Note

                    
	
                      Exhibit
      B-1 and Exhibit B-2

                    	
                      -  Forms
      of RUS Guarantee

                    
	
                      Exhibit
      C

                    	
                      -  Opinion
      of General Counsel for the Borrower

                    
	 
      	
                          Annex
      A to Exhibit C  -  Legal Actions

                    
	 
      	
                          Annex
      B to Exhibit C  -  Subsidiaries and
    Joint

                    
	 
      	
                          Ventures

                    
	
                      Exhibit
      D

                    	
                      -  Assignement
      and Assumption
Agreement

                    

            

          

        

         

      

    

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    TERM LOAN CREDIT AGREEMENT

     

    TERM LOAN
CREDIT AGREEMENT dated as of January 21, 2009, among NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION, a not-for-profit cooperative association
incorporated under the laws of the District of Columbia, as Borrower, the BANKS
listed on the signature pages hereof, THE BANK OF NOVA SCOTIA, as Administrative
Agent, U.S. BANK, N.A., as Syndication Agent, and KEYBANK NATIONAL ASSOCIATION,
as Documentation Agent.

     

    The
parties hereto agree as follows:

                        

     

    ARTICLE
1  

     

    Definitions

     

    Section
1.01 .  Definitions.  The following
terms, as used herein, have the following meanings:

     

    “1972 Indenture” means the
Seventeenth Supplemental Indenture dated as of March 1, 1987, amending and
restating in full the Indenture dated as of December 1, 1972, by and between the
Borrower and U.S. Bank Trust National Association, as trustee, as amended and
supplemented from time to time, providing for the issuance in series of certain
collateral trust bonds of the Borrower.

     

    “1994 Indenture” means the
Indenture dated as of February 15, 1994 and as amended as of September 16, 1994
between the Borrower and U.S. Bank National Association, as trustee, as amended
and supplemented from time to time, providing for the issuance in series of
certain collateral trust bonds of the Borrower.

     

    “2007 Indenture” means the
Indenture dated as of October 25, 2007 between the Borrower and U.S. Bank
National Association, as trustee, as amended and supplemented from time to time,
providing for the issuance in series of certain collateral trust bonds of the
Borrower.

     

    “Adjusted London Interbank Offered
Rate” has the meaning set forth in Section
2.06(b).

     

    “Administrative Agent” means
The Bank of Nova Scotia, in its capacity as administrative agent for the Banks
hereunder, and its successors in such capacity.

     

    “Administrative Questionnaire”
means, with respect to each Bank, the administrative questionnaire in the form
submitted to such Bank by the Administrative Agent and submitted to the
Administrative Agent (with a copy to the Borrower) duly completed by such
Bank.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Agreement” means this Term
Loan Credit Agreement, as the same may be amended from time to
time.

     

    “Applicable Lending Office”
means, with respect to any Bank, (i) in the case of its Base Rate Loans, its
Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office.

     

    “Assignee” has the meaning set
forth in Section 9.06(c).

     

    “Availability Period” means the
period beginning on the Effective Date and ending on the Commitment Termination
Date.

     

    “Bank” means each bank listed
on the signature pages hereof, each Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.

     

    “Base Rate” means, for any day,
a rate per annum equal to the highest of (i) the Prime Rate for such day, (ii)
the sum of 2% plus the Federal Funds Rate for such day and (iii) the Adjusted
London Interbank Offered Rate for a one month Interest Period on such day (or if
such day is not a Euro-Dollar Domestic Business Day, the immediately preceding
Euro-Dollar Business Day) plus 2%; provided that, for the
avoidance of doubt, the Adjusted London Interbank Offered Rate for any day shall
be based on the rate appearing on the Reuters BBA Libor Rates Page 3750 (or on
any successor or substitute page of such page) at approximately 11:00 A.M.
London time on such day.

     

    “Base Rate Loan” means a Loan
that bears interest at the Base Rate pursuant to the applicable Notice of
Borrowing or Notice of Interest Rate Election or the last sentence of Section 2.07(a) or Article
8.

     

    “Base Rate Margin” means 2.00%
per annum; provided
that such rate shall increase by 0.50% on the six-month anniversary of the
Effective Date and shall increase by an additional 0.25% on the nine-month
anniversary of the Effective Date.

     

    “Bonds” means any bonds issued
pursuant to any of the Indentures, as the context may require.

     

    “Borrower” means the National
Rural Utilities Cooperative Finance Corporation, a not-for-profit cooperative
association incorporated under the laws of the District of Columbia, and its
successors.

     

    “Borrowing” has the meaning set
forth in Section 1.03.

     

    “Commitment” means (i) with
respect to each Bank listed on the signature pages hereof, the amount set forth
opposite the name of such Bank on the Commitment
Schedule hereto and (ii) with respect to any Assignee that becomes a Bank
pursuant to Section 9.06(c), the amount of the
transferor Bank’s Commitment assigned to it pursuant to Section 9.06(c), in each case as such 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    amount
may from time to time be reduced pursuant to Sections 2.09 and 2.10; provided that, if the context
so requires, the term “Commitment” means the obligation of a Bank to extend
credit up to such amount to the Borrower hereunder.

     

    “Commitment Fee Rate” means
0.50% per annum.

     

    “Commitment Termination Date”
means the earlier of (i) January 31, 2009 or, if such day is not a Euro-Dollar
Business Day, the next preceding Euro-Dollar Business Day and (ii) the date on
which the entire Commitments shall have been terminated pursuant to Section 2.09 or Article
6.

     

    “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.

     

    “Consolidated Subsidiary Member” has the
meaning set forth in Section
5.03(b)(iii)(A).

     

    “Default” means any condition
or event which constitutes an Event of Default or which with the giving of
notice or lapse of time or both (as specified in Section
6.01) would, unless cured or waived, become an Event of
Default.

     

    “Defaulting Bank” means any
Bank that, at any time during the term of this Agreement, has (a) failed to fund
any portion of any of its Loans within three Domestic Business Days of the date
required to be funded by it hereunder, (b) notified the Borrower, the
Administrative Agent or any Bank that it does not intend to comply with any of
its funding obligations under this Agreement, (c) otherwise failed to pay
over to the Administrative Agent or any other Bank any other amount required to
be paid by it hereunder within three Domestic Business Days of the date when
due, unless the subject of a good-faith dispute, or (d) become the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee
or custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or
appointment.

     

    “Derivative Cash Settlements” means, for
any period, the line item “derivative cash settlements” as it appears on the
statement of operations of the Borrower and its Consolidated Subsidiaries for
such period delivered to the Banks pursuant to Section
5.03(b), calculated in accordance with generally accepted accounting
principles as in effect from time to time.

     

    “Derivatives Obligations” of
any Person means all obligations of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    similar
transaction (including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.

     

    “Determination Date” has the
meaning set forth in Section 5.09.

     

    “Documentation Agent” means
Keybank National Association, in its capacity as documentation agent hereunder,
and its successors in such capacity.

     

    “Domestic Business Day” means
any day except a Saturday, Sunday or other day on which commercial banks in New
York City are authorized or required by law to close.

     

    “Domestic Lending Office”
means, as to each Bank, its office located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office as such Bank may hereafter
designate as its Domestic Lending Office by notice to the Borrower and the
Administrative Agent.

     

    “Effective Date” means the date
this Agreement becomes effective in accordance with Section 3.01.

     

    “Environmental Laws” means any
and all federal, state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements and governmental
restrictions relating to the environment, the effect of the environment on human
health or to emissions, discharges or releases of pollutants, contaminants,
Hazardous Substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, Hazardous
Substances or wastes or the clean-up or other remediation thereof.

     

    “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended, or any successor
statute.

     

    “ERISA Group” means the
Borrower, any Subsidiary and all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any Subsidiary, are treated as a single
employer under Section 414(b) or (c) of the Internal Revenue Code or, for
purposes of Section 412 of the Internal Revenue Code, under Section 414(b), (c),
(m) or (o) of the Internal Revenue Code.

     

    “Euro-Dollar Business Day”
means any Domestic Business Day on which commercial banks are open for
international business (including dealings in dollar deposits) in
London.

     

    “Euro-Dollar Lending Office”
means, as to each Bank, its office, branch or affiliate located at its address
set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Euro-Dollar Lending Office) 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    or such
other office, branch or affiliate of such Bank as it may hereafter designate as
its Euro-Dollar Lending Office by notice to the Borrower and the Administrative
Agent.

     

    “Euro-Dollar Loan” means a Loan
that bears interest at a Euro-Dollar Rate pursuant to the applicable Notice of
Borrowing or Notice of Interest Rate Election.

     

    “Euro-Dollar Margin” means
3.00% per annum; provided that such rate shall
increase by 0.50% on the six-month anniversary of the Effective Date and shall
increase by an additional 0.25% on the nine-month anniversary of the Effective
Date.

     

    “Euro-Dollar Rate” means, for
any day, a rate per annum determined in accordance with Section 2.06(b).

     

    “Euro-Dollar Reference Bank”
means the principal London office of The Bank of Nova Scotia.

     

    “Euro-Dollar Reserve
Percentage” has the meaning set forth in Section
2.06(b).

     

    “Event of Default” has the
meaning set forth in Section 6.01.

     

    “Federal Funds Rate” means, for
any day, the rate per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Domestic Business Day next succeeding such day; provided that (i) if such day
is not a Domestic Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such rate
is so published on such next succeeding Domestic Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to The Bank of Nova Scotia on
such day on such transactions as determined by the Administrative
Agent.

     

    “Foreclosed Asset” has the
meaning set forth in Section 5.12.

     

    “Group of Loans” means, at any
time, a group of Loans consisting of (i) all Loans which are Base Rate
Loans at such time or (ii) all Euro-Dollar Loans having the same Interest Period
at such time; provided
that if a Loan of any particular Bank is converted to or made as a Base Rate
Loan pursuant to Article 8, such Loan shall be
included in the same Group or Groups of Loans from time to time as it would have
been in if it had not been so converted or made.

     

    “Guarantee” by any Person means
any obligation, contingent or otherwise, of such Person directly or indirectly
guaranteeing any Indebtedness or lease payments of any other Person or otherwise
in any manner assuring the 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    holder of
any Indebtedness of, or the obligee under any lease of, any other Person through
an agreement, contingent or otherwise, to purchase Indebtedness or the property
subject to such lease, or to purchase goods, supplies or services primarily for
the purpose of enabling the debtor or obligor to make payment of the
Indebtedness or under such lease or of assuring such Person against loss, or to
supply funds to or in any other manner invest in the debtor or obligor, or
otherwise; provided
that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of
business.  The term “Guarantee” when used as a verb
has a correlative meaning.

     

    “Guaranteed Portion” has the
meaning set forth in the definition of RUS Guaranteed Loan.

     

    “Hazardous Substances” means
any toxic, radioactive, caustic or otherwise hazardous substance, including
petroleum, its derivatives, by-products and other hydrocarbons, or any substance
having any constituent elements displaying any of the foregoing
characteristics.

     

    “Increased Amount Date” has the
meaning set forth in Section 2.16.

     

    “Incremental Bank” has the
meaning set forth in Section 2.16.

     

    “Incremental Commitments” has
the meaning set forth in Section 2.16.

     

    “Incremental Loan” has the
meaning set forth in Section 2.16.

     

    “Indebtedness” with respect to
any Person means:

     

    (1)           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;

     

    (2)           all
indebtedness of others Guaranteed by such Person;

     

    (3)           all
indebtedness secured by any Lien upon property owned by such Person, even though
such Person has not assumed or become liable for the payment of such
indebtedness; and

     

    (4)           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 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    evidences
of such indebtedness) in the amount necessary to pay, redeem or satisfy such
indebtedness, and thereafter such money and evidences of indebtedness so
deposited shall not be included in any computation of the assets of such Person;
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.

     

    “Indenture” means either the
1972 Indenture, the 1994 Indenture, the 2007 Indenture or any other Indenture
that provides for borrowing on terms not materially more disadvantageous to the
Borrower’s unsecured creditors than the borrowings under the 1972 Indenture, the
1994 Indenture or the 2007 Indenture, and “Indentures” means all such
Indentures.

     

    “Interest Expense” means, for
any period, the line item “interest expense” as it appears on the statement of
operations of the Borrower and its Consolidated Subsidiaries for such period
delivered to the Banks pursuant to Section 5.03(b),
calculated in accordance with generally accepted accounting principles as in
effect from time to time.

     

    “Interest Period” means: (1)
with respect to each Euro-Dollar Loan, the period commencing on the date on
which such Loan is made or the date on which such Loan is continued as or
converted to a Euro-Dollar Loan, as applicable, and ending one, two, three or
six months thereafter, as the Borrower may elect in the Notice of Borrowing or
the applicable Notice of Interest Rate Election; provided that:

     

    (a)           any
Interest Period which would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Euro-Dollar Business
Day;

     

    (b)           any
Interest Period which begins on the last Euro-Dollar Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to clause (c)
below, end on the last Euro-Dollar Business Day of a calendar month;
and

     

    (c)           any
Interest Period of any Euro-Dollar Loan included in such Borrowing which would
otherwise end after the Maturity Date shall, with respect to such Euro-Dollar
Loan, end on such Maturity Date;

     

    (2)           with
respect to each Base Rate Borrowing, the period commencing on the date of such
Borrowing and ending 30 days thereafter; provided that:

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (a)           any
Interest Period which would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding Euro-Dollar Business Day;
and

     

    (b)           any
Interest Period of any Base Rate Loan included in such Borrowing which would
otherwise end after the Maturity Date shall, with respect to such Base Rate
Loan, end on such Maturity Date.

     

    “Internal Revenue Code” means
the Internal Revenue Code of 1986, as amended, or any successor
statute.

     

    “Investments” has the meaning
set forth in Section 5.12.

     

    “Joint Venture” means any
corporation, partnership, association, joint venture or other entity in which
the Borrower, directly or indirectly through Subsidiaries or Joint Ventures, has
an equity interest at the time of 10% or more but which is not a Subsidiary;
provided that no Person
whose only assets are RUS Guaranteed Loans and investments incidental thereto
shall be deemed a Joint Venture.

     

    “Lien” means, with respect to
any asset, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset.  For the purposes of this
Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.

     

    “Loan” means a Base Rate Loan
or a Euro-Dollar Loan and “Loans” means Base Rate Loans
or Euro-Dollar Loans or any combination of the foregoing.

     

    “London Interbank Offered Rate”
has the meaning set forth in Section
2.06(b).

     

    “March 14, 2008 Revolving Credit
Agreement” means the Revolving Credit Agreement, dated as of March 14,
2008, as amended from time to time, among Borrower, The Bank of Nova Scotia, as
administrative agent, and the other institutions party thereto.

     

    “Maturity Date” means 364 days
from the Effective Date.

     

    “Member” means any Person which
is a member or a patron of the Borrower.

     

    “Members’ Subordinated
Certificate” means a note of the Borrower or its Consolidated
Subsidiaries substantially in the form of the membership subordinated
subscription certificates and the loan and guarantee subordinated certificates
outstanding on the date of the execution and delivery of this Agreement and any
other Indebtedness of the Borrower or its Consolidated 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    Subsidiaries
having substantially similar provisions as to subordination as those contained
in said outstanding membership subordinated subscription certificates and loan
and guarantee subordinated certificates.

     

    “Moody’s” means Moody’s
Investors Service, Inc., and its successors.

     

    “Multiple Employer Plan” means
a single employer plan, as defined in Section 4001 of ERISA and subject to Title
IV of ERISA, which has two or more contributing sponsors, one of whom is the
Borrower or a Subsidiary of the Borrower or any member of the ERISA Group, at
least two of whom are not under common control, within the meaning of Section
4063 of ERISA.

     

    “Net Income” means, for any
period, the sum of (i) the line item “net income” on the consolidated statement
of operations of the Borrower and its Consolidated Subsidiaries plus (ii) the line item
“minority interest” on the consolidated statement of operations of the Borrower
and its Consolidated Subsidiaries at the last day of such period, each as it
appears in the financial statements for such period delivered to the Banks
pursuant to Section 5.03(b), and each calculated in
accordance with generally accepted accounting principles as in effect from time
to time; provided that
non-cash adjustments (whether positive or negative) required to be made pursuant
to SFAS 133 and SFAS 52 on each such line item shall be excluded from the
calculation thereof to the extent otherwise included therein.

     

    “Notes” means promissory notes
of the Borrower, substantially in the form of Exhibit A hereto, evidencing the
obligation of the Borrower to repay the Loans, and “Note” means any one of such
promissory notes issued hereunder.

     

    “Notice of Borrowing” has the
meaning set forth in Section 2.02.

     

    “Notice of Interest Rate
Election” has the meaning set forth in Section
2.07.

     

    “Participant” has the meaning
set forth in Section 9.06(b).

     

    “Patronage Capital
Certificates” means those certificates that evidence the portion of Net
Income allocated by the Borrower among its Members in accordance with applicable
cooperative principles.

     

    “PBGC” means the Pension
Benefit Guaranty Corporation or any entity succeeding to any or all of its
functions under ERISA.

     

    “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.

     

    “Plan” means any multiemployer
plan or single employer plan (including any Multiple Employer Plan), as defined
in Section 4001 and subject to Title IV of ERISA, which is maintained or
contributed to by, or at any time during the five 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    calendar
years preceding the date of this Agreement was maintained or contributed to by,
the Borrower or a Subsidiary of the Borrower or any member of the ERISA
Group.

     

    “Prime Rate” means the rate of
interest published by the Wall
Street Journal from time to time as its prime rate.

     

    “Qualified Subordinated
Indebtedness” means the Borrower’s (i) 6.75% Subordinated Deferrable
Interest Notes Due 2043, (ii) 6.10% Subordinated Deferrable Interest Notes Due
2044, (iii) 5.95% Subordinated Deferrable Interest Notes Due 2045, and (iv) any
other Indebtedness of the Borrower having substantially similar terms as to
subordination as those contained in the instruments and documents relating to
the foregoing Indebtedness or that would be junior to any of the foregoing;
provided that such
Indebtedness (a) will not mature prior to the Maturity Date and (b) does not
require payments of principal prior to the Maturity Date, except pursuant to
acceleration or at the option of the Borrower.

     

    “REDLG Program Liens” means
Liens on any asset of the Borrower required to be pledged as collateral to
support obligations of the Borrower with respect to any government Guarantee
provided pursuant to regulations issued under the Rural Electrification Act of
1936, 7 U.S.C. 901 et. seq., and the Food, Conservation and Energy Act of 2008,
Pub. L. 110-234 Stat. 923 (“REDLG Obligations”) so long as
such Guarantee supports long-term Indebtedness issued by the Borrower and
permitted by Section 5.09.

     

    “REDLG Obligations” has the
meaning set forth in the definition of REDLG Program Liens.

     

    “Regulation U” means Regulation
U of the Board of Governors of the Federal Reserve System, as in effect from
time to time.

     

    “Regulation X” means Regulation
X of the Board of Governors of the Federal Reserve System, as in effect from
time to time.

     

    “Reportable Event” means an
event described in Section 4043(c) of ERISA or regulations promulgated by the
Department of Labor thereunder (with respect to which the 30 day notice
requirement has not been waived by the PBGC).

     

    “Required Banks” means at any
time Banks having at least 51% of the sum of the aggregate amount of the unused
Commitments and the aggregate principal outstanding amount of the
Loans.

     

    “RUS” means the Rural Utilities
Service of the Department of Agriculture of the United States of America (as
successor to the Rural Electrification Administration of the Department of
Agriculture of the United States of America) or any other regulatory body which
succeeds to its functions.

     

    
      
        
        

      

      
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    “RUS Guaranteed Loan” means any
loan made by any Person, which loan (x) bears interest at least equal to such
Person’s cost of funds and (y) is guaranteed, in whole or in
part, as to principal and interest by the United States of America through the
RUS pursuant to a guarantee, which guarantee contains provisions no less
favorable to the holder thereof than the provisions set forth in the form of
Exhibit B-1 or Exhibit
B-2 hereto; and “Guaranteed
Portion” of any RUS Guaranteed Loan means that portion of principal of,
and interest on, such RUS Guaranteed Loan which is guaranteed by the United
States of America through the RUS as provided in clause (y).

     

    “S&P” means Standard and
Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its
successors.

     

    “Securities and Exchange
Commission” means the Securities and Exchange Commission or any other
governmental authority succeeding to any or all of the functions of the
Securities and Exchange Commission.

     

    “SFAS 52” means Statement of
Financial Accounting Standards No. 52 entitled “Foreign Currency Translations”,
issued December, 1981 by the Financial Accounting Standards Board, as amended
from time to time.

     

    “SFAS 133” means Statement of
Financial Accounting Standards No. 133 entitled “Accounting for Derivative
Instruments and Hedging Activities”, issued June, 1998 by the Financial
Accounting Standards Board as amended from time to time.

     

    “Special Purpose Subsidiary”
has the meaning set forth in Section
5.12.

     

    “Start-up Investments” has the
meaning set forth in Section 5.12.

     

    “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 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 whose
only assets are RUS Guaranteed Loans and investments incidental thereto shall be
deemed a Subsidiary.

     

    “Superior Indebtedness” means
all Indebtedness of the Borrower and its Consolidated Subsidiaries (other than
Members’ Subordinated Certificates and Qualified Subordinated Indebtedness), but
excluding (i) Indebtedness of the Borrower or any of its Consolidated
Subsidiaries to the extent that the proceeds of such Indebtedness are used to
fund Guaranteed Portions of RUS Guaranteed Loans and (ii) any indebtedness of
any Member Guaranteed by the Borrower or any of its Consolidated Subsidiaries
(“Guaranteed
Indebtedness”), to the extent that either (x) the long-term unsecured
debt of such Member is rated at least 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    BBB+ by
S&P or Baa1 by Moody’s or (y) the payment of principal and interest by the
Borrower or any of its Consolidated Subsidiaries in respect of such Guaranteed
Indebtedness is covered by insurance or reinsurance provided by an insurer
having an insurance financial strength rating of AAA by S&P or a financial
strength rating of Aaa by Moody’s.

     

    “Syndication Agent” means U.S.
Bank, N.A., in its capacity as syndication agent hereunder, and its successors
in such capacity.

     

    “Term-Out of March 14, 2008 Revolving
Credit Agreement” means if any loans outstanding under the March 14, 2008
Revolving Credit Agreement on the maturity date thereof are converted into one
or more term loans in accordance with the provisions of the March 14, 2008
Revolving Credit Agreement.

     

    “TIER” means, for any period,
the ratio of (x) Net Income plus Interest Expense plus Derivative Cash
Settlements to (y) Interest Expense plus Derivative Cash
Settlements, in each case for such period.

     

    “Type” refers to whether a Loan
is a Base Rate Loan or a Euro-Dollar Loan.

     

    Section
1.02 .  Accounting Terms and
Determinations.   Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower’s independent public accountants) with the most recent audited
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks.

     

    Section
1.03 .  Types of
Borrowings.  The term “Borrowing” denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article 2 on a single date and for a single Interest
Period.  Borrowings are classified for purposes of this Agreement by
reference to the pricing of Loans comprising such Borrowing (e.g., a “Euro Dollar Borrowing” is a
Borrowing comprised of Euro Dollar Loans).

                              

     

    ARTICLE 2 

     

    The
Credits

     

    Section
2.01 .  Commitments to
Lend. During the Availability
Period, each Bank severally agrees, on the terms and conditions set forth in
this Agreement, to make Loans to the Borrower pursuant to this Section from time
to time (but in no event on more than three occasions unless in accordance with
Section 2.16(d)) in amounts such that the
aggregate principal amount of Loans by such Bank shall not exceed the amount of
its Commitment.  Each Borrowing shall be in an aggregate principal
amount of $50,000,000 or any larger multiple of $10,000,000

     

    
      
        
        

      

      
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     (except
that any such Borrowing may be in the maximum aggregate amount available in
accordance with Section 3.02(e)) and shall be made
from the several Banks ratably in proportion to their respective Commitments.
Commitments hereunder are not revolving and amounts repaid or prepaid may not be
reborrowed.

     

    Section
2.02 .  Notice of
Borrowings.  The Borrower
shall give the Administrative Agent notice (a “Notice of Borrowing”) not
later than 11:00 A.M. (New York City time) on (x) the date of such Borrowing, in
the case of each Base Rate Borrowing, and (y) the third Euro-Dollar Business Day
before such Borrowing, in the case of each Euro-Dollar Borrowing,
specifying:

     

    (a) the date
of such Borrowing, which shall be a Domestic Business Day in the case of a Base
Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing,

     

    (b) the
aggregate amount of such Borrowing,

     

    (c) whether
the Loans comprising such Borrowing are to bear interest initially at the Base
Rate or a Euro-Dollar Rate, and

     

    (d) in the
case of a Euro-Dollar Borrowing, the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period.

     

    Notwithstanding
the foregoing, no more than ten Euro-Dollar Loans shall be outstanding at any
one time, and any Borrowing which would exceed such limitation shall be made as
a Base Rate Borrowing.

     

    Section
2.03 . Notice to Banks; Funding of
Loans.  (a) Upon receipt of a Notice of
Borrowing, the Administrative Agent shall promptly notify each Bank of the
contents thereof and of such Bank’s share (if any) of such Borrowing and such
Notice of Borrowing shall not thereafter be revocable by the
Borrower.

     

    (b) Not later
than 1:00 P.M. (New York City time) on the date of each Borrowing, each Bank
shall make available its share of such Borrowing, in Federal or other funds
immediately available in New York City, to the Administrative Agent at its
address specified in or pursuant to Section
9.01.  Unless the Administrative Agent determines that any
applicable condition specified in Section 3.02 has
not been satisfied, the Administrative Agent will thereafter make the funds so
received from the Banks available to the Borrower at the Administrative Agent’s
aforesaid address.

     

    (c) Unless
the Administrative Agent shall have been notified by any Bank prior to the date
of such Borrowing (or prior to 1:00 P.M. (New York City time) on the date
of such Borrowing in the case of a Base Rate Borrowing) that such Bank does not
intend to make available to the Administrative Agent such Bank’s portion of the
Borrowing to be made on such date, the Administrative Agent may assume that such
Bank has made such amount available to the 

     

    
      
        
        

      

      
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    Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  If
such corresponding amount is not in fact made available to the Administrative
Agent by such Bank, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Bank.  If such Bank does not
pay such corresponding amount forthwith upon the Administrative Agent’s demand
therefor, the Administrative Agent shall promptly notify the Borrower and the
Borrower shall promptly pay such corresponding amount to the Administrative
Agent.  The Administrative Agent shall also be entitled to recover
from such Bank or the Borrower interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) in the
case of a Bank, the Federal Funds Rate for each such day and (y) in the case of
the Borrower, the then applicable rate for Base Rate Loans or Euro-Dollar Loans,
as appropriate.  Nothing herein shall be deemed to relieve any Bank
from its obligation to fulfill its Commitment hereunder or to prejudice any
rights which the Borrower may have against any Bank as a result of any default
by such Bank hereunder.  For purposes of this subsection (c), no amount paid to the Administrative Agent
hereunder shall be considered to have been recovered by the Administrative Agent
on the date of payment unless such amount shall have been received by the
Administrative Agent by 2:30 P.M. (New York City time) on such
date.

     

    Section
2.04 .  Notes.  (a) Any
Bank may request that the Loans of such Bank be evidenced by a single Note
payable to the order of such Bank for the account of its Applicable Lending
Office in an amount equal to the aggregate unpaid principal amount of such
Bank’s Loans.

     

    (b) Each Bank
that has requested that its Loans be evidenced by a Note may, by notice to the
Borrower and the Administrative Agent, request that its Loans of a particular
Type be evidenced by a separate Note in an amount equal to the aggregate unpaid
principal amount of such Loans.  Each such Note shall be in
substantially the form of Exhibit A hereto with appropriate modifications to
reflect the fact that it evidences solely Loans of the relevant
Type.  Each reference in this Agreement to the “Note” of such Bank shall be
deemed to refer to and include any or all of such Notes, as the context may
require.

     

    (c) Upon
receipt of each Bank’s Note pursuant to Section
3.01(b), the Administrative Agent shall forward such Note to such
Bank.  Each Bank shall record the date, amount and type of each Loan
made by it and the date and amount of each payment of principal made by the
Borrower with respect thereto, and may, if such Bank so elects in connection
with any transfer or enforcement of its Note, endorse on the schedule forming a
part thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided that the failure of
any Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes.  Each Bank
is hereby irrevocably authorized by the Borrower so 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    to
endorse its Note and to attach to and make a part of its Note a continuation of
any such schedule as and when required.

     

    Section
2.05 .  Maturity of
Loans.  Each Loan hereunder shall mature, and the principal
amount thereof shall be due and payable on the Maturity Date.

     

    Section
2.06 .  Interest
Rates.  (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the sum of
the Base Rate plus the applicable Base Rate Margin for such day.  Such
interest shall be payable for each Interest Period on the last day thereof and,
with respect to the principal amount of any Base Rate Loan that is prepaid or
converted to a Euro-Dollar Loan, on the date of such prepayment or
conversion.  Any overdue principal of or interest on any Base Rate
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate
Loans for such day.

     

    (b) Each
Euro-Dollar Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the sum of the Euro-Dollar Margin plus the applicable Adjusted London
Interbank Offered Rate.  Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than three months, three months after the first day thereof and, with respect to
the principal amount of any Euro-Dollar Loan that is prepaid or converted to a
Base Rate Loan, on the date of such prepayment or conversion.

     

    The
“Adjusted London Interbank
Offered Rate” applicable to any Interest Period means a rate per annum
equal to the quotient obtained (rounded upward, if necessary, to the next higher
1/100 of 1%) by dividing (i) the applicable London Interbank Offered Rate by
(ii) 1.00 minus the Euro-Dollar Reserve Percentage.

     

    The
“London Interbank Offered
Rate” applicable to any Interest Period means the rate appearing on
Reuters BBA Libor Rates Page 3750 (or on any successor or substitute page of
such Reuters Service, or if the Reuters Service ceases to be available, any
successor to or substitute for such Reuters Service, providing rate quotations
comparable to those currently provided on such page of such Reuters Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days prior to the commencement of such Interest Period, as
the rate for the offering of dollar deposits with a maturity comparable to such
Interest Period; provided
that, if such rate is not available, such rate shall be the rate per
annum at which deposits in dollars are offered to the Euro-Dollar Reference Bank
in the London interbank market at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days before the first day of such Interest Period in an
amount approximately equal to the principal amount of the Euro-

     

    
      
        
        

      

      
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    Dollar
Loan of the Euro-Dollar Reference Bank to which such Interest Period is to apply
and for a period of time comparable to such Interest Period.

     

    “Euro-Dollar Reserve
Percentage” means for any day that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in New York City
with deposits exceeding five billion dollars in respect of “Eurocurrency
liabilities” (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to United States
residents).  The Adjusted London Interbank Offered Rate shall be
adjusted automatically on and as of the effective date of any change in the
Euro-Dollar Reserve Percentage.

     

    (c) Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day from and including the date payment
thereof was due to but excluding the date of actual payment, at a rate per annum
equal to the sum of 2% plus (i) in the case of principal, the rate otherwise
applicable to Euro-Dollar Loans for such day or (ii) in the case of interest,
the sum of the Base Rate plus the applicable Base Rate Margin for such
day.

     

    (d) The
Administrative Agent shall determine each interest rate applicable to the Loans
hereunder.  The Administrative Agent shall give prompt notice to the
Borrower and the participating Banks of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of manifest
error.

     

    (e) The
Euro-Dollar Reference Bank agrees to use its best efforts to furnish quotations
to the Administrative Agent as contemplated by this Section.  If the
Euro-Dollar Reference Bank does not furnish a timely quotation, the provisions
of Section 8.01 shall apply.

     

    Section
2.07 .  Method of Electing Interest
Rates.  (a)  The Loans included in each Borrowing
shall bear interest initially at the type of rate specified by the Borrower in
the applicable Notice of Borrowing.  Thereafter, the Borrower may from
time to time elect to change or continue the type of interest rate borne by each
Group of Loans (subject to Section 2.07(d) and
the provisions of Article 8), as
follows:

     

    (i) if such
Loans are Base Rate Loans, the Borrower may elect to convert such Loans to
Euro-Dollar Loans as of any Euro-Dollar Business Day;

     

    (ii) if such
Loans are Euro-Dollar Loans, the Borrower may elect to convert such Loans to
Base Rate Loans as of any Domestic Business Day, subject to Section 2.13 if any such conversion is effective

     

    
      
        
        

      

      
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    on any
day other than the last day of an Interest Period applicable to such Loans, or
may elect to continue such Loans as Euro-Dollar Loans, as of the end of any
Interest Period applicable thereto, for an additional Interest
Period.

     

    Each such
election shall be made by delivering a notice (a “Notice of Interest Rate
Election”) to the Administrative Agent not later than 10:30 A.M. (New
York City time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective.  A Notice of
Interest Rate Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant Group of Loans; provided that (i) such
portion is allocated ratably among the Loans comprising such Group and (ii) such
portion, and the remaining portion to which such Notice does not apply, are each
at least $10,000,000 (unless such portion is comprised of Base Rate
Loans).  If no such notice is timely received before the end of an
Interest Period for any Group of Euro-Dollar Loans, the Borrower shall be deemed
to have elected that such Group of Loans be converted to Base Rate Loans at the
end of such Interest Period.

     

    (b) Each
Notice of Interest Rate Election shall specify:

     

    (i) the Group
of Loans (or portion thereof) to which such notice applies;

     

    (ii) the date
on which the conversion or continuation selected in such notice is to be
effective, which shall comply with the applicable clause of Section 2.07(a);

     

    (iii) if the
Loans comprising such Group are to be converted to Euro-Dollar Loans, the
duration of the next succeeding Interest Period applicable thereto;
and

     

    (iv) if such
Loans are to be continued as Euro-Dollar Loans for an additional Interest
Period, the duration of such additional Interest Period.

     

    Each
Interest Period specified in a Notice of Interest Rate Election shall comply
with the provisions of the definition of Interest Period.

     

    (c) Promptly
after receiving a Notice of Interest Rate Election from the Borrower pursuant to
Section 2.07(a), the Administrative Agent shall
notify each Bank of the contents thereof and such notice shall not thereafter be
revocable by the Borrower.

     

    (d) The
Borrower shall not be entitled to elect to convert any Loans to, or continue any
Loans for an additional Interest Period as, Euro-Dollar Loans if (i) the
aggregate principal amount of any Group of Euro-Dollar Loans created or
continued as a result of such election would be less than $10,000,000 or (ii) a

     

    
      
        
        

      

      
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    Default
shall have occurred and be continuing when the Borrower delivers notice of such
election to the Administrative Agent.

     

    (e) If any
Loan is converted to a different Type of Loan, the Borrower shall pay, on the
date of such conversion, the interest accrued to such date on the principal
amount being converted.

     

    Section
2.08 .  Fees.  (a)   Commitment
Fee.  The Borrower shall pay to the Administrative Agent for
the account of each Bank commitment fees accruing at the Commitment Fee Rate on
the daily average amount  of such Bank’s unused Commitment for the
period from and including the Effective Date to but excluding the Commitment
Termination Date.  Accrued commitment fees shall be payable on the
Commitment Termination Date.

     

    (b)           Agents’ Fees.  The
Borrower shall pay to the Administrative Agent one or more fees in such amounts
and at such times as has been previously agreed between the Borrower and the
Administrative Agent.

     

    Section
2.09 .  Optional Termination or Reduction of
Commitments.  During the Availability Period, the Borrower may,
upon at least three Domestic Business Days’ notice to the Administrative Agent
(which notice the Administrative Agent will promptly deliver to the Banks),
(i) terminate the Commitments at any time, if no Loans are outstanding at
such time or (ii) ratably reduce from time to time by an aggregate amount
of $10,000,000 or any larger multiple of $1,000,000, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans.

     

    Section
2.10 .  Mandatory Termination of
Commitments.  The Commitments shall terminate on the Commitment
Termination Date.

     

    Section
2.11 .  Prepayments.  (a)
Optional Prepayments.
Subject in the case of Euro-Dollar Loans to Section
2.13, the Borrower may (i) on any Business Day, upon notice to the
Administrative Agent, prepay any Group of Base Rate Loans or (ii) upon at
least three Euro-Dollar Business Days’ notice to the Administrative Agent,
prepay any Group of Euro-Dollar Loans, in each case in whole at any time, or
from time to time in part in amounts aggregating $10,000,000 or any larger
multiple of $1,000,000, by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment.  Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Group of Loans.

     

    (b) Mandatory
Prepayment.  Upon the date of a Term-Out of March 14, 2008
Revolving Credit Agreement, the Borrower shall prepay the Loans in an aggregate
amount equal to the aggregate principal amount of the loans that shall have been
converted to term loans pursuant to the Term-Out of March 14, 2008 Revolving
Credit Agreement.  Each such mandatory prepayment shall be applied to
prepay the Loans ratably.

     

    
      
        
        

      

      
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    (c) Upon
receipt of a notice of prepayment pursuant to this Section, the Administrative
Agent shall promptly notify each Bank of the contents thereof and of such Bank’s
ratable share (if any) of such prepayment and such notice shall not thereafter
be revocable by the Borrower.

     

    Section
2.12 .  General Provisions as to
Payments.  (a) The Borrower shall make each payment of
principal of, and interest on, the Loans and of fees hereunder, not later than
1:00 P.M. (New York City time) on the date when due, in Federal or other funds
immediately available in New York City, to the Administrative Agent at its
address referred to in Section
9.01.  The Administrative Agent will promptly distribute to each
Bank its ratable share of each such payment received by the Administrative Agent
for the account of the Banks.  Whenever any payment of principal of,
or interest on, the Base Rate Loans or of fees shall be due on a day which is
not a Domestic Business Day, the date for payment thereof shall be extended to
the next succeeding Domestic Business Day.  Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day.  If the
date for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.

     

    (b) Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Banks hereunder that the Borrower
will not make such payment in full, the Administrative Agent may assume that the
Borrower has made such payment in full to the Administrative Agent on such date
and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then due
such Bank.  If and to the extent that the Borrower shall not have so
made such payment, each Bank shall repay to the Administrative Agent forthwith
on demand such amount distributed to such Bank together with interest thereon,
for each day from the date such amount is distributed to such Bank until the
date such Bank repays such amount to the Administrative Agent, at the Federal
Funds Rate.

     

    Section
2.13 .  Funding
Losses.  If the Borrower
makes any payment of principal with respect to any Euro-Dollar Loan or any
Euro-Dollar Loan is converted to a Base Rate Loan (whether such payment or
conversion is pursuant to Article 2, 6 or 8 or otherwise) on any
day other than the last day of the Interest Period applicable thereto, or the
end of an applicable period fixed pursuant to Section
2.06(c), or if the Borrower fails to borrow, prepay, convert or continue any
Euro-Dollar Loans after notice has been given to any Bank in accordance with Section 2.03(a), 2.07(c) or
2.11(b) the Borrower shall reimburse each Bank
within 15 days after demand for any resulting loss or expense incurred by it,
including (without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period 

     

    
      
        
        

      

      
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    after any
such payment or conversion or failure to borrow, prepay, convert or continue;
provided that such Bank
shall have delivered to the Borrower a certificate as to the amount of such loss
or expense setting forth in reasonable detail the calculation thereof, which
certificate shall be conclusive in the absence of manifest error.

     

    Section
2.14 .  Computation of Interest and
Fees.  Interest based on the Prime Rate and fees hereunder
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year) and paid for the actual number of days elapsed (including the first day
but excluding the last day).  All other interest shall be computed on
the basis of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day).

     

    Section
2.15 .  Withholding Tax
Exemption.  At least five Domestic Business Days prior to the
first date on which interest or fees are payable hereunder for the account of
any Bank, each Bank that is not incorporated under the laws of the United States
of America or a state thereof agrees that it will deliver to each of the
Borrower and the Administrative Agent two duly completed copies of (i) United States Internal Revenue Service Form W-8BEN (or any
successor form), certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which exempts such Bank
from United States withholding tax or reduces the rate of withholding tax on
payments received for the account of such Bank under this Agreement and the
Notes, or (ii) United States Internal Revenue
Service Form W-8ECI (or any successor form), certifying that the income
receivable by such Bank under this Agreement and the Notes is effectively
connected with the conduct of a trade or business in the United
States.  Each Bank which so delivers a Form W-8BEN or W-8ECI further
undertakes to deliver to each of the Borrower and the Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
to the effect set forth in clause (i) or (ii) above, as applicable, unless an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent such Bank from duly
completing and delivering any such form with respect to it and such Bank advises
the Borrower and the Administrative Agent that it is not capable of making the
certifications set forth in clause (i) or (ii) above, as applicable.

     

    Section
2.16 .  Increase of
Commitments.  (a) Upon at least five
days’ prior notice to the Administrative Agent (which notice the Administrative
Agent shall promptly transmit to each of the Banks), the Borrower shall have the
right, until the Commitment Termination Date and subject to the terms and
conditions set forth below, to increase the aggregate amount of the Commitments
(but only once) in a minimum amount of $20,000,000 and in integral multiples of
$5,000,000 in excess of that amount; provided that the amount of
such increase 

     

    
      
        
        

      

      
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    when
added to the aggregate amount of all Commitments then existing hereunder
(including by way of creating new Commitments), on or after the Effective Date,
does not exceed $400,000,000.

     

    (b) Any such
increase in the Commitments (the “Incremental Commitments”)
hereunder shall apply, at the option of the Borrower, (x) to the Commitment of
one or more Banks; provided that (i) the
Administrative Agent and each Bank the Commitment of which is to be increased
shall consent to such increase and (ii) the amount set forth on the Commitment Schedule opposite the name of each
Bank the Commitment of which is being so increased shall be amended to reflect
the increased Commitment of such Bank and (iii) if any Loans are outstanding at
the time of such an increase, the Borrower will, notwithstanding anything to the
contrary contained in this Agreement, on the date of such increase, incur and
repay or prepay one or more Loans from the Banks in such amounts so that after
giving effect thereto the Loans shall be outstanding on a pro rata basis (based on the
Commitments of the Banks after giving effect to the changes made pursuant to
this Section 2.16 on such date) from all the Banks
or (y) to the creation of a new Commitment of one or more institutions not then
a Bank hereunder; provided that (i) such
institution becomes a party to this Agreement as a Bank by execution and
delivery to the Borrower and the Administrative Agent of counterparts of this
Agreement, (ii) the Commitment Schedule shall
be amended to reflect the Commitment of such new Bank, (iii) if requested by
such new Bank, the Borrower shall issue a Note to such new Bank in conformity
with the provisions of Section 2.04, (iv) if any
Loans are outstanding at the time of the creation of such Commitment of such
Bank, the Borrower will, notwithstanding anything to the contrary contained in
this Agreement, on the date of the creation of such Commitment, incur and repay
or prepay one or more Loans from the Banks in such amounts so that after giving
effect thereto the Loans shall be outstanding on a pro rata basis (based on the
Commitments of the Banks after giving effect to the changes made pursuant to
this Section 2.16 on such date) from all the Banks
and (v) if such institution is neither a banking institution nor an affiliate of
a Bank, such institution must be consented to by the Administrative
Agent.  The date on which the conditions set forth in this paragraph
are satisfied is the “Increased
Amount Date” and each such Bank providing an Incremental Commitment, an
“Incremental
Bank”.

     

    (c) On any
Increased Amount Date on which any Incremental Commitments are effective,
subject to the satisfaction of the foregoing conditions, each Incremental
Bank shall become a Bank hereunder with respect to its Incremental Commitment
and the Incremental Loans made pursuant thereto.

     

    (d) Any
Borrowing in respect of the Incremental Commitments (the “Incremental Loans”) shall
comply with the other provisions of this Article 2;
provided that if the
Increased Amount Date occurs after the date of the third Borrowing hereunder,
the Borrower may make one additional Borrowing so long as (i) the amount of such
Borrowing does not exceed the amount of the Incremental Commitments and (ii)
such Borrowing occurs within three Domestic Business Days of the Increased
Amount Date.

     

    
      
        
        

      

      
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    (e) The
Administrative Agent shall notify the Banks promptly upon receipt of the
Borrower’s notice of the Increased Amount Date and in respect thereof of
Incremental Commitments and the Incremental Banks.

     

    (f) The terms
and provisions of the Incremental Commitments and Incremental Loans shall be,
except as otherwise set forth herein, identical to the Commitments on the
Effective Date and the initial Loans made under this Agreement.

     

    (g) It is
understood that any increase in the amount of the Commitments or the making of
any Incremental Loans pursuant to this Section 2.16
shall not constitute an amendment of this Agreement or the Notes.

     

    Section
2.17 .  Replacement of
Banks.  If (i) any Bank requests payment of, or the Borrower is
otherwise required to pay to any Bank, any amount pursuant to Section 8.01(b) or Section
8.03, or (ii) if any Bank becomes a Defaulting Bank, then the Borrower may,
at its sole expense and effort, upon notice to such Bank and the Administrative
Agent, require such Bank to assign and delegate, without recourse, all its
interests, rights and obligations under this Agreement to an Assignee (which
Assignee may be another Bank, if such other Bank agrees to accept such
assignment) that shall assume such obligations pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit D hereto which shall
be executed by such Assignee and (except as otherwise provided in this Section 2.17) such transferor Bank; provided, that (A) the
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (B) such
transferor Bank shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder (in each case, if any), from the
Assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts), which amounts shall be
the only amounts payable to such transferor Bank in respect of such assignment
and delegation, (C) any Bank being replaced pursuant to this Section 2.17 shall be deemed to have granted to the
Administrative Agent the authority to act as its attorney-in-fact solely for the
purpose of executing such Assignment and Assumption Agreement, and (D) in
the case of any such assignment and delegation resulting from a request or claim
for payment under Section 8.03, such assignment will
result in a reduction in any payments due to such transferor Bank on a
dollar-for-dollar basis to the extent that such assignment eliminates or reduces
the amount that such transferor Bank is entitled to receive under Section 8.03.  A Bank shall not be required
to make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Bank or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.  With respect
to a demand for compensation from a Bank pursuant to Section 8.03(a), the Borrower’s rights under this Section 2.17 shall be an alternative to the Borrower’s
rights under Section 8.04.  Upon
execution and delivery by the Assignee and (except as otherwise provided in this
Section 2.17) the transferor Bank of the Assignment
and Assumption Agreement referred to above and payment by such Assignee to

     

    
      
        
        

      

      
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    such
transferor Bank of the amount (if any) payable by such Assignee pursuant to
clause (B) above: (1) such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with a
Commitment equal to such transferor Bank’s Commitment immediately prior to the
effectiveness of such assignment and delegation (or, if there is more than one
Assignee, the respective portion of such Commitment agreed to be assumed by each
such Assignee); provided, that if any
Assignee is the Borrower, a Subsidiary or a Consolidated Subsidiary of the
Borrower, then, only the transferor Bank’s unfunded Commitment (but not any of
its Loans) may be so assigned, and upon such assignment, such Commitment shall
be deemed to be zero for all purposes hereunder for so long as such Assignee
holds such Commitment; and (2) the transferor Bank shall be released from
its future obligations hereunder (but not from any obligation or liability
arising prior to the effectiveness of such assignment and delegation, nor, in
the case of a Defaulting Bank, from any obligation or liability arising in
respect of the matter(s) as a result of which such Bank is a Defaulting
Bank).  Upon the consummation of any such assignment and delegation,
the transferor Bank, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee.  If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall, prior to the first date
on which interest or fees are payable hereunder for its account, deliver to the
Borrower and the Administrative Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in accordance
with Section 2.15. In
connection with any assignment pursuant to this Section
2.17, (I) the Borrower shall cause to be paid to the Administrative
Agent an administrative fee for processing such assignment in the amount of
$3,500, and (II) notwithstanding anything to the contrary set forth herein,
if the transferor Bank does not execute and deliver to the Administrative Agent
a duly completed Assignment and Assumption Agreement reflecting such assignment
within five Domestic Business Days of the date on which the Assignee executes
and delivers such Assignment and Assumption Agreement to the transferor Bank,
then such transferor Bank shall be deemed to have executed and delivered such
Assignment and Assumption Agreement.

     

    Section
2.18 .  Defaulting
Banks.  Notwithstanding any provision of this Agreement to the
contrary, if any Bank becomes a Defaulting Bank, then the following provisions
shall apply for so long as such Bank is a Defaulting Bank:

     

    (a)          commitment
fees shall cease to accrue, or to be payable by the Borrower, on the Commitment
of such Defaulting Bank pursuant to Section 2.08(a)
for the account of such Defaulting Bank or otherwise; provided, however, that if
such Defaulting Bank’s Commitment is assigned to an Assignee pursuant to Section 2.17, commitment fees shall begin to accrue on
such assigned Commitment for the account of such Assignee pursuant to Section 2.08(a) commencing on and from the effective
date of the assignment of such Commitment to such Assignee and shall be payable
by the Borrower pursuant to Section 2.08(a);
and

     

    
      
        
        

      

      
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    (b)          the
Commitment of such Defaulting Bank shall not be included in determining whether
all Banks or the Required Banks have taken or may take any action hereunder
(including any consent to any amendment or waiver pursuant to Section 9.05); provided however, that if
such Defaulting Bank’s Commitment is assigned to an Assignee pursuant to Section 2.17, then subject to Section 2.17, the Commitment of such Assignee shall be
included in determining whether all Banks or the Required Banks shall have taken
or may take any action hereunder (including any consent to any amendment or
waiver pursuant to Section 9.05) with respect to
actions to be taken by the Banks from and after the effective date of the
assignment of such Commitment to such Assignee.

                               

     

    ARTICLE 3  

     

    Conditions

     

    Section
3.01 .  Effectiveness.  This
Agreement shall become effective on the date (the “Effective Date”) on which the
Administrative Agent shall have received the following documents or other items,
each dated the Effective Date unless otherwise indicated:

     

    (a) receipt
by the Administrative Agent of counterparts hereof signed by each of the parties
hereto (or, in the case of any party as to which an executed counterpart shall
not have been received, receipt by the Administrative Agent in form satisfactory
to it of telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party);

     

    (b) receipt
by the Administrative Agent for the account of each Bank that has requested a
Note of a duly executed Note dated on or before the Effective Date complying
with the provisions of Section 2.04;

     

    (c) receipt
by the Administrative Agent of an opinion of the General Counsel of the
Borrower, substantially in the form of Exhibit C hereto and covering such
additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request, such opinion to be in form and substance
satisfactory to the Administrative Agent;

     

    (d) receipt
by the Administrative Agent of a certificate signed by the Chief Financial
Officer or the Chief Executive Officer and an Assistant Secretary-Treasurer or
the Controller of the Borrower to the effect that the conditions set forth in
clauses (d) through (h), inclusive, of Section 3.02
have been satisfied as of the Effective Date and, in the case of clauses (d),
(f) and (h), setting forth in reasonable detail the calculations required to
establish such compliance;

     

    (e) receipt
by the Administrative Agent, with a copy for each Bank, of a certificate of an
officer of the Borrower acceptable to the Administrative Agent stating that all
consents, authorizations, notices and filings required or advisable in
connection with this Agreement are in full force and effect, and the

     

    
      
        
        

      

      
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    Administrative
Agent shall have received evidence thereof reasonably satisfactory to
it;

     

    (f) receipt
by the Administrative Agent (or its assigns) and by each Bank of all fees
required to be paid in the respective amounts heretofore mutually agreed, and
all expenses for which invoices have been presented, on or before the Effective
Date; and

     

    (g) receipt
by the Administrative Agent of all documents the Required Banks may reasonably
request relating to the existence of the Borrower, the corporate authority for
and the validity of this Agreement and the Notes, and any other matters relevant
hereto, all in form and substance satisfactory to the Administrative
Agent.

     

    The
Administrative Agent shall promptly notify the Borrower and the  Banks
of the Effective Date, and such notice shall be conclusive and binding on all
parties hereto.

     

    Section
3.02 .  Borrowings.  The
obligation of any Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions, in each case at the
time of such Borrowing and immediately thereafter:

     

    (a) the fact
that the Effective Date shall have occurred on or prior to January 31, 2009 and
that such Borrowing shall occur only during the Availability
Period;

     

    (b) receipt
by the Administrative Agent of a Notice of Borrowing as required by Section 2.02;

     

    (c) subject
to Section 2.16(d), there being a maximum of three
such Borrowings during the Availability Period;

     

    (d) the fact
that the Borrower is in compliance with Section 7.12(a) of the 1972 Indenture
and Section 7.11 of the 1994 Indenture, as each Indenture is in effect as of the
date hereof;

     

    (e) the fact
that the aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments (as such Commitments may be increased
pursuant to Section 2.16);

     

    (f) the fact
that no Default shall have occurred and be continuing;

     

    (g) the fact
that the representations and warranties of the Borrower (in case of a Borrowing,
other than the representation set forth in Section
4.02(c)) contained in this Agreement shall be true (it being understood and
agreed that the representation and warranty set forth in Section 4.12 shall be true and correct as to all
information furnished prior to the making of the respective Loan);
and

     

    
      
        
        

      

      
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    (h) the fact
that (i) there shall be no collateral securing Bonds issued pursuant to any
Indenture of a type other than the types of collateral permitted to secure Bonds
issued pursuant to such Indenture as of the date hereof, (ii) the allowable
amount of eligible collateral then pledged under any Indenture shall not exceed
150% of the aggregate principal amount of Bonds then outstanding under such
Indenture and (iii) no collateral shall secure Bonds other than (A) eligible
collateral under such Indenture, the allowable amount of which is included
within the computation under subsection (ii) above or (B)
collateral previously so pledged which ceases to be such eligible collateral not
as a result of any acts or omissions to act of the Borrower (other than the
declaration of an “event of
default” as defined in a mortgage which results in the exercise of any
right or remedy described in such mortgage).

     

    Each
Borrowing hereunder shall be deemed to be a representation and warranty by the
Borrower on the date of such Borrowing as to the facts specified in clauses (d), (e), (f), (g) and (h) of this Section
3.02.

                                   

     

    ARTICLE 4 

     

    Representations
and Warranties

     

    The
Borrower makes the following representations, warranties and agreements, which
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans:

     

    Section
4.01 . Corporate Existence, Power and
Authority.  The Borrower is a cooperative
association duly incorporated, validly existing and in good standing under the
laws of the District of Columbia and has the corporate power and authority and
all material governmental licenses, authorizations, consents and approvals
required to own its property and assets and to transact the business in which it
is engaged.  The Borrower is duly qualified or licensed as a foreign
corporation in good standing in every jurisdiction in which the nature of the
business in which it is engaged makes such qualification or licensing necessary,
except in those jurisdictions in which the failure to be so qualified or
licensed would not (after qualification, assuming that the Borrower could so
qualify without the payment of any fee or penalty and retain the rights as they
existed prior to such qualification all to an extent so that any fees or
penalties required to be so paid or any rights not so retained would not,
individually or in the aggregate, have a material adverse effect on the business
or financial condition of the Borrower), individually or in the aggregate, have
a material adverse effect upon the business or financial condition of the
Borrower.  The Borrower has the corporate power and authority to
execute, deliver and carry out the terms and provisions of this Agreement and
the Notes.  This Agreement has been, and the Notes when executed and
delivered will have been, duly and validly authorized, executed and delivered by
the Borrower, and this Agreement constitutes a legal, valid and binding
agreement of the Borrower, and the Notes, when executed and delivered by the
Borrower in accordance with this Agreement, will constitute legal, valid and
binding obligations of the Borrower, in each case enforceable in

     

    
      
        
        

      

      
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    accordance
with its terms, except as the same may be limited by bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and by general principles of
equity.

     

    Section
4.02 .  Financial Statements.  (a) The consolidated balance sheets of the Borrower and
its Consolidated Subsidiaries as at May 31, 2008 and the related consolidated
statements of operations, changes in equity and cash flows for the fiscal year
ended May 31, 2008, including the related notes, accompanied by the opinion and
report thereon of Deloitte & Touche LLP, independent public accountants,
heretofore delivered to the Banks, present fairly in all material respects in
accordance with generally accepted accounting principles (i) the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as at the date of said balance sheets and (ii) the
consolidated results of the operations of the Borrower and its Consolidated
Subsidiaries for said fiscal year.  The Borrower has no material
liabilities (contingent or otherwise) of the type required to be disclosed in
financial statements or footnotes which are not disclosed by or reserved against
in the most recent audited financial statements or in the notes thereto other
than (i) Indebtedness incurred and (ii) loan and guarantee commitments issued in
each case by the Borrower in the ordinary course of business since the date of
such financial statements.  All such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent with prior periods, except as disclosed
therein.  The same representations as are set forth in this Section 4.02 shall be deemed to have been made by the
Borrower in respect of the most recent annual and quarterly financial statements
of the Borrower and its Consolidated Subsidiaries (except that the annual
opinion and report of Deloitte & Touche LLP may be replaced by an opinion
and report of another nationally recognized firm of independent public
accountants) furnished or required to be furnished to the Banks prior to or at
the time of the making of each Loan hereunder, at the time the same are
furnished or required to be furnished.

     

    (b) The
unaudited consolidated balance sheets of the Borrower and its Consolidated
Subsidiaries as of August 31, 2008 and the related unaudited consolidated
statements of operations, changes in equity and cash flows for the three months
then ended, heretofore delivered to the Banks, present fairly in conformity with
generally accepted accounting principles applied on a basis consistent with the
financial statements referred to in subsection (a)
of this Section 4.02, the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and changes in financial position for
such three-month period (subject to normal year-end adjustments).  The
Borrower and its Consolidated Subsidiaries have no material liabilities
(contingent or otherwise) of the type required to be disclosed in financial
statements or footnotes which are not disclosed by or reserved against in such
financial statements for such three-month period other than (i) Indebtedness
incurred and (ii) loan and guarantee commitments issued in each case by the
Borrower or its Consolidated Subsidiaries in the ordinary course of business
since the date of such financial statements.

     

    
      
        
        

      

      
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    (c) Since
August 31, 2008 and except as disclosed in the Borrower’s public filings prior
to the date hereof, there has been no material adverse change in the business,
financial position, results of operations or prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole.

     

    Section
4.03 .  Litigation.  There are no actions, suits, proceedings or investigations
pending or, to the Borrower’s knowledge, threatened by or before any court or
any governmental authority, body or agency or any arbitration board which are
reasonably likely to materially adversely affect the business, property, assets,
financial position or results of operations of the Borrower or the authority or
ability of the Borrower to perform its obligations under this Agreement or the
Notes.

     

    Section
4.04 .  Governmental
Authorizations.  No material authorization,
consent, approval or license of, or declaration, filing or registration with or
exemption by, any governmental authority, body or agency is required in
connection with the execution, delivery or performance by the Borrower of this
Agreement or the Notes.  The Banks acknowledge that the Borrower may
file this Agreement with the Securities and Exchange Commission after the
Effective Date.

     

    Section
4.05 .  Members’ Subordinated
Certificates.  The holders of the Borrower’s
Members’ Subordinated Certificates are not and will not be entitled to receive
any payments with respect to the principal thereof or interest thereon solely
because of withdrawing or being expelled from membership in the
Borrower.

     

    Section
4.06 .  No Violation of
Agreements.  Neither the Borrower nor any
Subsidiary is in default in any material respect under any material agreement or
other material instrument to which it is a party or by which it is bound or its
property or assets may be affected.  No event or condition exists
which constitutes, or with the giving of notice or lapse of time or both would
constitute, such a default under any such agreement or other
instrument.  Neither the execution and delivery of this Agreement or
the Notes, nor the consummation of any of the transactions herein or therein
contemplated, nor compliance with the terms and provisions hereof or thereof,
will contravene any material provision of law, statute, rule or regulation to
which the Borrower is subject or any material judgment, decree, award,
franchise, order or permit applicable to the Borrower, or will conflict or be
inconsistent with, or will result in any breach of, any of the material terms,
covenants, conditions or provisions of, or constitute (or with the giving of
notice or lapse of time, or both, would constitute) a material default under (or
condition or event entitling any Person to require, whether by purchase,
redemption, acceleration or otherwise, the Borrower to perform any obligations
prior to the scheduled maturity thereof), or result in the creation or
imposition of any Lien upon any of the property or assets of the Borrower
pursuant to the terms of, any indenture, mortgage, deed of trust, agreement or
other instrument to which it may be subject, or violate any provision of the
certificate of incorporation or by-laws of the Borrower.  Without
limiting the generality of the foregoing, the 

     

    
      
        
        

      

      
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    Borrower
is not a party to, or otherwise subject to any provision contained in, any
instrument evidencing Indebtedness of the Borrower, any agreement or indenture
relating thereto or any other material contract or agreement (including its
certificate of incorporation and by-laws), which would be violated by the
incurring of the Indebtedness to be evidenced by the Notes.

     

    Section
4.07 .  No Event of Default under the
Indentures.  The Borrower has complied fully
with all of the material provisions of each Indenture.  No Event of
Default (within the meaning of such term as defined in each Indenture) and no
event, act or condition (except for possible non-compliance by the Borrower with
any immaterial provision of such Indenture which in itself is not such an Event
of Default under such Indenture) which with notice or lapse of time, or both,
would constitute such an Event of Default has occurred and is continuing under
such Indenture.  The Borrowings by the Borrower contemplated by this
Agreement will not cause such an Event of Default under, or the violation of any
covenant contained in, any Indenture.

     

    Section
4.08 .  Compliance with
ERISA.  The Plans (other than Plans consisting
of multiemployer plans (as defined in Section 4001 of ERISA)) are in substantial
compliance with ERISA other than any failure to comply that is not reasonably
likely to have a material adverse effect on the business, operations, prospects,
property, assets or financial position of the Borrower, no such Plan is
insolvent or in reorganization other than an insolvency or reorganization that
is not reasonably likely to have a material adverse effect on the business,
operations, prospects, property, assets or financial position of the Borrower,
and no such Plan has an accumulated or waived funding deficiency within the
meaning of Section 412 of the Internal Revenue Code other than any accumulated
or waived funding deficiency that is not reasonably likely to have a material
adverse effect on the business, operations, prospects, property, assets or
financial position of the Borrower.  No Plan consisting of a
multiemployer plan (as defined in Section 4001 of ERISA) is in
reorganization.  Neither the Borrower nor a Subsidiary of the Borrower
nor any member of the ERISA Group has incurred any material liability (including
any material contingent liability) to or on account of a Plan pursuant to
Section 4062, 4063, 4064, 4201 or 4204 of ERISA, no proceedings have been
instituted to terminate any Plan, and no condition exists which presents a
material risk to the Borrower of incurring a material liability to or on account
of a Plan pursuant to any of the foregoing Sections of ERISA.

     

    Section
4.09 .  Compliance with Other
Laws.  The Borrower and each Subsidiary is in
compliance, in all material respects, with all applicable requirements of law
and all applicable rules and regulations of each Federal, State, municipal or
other governmental department, agency or authority, domestic or
foreign.

     

    Section
4.10 .  Tax
Status.  The Borrower is exempt from payment of Federal income
tax under Section 501(c)(4) of the Internal Revenue Code.

     

    
      
        
        

      

      
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    Section
4.11 .  Investment Company
Act.  The Borrower is not an “investment company” or a company
“controlled” by an “investment company”, within the meaning of the Investment
Company Act of 1940, as amended.

     

    Section
4.12 .  Disclosure.  To the
best of the Borrower’s knowledge, information and belief, neither this Agreement
nor any document, certificate or financial statement furnished to any Bank by or
on behalf of the Borrower in connection herewith (all such documents,
certificates and financial statements, taken as a whole) contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements contained herein and therein not
misleading.  There is no fact (other than facts of a general economic
or political nature) known to the Borrower which in its judgment materially
adversely affects or in the future is likely to (so far as is now known to the
Borrower) have a material adverse effect upon the business, operations,
prospects, property, assets or financial condition of the Borrower which has not
been set forth in this Agreement or in other documents, certificates or
financial statements furnished to the Banks by or on behalf of the Borrower in
connection with the transactions contemplated hereby.

     

    Section
4.13 .  Subsidiaries.  Each
of the Borrower’s corporate Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.

     

    Section
4.14 .  Environmental
Matters.  In the ordinary course of its business, the Borrower
conducts reviews, to the extent appropriate given the nature of its business
operations, of the effect of Environmental Laws on the business, operations and
properties of the Borrower and its Subsidiaries, in the course of which it
identifies and evaluates associated liabilities and costs (including, without
limitation, any capital or operating expenditures required for clean-up or
closure of properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license, permit or
contract, any related constraints on operating activities, including any
periodic or permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat, any costs or liabilities
in connection with off-site disposal of wastes or Hazardous Substances, and any
actual or potential liabilities to third parties, including employees, and any
related costs and expenses).  On the basis of this review, the
Borrower has reasonably concluded that such associated liabilities and costs,
including the cost of compliance with Environmental Laws, are unlikely to have a
material adverse effect on the business, financial condition, results of
operations or prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.

                                  

    
      
        
        

      

      
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    ARTICLE 5  

     

    Covenants

     

    The
Borrower agrees that, so long as any Bank has any Commitment hereunder or any
amount payable under any Note or any fee payable pursuant to  Section 2.09 or any other amount then due and payable
hereunder remains unpaid:

     

    Section
5.01 .  Corporate
Existence.  The Borrower, at its own cost and expense, will,
and will cause each Subsidiary to, do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence, material
rights and franchises; provided, however, that
neither the Borrower nor any Subsidiary shall be required to preserve any right
or franchise or, in the case of a Subsidiary, its corporate existence, if its
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Borrower or such Subsidiary
(provided that the
termination of the corporate existence of a Subsidiary shall be permitted if the
Board of Directors of the Borrower shall determine that its existence is not
desirable in the conduct of the business of the Borrower) and that the loss
thereof is not disadvantageous in any material respect to the
Banks.

     

    Section
5.02 .  Disposition of Assets, Merger,
Character of Business, etc.  The Borrower will not wind up or
liquidate its business or sell, lease, transfer or otherwise dispose of all or
substantially all of its assets as an entirety or in a series of related
transactions and will not consolidate with or merge with or into any other
Person other than a merger with a Subsidiary in which the Borrower is the
surviving Person.  The Borrower will not engage in any business other
than the business contemplated by its certificate of incorporation and by-laws,
each as in effect on the Effective Date.

     

    Section
5.03 .  Financial
Information.  (a) The Borrower will, and will cause each
Subsidiary other than the Subsidiaries listed on Schedule 5.03(a) to, keep its books of account in accordance
with generally accepted accounting principles.

     

    (b) The
Borrower will furnish to the Banks:

     

    (i) as soon
as available and in any event within 60 days after the close of each of the
first three quarters of each fiscal year of the Borrower, as at the end of, and
for the period commencing at the end of the previous fiscal year and ending
with, such quarter, unaudited consolidated balance sheets of the Borrower and
its Consolidated Subsidiaries and the related unaudited consolidated statements
of operations, changes in equity and cash flow of the Borrower and its
Consolidated Subsidiaries for such quarter and for the portion of the Borrower’s
fiscal year ended at the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter and the corresponding
portion of the Borrower’s previous fiscal year, all in reasonable detail and
certified (subject to normal year-end adjustments) as 

     

    
      
        
        

      

      
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    to
fairness of presentation in accordance with generally accepted accounting
principles in all material respects and consistency (except for changes
concurred in by the Borrower’s independent public accountants) by the Chief
Executive Officer, the Chief Financial Officer, an Assistant Secretary-Treasurer
or the Controller of the Borrower;

     

    (ii) as soon
as practicable and in any event within the earlier of (i) two Domestic Business
Days after filing with the Securities and Exchange Commission and (ii) 120 days
after the close of each fiscal year of the Borrower, as at the end of and for
the fiscal year just closed, consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries and the related consolidated statements of operations,
changes in equity and cash flow for such fiscal year for the Borrower and its
Consolidated Subsidiaries, all in reasonable detail and fully certified (without
any qualification as to the scope of the audit) by Deloitte & Touche LLP or
other independent public accountants of nationally recognized standing selected
by the Borrower, who shall have audited the books and accounts of the Borrower
for such fiscal year;

     

    (iii) together
with the financial statements referred to in clauses (i) and (ii) above, a
certificate signed by the Chief Executive Officer, the Chief Financial Officer,
an Assistant Secretary-Treasurer or the Controller of the Borrower, in such
detail as shall be reasonably satisfactory to the Required Banks,

     

    (A) identifying
(x) all Indebtedness outstanding as at the end of the fiscal period covered by
such financial statements extended by the Borrower or its Consolidated
Subsidiaries or by any other Person and Guaranteed by the Borrower or its
Consolidated Subsidiaries to the ten Members or borrowers of any Consolidated
Subsidiary (“Consolidated
Subsidiary Members”), taken as a whole, with the largest amount of
Indebtedness to (or Guaranteed by) the Borrower or its Consolidated Subsidiaries
outstanding as at the end of the fiscal period covered by such financial
statements (the “Largest
Members”) as to which, to the knowledge and information of the Borrower
or such Consolidated Subsidiary, the Member or Consolidated Subsidiary Member is
in default (whether in the payment of the principal thereof or interest thereon
or with respect to any material covenant or agreement contained in any
instrument, mortgage or agreement evidencing or relating to such Indebtedness)
and specifying whether such default has been waived by the Borrower or such
Consolidated Subsidiary or such other Person and the nature and status of each
such default not so waived and (y) the aggregate amount of all Indebtedness
outstanding as of the end of the fiscal period covered by such financial
statements as to which, to the knowledge and information of the Borrower or such
Consolidated Subsidiary, Members or Consolidated Subsidiary Members other than
the 

     

    
      
        
        

      

      
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    Largest
Members are in default in the payment of the principal thereof or interest
thereon or are in default with respect to any material covenant or agreement
contained in any instrument, mortgage or agreement evidencing or relating to
such Indebtedness and as to which the Borrower or such Consolidated Subsidiary
has commenced the exercise of remedies in respect thereof,

     

    (B) identifying
the ten Members or Consolidated Subsidiary Members, taken as a whole, with the
largest amount of Indebtedness to (or Guaranteed by) the Borrower or its
Consolidated Subsidiaries outstanding as of the end of the fiscal period covered
by such financial statements, together with the principal amount of such
Indebtedness outstanding with respect to each such Member or Consolidated
Subsidiary Member as of the end of such fiscal period, and

     

    (C) providing
the aggregate principal amount of all loans which are RUS Guaranteed Loans and
are outstanding as of the end of the fiscal period covered by such financial
statements, provided
that if such amount has previously been disclosed by the Borrower in its regular
or periodical reports filed with, or furnished to, the Securities and Exchange
Commission, then the certificate need only reference such report and the section
of such report in which such information may be found;

     

    (iv) with
reasonable promptness, copies of all regular and periodical reports (including
Current Reports on Form 8-K) filed with, or furnished to, the Securities and
Exchange Commission;

     

    (v) promptly
after obtaining knowledge or receiving notice of a change (whether an increase
or decrease) in any rating issued by S&P or Moody’s pertaining to any
securities of, or guaranteed by, the Borrower or any of its Subsidiaries or
affiliates, a notice setting forth such change; and

     

    (vi) with
reasonable promptness, such other information respecting the business,
operations, prospects and financial condition of the Borrower or any of its
Subsidiaries or any Joint Venture as any Bank may, from time to time, reasonably
request, including, without limitation, with respect to the performance and
observance by the Borrower of the covenants and conditions contained in this
Agreement.

     

    Section
5.04 .  Default
Certificates.  Concurrently with each financial statement
delivered to the Banks pursuant to clauses (i)
and (ii) of Section
5.03(b), the Borrower will furnish to the Banks a certificate signed by the
Chief Executive Officer, the Chief Financial Officer, an Assistant
Secretary-Treasurer or the Controller of the Borrower to the effect that the
review of the activities of the Borrower during such year or the portion thereof
covered by such financial 

     

    
      
        
        

      

      
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    statement
and of the performance of the Borrower under this Agreement has been made under
his supervision and that to the best of his knowledge, based on such review,
there exists no event which constitutes a Default or an Event of Default under
this Agreement or, if any such event exists, specifying the nature thereof, the
period of its existence and what action the Borrower has taken and proposes to
take with respect thereto, which certificate shall set forth the calculations or
other data required to establish compliance with the provisions of Section 5.09 and Sections 5.12 through 5.14,
inclusive, at the end of such fiscal quarter or fiscal year, as the case may
be.  The Borrower further covenants that upon any such officer of the
Borrower obtaining knowledge of any Default or Event of Default under this
Agreement, it will forthwith, and in no event later than the close of business
on the Domestic Business Day immediately after the day such knowledge is
obtained, deliver to the Banks a statement of any officer referred to above
specifying the nature and the period of existence thereof and what action the
Borrower has taken and proposes to take with respect thereto.

     

    Section
5.05 .  Notice of Litigation, Legislative
Developments and Defaults.  The Borrower will promptly give
written notice to each of the Banks of (i) any action, proceeding or claim of
which the Borrower may have notice, which may be commenced against the Borrower
or any Subsidiary in which the amount involved is $50,000,000 or more and is not
covered in full by insurance or as to which any insurer has disclaimed
liability; (ii) any dispute which may exist between the Borrower or any
Subsidiary and any governmental body, which is likely to materially and
adversely affect the normal business operation of the Borrower or the Borrower
and its Subsidiaries taken as a whole or any of the material properties and
assets of the Borrower or the Borrower and its Subsidiaries taken as a whole;
(iii) any legislation enacted by any governmental body and any rulings and
regulations promulgated by any governmental or regulatory bodies, known to the
Borrower, affecting the Borrower or any Subsidiary or, if known to the Borrower,
generally affecting the Borrower’s Members which is likely to materially and
adversely affect the present or future operations of the Borrower, the Borrower
and its Subsidiaries taken as a whole or the Borrower’s Members; and (iv) any
default by the Borrower or any Subsidiary or event or condition known to the
Borrower which with the giving of notice or lapse of time, or both, would
constitute a default, with respect to any payment or payments in respect of
Indebtedness of the Borrower or such Subsidiary aggregating in excess of
$25,000,000 (whether in payment of principal thereof or interest thereon or with
respect to any material covenant or agreement contained in any instrument,
mortgage, deed of trust or agreement evidencing or relating to such Indebtedness
or otherwise), provided
that if any matter described in clauses (i) through (iv) of this Section has
previously been disclosed by the Borrower in its regular or periodical reports
filed with, or furnished to, the Securities and Exchange Commission, then no
additional written notice shall be required under this Section.

     

    Section
5.06 .  ERISA.  As soon as
possible and, in any event, within 10 days after the Borrower or a Subsidiary of
the Borrower knows or has reason to know that a Reportable Event has occurred,
that an accumulated funding 

     

    
      
        
        

      

      
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    deficiency
has been incurred or an application may be or has been made to the Secretary of
the Treasury for a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code with respect to a Plan, that a Plan has been or may be
terminated, that proceedings may be or have been instituted to terminate a Plan,
or that the Borrower, a Subsidiary of the Borrower or any member of the ERISA
Group will or may incur any liability in excess of $5,000,000 to or on account
of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA, the Borrower
will deliver to each of the Banks a certificate of the Chief Financial Officer
of the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or such Subsidiary is required or proposes to take, together
with any notices required to be filed by the Borrower, such Subsidiary, such
member of the ERISA Group or the plan administrator with the PBGC with respect
thereto.

     

    Section
5.07 .  Payment of
Charges.  The Borrower will, and will cause each Subsidiary to,
duly pay and discharge (i) all taxes, assessments and governmental charges or
levies imposed upon or against it or its property or assets, prior to the date
on which material penalties attach thereto, unless and to the extent only that
such taxes, assessments and governmental charges or levies are being contested
in good faith by appropriate proceedings; and (ii) all material lawful claims,
including, without limitation, claims for labor, materials, supplies or
services, which might or could, if unpaid, become a Lien upon such property or
assets, unless and to the extent only that the validity or the amount thereof is
being contested in good faith by appropriate proceedings.

     

    Section
5.08 .  Inspection of Books and
Assets.  The Borrower will, and will cause each Subsidiary to,
permit any representative of any Bank (or any agent or nominee of such Bank) to
visit and inspect any of the property of the Borrower or such Subsidiary, to
examine the books of record and account of the Borrower or such Subsidiary and
to discuss the affairs, finances and accounts of the Borrower or such Subsidiary
with the officers and independent public accountants of the Borrower or such
Subsidiary, all at such reasonable times and as often as such Bank may
reasonably request.

     

    Section
5.09 .  Indebtedness.  (a)
The Borrower will not, and will not permit any of its Consolidated Subsidiaries
(other than Rural Telephone Finance Cooperative and National Cooperative
Services Corporation) to, incur, assume or Guarantee any Superior Indebtedness,
or make any optional prepayment on any Members’ Subordinated Certificate; provided that (i)
subject to the provisions of Section 5.12, any
such Subsidiary may incur Superior Indebtedness owing to the Borrower or assume
or Guarantee Indebtedness of any Person (other than the Borrower or any of its
Subsidiaries) owing to the Borrower and (ii) the Borrower may incur, assume
or Guarantee Superior Indebtedness or make optional prepayments on Members’
Subordinated Certificates if, after giving effect to any such action specified
above in this clause (ii), (x) on the date of such
incurrence, assumption or Guarantee or making of such optional prepayment (the
“Determination Date”)
the aggregate principal amount of Superior Indebtedness then outstanding would
not exceed ten times the sum of (a) the aggregate principal amount of Members’
Subordinated Certificates outstanding on the Determination Date, (b) the
aggregate amount of the line item “total equity” shown on the consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries on the
Determination Date, (c) the aggregate amount of the line item “minority
interest” shown on the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries on the Determination Date and (d) the aggregate
principal amount of Qualified Subordinated Indebtedness outstanding on the
Determination Date and (y) on no given future date ending on the last day
of each fiscal quarter would the aggregate principal amount of Superior
Indebtedness outstanding on the Determination Date which will remain outstanding
on such given future date exceed ten times the sum of (a) the aggregate

     

    
      
        
        

      

      
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    principal
amount of Members’ Subordinated Certificates outstanding on the Determination
Date which will remain outstanding on such given future fiscal quarter-end date,
(b) the aggregate amount of the line item “total equity” shown on the
consolidated  balance sheet of the Borrower and its Consolidated
Subsidiaries on the Determination Date, (c) the aggregate amount of the line
item “minority interest” shown on the consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries on the Determination Date and (d) the
aggregate principal amount of Qualified Subordinated Indebtedness outstanding on
the Determination Date which will remain outstanding on such given future date;
provided that the
non-cash adjustments (whether positive or negative) required to be made pursuant
to SFAS 133 and SFAS 52 shall be excluded from calculations under clause (ii) above to the extent otherwise included
therein.  The respective principal amounts of Superior Indebtedness,
Members’ Subordinated Certificates and Qualified Subordinated Indebtedness to be
outstanding on such given future date shall be determined after giving effect to
mandatory sinking fund payments, other mandatory prepayments and serial and
other maturity payments required to be made on or prior to said given future
date by the terms of such Superior Indebtedness, Members’ Subordinated
Certificates, Qualified Subordinated Indebtedness or any indenture or other
instrument pursuant to which they are respectively issued.

     

    (b) If any
Loan is outstanding hereunder, the Borrower will not take any action which would
prevent it from then complying, or fail to take any action which would enable it
then to comply, with the provisions of 3.02(h), assuming for this purpose only
that the Borrower then intended to borrow from one or more of the Banks
hereunder.

     

    Section
5.10 .  Liens.  The Borrower will not create or permit to exist any Lien on
or with respect to any Indebtedness of any Member which is an asset of the
Borrower, now existing or hereafter created, or on any notes, mortgages or other
documents or instruments evidencing any such Indebtedness, and the Borrower will
not permit any Consolidated Subsidiary to create or permit to exist any Lien on
or with respect to any of such Subsidiary’s assets, except Liens (i) granted by
the Borrower to the trustee pursuant to any Indenture, (ii) on any such
Indebtedness granted by the Borrower or its Consolidated Subsidiary to secure
any borrowing for the purpose of making loans to Member power supply systems or
loans to Members for bulk power supply projects or loans to Members for the

     

    
      
        
        

      

      
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    purpose
of providing financing to telephone and related systems eligible to borrow from
the RUS or loans to borrowers borrowing from National Cooperative Services
Corporation or Rural Telephone Finance Cooperative, which borrowing or
borrowings are on terms (except as to terms of interest, premium, if any, and
amortization) not materially more disadvantageous to the Borrower’s unsecured
creditors than the borrowings under any Indenture (it being understood that the
Borrower can not pledge such assets to an extent greater than 150% of the
aggregate principal amount of such Indebtedness); provided that Liens incurred
in reliance on this subsection (ii) shall not secure amounts exceeding
$500,000,000 in the aggregate at any one time outstanding, (iii) of current
taxes not delinquent or a security for taxes being contested in good faith, (iv)
other than in favor of the PBGC, created by or resulting from any legal
proceedings (including legal proceedings instituted by the Borrower or any
Subsidiary) which are being contested in good faith by appropriate proceedings,
including appeals of judgments as to which a stay of execution shall have been
issued, and adequate reserves shall have been established, (v) created by the
Borrower to secure Guarantees by the Borrower of Indebtedness, the interest on
which is excludable from the gross income of the recipient thereof for Federal
income tax purposes as provided in Section 103(a) of the Internal Revenue Code
or Section 103(a) of the Internal Revenue Code of 1954, as amended, (x) of a
Member which is a state or political subdivision thereof or (y) of a state or
political subdivision thereof incurred to benefit a Member for one of the
purposes provided in Section 142(a)(2), (4), (5), (6), (8), (9), (10) or (12) of
the Internal Revenue Code or Section 103(b)(4)(D), (E), (F), (G), (H) or (J) of
the Internal Revenue Code of 1954, as amended, (vi) granted by any Subsidiary to
the Borrower, (vii) REDLG Program Liens securing REDLG Obligations with respect
to government Guarantees of Indebtedness of the Borrower in an aggregate
principal or face amount not to exceed $6,000,000,000 at any one time
outstanding, and (viii) on any such Indebtedness granted
by the Borrower to secure any borrowings, which borrowings are on terms (except
as to terms of interest, premium, if any, and amortization) not materially more
disadvantageous to the Borrower’s unsecured creditors than the borrowings under
any Indenture (it being understood that the Borrower can not pledge such assets
to an extent greater than 150% of the aggregate principal amount of such
Indebtedness); provided
that Liens incurred in reliance on this subsection (viii) shall not secure amounts exceeding
$1,000,000,000 in the aggregate at any one time outstanding.

     

    Section
5.11 .  Maintenance of
Insurance.  The Borrower will maintain, and will cause each
Subsidiary to maintain, insurance in such amounts, on such forms and with such
companies as is necessary or appropriate for its business.

     

    Section
5.12 .  Subsidiaries and Joint
Ventures.  The Borrower will not permit (a) the sum
of (i) the amount of Indebtedness owing to the Borrower by all of its
Subsidiaries and Joint Ventures plus (ii) the amount
paid by the Borrower in respect of the stock, obligations or securities of or
any other interest in such Subsidiaries and Joint Ventures plus (iii) any capital
contributions by the Borrower to such Subsidiaries and Joint Ventures (the
amounts referred to in paragraphs (i) through
(iii), the “Investments”) plus (iv) the amount of
assets 

     

    
      
        
        

      

      
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    (excluding
Foreclosed Assets) otherwise sold or transferred by the Borrower to such
Subsidiaries and Joint Ventures (other than sales at fair market value) minus (v) any Start-up
Investments minus (vi) any
Investment made in cash by the Borrower in any Special Purpose Subsidiary (up to
a maximum amount not to exceed the lesser of (x) the amount necessary to
provide such Special Purpose Subsidiary with sufficient working capital to
conduct its business as contemplated hereby and (y) $150,000,000) to exceed
at any time (b) 10% of the sum of (i) all accounts which, in
accordance with generally accepted accounting principles, constitute equity in
the Borrower and its Consolidated Subsidiaries at such time plus (ii) all
Indebtedness of the Borrower shown on its balance sheet dated as of May 31, 2008
as Members’ Subordinated Certificates as such Indebtedness shall be reduced from
time to time and any other Indebtedness of the Borrower incurred after May 31,
2008 having substantially similar provisions as to subordination as those
contained in said outstanding certificates as such other Indebtedness shall be
reduced from time to time, in each case at such time plus (iii) all “minority
interest” shown on the consolidated statement of operations of the Borrower and
its Consolidated Subsidiaries most recently delivered by the Borrower to the
Banks pursuant to Section 4.02 or Section 5.03 plus (iv) all Qualified Subordinated
Indebtedness outstanding at such time; provided that non-cash
adjustments (whether positive or negative) required to be made pursuant to SFAS
133 and SFAS 52 shall be excluded from the calculation of the amounts specified
in clauses 5.12(b)(i), 5.12(b)(ii), 5.12(b)(iii)
and 5.12(b)(iv) to the extent otherwise included
therein; provided
further that, in addition to the foregoing, the Borrower may transfer
assets with an aggregate fair market value of not more than $150,000,000 to a
bankruptcy remote trust required to be established to support REDLG Obligations
of the Borrower, and any such transfer shall be excluded from any calculation
under clauses (a) and (b) above to the extent otherwise included
therein.  For the purpose of this Section
5.12, “Foreclosed
Asset” means (x) any property distributed or to be distributed to the
Borrower with the authority of any Bankruptcy Court in connection with the
bankruptcy of any of the Borrower’s debtors and (y) property received by the
Borrower upon enforcement by the Borrower of its security interest (if any) in
such property or in settlement of delinquent accounts or other overdue amounts
owed to it by any of the Borrower’s debtors; “Special Purpose Subsidiary”
means any domestic Subsidiary all of the shares of capital stock or other
ownership interest of which are directly or indirectly owned by the Borrower,
which Subsidiary is established for the sole purpose of, and whose sole business
shall at all times be, holding Foreclosed Assets; and “Start-up Investments” means
Investments made in a Special Purpose Subsidiary solely to finance such Special
Purpose Subsidiary’s initial acquisition of Foreclosed Assets.

     

    Section
5.13 .  Minimum
TIER.  The Borrower shall not permit, as of the last day of
each fiscal quarter, the average of the TIERs for the six (6) immediately
preceding fiscal quarters (including the fiscal quarter ending on such date) of
the Borrower to be less than 1.025:1.00.

     

    Section
5.14 .  Retirement of Patronage
Capital.  The Borrower shall not make, or permit any
Subsidiaries of the Borrower to make, any payments to 

     

    
      
        
        

      

      
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    Members
in respect of Patronage Capital Certificates unless (i) the TIER for the
immediately preceding fiscal year for which financial statements have been
delivered to the Banks pursuant to Section 5.03(b)
equals or exceeds 1.05:1.00 and (ii) there exists (and would exist after giving
effect to any such payment) no Default or Event of Default under this
Agreement.

     

    Section
5.15 .  Use of
Proceeds.  The proceeds of the Loans made hereunder may be used
by the Borrower for general corporate purposes.  None of such proceeds
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any “margin stock”, within the
meaning of Regulation U.  Neither the Borrower nor any agent acting on
its behalf has taken or will take any action which might cause this Agreement or
the Notes to violate Regulation U or Regulation X.

                                

     

    ARTICLE 6 

     

    Defaults

     

    Section
6.01 .  Events
of Default.  If one or more of the following events (“Events of Default”) shall have
occurred and be continuing:

     

    (a) Principal and
Interest.  The Borrower shall (i) fail to pay when due
(whether upon stated maturity, by acceleration or otherwise) any principal of
any Loan or (ii) fail, and such failure shall continue uncured for one or
more Domestic Business Days, to pay when due (whether upon stated maturity, by
acceleration or otherwise) any interest on any Loan;

     

    (b) Other
Amounts.  The  Borrower shall fail to pay when due
any fee or other amount payable under this Agreement (including pursuant to Section 2.08(b)) and such failure remains uncured for
five days after the due date thereof;

     

    (c) Covenants Without
Notice.  The Borrower shall fail to observe or perform any
covenant or agreement on its part to be observed or performed which is set forth
in Section 5.01 (only with respect to the Borrower’s
corporate existence), 5.02, 5.09, 5.10, 5.12, 5.13, 5.14 or 5.15;

     

    (d) Covenants With 10 Days’
Grace.  The Borrower shall fail to observe or perform any
covenant or agreement on its part to be observed or performed, which is set
forth in the last sentence of Section 5.04, or in Section 5.05, 5.06, 5.07, 5.08, and such
non-observance or non-performance shall continue unremedied for a period of more
than 10 days;

     

    (e) Other
Covenants.  The Borrower shall fail to observe or perform any
covenant, condition or agreement on its part to be observed or performed, other
than as referred to in subsections (a), (b), (c) and (d) above, for a period of 30 days after written
notice specifying such failure and requesting that it be remedied is given by
any Bank to the Borrower and the other Banks; provided that, if the failure
be such that it cannot be corrected within the applicable period, but can be

     

    
      
        
        

      

      
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    corrected
within a reasonable period of time thereafter, it shall not constitute a Default
if corrective action is instituted by the Borrower within the applicable period
and diligently pursued until the failure is corrected, but any such failure that
is not so corrected within 45 days after such applicable period shall constitute
a Default;

     

    (f) Representations.  Any
representation, warranty, certification or statement made or deemed to be made
by the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made or deemed to be made;

     

    (g) Non-Payments of Indebtedness and/or
Derivatives Obligations.  The Borrower or any Subsidiary of the
Borrower shall fail to make any payment or payments aggregating for the Borrower
and its Subsidiaries in excess of $50,000,000 in respect of Indebtedness and/or
Derivatives Obligations of the Borrower or any Subsidiary (other than the Loans
or any Indebtedness under this Agreement) when due (whether upon stated
maturity, by acceleration or otherwise) or within any applicable grace
period;

     

    (h) Defaults Under Other
Agreements.  The Borrower or any Subsidiary shall fail to
observe or perform within any applicable grace period any covenant or agreement
contained in any agreement or instrument relating to any Indebtedness of the
Borrower or any Subsidiary, aggregating for the Borrower and its Subsidiaries in
excess of $50,000,000 if the effect of such failure is to accelerate, or to
permit the holder of such Indebtedness or any other Person to accelerate, the
maturity of such Indebtedness;

     

    (i) Bankruptcy.  The
Borrower or any Subsidiary shall generally not pay its debts as they become due,
or shall admit in writing its inability to pay its debts generally or shall make
a general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower or any Subsidiary seeking to adjudicate it
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, conservation or proceeding in the nature
thereof, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief or protection of debtors, or
seeking the entry of an order for relief or the appointment of a receiver
(including state regulatory authorities acting in a similar capacity), trustee,
custodian or other similar official for it or for any substantial part of its
property, and, in the case of any such proceeding instituted against it (but not
instituted by it) shall remain undismissed or unstayed for a period of 60 days;
or the Borrower or any Subsidiary shall take any action to authorize any of the
actions set forth above in this subsection (i);

     

    (j) ERISA.  A Plan
shall fail to maintain the minimum funding standard required by Section 412 of
the Internal Revenue Code for any plan year or a waiver of such standard is
sought or granted under Section 412(d), or a Plan is, shall have been or is
likely to be terminated or the subject of termination 

     

    
      
        
        

      

      
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    proceedings
under Section 4042 of ERISA, or the Borrower or a Subsidiary of the Borrower or
any member of the ERISA Group has incurred or is likely to incur a liability to
or on account of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA,
and there shall result from any such event or events either a liability or a
material risk of incurring a liability to the PBGC or a Plan, which in the
opinion of the Required Banks, will have a material adverse effect upon the
business, operations or the financial condition of the Borrower; or

     

    (k) Money Judgment.  A
final judgment or order for the payment of money in excess of $50,000,000 shall
be rendered against the Borrower or any Subsidiary and such judgment or order
shall continue unsatisfied and in effect for a period of 45 days during which
execution shall not be effectively stayed or deferred (whether by action of a
court, by agreement or otherwise);

     

    then, and
in any such event, and at any time thereafter, if any Event of Default shall
then be continuing, the Administrative Agent, upon the request of the Required
Banks, shall by notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent, any Bank
or the holder of any Note to enforce its claims against the
Borrower:  (a) declare the Commitments terminated, whereupon the
Commitment of each Bank shall forthwith terminate immediately and any fee
payable pursuant to Section 2.09 shall forthwith
become due and payable without any other notice of any kind; and/or (b) declare
the principal of and accrued interest on the Loans, and all other obligations
owing hereunder, to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that, if an Event of
Default specified in subsection (i) shall occur,
the result which would occur upon the giving of written notice by the
Administrative Agent to the Borrower, as specified in clauses (a) and (b) above, shall
occur automatically without the giving of any such notice.

     

    Section
6.02 .  Notice
of Default.  The Administrative Agent shall give notice to the
Borrower under Section 6.01(e) promptly upon
being requested to do so by any Bank and shall thereupon notify all the Banks
thereof.

                                  

     

    ARTICLE 7  

     

    The
Administrative Agent

     

    Section
7.01 .  Appointment and
Authorization.  Each Bank irrevocably appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the Notes as are delegated to the
Administrative Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.

     

    Section
7.02 .  Administrative Agent and
Affiliates.  The Bank of Nova Scotia shall have the same rights
and powers under this Agreement as any other Bank and may exercise or refrain
from exercising the same as though it were not 

     

    
      
        
        

      

      
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    the
Administrative Agent, and The Bank of Nova Scotia and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower as if it were not
the Administrative Agent hereunder.

     

    Section
7.03 .  Action by
Administrative Agent.  The obligations of the Administrative
Agent hereunder are only those expressly set forth herein.  Without
limiting the generality of the foregoing, the Administrative Agent shall not be
required to take any action with respect to any Default, except as expressly
provided in Article 6.

     

    Section
7.04 .  Consultation with
Experts.  The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.

     

    Section
7.05 .  Liability of Administrative
Agent.  Neither the Administrative Agent nor any of its
affiliates nor any of their respective directors, officers, agents, or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct.  Neither
the Administrative Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Article 3, except receipt of items required to
be delivered to the Administrative Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith.  The Administrative Agent shall not
incur any liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex or similar writing)
reasonably believed by it to be genuine or to be signed by the proper party or
parties.

     

    Section
7.06 .  Indemnification.  Each
Bank shall, ratably in accordance with its Commitment, indemnify the
Administrative Agent, its affiliates and their respective directors, officers,
agents and employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including counsel fees and disbursements), claim, demand, loss,
damages or liability (except such as result from such indemnitee’s gross
negligence or willful misconduct) that such indemnitees may suffer or incur in
connection with this Agreement or any action taken or omitted by such
indemnitees hereunder.

     

    Section
7.07 .  Credit
Decision.  Each Bank acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Bank, and based
on such documents and information as it has deemed 

     

    
      
        
        

      

      
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    appropriate,
made its own credit analysis and decision to enter into this
Agreement.  Each Bank also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any action
under this Agreement.

     

    Section
7.08 .  Successor
Administrative Agent.  The Administrative Agent may, and for so
long as long as no Event of Default has occurred and is continuing, at the
request of the Borrower, shall, resign at any time by giving written notice
thereof to the Banks and the Borrower.  Upon any such resignation, the
Borrower shall have the right, with the consent of the Required Banks, such
consent not to be unreasonably withheld, to appoint a successor Administrative
Agent.  If no successor Administrative Agent shall have been so
appointed by the Borrower, and shall have accepted such appointment, within 15
days after the retiring Administrative Agent gives notice of resignation, then
the retiring Administrative Agent may, on behalf of the Banks, appoint a
successor Administrative Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least
$1,000,000,000.  Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder.  After any retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent.

     

    Section
7.09 .  Documentation Agent And
Syndication Agent Not Liable.  Nothing in this Agreement shall
impose upon the Documentation Agent or the Syndication Agent, each in such
capacity, any duties or responsibilities whatsoever.

                                    

     

    ARTICLE 8

     

    Change
in Circumstances

     

    Section
8.01 .  Basis for Determining Interest Rate
Inadequate or Unfair.  If on or prior to the first day of any
Interest Period for any Euro-Dollar Loans:

     

    (a) the
Administrative Agent is advised by the Euro-Dollar Reference Bank that the
London Interbank Offered Rate is not available in the manner set forth in the
definition of London Interbank Offered Rate for such Interest Period,
or

     

    (b) in the
case of a Borrowing, Banks having 50% or more of the aggregate amount of the
Commitments advise the Administrative Agent that the 

     

    
      
        
        

      

      
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    Adjusted
London Interbank Offered Rate, as determined by the Administrative Agent will
not adequately and fairly reflect the cost to such Banks of funding their
Euro-Dollar Loans for such Interest Period,

     

    the
Administrative Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make Euro-Dollar Loans or to continue or convert
outstanding Loans as or into Euro-Dollar Loans shall be suspended and (ii) each
outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the
last day of the then current Interest Period applicable thereto.

     

    Section
8.02 .  Illegality.  If, on
or after the date of this Agreement, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Administrative Agent
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans or to convert outstanding
Loans into Euro-Dollar Loans or continue outstanding Loans as Euro-Dollar Loans,
shall be suspended.  Before giving any notice to the Administrative
Agent pursuant to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid the need for giving
such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank.  If such Bank shall determine that it
may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the then outstanding principal amount of each
such Euro-Dollar Loan, together with accrued interest
thereon.  Concurrently with prepaying each such Euro Dollar Loan, the
Borrower shall borrow a Base Rate Loan in an equal principal amount from such
Bank (on which interest and principal shall be payable contemporaneously with
the related Euro Dollar Loans of the other Banks), and such Bank shall make such
a Base Rate Loan such Euro-Dollar Loans.

     

    Section
8.03 .  Increased Cost and Reduced
Return.  (a) If on or after the date hereof, in the case of any
Loan or any obligation to make Loans, the adoption of any applicable law, rule
or regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:

     

    
      
        
        

      

      
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    (i) shall
subject any Bank (or its Applicable Lending Office) to any tax, duty or other
charge with respect to its Euro-Dollar Loans, its Notes or its obligation to
make Euro-Dollar Loans, or shall change the basis of taxation of payments to any
Bank (or its Applicable Lending Office) of the principal of or interest on its
Euro-Dollar Loans or any other amounts due under this Agreement in respect of
its Euro-Dollar Loans or its obligation to make Euro-Dollar Loans (except for
changes in the rate of tax on the overall net income of such Bank or its
Applicable Lending Office imposed by the jurisdiction in which such Bank’s
principal executive office or Applicable Lending Office is located);
or

     

    (ii) shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Euro-Dollar Loan any such requirement
included in an applicable Euro-Dollar Reserve Percentage), special deposit,
insurance assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office) or the
London interbank market any other condition affecting its Euro-Dollar Loans, its
Notes or its obligation to make Euro-Dollar Loans; and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Euro-Dollar Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Administrative Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank for
such increased cost or reduction (including any amount or amounts equal to any
taxes on the overall net income of such Bank payable by such Bank with respect
to the amount of payments required to be made pursuant to this Section 8.03(a)).

     

    (b) If any
Bank determines that the adoption of any applicable law, rule, regulation,
guideline or request concerning capital adequacy, or any change therein, or any
change in interpretation or administration thereof by any governmental
authority, central bank or comparable agency (including, without limitation, any
such adoption or change the effect of which would be, for purposes of capital
adequacy requirements, to treat the Commitments hereunder as not constituting
commitments with an original maturity of one year or less), occurring after the
date hereof, will have the effect of increasing the amount of capital required
or expected to be maintained by such Bank based on the existence of such Bank’s
Commitment hereunder or its obligations hereunder, it will notify the
Borrower.  This determination will be made on a Bank-by-Bank
basis.  The Borrower will pay to each Bank on demand such additional
amounts as are necessary to compensate for the increased cost to such Bank as a
result of the event described in the first sentence of this Section 8.03(b).  In determining such

     

    
      
        
        

      

      
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    amount,
such Bank will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable, and such Bank will pass such costs on
to the Borrower only if such costs are passed on in a similar manner by such
Bank to similarly-situated borrowers (which are parties to credit or loan
documentation containing a provision similar to this Section 8.03(b)), as determined by such Bank in its
reasonable discretion.  Each Bank’s determination of compensation
shall be conclusive if made in accordance with this provision.  Each
Bank, upon determining that any increased costs will be payable pursuant to this
Section 8.03(b), will give prompt written notice
thereof to the Borrower, which notice shall show the basis for calculation of
such increased costs, although the failure to give any such notice shall not
release or diminish any of the Borrower’s obligations to pay increased costs
pursuant to this Section 8.03(b).

     

    (c) Each Bank
will promptly notify the Borrower and the Administrative Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this Section and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank.  A Bank claiming compensation
under this Section shall furnish a certificate to the Borrower setting forth the
additional amount or amounts to be paid to it hereunder, which shall be
conclusive in the absence of manifest error.  In determining such
amount, such Bank may use any reasonable averaging and attribution
methods.

     

    (d) Failure
or delay on the part of any Bank to demand compensation pursuant to this Section
8.03 shall not constitute a waiver of such Bank’s right to demand such
compensation; provided
that the Borrower shall not be required to compensate any Bank pursuant to this
Section 8.03 for any increased costs or reductions incurred more than six months
prior to the date that such Bank notifies the Borrower and the Administrative
Agent of the circumstances giving rise to such increased costs or reductions and
of such Bank’s intention to claim compensation therefor; provided further that, if the
circumstances giving rise to such increased costs or reductions are retroactive,
then the six-month period referred to above shall be extended to include the
period of retroactive effect thereof.

     

    Section
8.04 .  Base Rate Loans Substituted for
Affected Euro-Dollar Loans.  If (i) the obligation of any Bank
to make, or to continue or convert outstanding Loans as or to, Euro-Dollar Loans
has been suspended pursuant to Section 8.02 or
(ii) any Bank has demanded compensation under Section
8.03(a) and the Borrower shall, by at least five Euro-Dollar Business Days’
prior notice to such Bank through the Administrative Agent, have elected that
the provisions of this Section shall apply to such Bank, then, unless and until
such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer apply:

     

    
      
        
        

      

      
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    (a) all Loans
which would otherwise be made by such Bank as Euro-Dollar Loans shall be made
instead as Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks),
and

     

    (b) after
each of its Euro-Dollar Loans has been repaid, all payments of principal which
would otherwise be applied to repay such Euro-Dollar Loans shall be applied to
repay its Base Rate Loans instead.

                               

     

    ARTICLE 9     

     

    Miscellaneous

     

    Section
9.01 .  Notices.  (a) All notices, requests, directions, consents, approvals
and other communications to any party hereunder shall be in writing (including
bank wire, telex, facsimile transmission or similar writing) and shall be given
to such party (subject to subparagraph (b)
below):  (x) in the case of the Borrower or the Administrative Agent,
at its address or telex or telecopier number set forth on the signature pages
hereof, (y) in the case of any Bank, at its address or telex or telecopier
number set forth in its Administrative Questionnaire or (z) in the case of any
other party, such other address or telex or telecopier number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and the
Borrower.  Each such notice, request, direction, consent, approval or
other communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received or (ii) if given by any other means, when delivered or
received at the address specified in this Section; provided that notices to the
Administrative Agent under Article 2 or Article 8 shall not be effective until
received.

     

    (b) Notices
and other communications to the Banks hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative
Agent; provided that
the foregoing shall not apply to notices pursuant to Article 2 or Article 8
unless otherwise agreed by the Administrative Agent and the applicable
Bank.  The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or
communications.

     

    Section
9.02 .  No Waivers.  No failure or delay by the Administrative Agent or any Bank
in exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    Section
9.03 .  Expenses; Documentary Taxes;
Indemnification.  (a) The Borrower
shall pay (i) all documented reasonable out-of-pocket expenses of the
Administrative Agent, including reasonable fees and disbursements of special
counsel for the Administrative Agent, in connection with the preparation of this
Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (ii) if an Event of Default
occurs, all documented reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Bank, including reasonable fees and disbursements
incurred by counsel or in-house counsel, in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.  The Borrower shall indemnify each Bank against
any transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of this Agreement
or the Notes and any and all liabilities with respect to or resulting from any
delay or omission (unless solely attributable to such Bank) to pay such
taxes.

     

    (b) The
Borrower agrees to indemnify each Bank, their respective affiliates and the
respective directors, officers, agents, advisors and employees of the foregoing
(each an “Indemnitee”)
and hold each Indemnitee harmless from and against any and all liabilities,
losses, damages, costs, claims, demands and expenses of any kind, including,
without limitation, the reasonable fees and disbursements of counsel, which may
be incurred by any Indemnitee (or by the Administrative Agent in connection with
its actions as Agent hereunder) in connection with any investigative,
administrative or judicial proceeding (whether or not such Indemnitee shall be
designated a party thereto) relating to or arising out of this Agreement or any
actual or proposed use of proceeds of Loans hereunder; provided that no Indemnitee
shall have the right to be indemnified hereunder for its own gross negligence,
willful misconduct or unlawful conduct as determined by a court of competent
jurisdiction.

     

    Section
9.04 .  Sharing of Set-offs.  Each Bank agrees that if it shall, by exercising any right
of set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest then due with respect to any Loans
made by it which is greater than the proportion received by any other Bank in
respect of the aggregate amount of principal and interest due with respect to
any Loans made by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the Loans held by the
other Banks, and such other adjustments shall be made, as may be required so
that all such payments of principal and interest with respect to the Loans held
by the Banks shall be shared by the Banks pro rata; provided that nothing in this
Section shall impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Borrower other than its indebtedness under the
Loans.  The Borrower agrees, to the fullest extent it may effectively
do so under applicable law, that any holder of a participation in a Loan,
whether or not acquired pursuant to the foregoing arrangements, may exercise
rights of set-off or counterclaim and other rights with respect to such

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    participation
as fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.

     

    Section
9.05 .  Amendments and Waivers.  Except as provided by Section
2.16, any provision of this Agreement or the Notes may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Required Banks (and, if the rights or duties of the
Administrative Agent are affected thereby, by the Administrative Agent); provided that, no such
amendment or waiver shall (i) increase or decrease the
Commitment of any Bank (except for a ratable decrease in the Commitments of all
Banks) or subject any Bank to any additional obligation without the written
consent of such Bank, (ii) reduce the principal
of or rate of interest on any Loan or any fees hereunder without the written
consent of each Bank directly affected thereby, (iii)
postpone the date fixed for any payment of principal of or interest on any Loan
or any fees hereunder or for any reduction or termination of any Commitment
without the written consent of each Bank directly affected thereby, (iv) change
the percentage of the Commitments (other than in connection with any increase in
Commitments pursuant to Section 2.16) or of the
aggregate unpaid principal amount of the Notes without the written consent of
each Bank directly affected thereby or (v) change any of the provisions of this
Section 9.05 or the definition of “Required Banks”
or any other provision hereof specifying the number or percentage of Banks
required to waive, amend or modify any rights hereunder, make any determination
or grant any consent hereunder or take any other action under any provision of
this Agreement without the written consent of each Bank.

     

    Section
9.06 .  Successors and Assigns.  (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks.

     

    (b) Any Bank
may at any time grant to one or more affiliates of such Bank, banks or other
institutions (each a “Participant”) participating
interests in its Commitment or any or all of its Loans.  In the event
of any such grant by a Bank of a participating interest to a Participant,
whether or not upon notice to the Borrower and the Administrative Agent, such
Bank shall remain responsible for the performance of its obligations hereunder,
and the Borrower and the Administrative Agent shall continue to deal solely and
directly with such Bank in connection with such Bank’s rights and obligations
under this Agreement.  Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of Section 9.05
without the consent of the Participant.  Subject to the provisions of
subsection (e), the Borrower agrees that each
Participant shall, to the extent provided in its participation agreement, be

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    entitled
to the benefits, and be bound by the obligations, of Article 8 with respect to its participating
interest.  An assignment or other transfer which is not permitted by
subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this subsection (b).

     

    (c) Any Bank
may at any time assign to one or more banks or other institutions (each an
“Assignee”) all, or a
proportionate part (but not in any case in an amount less than $10,000,000,
unless (x) such Assignee is another Bank or an affiliate of such transferor Bank
or (y) such assignment is for all of such transferor Bank’s rights and
obligations under this Agreement and the Notes) of all of its rights and
obligations under this Agreement and the Notes, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit D hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of the Borrower
and the Administrative Agent, such consents not to be unreasonably withheld;
provided that (i) if an
Assignee is another Bank or an affiliate of such transferor Bank, or (ii) in the
case of an assignment by any Bank to one or more Assignees after the occurrence
and during the continuance of an Event of Default, no such consent of the
Borrower shall be required.  Upon execution and delivery of such an
instrument and payment by such Assignee to such transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required.  Upon the consummation of any
assignment pursuant to this subsection (c), the
transferor Bank, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee.  In connection with any such assignment, the transferor Bank
shall pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $3,500.  If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to the Borrower and the Administrative Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section
2.15.

     

    (d) Any Bank
may at any time assign all or any portion of its rights under this Agreement and
its Note to a Federal Reserve Bank.  No such assignment shall release
the transferor Bank from its obligations hereunder.

     

    (e) No
Assignee, Participant or other transferee of any Bank’s rights shall be entitled
to receive any greater payment under Section 8.03
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower’s prior written
consent or by reason of the provisions of Section
8.02 or 8.03 requiring such Bank to designate

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

    a
different Applicable Lending Office under certain circumstances or at a time
when the circumstances giving rise to such greater payment did not
exist.

     

    Section
9.07 .  Collateral.  Each of the Banks represents to the Administrative Agent and each of the
other Banks that it in good faith is not relying upon any “margin stock” (as
defined in Regulation U) as collateral in the extension or maintenance of the
credit provided for in this Agreement.

     

    Section
9.08 .  Governing Law.  (a) This Agreement and each Note shall be governed by and
construed in accordance with the laws of the State of New York.

     

    (b) The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District Court of
the Southern District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court.  Each of the
parties hereto agrees, to the fullest extent permitted by law, that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Agreement shall affect any right
that the Administrative Agent or any Bank may otherwise have to bring any action
or proceeding relating to this Agreement against the Borrower or its properties
in the courts of any jurisdiction.

     

    (c) The
Borrower hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any court referred to in paragraph (b) of this Section.  Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

     

    (d) Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section
9.01.  Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by
law.

     

    Section
9.09 .  Counterparts; Integration.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.  This
Agreement constitutes the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    Section
9.10 .  Several Obligations.  The obligations of the Banks hereunder are
several.  Neither the failure of any Bank to carry out its obligations
hereunder nor of this Agreement to be duly authorized, executed and delivery by
any Bank shall relieve any other Bank of its obligations hereunder (or affect
the rights hereunder of such other Bank).  No Bank shall be
responsible for the obligations of, or any action taken or omitted by, any other
Bank hereunder.

     

    Section
9.11 .  Severability.  In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

     

    Section
9.12 .  Confidentiality.  The
Administrative Agent and each Bank represent that they will maintain the
confidentiality of any written or oral information provided by or on behalf of
the Borrower (hereinafter collectively called “Confidential Information”),
subject to the Administrative Agent’s and each Bank’s (a) obligation to
disclose any such Confidential Information pursuant to a request or order under
applicable laws or regulations or from a regulatory authority or pursuant to a
subpoena or other legal process, (b) right to disclose any such
Confidential Information to its bank examiners, auditors, counsel and other
professional advisors, and its employees, officers and directors, and to other
Banks (it being understood that such Persons shall be informed of the
confidential nature of such information and instructed to keep it
confidential),  (c) right to disclose any such Confidential Information in
connection with any litigation or dispute involving the Banks and the Borrower
or any of its Subsidiaries and affiliates, (d) right to provide such
information to Participants, prospective Participants to which sales of
participating interests are permitted pursuant to Section 9.06(b) and prospective Assignees to which
assignments of interests are permitted pursuant to Section 9.06(c) if such Participant, prospective
Participant or prospective Assignee agrees in writing to maintain the
confidentiality of such information on terms substantially similar to those of
this Section as if it were a “Bank” party hereto, and (e) right to disclose
Confidential Information to its affiliates if such affiliate agrees in writing
to maintain the confidentiality of such information on terms substantially
similar to those of this Section.  Notwithstanding the foregoing, any
such information supplied to a Bank, Participant, prospective Participant or
prospective Assignee under this Agreement shall cease to be Confidential
Information if it is or becomes known to such Person by other than unauthorized
disclosure, or if it becomes a matter of public knowledge other than as a result
of a breach of this Section by such Person.

     

    Section
9.13 .  WAIVER OF JURY
TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    Section
9.14 . USA Patriot Act.  Each Bank hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Bank to identify the Borrower in accordance with the
Act.

     

    Section
9.15 .  ICC
Transactions.  Notwithstanding anything to the contrary set
forth in this Agreement (without limiting the terms of the penultimate sentence
of this Section 9.15) or in any of the Notes or
other instruments or documents that have been or are in the future executed or
delivered pursuant to, or that otherwise relate to, this Agreement or to any
Borrowings or Loans hereunder (all of the foregoing, collectively with this
Agreement, the “Credit
Documentation”), (a) to the extent necessary under the Credit
Documentation, the Banks hereby consent to, and waive any Default, Event of
Default or other breach, violation, default or noncompliance with the provisions
of the Credit Documentation that might otherwise be caused by or be attributable
to, the “ICC
Transactions” as such term is defined in Schedule 9.15 hereto, and (b) the ICC Transactions, the “ICC Assets,” the “ICC Related Companies” (as
such terms are respectively defined in Schedule 9.15 hereto), and the assets, liabilities and
operations of the ICC Related Companies (including without limitation any
circumstances, events, occurrences, actions or omissions relating to, of or by
any of the ICC Related Companies), are hereby excluded from, and shall not be
taken into account in applying, interpreting or determining compliance with, the
provisions of the Credit Documentation (including without limitation, the
definitions, representations, warranties, covenants, agreements, conditions and
events of default set forth in the Credit Documentation) and may be excluded
from any certifications, notices, reports or statements delivered or to be
delivered pursuant to the Credit Documentation.  Without limiting the
generality of the foregoing, the defined terms “Controlled Subsidiary,”
“Consolidated Subsidiary Member,” “ERISA Group,” “Joint Venture,” “Member” and
“Subsidiary,” among others, as used in the Credit Documentation shall not
include the ICC Related Companies.  Notwithstanding the preceding
provisions of this Section 9.15, any new
investments in the ICC Related Companies by purchase of equity and/or debt
securities, funding (through capital contributions and/or newly originated
loans) of working capital or capital expenditure needs of the ICC Related
Companies, payment by RTFC or the Borrower of claims of other creditors of the
ICC Related Companies, and/or provision of any new guarantees, letters of credit
and/or other new credit support or credit enhancement of the debt or other
obligations of the ICC Related Companies, in the case of each of the foregoing,
made or provided by the Borrower and/or RTFC at any time from the date hereof
shall not exceed in the aggregate (but without double-counting any such new
investments) $275,000,000 without the consent of the Required
Banks.  To the extent that the Credit Documentation provides that any
of the ICC Transactions may be implemented if certain advance notice thereof is
given, all such conditions or requirements of advance notice shall be deemed to
have been complied with and all such notices shall be deemed to have been duly
and timely given in accordance with the terms of the Credit
Documentation.

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

     

    
      
        
          	
                  NATIONAL
      RURAL UTILITIES

                  COOPERATIVE
      FINANCE

                  CORPORATION

                
	
                  By:

                	/s/
      STEVEN L. LILLY  
	
                  Name:Steven
      L. Lilly

                
	
                  Title: 
      Senior Vice President, Chief 

                     Financial
      Officer and Assistant 

                     Secretary-Treasurer

                   

                
	
                  Address:                  
      2201 Cooperative Way

                  Herndon, Virginia
      20171

                  Attention:                 Steven
      L. Lilly

                  Title:Senior
      Vice President, Chief

                           Financial
      Officer and Assistant Secretary-Treasurer

                  Telephone
      No.:        (703)
      709-6718

                  Telecopier
      No.:        (703)
      709-6779

                

        

      

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    
      
        	
                THE
      BANK OF NOVA SCOTIA, as Administrative Agent and as a
  Bank

              
	
                By:

              	/s/
      THANE RATTEW  
	
                Name:
      Thane Rattew

              
	
                Title:
      Managing Director

              
	
                Address:
        c/o GWS Loan Operations

                                  
      720 King Street West, 2nd
      Floor

                                  
      Toronto, Ontario M5V 2T3

                Attention:
      NYA Loan Operations

                Telephone
      No.:  (212) 225-5706

                Telecopier
      No.:  (212) 225-5708

                E-mail:  jamie_breese@scotiacapital.com

                              karen_lam@scotiacapital.com

                 

              

      

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
         

         

        
          
            
              
                
                  
                    	
                            U.S. Bank, N.A., as a Bank and as
      

                            Syndication Agent 

                          
	
                            By:

                          	/s/ ERIC
      J. COSGROVE   
	
                            Name:
      Eric J. Cosgrove

                          
	
                            Title:
      Vice President

                          

                  

                

              

               

               

            

          

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

        
          
            
              	
                      KEYBANK NATIONAL

                      ASSOCIATION, as a Bank and as

                      Documention Agent

                    
	
                      By:

                    	/s/
      SHERRIE I. MANSON  
	
                      Name:
      Sherrie I. Manson

                    
	
                      Title:
      Senior Vice President

                    

            

          

        

         

         

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

        
          
            
              	
                      PNC Bank, N.A., as a
    Bank

                    
	
                      By:

                    	/s/
      D. JERMAINE JOHNSON
	
                      Name:
      D. Jermaine Johnson

                    
	
                      Title:
      Vice President

                    

            

          

        

         

         

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    COMMITMENT SCHEDULE

     

    

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Institution

                              	
                                Commitment

                              
	
                                Bank
      of Nova Scotia

                              	
                                $75,000,000

                              
	
                                Keybank
      National Association

                              	
                                $50,000,000

                              
	
                                U.S.
      Bank, N.A.

                              	
                                $50,000,000

                              
	
                                PNC
      Bank, N.A.

                              	
                                $25,000,000

                              
	
                                Total

                              	
                                $200,000,000

                              

                      

                    

                  

                

              

            

          

        

      

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
5.03(a)

     

    NON-GAAP
SUBSIDIARIES

     

    

    
      	
              a.  

            	
              Denton
      Realty Holdings, LLC, organized in the State of Delaware. Borrower owns
      100% of the membership interests.

            

    

    

    
      	
              b.  

            	
              Denton
      Realty Investors, LLC, organized in the State of Delaware. Borrower owns
      100% of the membership interests.

            

    

    

    
      	
              c.  

            	
              Denton
      Realty Partners, LP, organized in the State of Delaware. Denton Realty
      Holdings, LLC is the general partner and owns 0.5% of the partnership
      interests, and Denton Realty Investors, LLC is the limited partner and
      owns 99.5% of the partnership
interests.

            

    

    

    
      	
              d.  

            	
              CFC
      Advantage, LLC, organized in the State of Delaware. Borrower owns 100% of
      the membership interests.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
9.15

     

    ICC
TRANSACTIONS

     

    Background

     

    As
described in the Borrower’s filings with the U.S. Securities and Exchange
Commission, Rural Telephone Finance Cooperative (“RTFC”), a Consolidated
Subsidiary of the Borrower, made secured loans to Innovative Communication
Corporation (“ICC”), a
diversified telecommunications company organized under the laws of the United
States Virgin Islands (“USVI”) and headquartered in
St. Croix, USVI, which loans have been on non-accrual status since February
2005, and ICC and certain of its affiliates are the subject of pending
bankruptcy proceedings.  Through operating divisions and subsidiaries,
ICC provides cellular, wireline local and long-distance telephone, cable
television, Internet access and other telecommunications services in the eastern
and southern Caribbean and in mainland France.  ICC and its
subsidiaries are hereby defined as the “ICC Companies.”  As
of August 31, 2008, RTFC had $484 million in loans outstanding to ICC, and all
such ICC loans have been on non-accrual status since February 1,
2005.  A Bankruptcy Trustee has been appointed to manage the
operations of the ICC bankrupt estate (the “Trustee”).  The
Trustee has separated the bankrupt estate into two groups described by the
Trustee as follows:

    

    “Group 1”:

    

    
      	
              ·  

            	
              Wireline
      telephone operations in the USVI,

            

    

    
      	
              ·  

            	
              Wireless
      telephone operations in the USVI and St. Maarten/St. Martin,
      and

            

    

    
      	
              ·  

            	
              Cable
      television service operations in the USVI, the British Virgin Islands and
      St. Maarten.

            

    

    

    “Group 2”:

    

    
      	
              ·  

            	
              Cable
      television operations in Guadeloupe, Martinique and
  France.

            

    

    

    

    ICC
Transactions

     

    The
Borrower and RTFC are contemplating the acquisition of some or all of the assets
and/or stock of the ICC Companies in Group 1 and/or Group 2 (collectively,
“ICC Assets”), either
through a credit bid pursuant to which, if such credit bid is successful, ICC
Assets would be transferred to RTFC, the Borrower or one or more designees
controlled by the Borrower or RTFC (and which may be one or more special purpose
entities owned directly or indirectly by the Borrower or RTFC) or through one or
more joint ventures with one or more third-party bidders pursuant to which the
Borrower, RTFC and/or one or more special purpose entities created by the
Borrower or RTFC would receive partial equity 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ownership
in the acquisition entity/ies (the above-mentioned designees, special purpose
entities and joint ventures, together with the ICC Companies, are hereby defined
collectively as the “ICC
Related Companies”); and in either case, among other things, (i) RTFC may
transfer some or all of its rights with respect to its ICC loans (including
without limitation the right to acquire ICC Assets pursuant to a successful RTFC
credit bid) to the Borrower or to one or more special purpose entities
controlled and designated by the Borrower, and such transfer(s) of RTFC’s rights
may occur (A) in exchange for the Borrower’s forgiveness of, or in satisfaction
of, some or all of RTFC’s indebtedness to the Borrower that was incurred to
finance RTFC’s ICC loans, and/or (B) pursuant to the terms of a guaranty
agreement between the Borrower and RTFC under which the Borrower has guaranteed,
subject to certain limitations, that RTFC’s loss in respect of its ICC loans
will not exceed its loss reserve therefor and under which the Borrower is
entitled to be transferred RTFC’s rights relating to the ICC loans if RTFC makes
a call on the guaranty; (ii) the Borrower and/or RTFC may provide equity and/or
debt capitalization of, and ongoing funding for, the entities involved in the
acquisition, ownership and operation of ICC Assets, and may create one or more
of special purpose entities for such purposes; (iii) the Borrower and/or RTFC
may provide working capital and capital expenditure financing to the ICC
Companies and for the ICC Assets, either directly or through such special
purpose entity/ies; (iv) the acquisition of ICC Assets would involve settling
claims of other creditors of the ICC Companies, which settlements may be
financed by the Borrower and/or RTFC directly or through ICC Related Companies;
(v) the Borrower and/or RTFC may provide credit support and/or credit
enhancement for obligations of ICC Related Companies, including without
limitation in the form of guaranties and/or letters of credit; (vi) the Borrower
or RTFC would hold such ICC Assets (through one or more special purpose
entities) or such joint venture investment(s) and operate or provide for the
operation of the ICC Companies for the purpose of preserving and rehabilitating
such ICC Assets, preparing them for resale or other disposition and reselling or
disposing of them in one or more transactions at a price or prices or for other
consideration satisfactory to RTFC and/or the Borrower; and (vii) the
Borrower and/or RTFC may engage staff and/or outside consultants, agents,
managers, management companies and other professional advisers to advise and
assist with respect to, and/or to carry out, the foregoing.  All of
the potential transactions, actions and other matters referred to above in this
paragraph (together with such other related transactions and steps, occurring
prior to or concurrently with or within a reasonable time after the
transactions, actions and other matters referred to above and as may be
reasonably necessary to carry out such transactions, actions and other matters)
are hereby defined collectively as the “ICC
Transactions.”

     

    Nothing
in this Schedule 9.15 or in Section 9.15 of the Credit Agreement shall constitute
an obligation on the Borrower, RTFC or any other Person to enter into all or any
of the transactions, or to take all or any of the actions, described in this
Schedule 9.15.  Transactions and
actions referred to in this Schedule 9.15 are
not necessarily listed in the chronological order in which they may be entered
into or taken.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT A

     

    

    FORM OF
NOTE

     

    New York,
New York [DATE]

     

    For value
received, National Rural Utilities Cooperative Finance Corporation, a
not-for-profit cooperative association incorporated under the laws of the
District of Columbia (the “Borrower”), promises to pay to
the order of [·] (the
“Bank”), for the account
of its Applicable Lending Office, the unpaid principal amount of each Loan made
by the Bank to the Borrower pursuant to the Term Loan Credit Agreement referred
to below on the Maturity Date with respect to such Loan.  The Borrower
promises to pay interest on the unpaid principal amount of each such Loan on the
dates and at the rate or rates provided for in the Term Loan Credit
Agreement.  All such payments of principal and interest shall be made
in lawful money of the United States in Federal or other immediately available
funds at the office of The Bank of Nova Scotia, c/o GWS Loan Operations, 720
King Street West, 2nd Floor,
Toronto, Ontario, M5V 2T3, Attn: NYA Loan Operations.

     

    All Loans
made by the Bank, the respective types and maturities thereof and all repayments
of the principal thereof shall be recorded by the Bank and, prior to any
transfer hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of
the Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Term Loan Credit
Agreement.

     

    This note
is one of the Notes referred to in the Term Loan Credit Agreement dated as of
January 21, 2009, among the Borrower, the Banks listed on the signature pages
thereof, The Bank of Nova Scotia, as Administrative Agent, U.S. Bank, N.A., as
Syndication Agent, and Keybank National Association as Documentation Agent (as
the same may be amended from time to time, the “Term Loan Credit
Agreement”).Terms defined in the Term Loan Credit Agreement are used
herein with the same meanings.  Reference is made to the Term Loan
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.

     

    
      
        	
                NATIONAL
      RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

              
	
                By:

              	 
      
	
                Name:

              
	
                Title:

              

      

    

     

     

    
      
        
        

      

      
        Ex.A-1

        
          

        

      

      
        
        

      

    

    Note
(cont'd)

     

     

    LOANS AND
PAYMENTS OF PRINCIPAL

    

    

    
      
        	
                Date

              	
                Amount
      of 

                Loan

              	
                Type
      of 

                Loan

              	
                Amount
      of 

                Principal
      

                Repaid

              	
                Maturity
      

                Date

              	
                Notation
      

                Made
      By

              
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      

      

    

    

    
      
        
        

      

      
        Ex.A-2

        
          

        

      

      
        
        

      

    

    EXHIBIT B-1

     

    FORM OF RUS
GUARANTEE

    

    The
United States of America acting through the Administrator of the Rural Utilities
Service (“RUS”) hereby
unconditionally guarantees to [name of Payee] the making of [__%] of the
payments of principal and interest when and as due on this Note of _________
(the “Cooperative”) in
accordance with the terms hereof and of the Loan Agreement referred to in this
Note, until such principal and interest shall be indefeasibly paid in full
(which includes interest accruing on such principal between the date of default
under this Note and the payment in full of this Guarantee), irrespective of
receipt by RUS of any sums or property from its enforcement of its remedies for
the Cooperative default.  This Guarantee shall be incontestable except
for fraud or misrepresentation of which the holder had actual knowledge at the
time it became a holder.  RUS hereby waives diligence, presentment,
demand, protest and notice of any kind, as well as any requirement that [name of
Payee] exhaust any right or take any action against the
Cooperative.

     

    This
Guarantee is issued pursuant to Title III of the Rural Electrification Act of
1936, as amended (7 U.S.C. '' 901,
et seq.), and the Loan Guarantee
and Servicing Agreement among RUS, the Cooperative, Bank One, NA and National
Rural Utilities Cooperative Finance Corporation dated ___________,
____.

     

    
      
        
          	 
      	
                  UNITED
      STATES OF AMERICA

                
	
                  Date________________,
      ___

                	
                  By:

                	 
      
	 
      	
                  Name:

                
	 
      	
                  Title:Administrator
      of Rural

                  Electrification
      Administration

                

        

      

    

     

    
      
        
        

      

      
        Ex.B-1

        
          

        

      

      
        
        

      

    

    EXHIBIT B-2

     

    FORM OF RUS
GUARANTEE

    

    The
United States of America acting through the Administrator of the Rural Utilities
Service (“RUS”) hereby
unconditionally guarantees to the Payee the making of the payments of principal
and Guaranteed Interest when and as due on the Note of _______________ (the
“Cooperative”) dated
_____ in the original principal amount of $ _____ (the “Note”), in accordance with the
terms thereof and of the Loan Agreement and the Master Loan Guarantee and
Servicing Agreement referred to in the Note, until such principal and Guaranteed
Interest shall be indefeasibly paid in full (which includes interest accruing at
the Guaranteed Interest Rate between the date of default under the Note and the
payment in full of this Guarantee), irrespective of receipt by RUS of any sums
or property from its enforcement of its remedies for the Cooperative’s
default.  This Guarantee shall be incontestable except for fraud or
misrepresentation of which the holder had actual knowledge at the time it became
a holder.  RUS hereby waives diligence, presentment, demand, protest
and notice of any kind (except the “Default Notice” required pursuant to Section
5.3(a) of the Master Loan Guarantee and Servicing Agreement), and acknowledges
that the Payee does not have any right or obligation to exercise any right or
take any action against the Cooperative.

     

    This
Guarantee is issued pursuant to the Rural Electrification Act of 1936, as
amended (7 U.S.C. ''
901, et seq.) (the “Act”), and the Master Loan
Guarantee and Servicing Agreement between RUS and National Rural Utilities
Cooperative Finance Corporation dated as of February 16, 1999.

     

    THIS
GUARANTEE 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 COMMONWEALTH OF VIRGINIA.

     

    THE
UNDERSIGNED, AS [ADMINISTRATOR] OF RUS, DOES HEREBY CERTIFY THAT I AM AUTHORIZED
UNDER THE ACT AND 7 CFR PART 1700 TO DELIVER THIS GUARANTEE.

     

    
      
        	
                UNITED
      STATES OF AMERICA

              
	
                By:

              	 
      
	
                Name:

              
	
                Title:[Administrator]
      of the Rural Utilities Service

              

      

       

      Dated:__________________                           RUS Loan
No____________________________

       

    

    
      
        
        

      

      
        Ex.B-2

        
          

        

      

      
        
        

      

    

    
      EXHIBIT
C

    

    

    OPINION OF GENERAL COUNSEL
OF THE BORROWER

    

    January
21, 2009

    

    To the
Administrative Agent and each of the Bank parties

     to
the Term Loan Credit Agreement referred to below

    c/o The
Bank of Nova Scotia

    One
Liberty Plaza

    New York,
New York 10006

    

    Ladies
and Gentlemen:

    

    I, John
Jay List, General Counsel of the National Rural Utilities Cooperative Finance
Corporation (the “Borrower”), am delivering this
opinion pursuant to the Term Loan Credit Agreement (the “Agreement”) dated as of
January 21, 2009 among the Borrower, the Banks listed on the signature pages
thereof, The Bank of Nova Scotia, as Administrative Agent, U.S. Bank, N.A., as
Syndication Agent, and Keybank National Association, as Documentation Agent.
Terms defined in the Agreement are used herein as therein
defined.  This opinion is being rendered to you at the request of the
Borrower, pursuant to Section 3.01(c) of the Agreement.

    

    I have
examined originals or copies, certified or otherwise identified to my
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion. This opinion is limited to the laws of the District of
Columbia.

    

    Upon the
basis of the foregoing, I am of the opinion that:

    

    1.           The
Borrower is a cooperative association duly incorporated, validly existing and in
good standing under the laws of the District of Columbia and has the corporate
power and authority and all material governmental licenses, authorizations,
consents and approvals required to own its property and assets and to transact
the business in which it is engaged.  The Borrower is duly qualified
or licensed as a foreign corporation in good standing in every jurisdiction in
which the nature of the business in which it is engaged makes such qualification
or licensing necessary, except in those jurisdictions in which the failure to be
so qualified or licensed would not (after qualification, assuming that the
Borrower could so qualify without the payment of any fee or penalty and retain
its rights as they existed prior to such qualification all to an extent so that
any fees or penalties required to be so paid or any rights not so retained would
not, individually or in the aggregate, have a material adverse effect on the
business or financial condition of the Borrower), individually or in the
aggregate, have a material adverse effect upon the business or financial
condition of the Borrower.

     

    
      
        
        

      

      
        Ex.C-1

        
          

        

      

      
        
        

      

    

    2.           The
Borrower has the corporate power and authority to execute, deliver and carry out
the terms and provisions of the Agreement and the Notes.  The
Agreement and the Notes have been duly and validly authorized, executed and
delivered by the Borrower, and the Agreement constitutes a legal, valid and
binding agreement of the Borrower, and the Notes constitute legal, valid and
binding obligations of the Borrower, in each case enforceable in accordance with
its terms, except as the same may be limited by: (a) 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 (b) 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 a proceeding in equity or at law). The opinions expressed in this paragraph
shall be understood to mean 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 sections (a) and (b) of this paragraph, the court will
provide a money damage (or perhaps injunctive or specific performance)
remedy.

    

    3.           There
are no actions, suits, proceedings or investigations pending or, to my
knowledge, threatened against or affecting the Borrower by or before any court
or any governmental authority, body or agency or any arbitration board which are
reasonably likely to materially adversely affect the business, property, assets,
financial position or results of operations of the Borrower or the authority or
ability of the Borrower to perform its obligations under the Agreement or the
Notes.  Without limiting the foregoing opinion, I would like to draw
your attention to the legal actions described on Annex A.

    

    4.           No
authorization, consent, approval or license of, or declaration, filing or
registration with or exemption by, any governmental authority, body or agency is
required in connection with the execution, delivery or performance by the
Borrower of the Agreement or the Notes.

    

    5.           The
holders of the Borrower’s Members’ Subordinated Certificates are not and will
not be entitled to receive any payments with respect to the principal thereof or
interest thereon solely because of withdrawing or being expelled from membership
in the Borrower.

    

    6.           Neither
the Borrower nor any Consolidated Subsidiary is in default in any material
respect under any material agreement or other instrument to which it is a party
or by which it or its property or assets is bound. No event or condition exists
which constitutes, or with the giving of notice or lapse of time or both would
constitute, such a default under any such agreement or other
instrument.  

     

    
      
        
        

      

      
        Ex.C-2

        
          

        

      

      
        
        

      

    

    Neither
the execution and delivery of the Agreement or the Notes, nor the consummation
of any of the transactions therein contemplated, nor compliance with the terms
and provisions thereof, will contravene any provision of law, statute, rule or
regulation to which the Borrower is subject or any judgment, decree, award,
franchise, order or permit applicable to the Borrower, or will conflict or be
inconsistent with, or will result in any material breach of, any of the material
terms, covenants, conditions or provisions of, or constitute (or with the giving
of notice or lapse of time, or both, would constitute) a default under (or
condition or event entitling any Person to require, whether by purchase,
redemption, acceleration or otherwise, the Borrower to perform any obligations
prior to the scheduled maturity thereof), or result in the creation or
imposition of any Lien upon any of the property or assets of the Borrower
pursuant to the terms of, any indenture, mortgage, deed of trust, agreement or
other instrument to which it may be subject, or violate any provision of the
certificate of incorporation or by-laws of the Borrower.  Without
limiting the generality of the foregoing, the Borrower is not a party to, or
otherwise subject to any provision contained in, any instrument evidencing
Indebtedness of the Borrower, any agreement or indenture relating thereto or any
other contract or agreement (including its certificate of incorporation and
by-laws), which would be violated by the incurring of the Indebtedness to be
evidenced by the Notes.

    

    7.           The
Borrower has complied fully with all of the material provisions of each
Indenture.  No Event of Default (within the meaning of such term as
defined in any Indenture) and no event, act or condition (except for possible
non-compliance by the Borrower with any immaterial provisions of such Indenture
which in itself is not such an Event of Default under such Indenture) which with
notice or lapse of time, or both, would constitute such an Event of Default has
occurred and is continuing under such Indenture.  The borrowings of
the Borrower contemplated by the Agreement will not cause such an Event of
Default under, or the violation of any covenant contained in, any
Indenture.

    

    8.           Set
forth on Annex B attached hereto is a true, correct and complete list of all of
the Borrower’s Subsidiaries and Joint Ventures, the jurisdiction of
incorporation or organization of each such Subsidiary and Joint Venture and the
nature and percentage of the Borrower’s ownership of each such Subsidiary and
Joint Venture.

    

    9.           The
Borrower has received a ruling from the Internal Revenue Service to the effect
that it is exempt from payment of Federal income tax under Section 501(c)(4) of
the Internal Revenue Code of 1986, and nothing has come to our attention that
leads us to believe that the Borrower is not so exempt.

     

    

    Although
the parties have agreed that the Agreement and Notes shall be governed by and
construed in accordance with the laws of the State of New York, if a court were
to hold that the Agreement and Notes are to be governed and construed in
accordance with the laws of the District of Columbia, the Agreement and Notes

     

    
      
        
        

      

      
        Ex.C-3

        
          

        

      

      
        
        

      

    

    would,
under the laws of the District of Columbia, be legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms, subject as to enforceability only to those
qualifications referenced in Paragraph 1 above.

    

    

    Sincerely,

    

    

    

    John Jay
List

    General
Counsel

    

    
      
        
        

      

      
        Ex.C-4

        
          

        

      

      
        
        

      

    

    

    Annex
A

    

    Innovative
Communication Corporation ("ICC") is a diversified telecommunications company
and Rural Telephone Finance Cooperative (“RTFC”) borrower headquartered in St.
Croix, United States Virgin Islands ("USVI").  In the USVI, through
its subsidiary Virgin Islands Telephone Corporation d/b/a Innovative Telephone
("Vitelco"), ICC provides cellular, wireline local and long-distance telephone,
cable television, and Internet access services.  Through other
subsidiaries, ICC provides telecommunications, cable television, and Internet
access services in the eastern and southern Caribbean and mainland
France.

    

    As of
November 30, 2008 and May 31, 2008, RTFC had $485 million and $492 million,
respectively, in loans outstanding to ICC.  All loans to ICC have been
on non-accrual status since February 1, 2005.  ICC has not made debt
service payments to RTFC since June 2005.

    

    RTFC is
the primary secured lender to ICC.  RTFC’s collateral for the loans
included (i) a series of mortgages, security agreements, financing statements,
pledges and guaranties creating liens in favor of RTFC on substantially all of
the assets and voting stock of ICC, (ii) a direct pledge of 100% of the voting
stock of ICC’s USVI local exchange carrier subsidiary, Vitelco, (iii) secured
guaranties, mortgages and direct and indirect stock pledges encumbering the
assets and ownership interests in substantially all of ICC’s other operating
subsidiaries and certain of its parent entities, including ICC’s immediate
parent, Emerging Communication, Inc., a Delaware corporation ("Emcom") and
Emcom’s parent, Innovative Communication Company LLC, a Delaware limited
liability company ("ICC-LLC"), and (iv) a personal guaranty of the loans from
ICC’s indirect majority shareholder and chairman, Jeffrey Prosser
("Prosser").

    

    In
February 2006, involuntary bankruptcy petitions were filed against Prosser,
Emcom and ICC-LLC; and on April 26, 2006, RTFC reached a settlement of related
litigation with ICC, Vitelco, ICC-LLC, Emcom, their directors and Prosser,
individually.  Under the settlement, RTFC obtained entry of judgments
in the District Court for the District of the Virgin Islands against ICC for
approximately $525 million and Prosser for approximately $100
million.  RTFC also obtained dismissals with prejudice of all
counterclaims, affirmative defenses and other lawsuits alleging wrongful acts by
RTFC, certain of its officers, and National Rural Utilities Cooperative Finance
Corporation (“CFC”), thereby resolving all the related loan litigation in RTFC’s
favor.  Prosser and related parties continue to asset claims in
proceedings against CFC and certain of its officers and directors and other
parties.

    

    On July
31, 2006, ICC-LLC, Emcom and Prosser each filed a voluntary bankruptcy petition
for reorganization.  The cases are pending in the United States
District Court for the Virgin Island, Bankruptcy Division (the “Bankruptcy

     

    
      
        
        

      

      
        Ex.C-5

        
          

        

      

      
        
        

      

    

    Court”).  A
Chapter 11 trustee, Stan Springel, was later appointed for the ICC-LLC and Emcom
estates; and Prosser’s individual case was converted to Chapter 7 liquidation in
October 2007.  Prosser’s Chapter 7 trustee is in the process of
marshaling Prosser’s non-exempt assets for disposition and eventual payment in
respect of creditor claims.

    

    On
September 21, 2007, the Bankruptcy Court entered an order placing ICC in its own
bankruptcy proceeding, and on October 3, 2007 appointed Stan Springel as its
trustee.  The Chapter 11 trustee of ICC has assumed ownership and
control of ICC, including its subsidiaries, and has begun to marshal RTFC
collateral and other assets, including property in Prosser’s possession or
control, for disposition and eventual payment in respect of RTFC’s claims and
the claims of other parties-in-interest.  Certain assets have been
sold, including certain foreign companies, aircraft, and real
estate.  The principal assets in the U.S. Virgin Islands, including
Vitelco, are scheduled to be auctioned in February 2009.

    

    In most
cases, the sale (as part of the Chapter 11 cases) of ICC or any of its
subsidiaries engaged in a regulated telecommunications or cable television
business, or of the regulated assets of ICC or its subsidiaries, will require
the prior consent of the respective regulators in the United States (including
the Federal Communications Commission and the U.S. Virgin Islands Public
Services Commission), the British Virgin Islands, France and its Caribbean
territories, and the Netherlands Antilles.  In certain limited cases,
only a post-transaction notification will be required.

    

    On or
about December 7, 2008, Jeffrey Prosser, Dawn Prosser, Adrian Prosser and John
Raynor filed a lawsuit in the United States District for the United States
Virgin Islands against CFC, RTFC, Sheldon C. Petersen, John Jay List, Steven L.
Lilly, Wayne Stratton et. al. alleging violations of the Racketeer Influenced
and Corrupt Organizations Act and the Virgin Islands Criminally Influenced and
Corrupt  Organizations Act, torts actionable under Virgin Islands law,
and common law civil conspiracy.  CFC and RTFC believe that the suit
is completely without merit and will vigorously pursue a dismissal of the
case.  CFC and RTFC believe that the allegations raised in this
complaint, like similar allegations brought previously and either released or
dismissed, are completely baseless, and part of a pattern of abusive litigation
in this matter.

    

    As a
result of certain interest rate swap transactions with Lehman Brothers Special
Financing, Inc. (“LBSF”) that were guaranteed by Lehman Brothers Holding, Inc.
(“LBHI”), CFC will be a creditor in the bankruptcies of LBHI and LBSF. As
of September 26, 2008, CFC terminated interest rate swaps with LBSF totaling a
termination net settlement amount of $26 million.

    

    Nothing
herein constitutes an admission that the foregoing are reasonably likely to
materially adversely affect the business, property, assets, financial position
or results of CFC or the authority or ability of CFC to perform its obligations
under the Agreement or the Notes.

    

    
      
        
        

      

      
        Ex.C-6

        
          

        

      

      
        
        

      

    

    

    Annex
B

     

    Subsidiaries, Special Purpose
Subsidiaries and Joint Ventures:

    

    
      	
               
      

            	
              a.

            	
              CFC
      Advantage, LLC, organized in the State of Delaware. Borrower owns 100% of
      the membership interests.

            

    

    

    
      	
               
      

            	
              b.

            	
              Denton
      Realty Holdings, LLC, organized in the State of Delaware. Borrower owns
      100% of the membership interests.

            

    

    

    
      	
               
      

            	
              c.

            	
              Denton
      Realty Investors, LLC, organized in the State of Delaware. Borrower owns
      100% of the membership interests.

            

    

    

    
      	
               
      

            	
              d.

            	
              Denton
      Realty Partners, LP, organized in the State of Delaware. Denton Realty
      Holdings, LLC is the general partner and owns 0.5% of the partnership
      interests, and Denton Realty Investors, LLC is the limited partner and
      owns 99.5% of the partnership
interests.

            

    

    

    Denton Realty Partners, LP ownership
interest:

    

    Rayzor Ranch,
L.P.                                                        25%

    Laurel Development II,
L.P.                                         10%

    W/J Lakes Development
LP                                       
50%

    W/J Lakes
LP                                                                50%

     

    
      
        
        

      

      
        Ex.C-7

        
          

        

      

      
        
        

      

    

    EXHIBIT D

     

    ASSIGNMENT AND ASSUMPTION
AGREEMENT

    

    AGREEMENT
dated as of ___________, 200__ among [ASSIGNOR] (the “Assignor”), [ASSIGNEE] (the
“Assignee”), NATIONAL
RURAL UTILITIES COOPERATIVE FINANCE CORPORATION (the “Borrower”) and THE BANK OF
NOVA SCOTIA, as Administrative Agent (the “Agent”).

     

    W I T N E
S S E T H

    

    WHEREAS,
this Assignment and Assumption Agreement (the “Agreement”) relates to the
Term Loan Credit Agreement dated as of January 21, 2009 (the “Credit Agreement”), among the
Borrower, the Banks listed on the signature pages thereof, The Bank of Nova
Scotia, as Administrative Agent (the “Agent”), U.S. Bank, N.A., as
Syndication Agent, and Keybank National Association, as Documentation
Agent;

     

    WHEREAS,
as provided under the Credit Agreement, the Assignor has a Commitment to make
Loans to the Borrower in an aggregate principal amount at any time outstanding
not to exceed $__________;

     

    WHEREAS,
Loans made to the Borrower by the Assignor under the Credit Agreement in the
aggregate principal amount of $__________ are outstanding at the date hereof;
and

     

    WHEREAS,
the Assignor proposes to assign to the Assignee all of the rights of the
Assignor under the Credit Agreement in respect of a portion of its Commitment
thereunder in an amount equal to $__________ (the “Assigned Amount”), together
with a corresponding portion of its outstanding Loans, and the Assignee proposes
to accept assignment of such rights and assume the corresponding obligations
from the Assignor on such terms;

     

    NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained
herein, the parties hereto agree as follows:

     

    Section
1.                      Definitions.  All
capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.

     

    Section
2.                                Assignment.  The
Assignor hereby assigns and sells to the Assignee all of the rights of the
Assignor under the Credit Agreement to the extent of the Assigned Amount, and
the Assignee hereby accepts such assignment from the Assignor and assumes all of
the obligations of the Assignor under the Credit Agreement to the extent of the
Assigned Amount, including the purchase from the Assignor of the corresponding
portion of the principal amount of the Loans made by the Assignor outstanding at
the date hereof.  Upon the execution and delivery hereof by the
Assignor, the Assignee, the Borrower and the 

     

    
      
        
        

      

      
        Ex.D-1

        
          

        

      

      
        
        

      

    

    Administrative
Agent and the payment of the amounts specified in Section
3 required to be paid on the date hereof (i) the Assignee shall, as of the
date hereof, succeed to the rights and be obligated to perform the obligations
of a Bank under the Credit Agreement with a Commitment in an amount equal to the
Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such obligations have been
assumed by the Assignee.  The assignment provided for herein shall be
without recourse to the Assignor.

     

    Section 3.  Payments.  As
consideration for the assignment and sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds the amount heretofore agreed between
them.  It is understood that commitment fees accrued to the date
hereof are for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee.  Each
of the Assignor and the Assignee hereby agrees that if it receives any amount
under the Credit Agreement which is for the account of the other party hereto,
it shall receive the same for the account of such other party to the extent of
such other party’s interest therein and shall promptly pay the same to such
other party.

     

    Section
4.                      Consent of the Borrower and the
Administrative Agent.  This Agreement is conditioned upon the
consent of the Borrower and the Administrative Agent pursuant to Section 9.06(c) of the Credit Agreement.  The
execution of this Agreement by the Borrower and the Administrative Agent is
evidence of this consent.  Pursuant to Section
9.06(c) of the Credit Agreement, if requested by the Assignee, the Borrower
agrees to execute and deliver a Note payable to the order of the Assignee to
evidence the assignment and assumption provided for herein.

     

    Section
5.                      Non-Reliance on
Assignor.  The Assignor makes no representation or warranty in
connection with, and shall have no responsibility with respect to, the solvency,
financial condition, or statements of the Borrower, or the validity and
enforceability of the obligations of the Borrower in respect of the Credit
Agreement or any Note.  The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of the Borrower.

     

    Section
6.                      Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

     

    
      
        
        

      

      
        Ex.D-2

        
          

        

      

      
        
        

      

    

    Section
7.                      Counterparts.  This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.

     

    
      
        
        

      

      
        Ex.D-3

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their duly authorized officers as of the date first above
written.

     

    
      
        
          
            	
                    [ASSIGNOR]

                  
	
                    By:

                  	 
      
	
                    Name:

                  
	
                    Title:

                  

          

        

      

    

    

    
      
        	
                [ASSIGNEE]

              
	
                By:

              	 
      
	
                Name:

              
	
                Title:

              

      

    

    

    
      
        	
                NATIONAL
      RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

              
	
                By:

              	 
      
	
                Name:

              
	
                Title:

              

      

    

    

    
      
        	
                THE
      BANK OF NOVA SCOTIA, as Administrative Agent

              
	
                By:

              	 
      
	
                Name:

              
	
                Title:

              

      

    

    

    
      
        
        

      

      
        Ex.D-4fm_notepurchase.htm

    

     

    EXECUTION
COPY

    

     

    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 February 5, 2009

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                  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

                	
                  8

                
	
                  SECTION
      3.01.  Conditions Precedent to the Purchase of Each
      Note

                	
                  8

                
	
                  SECTION
      3.02.  Certificate of Pledged Collateral

                	
                  9

                
	 
      	 
      
	
                  ARTICLE
      IV REPORTING REQUIRMENTS

                	
                  9

                
	
                  SECTION
      4.01.  Annual Reporting Requirements

                	
                  9

                
	
                  SECTION
      4.02.  Default Notices

                	
                  9

                
	 
      	 
      
	
                  ARTICLE
      V REPRESENTATIONS OF THE PARTIES

                	
                  10

                
	
                  SECTION
      5.01.  Represenations of Farmer Mac and the
      Purchaser

                	
                  10

                
	
                  SECTION
      5.02.  Representations of National Rural

                	
                  10

                
	 
      	 
      
	
                  ARTICLE
      VI SECURITY AND COLLATERAL

                	
                  12

                
	
                  SECTION
      6.01.  Security and Collateral

                	
                  12

                
	 
      	 
      
	
                  ARTICLE
      VII EVENTS OF DEFAULT

                	
                  13

                
	
                  SECTION
      7.01.  Events of Defaults

                	
                  13

                
	
                  SECTION
      7.02.  Acceleration

                	
                  13

                
	
                  SECTION
      7.03.  Remedies Not Exclusive

                	
                  14

                
	 
      	 
      
	
                  ARTICLE
      VIII MISCELLANEOUS

                	
                  14

                
	
                  SECTION
      8.01.  GOVERNING LAW

                	
                  14

                
	
                  SECTION
      8.02.  WAIVER OF JURY TRIAL

                	
                  14

                
	
                  SECTION
      8.03.  Notices

                	
                  14

                
	
                  SECTION
      8.04.  Benefit of Agreement

                	
                  14

                
	
                  SECTION
      8.05.  Entire Agreement

                	
                  14

                
	
                  SECTION
      8.06.  Amendments and Waivers

                	
                  15

                
	
                  SECTION
      8.07.  Counterparts

                	
                  15

                
	
                  SECTION
      8.08.  Termination of Agreement

                	
                  15

                
	
                  SECTION
      8.09.  Survival

                	
                  15

                
	
                  SECTION
      8.10.  Severability

                	
                  15

                
	 
      	 
      
	
                  ARTICLE
      IX GUARANTEE

                	
                  16

                

        

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                SECTION
      9.01  Guarantee

              	
                16

              
	
                SECTION
      9.02  Control by Guarantor

              	
                17

              
	 
      	 
      

      

       

    

    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 February 5, 2009, 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, in
the form of Schedule II 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, in the form of
Schedule II 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 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 Purchaser 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, the Fixed Rate Notes-5Y, or any other fixed rate
notes with terms determined by the parties pursuant to the terms of a Pricing
Agreement.

     

    
      
        
        

      

      
        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, or any
other floating rate notes with terms determined by the parties pursuant to the
terms of a Pricing Agreement.

     

    “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 (unless another maturity is agreed by the
parties hereto and set forth in the applicable Pricing
Agreement).  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 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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “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.

     

    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 February 28, 2011, 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 $5 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, unless otherwise agreed by the
parties hereto and set forth in the applicable Pricing Agreement.

     

    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.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (b) Fixed Rate
Notes.  Each Fixed Rate Note 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 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, 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)   (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, unless the parties otherwise agree
to a longer period of time as set forth in the applicable Pricing
Agreement.  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.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (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 only
or in whole or in part (as specified in the applicable Pricing Agreement) on or
after the first (1st)
anniversary of the applicable Closing Date on the scheduled call dates set forth
in the applicable Pricing Agreement, upon at least nine (9) Business Days prior
written notice to Farmer Mac, which notice shall be received by Farmer Mac on a
day that is on or before the ninth Business Day prior to the related call date,
but in any event, no later than noon eastern time on the ninth Business Day
prior to the related call date.  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.

     

    (iii) The
prepayment terms of any other type of Fixed Rate Note or Floating Rate Note
shall be set forth in the applicable Pricing Agreement.

     

    (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) February 28,
2013.

     

    (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) February 29,
2016.

     

    (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) February 29,
2016.

     

    (d) Other
Notes.  Any other type of Note issued hereunder will have the
maturity date set forth in the applicable Pricing Agreement.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    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, or otherwise in a form agreed by the
parties.

     

    (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.

     

    (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
sum of (1) the aggregate principal amount of the Notes outstanding hereunder and
(2) the aggregate principal amount of the notes outstanding under the Note
Purchase Agreement among the parties dated as of December 15, 2008, taking into
account the advance made hereunder on the Closing Date.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (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 and the Collateral Agent 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, or a
more recent date, at National Rural’s option, 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:

     

    (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.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    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:

     

    (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, 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    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, except to the extent set forth on Schedule
5.02 hereto, 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 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,
except to the extent set forth on Schedule 5.02 hereto, 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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     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;

     

    (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;
and

     

    (j) to the
extent that National Rural is required to obtain the consent of any lenders or
to amend any applicable credit agreement for National Rural to incur liens to
secure a Note pursuant to the Agreement and the Pledge Agreement, as described
in Schedule 5.02, National Rural shall have obtained such consent or amendment
on or prior to each date on which the Purchaser purchases that Note from
National Rural.

     

     

    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.

     

    (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).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    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 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.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    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 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.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    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.

     

    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.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    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.

     

    (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 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    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]

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    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/ TOM D.
      STENSON  
	
                    Name:

                  	
                    Tom
      D. Stenson     
      

                  
	Title:	Vice
      President 

          

        

      

    

    

     

    
      
        
          
            	
                    FEDERAL
      AGRICULTURAL

                    MORTGAGE
      CORPORATION,

                  
	 
      	 
      
	
                    By:

                  	/s/
      MICHAEL A. GERBER  
	
                    Name:

                  	Michael
      A. Gerber  
	Title: 	Acting President
      and CEO 

          

        

      

    

    

    

    
      
        
          
            
              	
                      NATIONAL
      RURAL UTILITIES COOPERATIVE FINANCE CORPORATION,

                    
	 
	 
      	 
      
	
                      By:

                    	 
      
	
                      Name:

                    	 
      
	      
                      Title: 

                    	 

            

          

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

    

     

    
      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:

                    	 
	
                      Name:

                    	
                          
      

                    
	Title:	 

            

          

        

      

      

       

      
        
          
            
              	
                      FEDERAL
      AGRICULTURAL

                      MORTGAGE
      CORPORATION,

                    
	 
      	 
      
	
                      By:

                    	 
      
	
                      Name:

                    	 
	Title: 	 

            

          

        

      

      

      

      
        
          
            
              
                	
                        NATIONAL
      RURAL UTILITIES COOPERATIVE FINANCE CORPORATION,

                      
	 
	 
      	 
      
	
                        By:

                      	/s/ JOHN
      J. LIST  
	
                        Name:

                      	John
      J. List  
	      
                        Title: 

                      	Senior
      Vice President 

              

            

          

           

        

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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 February 5, 2009 among 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][specify other Fixed
Rate or 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 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 [only] [or in
part], at the option of National Rural, according to the terms of the Note
Purchase Agreement (as defined below).]

     

    [Scheduled
call dates: __________________]

     

    Maturity
Date: __________________

     

    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
February 5, 2009, 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.

     

    In the
event of any inconsistency between the terms of this Pricing Agreement and the
Note Purchase Agreement, the terms of this Pricing Agreement shall
apply.

     

    
      
        
        

      

      
        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 February 5,
2009, as well as the Pricing Agreement for $__ Fixed Rate Notes dated as of
______ __, 20__ (together, 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 February 5, 2009, 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 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 [only] [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 February 5,
2009, as well as the Pricing Agreement for $__ Fixed Rate Notes dated as of
_________ __, 20__ (together, 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 February 5, 2009, 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 February 5,
2009, as well as the Pricing Agreement for $__ Floating Rate Notes dated as of
_________ __, 20__ (together, 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 February 5, 2009, 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 February 5, 2009 (“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;
(c) the Pricing Agreement for $__________ [Fixed] [Floating] Rate Notes
dated as of ____________ among the Borrower, the Purchaser and Farmer Mac (the
“Pricing Agreement”) and (d) the Pledge Agreement, dated as of February 5,
2009, among the Borrower, the Purchaser, Farmer Mac and U.S. Bank National
Association (the “Pledge Agreement”).  The documents described in
items (a) through (d) 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 or attached hereto
as Exhibit A, 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 (as
such term is defined in the Pledge Agreement), (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 (as such term is
defined in the Pledge Agreement) 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
February 5, 2009, 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:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    Schedule
5.02

    

    

    For
purposes of making the representations and warranties contained in Section
5.02(e) and (f) of the Agreement on the date of the Agreement and on any Closing
Date up to the time the aggregate amount of Notes outstanding under the
Agreement exceeds $100 million, note the following:

    

    Certain
credit agreements of the Borrower require consent of the lenders or amendment of
the credit agreements in order for the Borrower to incur liens to secure amounts
in excess of $100 million pursuant to the Agreement and the Pledge
Agreement.

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