Document:

Form 10-K - Exhibit 10.1

 

  
  	
        

        

         

         

        NATIONAL RURAL UTILITIES

        COOPERATIVE FINANCE CORPORATION

        DEFERRED COMPENSATION PLAN

        
         

         

         

         

        
        As Amended and Restated Effective July 1, 2003

         

         

        
         

  

  
  	
        TABLE OF CONTENTS

		
        
	Page
	  	  	  
	
         
	
         
	
         

	
        ARTICLE I
	
        INTRODUCTION
	
        1

	  	  	  
	
        ARTICLE II
	
        DEFINITIONS
	2
	  	  	  
	
        ARTICLE III
	PARTICIPATION	3
			
	
        ARTICLE IV
	
        PARTICIPANT DEFERRALS
	4
	   	  	  
	
        ARTICLE V
	EMPLOYER CREDITS	
        6

	   	   	   
	
        ARTICLE VI
	ACCOUNTING AND
        ACCOUNT ADJUSTMENTS	
        7

	   	   	   
	
        ARTICLE VII.
	PAYMENT OF
        PARTICIPANTS ACCOUNT BALANCES	
        9

	   	   	  
	ARTICLE VIII	DEATH BENEFITS	12
	 	 	 
	ARTICLE IX	PLAN
        ADMINISTRATION	14
	 	 	 
	ARTICLE X	GENERAL PROVISIONS	15
	  	  	  
	  	
        -i-
	   
	    

  

  
  	
        PREAMBLE

	
           
	
                  WHEREAS,
        the National Rural Utilities Cooperative Finance Corporation (NRUCFC)
        maintains the National Rural Utilities Cooperative Finance Corporation
        Deferred Compensation Plan (Plan), which was first established,
        effective January 1, 1981; and

	
           
	
                  WHEREAS,
        the Homestead Funds were added as an additional investment option under
        the Plan, effective January 1, 1997; and

	
           
	
                  WHEREAS,
        the Plan's original investment option under the Plan was frozen to new
        participants, effective as of January 1, 1999; and

	
           
	
                  WHEREAS,
        NRUCFC now desires to amend and restate the Plan document to
        (1) change the Plan's eligibility requirements, (2) incorporate all
        applicable new law changes and (3) make other minor changes to the Plan.

	
           
	
                  NOW
        THEREFORE, National Rural Utilities Cooperative Finance Corporation,
        intending to be legally bound, hereby amends and restates the Plan,
        effective July 1, 2003, as follows:

	   
	
        ARTICLE I

	
        INTRODUCTION

	
            
	
                  1.1. Name.
        The name of this Plan is the National Rural Utilities Cooperative
        Finance Corporation Deferred Compensation Plan.

	   
	
                  1.2. Purpose.
        The purpose of the Plan is to make available to eligible employees a
        nonqualified savings program which is an "eligible deferred
        compensation plan" within the meaning of Code section 457(b). The
        Plan is not, and is not intended to be, a qualified plan for federal
        income tax purposes. The Employer acknowledges that the Plan is an
        "employee pension benefit plan" within the meaning of Section
        3(2) of the ERISA. To the extent applicable, the Plan is intended to be
        an unfunded plan maintained "primarily for the purpose of providing
      

	
           
	
        -1-

	   
	
        

        

	deferred compensation for a select group of management or
        highly compensated employees" which is eligible for the exemptions
        applicable to such plans under Title I of ERISA.
	    
	
                  1.3. Effective
        Date. The original effective date of the Plan is January 1, 1981.
        The effective date of this amendment and restatement is July 1, 2003.

	  
	
                  1.4. Plan
        Year. The Plan's annual accounting period is the calendar year.

	    
	
        ARTICLE II

	
        DEFINITIONS

	
            

	
                  2.1. Account.
        A Participant's Deferral Account and Employer Contribution Account, if
        any.

	
            

	
                  2.2. Administrator.
        The Employer (or its designee).

	
           

	
                  2.3. Code.
        The Internal Revenue Code of 1986, as amended from time to time.

	   
	
                  2.4. Compensation.
        Except as otherwise provided by the Administrator, the total amount of
        compensation (including incentive pay, if any) as determined by the
        Employer in its sole discretion, earned by an Employee in any Plan Year
        (or other applicable time period) for services rendered to the Employer
        in that year that would (if paid to the Employee) be reportable on the
        Participant's Federal income tax Form W-2 for the year.

	     
	
                  2.5. Deferral
        Account. The account established on the Employer's books and records
        under Section 4.1.

	   
	
                  2.6. Employee.
        (a) Those employees of the Employer who are (i) classified as a
        member of the senior management or executive team and (ii) included in
        either the Employer's I or S band for compensation purposes, (b) any
        other employee who was making Elective Deferrals under the Plan as of
        June 30, 2003 (but only so long as such employee continues to make
        Elective Deferrals under the Plan thereafter), and (c) any other (or
        different group of) 

	          
	
        -2-

	          
	
        

      

	
 highly compensation or management employees as may
        be designated by the Employer from time to time in its sole discretion.
	
                  
	
                  2.7. Employer.
        National Rural Utilities Cooperative Finance Corporation (and any
        successor thereto whether by merger, consolidation, liquidation or
        otherwise).

	 
	
                  2.8. Employer
        Contribution Account. The account established on the Employer's
        books and records under Section 5.1.

	          
	
                  2.9. ERISA.
        The Employee Retirement Income Security Act of 1974, as amended from
        time to time.

	          
	
                  2.10. Includible
        Income. Compensation for services performed for the Employer in any
        year that is includible in gross income for Federal income tax purposes.

	          
	
                  2.11. Investment Account. The investment account established
        by the Employer in accordance with Article VI.

	          
	
                  2.12. Normal Retirement Age. Age 62.

	          
	
                  2.13. Participant. Any Employee or former Employee who has an
        Account hereunder.

	          
	
                  2.14. Plan. The National Rural Utilities Cooperative Finance
        Corporation Deferred Compensation Plan, as amended from time to time.

	          
	
                  2.15. Valuation Date. The last day of each Plan Year and such
        other dates as the Administrator may designate from time to time in its
        sole discretion.

	          
	
        ARTICLE III

	
        PARTICIPATION

	          
	
                  3.1. Eligibility. Any Employee may elect to become a
        Participant as provided in Section 3.2.

	          
	
        -3-

	          
	          
        

      

	
                  3.2. Participation. An Employee shall commence participation
        as soon as administratively feasible after the later of the Plan's
        effective date or the date he or she becomes an Employee, provided, that
        an Employee shall not become a Participant hereunder until he or she
        completes such forms and takes such actions as may be required by the
        Administrator, in its sole discretion, to enroll in the Plan.

	          
	
        ARTICLE IV

	
        PARTICIPANT
        DEFERRALS

	
                  

	
                  4.1. Elective Deferrals.

	
                  

	
                            (a) Subject to the limits in Section 4.3, any Employee may elect, in
        accordance with Section 4.2 hereof, to defer the receipt of a specific
        percentage (or, if the Administrator permits in its discretion, a
        specific dollar amount) of his or her Compensation for any Plan Year (or
        such other period as may be established by the Administrator). Any
        amounts deferred under this Section 4.1 shall be credited on the books
        and records of the Employer in a Deferral Account maintained in the name
        of the Employee as of the date such compensation would have been paid to
        the Employee but for the deferral election hereunder.

	
                  

	
                            (b) The Administrator may permit an Employee to elect, in addition to
        (or in lieu of) the election provided under subsection (a) above, to
        defer the receipt of a specific percentage (or, if the Administrator
        permits in its discretion, a specific dollar amount) of any bonus
        payable to the Employee for the Plan Year or other applicable period.

	
                  

	
                  4.2. Election to Defer Compensation.

	
                  
	
                            (a) An Employee's election to defer Compensation under Section 4.1
        shall be submitted to the Employer on such forms (or by such other
        means) as may be permitted by the Administrator. The election shall take
        effect as of the first pay period beginning in the first

	
            
	
        -4-

	
            
	
        

         

	
         calendar month
        after the date on which the required election is submitted to the
        Employer as provided herein.
	
                  
	
                            (b) An Employee may elect to change or revoke a prior election at any
        time. Such an election shall be submitted to the Employer on such forms
        (or by such other means) as may be permitted by the Administrator and
        will be effective as of the first pay period beginning in the first
        calendar month after the date on which the required election is
        submitted to the Employer.

	          
	
                  4.3. Maximum Permissible Deferrals.

	                    
	
                            (a) The maximum amount which may be deferred under the Plan by an
        Employee in any Plan Year may not exceed the lesser of (i) 100% of his
        or her Includible Compensation for the year, or (ii) the applicable
        dollar amount in effect for the Plan Year, as set forth below:

	          
	
         
	
        For The Plan

        Year Beginning In

        
        2002

        2003

        2004

        2005

        2006 and thereafter

      		
        The Applicable

        Dollar Amount

        $11,000

        $12,000

        $13,000

        $14,000

        $15,000

      	
	
                  
	
        Beginning in 2007, the applicable dollar amount shall be adjusted
        from time to time for changes in the cost-of-living as provided in Code
        section 415(d). The maximum amount that may be deferred by any
        Participant for a year shall be reduced by the amount of any prior
        Employer contribution credits made under Section 5.1 for that year.

	
                  
	
                            (b) Notwithstanding subsection (a) above, for one or more of the
        three Plan Years preceding the Plan Year in which an Employee reaches
        Normal Retirement Age, the 

	
                  
	
        -5-

	
                  
	
        

         

	
 maximum amount that may be deferred by the
        Employee in any such year may not exceed the lesser of:
	
                  
	
                                      (i) twice the applicable dollar amount in effect under Section 4.3(a)
        for the year, or

	 
	
        
                            (ii) the limitation in effect under Section 4.3(a) for the taxable
        year, plus so much of the limitation in effect under Section 4.3(a) for
        all prior Plan Years in which the Participant was eligible to
        participate, but which he/she did not use in those years.
        

      
	
                  

	
                            (c) Notwithstanding any other Plan provision to the contrary, the
        Administrator may, in its sole discretion, impose such limits and
        conditions on the maximum amount that may be deferred under the Plan at
        any time as it deems necessary or appropriate to comply with applicable
        law.

	
                  

	
                  4.4. Vesting. A Participant's Deferral Account shall be fully
        vested and nonforfeitable at all times.

	
                  

	
        ARTICLE V

	
        EMPLOYER
        CREDITS

	
                  

	
                  5.1. Employer Credits. The Employer may, from time to time,
        credit such additional amounts to an Employee under the Plan as it may
        determine in its sole discretion. Any credits made under this Section
        5.1 shall be credited on the Employer's books and records to an Employer
        Contribution Account maintained in the name of the Employee as of the
        date the credit is declared or such other date as may be established by
        the Employer. Except as otherwise provided under Code Section 457(e)(12)
        or other applicable law, the amount of such credits for a Participant
        for any year shall not exceed the annual limit applicable to the
        Participant for the year 

	          
	
        -6-

	          
	
        

         

	 under Section 4.3, reduced by any prior
        elective deferral credits under Section 4.1 made on behalf of the
        Participant for that year.
	          
	
                  5.2. Vesting.

	          
	
                            (a) Except as otherwise provided by the Employer, a Participant's
        Employer Contribution Account shall be fully vested and nonforfeitable
        at all times.

	           
	
                            (b) Notwithstanding (a) above, a Participant shall forfeit his or her
        Employer Contribution Account if the Participant's employment is
        terminated by the Employer for Cause.

	           
	
                            (c) For purposes of this Plan, "Cause" shall mean the
        following:

	           
	
                                      (i) Dishonesty;

	           
	
                                      (ii) gross negligence or willful misconduct;

	          
	
                                      (iii) fraudulent or unethical conduct;

	          
	
                                      (iv) unreasonable neglect of or refusal to perform the Employee's
        material duties;

	          
	
        
          
                  (v) a material violation of the Employer's established policies or
        any employment or other written agreement with the Employer;
          

        

      
	          
	
                                      (vi) conduct constituting a felony or other crime of moral turpitude;
        or

	          
	
        
          
                  (vii) willful or malicious conduct that causes injury to the
        Employer's business or reputation or otherwise adversely affects its
        interests.
          

        

      
	   
	
        ARTICLE VI

	
        ACCOUNTING
        AND ACCOUNT ADJUSTMENTS

	          
	
                  6.1. Adjustments to the Accounts of Pre-1999 Participants.

	
                  
	
                            (a) For Participants who first commenced participating in the Plan
        before January 1, 1999, the Participant may elect, upon such terms and
        conditions as may be established 

	
                  
	
        -7-

	
                  
	
        

      

	
 by the Administrator, to have his or
        her Account credited (1) with simple interest as of each Valuation Date
        at a rate to be determined by the Administrator in its sole discretion
        (based on the rate of return on medium term notes of the Employer) or
        (2) with investment gains and losses as provided in Section 6.2 below.
	
                  
	
                            (b) The Accounts of such Participants shall be adjusted each
        Valuation Date for (1) any payments made to, or on behalf of, the
        Participant or his or her beneficiary under the Plan since the last
        Valuation Date (2) any contribution (and, if applicable, interest)
        credits made to such Account since that date and (3) any appreciation or
        depreciation in value of any Investment Account established pursuant to
        Section 6.2 for the Participant since that date.

	          
	
                  6.2. Investment Accounts.

	          
	
                            (a) For those Participants who (1) commenced participating in the
        Plan on or after January 1, 1999 or (2) make an election under Section
        6.1(a)(2), the Employer shall transfer to an Investment Account, funds
        equal to the amounts credited to Deferral Accounts under Section 4.1 and
        Employer Contribution Accounts under Section 5.1 as soon as
        administratively feasible on or after the date on which such credits are
        to be entered on the Employer's books and records as otherwise provided
        herein. A separate subaccount shall be established under the Investment
        Account representing each Participant's Deferral Account and Employer
        Contribution Account, to which the portion of each transfer allocable to
        such Accounts (if any) shall be credited. Title to and beneficial
        ownership of the assets of the Investment Account shall at all times
        remain in the Employer and Participants shall not have any property
        interest whatsoever in such assets. The Administrator may, in its sole
        discretion and upon such terms

	
            
	
        -8-

	
            
	
        

      

	
 and conditions as it may establish,
        permit Participants to direct the investment of his or her subaccount
        under the Investment Account.
	
                  
	
                  (b) For any period prior to the payment of benefits hereunder that
        assets are not allocated to an Investment Account in accordance with (a)
        above, the portion of a Participant's Account for which there are no
        assets in the corresponding subaccount shall be credited with interest
        at the rate used under Section 6.1(a); provided, that the Employer may,
        in lieu of using an interest rate, make adjustments to that portion of
        the Account taking into account the appreciation or depreciation of such
        deemed investment options (including, but not limited to, mutual funds)
        as it may select in its sole discretion.

	
                  
	
                  (c) The value of the Participant's Account shall be adjusted each
        Valuation Date for (1) any payments made to, or on behalf of, the
        Participant or his or her beneficiary under the Plan since the last
        Valuation Date, (2) any contribution (and, if applicable, interest)
        credits made to such Account since that date and (3) any appreciation or
        depreciation in value of the Investment Account under (a) above since
        that date.

	          
	
                  6.3. Notice to Participants. The Administrator shall
        periodically provide statements to each Participant (no less than once
        each Plan Year) setting forth the balance (if any) to the credit of the
        Participant's Account and such other information as it deems
        appropriate.

	          
	
        ARTICLE VII

	
        PAYMENT OF PARTICIPANT
        ACCOUNT BALANCES

	          
	
                  7.1. Commencement of Payments.

	          
	
                            (a) The payment of the Participant's Account shall be made on or
        about the 60th day following the date on which the
        Participant terminates employment with the Employer.

	          
	
        -9-

	          
	
        

      

	
                            (b) Notwithstanding subsection (a) above, the Employer may, upon such
        terms and conditions as it may establish in its sole discretion
        consistent with Code Section 457 and Section 7.3, permit a Participant
        to make a one-time irrevocable election before the date on which payment
        is otherwise to be made, to defer the date for commencing payment
        hereunder.

	 
	
                            (c) If a Participant has elected under subsection (b) above to defer
        payment, the Employer may, upon such terms and conditions as it may
        establish in its sole discretion consistent with Code Section 457 and
        Section 7.3, permit a Participant to make a one-time irrevocable
        election at any time before the date on which payment is otherwise to be
        made, to defer further the date for commencing payment hereunder.

	          
	
                  7.2. Form and Amount of Payments.

	          
	
                            (a) Unless the Participant elects a different form of payment in
        accordance with (b) below, payment of the Participant's Account shall be
        made by the Employer in fifteen (15) substantially equal annual
        installments.

	          
	
                            (b) A Participant may, upon such terms and conditions as the Employer
        may establish in its sole discretion consistent with Code Section 457
        and Section 7.3, make (in lieu, or as part, of the deferral election
        permitted under Section 7.1(b)) a one-time irrevocable election to
        change the payment form before the date on which payment is otherwise to
        be made under Section 7.1 to a single lump sum payment or substantially
        equal annual installments of two (2) to fourteen (14).

	          
	
                            (c) For any Participant who has elected under Section 7.1(b) to defer
        payment, the Participant may, upon such terms and conditions as the
        Employer may establish in its sole discretion consistent with Code
        Section 457 and Section 7.3, permit a Participant to make (in lieu, or
        as part, of the deferral election permitted under Section 7.1(c)) a
        one-time irrevocable 

	          
	
        -10-

	     
	
        

      

	 election to change the payment form before the date
        on which payment is otherwise to be made under Section 7.1 to a single
        lump sum payment or substantially equal annual installments of two (2)
        to fourteen (14).
	          
	
                            (d) The determination of the amount to be distributed under this
        Section shall be based upon the value of the Participant's Account as of
        the last Valuation Date preceding the date of distribution, determined
        in accordance with Article VI.

	          
	
                  7.3. Special Rule For Unforeseeable Emergency.

	          
	
                            (a) In the event of a severe financial hardship to a Participant
        resulting (i) from a sudden and unexpected illness or accident of a
        Participant or a Participant's dependent as defined in Code Section
        152(a)), (ii) loss of a Participant's property due to casualty, or
        (iii) other similar extraordinary and unforeseeable circumstances
        arising as a result of events beyond a Participant's control, the
        Participant may apply for a payment of all or a part of his or her
        Account (to be paid first from the Deferral Account) as may be necessary
        to meet the foregoing hardship. A hardship does not qualify under this
        Section if it is or may be relieved (i) through reimbursement or
        compensation by insurance or otherwise, (ii) by liquidation of the
        Participant's assets (to the extent such liquidation would not cause
        severe financial hardship) or (iii) by ceasing deferrals under the Plan.

	          
	
                            (b) The Administrator shall have the authority, in its sole
        discretion, to approve payment under (a) above in any amount up to the
        least of: (i) the requested amount, (ii) the amount reasonably
        needed to satisfy the hardship (which may include such additional
        amounts as may be necessary to pay any taxes or penalties which may
        result from the distribution), as determined by the Administrator in its
        sole discretion, or (iii) the value of the Participant's Account as
        determined under Section 6.1.

	          
	
        -11-

	          
	
        

      

	
                  7.4. Minimum Distribution Requirements. Notwithstanding any
        other provision of the Plan to the contrary, the payment of a
        Participant's Account shall be made in accordance with, and at the
        time(s) required by, the minimum distribution requirements under Code
        Section 457(d)(2).

	          
	
        ARTICLE VIII

	
        DEATH
        BENEFITS

	          
	
                  8.1. Payment of Death Benefits.

	           
	
                            (a) Upon the death of a Participant, the unpaid balance (if any) of
        the Participant's Account shall be paid to his or her beneficiary
        (determined in accordance with Section 8.2) as soon as administratively
        feasible after the Participant's death in one lump sum payment.

	          
	
                            (b) Notwithstanding subsection (a) above, the Employer may, upon such
        terms and conditions as it may establish in its sole discretion
        consistent with the requirements under Code Section 457 and Section
        8.1(e), permit the beneficiary to make a one-time irrevocable election
        before the date on which payment is otherwise to be made, to defer the
        date for commencing payment hereunder.

	          
	
                            (c) Notwithstanding subsection (a) above and in lieu of deferral
        election permitted under Section 8.1(b), the Employer may, upon such
        terms and conditions as it may establish in its sole discretion
        consistent with Code Section 457 and Section 8.1(e), permit the
        beneficiary to make a one-time irrevocable election to change the
        payment form before the date on which payment is otherwise to be made
        under Section 8.1(a) to substantially equal annual installments or other
        available form of payment.

	
	
        -12-

	          
        

        

      
	
                            (d) The determination of the amount to be distributed under this
        Section shall be based upon the value of the Participant's Account as of
        the last Valuation Date preceding the date of distribution, determined
        in accordance with Article VI.

	          
	
                            (e) Notwithstanding any other provision of the Plan to the contrary,
        the payment of a deceased Participant's Account to his or her
        beneficiary shall be made in accordance with, and at the time(s)
        required by, the minimum distribution requirements under Code Section
        457(d)(2).

	          
	
                  8.2. Participant's Beneficiary.

	 
	
                            (a) If a Participant is married at the time of his or her death, the
        Participant's beneficiary shall be his or her spouse, unless the
        Participant names another beneficiary in accordance with (c) below and
        the named beneficiary is alive (or, in the case of a trust, in
        existence) on the Participant's date of death.

	          
	
                            (b) If a Participant is not married at the time of his or her death,
        the Participant's beneficiary shall be the individual or trust the
        Participant has designated in accordance with (c) below prior to his or
        her death. If a Participant dies without naming a beneficiary or if the
        named beneficiary is no longer living (or, in the case of a trust, in
        existence) on the Participant's date of death, the Participant's
        beneficiary shall be his or her estate.

	          
	
                            (c) A Participant may make a beneficiary designation (or change a
        prior designation) as provided in (a) or (b) above at any time prior to
        his or her death by delivery of a written designation to the Employer's
        human resources directorate (or its designee) on such forms as may be
        required by the Administrator. Both individuals and trusts may be
        designated as beneficiaries under this Section.

	          
	
        -13-

	          
	
        

      

	
                  8.3. Proper Beneficiary. If there is a dispute as to the
        proper beneficiary to receive payment hereunder, the Employer shall have
        the right to withhold such payment until the matter is finally resolved
        or adjudicated; provided that any payment made in good faith by the
        Employer shall fully discharge the Employer and the Administrator from
        all further obligations with respect to that payment.

	          
	
        ARTICLE IX

	          
	
        PLAN
        ADMINISTRATION

	          
	
                  9.1. Administration. The Administrator (or its delegate)
        shall, from time to time, establish such rules, forms and procedures for
        the administration of the Plan as it deems appropriate. The
        Administrator shall have full discretionary power and authority to
        interpret and administer this Plan and to delegate all or a part of its
        duties and responsibilities hereunder. The interpretation and
        construction of the Plan by the Administrator or its delegate, and any
        action taken hereunder, shall be final, binding and conclusive upon all
        parties in interest. Neither the Administrator nor any of its agents or
        employees shall be liable to any person for any action taken or omitted
        to be taken in connection with the interpretation, construction or
        administration of this Plan, so long as such action or omission to act
        is made in good faith.

	          
	
                  9.2. Determination of Benefits. The Administrator shall make
        all determinations as to the rights to benefits under this Plan. Subject
        to and in compliance with the specific procedures contained in the
        applicable regulations under ERISA: (a) Any decision by the
        Administrator denying a claim by a Participant or his beneficiary for
        benefits under this Plan shall be stated in writing and delivered or
        mailed to the Participant or beneficiary; (b) each such notice shall set
        forth the specific reasons for the denial, written in a manner that is
        intended to be understandable to the claimant; and (c) the Administrator
        shall afford a reasonable opportunity to the Participant 

	          
	
        -14-

	
	
        

      

	 or beneficiary
        for a full and fair review of the decision denying such claim. The
        benefit claims procedures then in effect under Section 503 of ERISA, and
        any regulations thereunder, shall be followed by the Administrator in
        making any benefit determinations under this Plan. All interpretations,
        determinations and decisions of the Administrator with respect to any
        claim hereunder shall be made in its sole discretion and shall be final
        and conclusive.
	          
	
                  9.3. Expenses. Unless otherwise directed by the Employer, the
        expenses of administering the Plan and any Investment Account
        established under Section 6.1 (including any income or other taxes owing
        on the investments of any such account) shall be paid from the assets of
        the account and shall be allocated among the then existing subaccounts
        thereunder on a pro rata or other appropriate basis as determined by the
        Administrator in its sole discretion.

	          
	
        ARTICLE X

	
        GENERAL
        PROVISIONS

	          
	
                  10.1. Amendment, Suspension and Termination.

	          
	
                            (a) The Employer reserves the right to amend the Plan at any time and
        from time to time. No amendment shall deprive a Participant of his or
        her Account hereunder determined as of the last Valuation Date preceding
        the amendment.

	          
	
                            (b)
        The Employer reserves the right to
        terminate the Plan at any time; provided that upon termination, no
        Participant shall be deprived of his or her Account hereunder determined
        as of the last Valuation Date preceding termination. Upon termination of
        the Plan, the payment of the Accounts shall be made in accordance with
        the terms of the Plan in effect on the date of termination (unless
        otherwise amended by the Employer).

	 
	
                  10.2. Nontransferability of Benefits. The rights of the
        Participant and any beneficiary under the Plan are not subject to the
        claims of their creditors and may not be voluntarily or 

	          
	
        -15-

	          
	
        

      

	 involuntarily transferred,
        assigned, alienated, accelerated or encumbered. Notwithstanding the
        preceding sentence, the Accounts payable under the Plan may, in the
        Employer's discretion, be offset by any liability of the Participant to
        the Employer. An amount will be subject to offset hereunder if owed or
        otherwise payable by the Participant at any time and for any reason,
        including, but not limited to, a loan made by the Employer to the
        Participant, recovery of amounts due to misconduct of the Participant,
        or any other liability or obligation of the Participant of any type, as
        determined by the Employer.
	          
	
                  10.3. Qualified Domestic Relations Orders. Notwithstanding any
        other provision of this Plan, all or part of the Participant's Account
        may be distributed to an alternate payee pursuant to terms of a
        qualified domestic relations order within the meaning of Code section
        414(p). Such distribution may be made even if the Participant is not
        otherwise eligible to receive a distribution at the time of payment to
        the alternate payee(s).

	          
	
                  10.4. Participant's Rights Unsecured. The Plan is intended to
        be unfunded for purposes of both the Code and ERISA. The right of a
        Participant or his or her beneficiary to receive payment of the
        Participant's Account hereunder shall be a general unsecured claim
        against the general assets of the Employer, and neither the Participant
        nor his or her beneficiary shall have any rights in or against any
        amount credited to any Investment Account or any other specific assets
        of the Employer. To the extent that any person acquires a right to
        receive payments from an Employer under the Plan, such right shall be no
        greater than the right of any general unsecured creditor of the
        Employer.

	          
	
                  10.5. Erroneous Payments. In the event that a Participant or a
        beneficiary receives a distribution under this Plan in excess of the
        amount, if any, to which he is entitled, by reason of a calculation
        error or otherwise, the Administrator or its delegate may, in its sole
        discretion, adjust 

	          
	-16-
	          
	
        

      

	 future benefit payments to the Participant or the
        beneficiary to the extent necessary to recoup the amount which the
        Participant or the beneficiary received which was in excess of the
        amount to which he was entitled under the terms of the Plan. If the
        Administrator or its delegate determines, in its sole discretion, that
        it is not feasible or desirable to adjust future benefit payments to the
        Participant or beneficiary, it may require him or her to repay to the
        Plan the amount which is in excess of the amount to which he or she is
        entitled under the terms of the Plan. All amounts received by a
        Participant or a beneficiary under the Plan shall be deemed to be paid
        subject to this condition.
	          
	
                  10.6. Applicable Law. This Agreement shall be construed and
        enforced in accordance with the laws of the Commonwealth of Virginia, to
        the extent applicable.

	          
	
                  10.7. Effect on Employment Rights. Nothing in this Plan shall
        be construed as (a) giving any Participant any right to continued
        employment with the Employer or otherwise modifying his or her
        employment with the Employer or any affiliate or (b) affecting the
        eligibility for, or calculation of, any benefit provided to any
        Participant by the Employer to the extent permitted by law. No
        Participant shall have the right to receive any benefit under the Plan
        except in accordance with the Plan's terms.

	          
	
                  10.8. Severability. If any provision of the Plan shall be held
        invalid or illegal for any reason, such event shall not affect or render
        invalid or unenforceable the remaining provisions of the Plan.

	          
	
                  10.9. Notice. Any notice, consent, election or demand required
        or permitted to be given under the provisions of this Plan shall be in
        writing, and shall be signed by the party giving or making the same. If
        such notice, consent, election or demand is to be mailed, it shall be
        sent by 

	             
	
        -17-

	               
	
        

      

	 United States first class mail, postage prepaid, addressed to
        the addressee's last known address. The date of such mailing shall be
        deemed the date of notice, consent, election or demand.
	          
	
                  10.10. Tax Liability. Any required federal, state or local tax
        withholding may be withheld from any payment made pursuant to this Plan.

	          
	
                  10.11. No Guarantee of Benefits. Nothing in this Plan shall
        constitute a guarantee by the Employer, the Administrator or any other
        person or entity that the assets of the Employer will be sufficient to
        pay any benefits hereunder.

	          
	
                  10.12. Incapacity of Recipient. If the Administrator shall
        find that any person to whom any benefits are payable hereunder is (a)
        unable to care for his or her affairs because of illness or accident or
        (b) a minor, any payment due under the Plan may be paid to the duly
        appointed guardian or conservator of such person or to any third party
        who is eligible to receive payment from the Plan for the account of such
        person. Any such payment shall be a complete discharge of the
        liabilities of the Employer hereunder.

	          
	
                  10.13. Construction. Titles of articles and sections herein
        are for convenience of reference only and are not to be taken into
        account in interpreting the Plan. The singular shall include the plural
        and the plural shall include the singular whenever used herein unless
        the context requires otherwise.

	
            
	
        -18-

	
             
	
        

      

	
                  IN WITNESS WHEREOF, National Rural Utilities Cooperative Finance
Corporation has caused this document to be executed by its duly authorized
officer, this 24th day of July, 2003.
	
                  
	
                  
	
           	
        NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
	
            	
           
	
           	
        By:    /s/ Sheldon C.
        Petersen            
	
          	
        Title: Chief Executive Officer
	
          	
           
	
           	
          
	
        ATTEST:	
           
	
           	
           
	
        /s/ John
        T. Evans           

 	
 	
           
	
        SVP-Operations	
      
	
            
	
        -19-Note Purchase Agreement - Exhibit - 4.16

  
	
      ____________________________________________________________

      
       

       

      FEDERAL AGRICULTURAL

      MORTGAGE CORPORATION

      as Note Purchaser

       

      NATIONAL RURAL UTILITIES

      COOPERATIVE FINANCE CORPORATION

      as Borrower

       

      
      _______________________________

      
       

      NOTE PURCHASE AGREEMENT

       

      
      _______________________________

      
       

      Dated as of July 28, 2005

       

      
      ____________________________________________________________

    

  

  
  		
        TABLE OF CONTENTS
	
			
	RECITALS		1
	 	 	   
		
        ARTICLE I
	
	 	 	  
		
        DEFINITIONS
	
	 	 	 
	SECTION 1.01.	Definitions	1
	SECTION 1.02.	Principles of Construction	2
	 	 	 
		
        ARTICLE II
	
	 	 	 
		
        PURCHASE OF NOTES
	
	 	 	 
	SECTION 2.01.	Purchase of Notes; Minimum Denominations	3
	SECTION 2.02.	Interest Rates and Payment Dates	3
	SECTION 2.03.	Maturity; Amortization	3
	 	 	 
		
        ARTICLE III
	
	 	 	 
		
        CONDITIONS PRECEDENT
	
	 	 	 
	SECTION 3.01.	Conditions Precedent to the Purchase of
        Each Note	3
	 	 	 
		
        ARTICLE IV
	
	 	 	 
		
        REPORTING REQUIREMENT
	
	 	 	 
	SECTION 4.01.	Annual Reporting Requirements	4
	SECTION 4.02.	Default Notices	5
	 	 	 
		
        ARTICLE V
	
	 	 	 
		
        REPRESENTATIONS OF THE PARTIES
	
	 	 	 
	SECTION 5.01.	Representation of Farmer Mac	5
	SECTION 5.02.	Representation of CFC	5
	 	 	 
		
        i
	

  

  
  		
        ARTICLE VI
	
	 	 	 
		
        SECURITY AND COLLATERAL
	
	 	 	 
	SECTION 6.01.	Security and Collateral	7
	 	 	 
		
        ARTICLE VII
	
	 	 	 
		
        EVENTS OF DEFAULT
	
	 	 	 
	SECTION 7.01.	Events of Default	7
	SECTION 7.02.	Acceleration	8
	SECTION 7.03.	Remedies Not Exclusive	8
	 	 	 
		
        ARTICLE VIII
	
	 	 	 
		
        MISCELLANEOUS
	
	 	 	 
	SECTION 8.01.	GOVERNING LAW	9
	SECTION 8.02.	WAIVER OF JURY TRIAL	9
	SECTION 8.03.	Notices	9
	SECTION 8.04.	Benefit of Agreement	9
	SECTION 8.05.	Entire Agreement	9
	SECTION 8.06.	Amendments and Waivers	9
	SECTION 8.07.	Counterparts	10
	SECTION 8.08.	Termination of Agreement	10
	SECTION 8.09.	Survival	10
	SECTION 8.10.	Severability	10
	 	 	 
	Schedule I - Address for Notices
	 
	Annex A - Form of Note
	Annex B - Opinion of Counsel to CFC
	Annex C - Officers' Certificate
	   
	
        ii

	   

  

	    	
                NOTE
      PURCHASE AGREEMENT dated as of July 28, 2005, between FEDERAL
      AGRICULTURAL MORTGAGE CORPORATION, a federally-chartered instrumentality
      of the United States and an institution of the Farm Credit System ("Farmer
      Mac"); and NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
      CORPORATION, a cooperative association existing under the laws of the
      District of Columbia ("CFC").

	
          
	
      RECITALS

	
       
	
                WHEREAS CFC
      wishes from time to time to issue and sell Notes to Farmer Mac, and Farmer
      Mac wishes from time to time to purchase such Notes from CFC, all on the
      terms and subject to the conditions herein provided; and

	
       
	
                WHEREAS
      Farmer Mac, as an instrumentality of the United States formed to
      provide for a secondary marketing arrangement for agricultural real estate
      mortgages; CFC, as a non-profit cooperative formed in part to provide
      financing for rural electric distribution cooperatives and to finance the
      infrastructure in rural America; and Farmer Mac and CFC have agreed that
      the Notes will be secured by the pledge of mortgage notes for borrowings
      from CFC by rural electric distribution cooperative members of CFC that
      serve primarily communities with fewer than 50,000 inhabitants, as
      provided herein;

	
       
	
                NOW,
      THEREFORE, in consideration of the mutual agreements herein contained,
      Farmer Mac and CFC 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.

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

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

	
       
	
      1

	
      

      

    
	
      Note Purchase Agreement

	    
	
                "CFC
      Notice" has the meaning given to that term in the Pledge
      Agreement.

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

	
       
	
                "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.

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

	
        
	
                "Fiscal
      Year" means the fiscal year of CFC, 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.

	
       
	
                "Member"
      shall mean any Person who is member of CFC.

	
       
	
                "Note"
      means a note of CFC payable to Farmer Mac, having the terms provided for
      in Article II of this Agreement and otherwise in the form of Annex A
      attached hereto, except to the extent Farmer Mac may have approved changes
      therein.

	
       
	
                "Note
      Documents" means the Notes, this Agreement, the Pledge Agreement
      and the Registration Rights Agreement.

	
       
	
                "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 CFC, 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.

	
       
	
                "Registration Rights Agreement" means the Registration
      Rights Agreement dated as of the date hereof between Farmer Mac and CFC.

	
       
	
                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

	
       
	
      2

	
      

    

	
      Note Purchase Agreement

	
           
	
      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. Farmer Mac agrees to purchase Notes,
      at 100% of their principal amount, from time to time, but not after
      August 31, 2005, as requested by CFC (and, if the purchase is other
      than on July 29 , 2005 upon at least five Business Days' advance notice 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. Unless otherwise agreed to by Farmer
      Mac and CFC, each Note shall be in the principal amount of
      $50 million or an integral multiple of $10 million in excess
      thereof.

	
       
	
                SECTION 2.02. Interest Rates and Payment
      Dates. Each Note shall bear interest on the outstanding principal
      amount thereof (computed on the basis of a 360-day year of twelve 30-day
      months) from its date of issuance until final payment on the maturity date
      thereof or otherwise at a fixed or floating rate as is agreed to by CFC
      and Farmer Mac. Interest will be payable semi-annually in arrears on each
      of the dates specified in such Note and upon the payment of principal. To
      the extent any payment of interest or principal is not paid when due,
      interest shall continue to accrue at the stated rate of interest thereon
      plus one percent.

	
       
	
                SECTION 2.03. Maturity; Amortization.
      Each Note will mature on a date, not more than ten years and no less than
      one year from its date, specified by CFC in its notice pursuant to
      Section 2.01 and set forth on the face of the Note. The full
      principal amount of each Note will be payable on its maturity date or
      thereafter as provided in Section 2.02.

	
        
	
      ARTICLE III

	
       
	
      
      
      CONDITIONS PRECEDENT

	
     
    
	
                SECTION 3.01. Conditions Precedent to the
      Purchase of Each Note. Farmer Mac shall be under no obligation to
      purchase any Note unless and until the following conditions have been
      satisfied:

	 
	
                (a) The Note. Farmer Mac shall have received the original
      of such Note, duly executed on behalf of CFC, in form and substance,
      including interest rate and maturity date, as is acceptable to Farmer Mac.

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

	 
	
      3

	
      

    

	
      Note Purchase Agreement

	 
	
                (c) The Registration Rights Agreement. Farmer Mac shall
      have received an original of the Registration Rights Agreement duly
      executed on behalf of CFC.

	 
	
                (d) Opinion of Counsel. Farmer Mac shall have received an
      opinion of counsel to CFC substantially as to each of the matters listed
      in Annex B attached hereto, in form and substance as is acceptable to
      Farmer Mac.

	 
	
                (e) Financial and Other Information. CFC shall have
      provided Farmer Mac with its most recent Financial Statements and such
      other information concerning CFC as Farmer Mac shall have reasonably
      requested.

	 
	
                (f) No Material Adverse Change. CFC 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 CFC between
      the end of CFC's most recently completed Fiscal Year for which Financial
      Statements have been made publicly available and the date of the purchase
      of such Note, as provided herein.

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

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

	 
	
                (i) Certification of Senior Management. CFC shall have
      provided Farmer Mac a certification by its Governor and its Chief
      Financial Officer (or other senior management acceptable to Farmer Mac),
      substantially in the form of Annex C attached hereto, of the
      following: (i) that CFC 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 rural electric
      distribution cooperative Members for rural electrification and related
      purposes; (ii) the matter to be certified under paragraphs (f) and (h) of
      this Section 3.01; and (iii) as to the representations and
      warranties of CFC.

	
        
	
                SECTION 3.02. Certificate of Pledged Collateral. No later than
      August 2, 2005, CFC shall provide Farmer Mac a copy of a Certificate
      of Pledged Collateral, dated as of the last date of the most recently
      completed calendar month, in accordance with the terms of the Pledge
      Agreement.

	
        
	
      ARTICLE IV

	
        
	
      
      
      REPORTING REQUIREMENTS

	
        
	
                SECTION 4.01. Annual Reporting Requirements.
      CFC 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:

	
         
	
      4

	
      

    

	
      Note Purchase Agreement

	
       
    
	
          
                    (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 CFC 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, CFC shall deliver a CFC
      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 CFC 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 CFC is taking to cure such Event of Default.

	
         
	
      ARTICLE V

	
         
	
      
      
      REPRESENTATIONS OF THE PARTIES

	
         
	
                SECTION 5.01. Representation of Farmer Mac.
      Farmer Mac represents to CFC that on the date hereof and on each date on
      which Farmer Mac purchases a Note from CFC:

	
         
    
	
          
                    (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 in particular the terms of the transaction, and the actions taken
          by Farmer Mac, are in compliance with and in satisfaction of the
          requirements of the approval letter dated June 24, 2005 from the Farm
          Credit Administration, as amended or waived by the Farm Credit
          Administration; and
    

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

	
        
	
                SECTION 5.02. Representations of CFC.
      CFC hereby represents to Farmer Mac that on the date hereof and on each
      date on which Farmer Mac purchases a Note from CFC:

	
         
	
      5

	
      

    

	
      Note Purchase Agreement

	
         
    
	
          
                    (a) CFC 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) CFC has the corporate power and authority to execute and
          deliver this Agreement and each of the other Note Documents, to
          consummate the transactions contemplated hereby and thereby and to
          perform its obligations hereunder and thereunder;
    

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

	
       
    
	
          
                    (d) this Agreement and each of the other Note Documents have
          been duly authorized, executed and delivered by CFC and constitute the
          legal, valid and binding obligations of CFC, enforceable against CFC
          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 CFC or any third party under any agreement to which
          CFC is a party to authorize the execution and delivery by CFC of this
          Agreement or any of the other Note Documents, or the consummation by
          CFC of the transactions contemplated hereby or thereby or the
          performance by CFC of its obligations hereunder or thereunder;
    

	
      
    
	
          
                    (f) neither the execution or delivery by CFC of this
          Agreement or any of the other Note Documents nor the consummation by
          CFC of any of the transactions contemplated hereby or thereby nor the
          performance by CFC 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 CFC or any
          provision of any existing law or any rule or regulation currently
          applicable to CFC or any judgment, order or decree of any court or any
          regulatory body, administrative agency or governmental authority
          having jurisdiction over CFC or the terms of any mortgage, indenture,
          contract or other agreement to which CFC is a party or by which CFC or
          any of its properties is bound;
    

	
      
    
	
      6

	
      

    

	
      Note Purchase Agreement

	
       
    
	
          
                    (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
          CFC, threatened with respect to CFC, this Agreement or any of the
          other Note Documents challenging the validity or enforceability of
          this Agreement or any of the other Note Documents or seeking to
          restrain, enjoin or otherwise prevent CFC from engaging in its
          business as currently conducted or the consummation by CFC of the
          transactions contemplated by this Agreement or any of the other Note
          Documents or which, if adversely determined, would have a material
          adverse effect on CFC's financial condition or its ability to perform
          its obligations under this Agreement or any of the other Note
          Documents;
    

	
      
    
	
          
                    (h) CFC
          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 rural electric distribution
          cooperative Members for rural electrification purposes; and
    

	
      
    
	
          
                    (i) no material adverse change has occurred in the financial
          condition or business of CFC between the end of CFC's most recently
          completed Fiscal Year for which Financial Statements have been made
          publicly available and the date this representation is given.
    

	
       
    
	
      ARTICLE VI

	
       
    
	
      
      
      SECURITY AND COLLATERAL

	
      
    
	
                SECTION 6.01.
      Security and Collateral. (a) CFC 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) CFC 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 mortgage notes
      issued to CFC by rural electric distribution cooperatives that are
      Eligible Members.

	
      
    
	
      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)

	
       
    
	
      7

	
      

    

	
      Note Purchase Agreement

	
       
    
	
      below) if CFC 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 CFC to make a payment of principal or
          interest on a Note for more than ten days after the same becomes due
          and payable;
    

	
        
    
	
          
                    (b) a material representation by CFC 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 CFC 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 CFC a bankrupt or insolvent, or
          approving as properly filed a petition seeking reorganization,
          arrangement, adjustment or composition of or in respect of CFC 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 CFC 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 CFC 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
          CFC 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 CFC 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 CFC, declare the entire principal
      amount of, and accrued interest on, the Notes at the time outstanding to
      be immediately due and payable.

	
       
    
	
                SECTION 7.03. Remedies Not Exclusive.
      Upon the occurrence, and during the continuance, of an Event of Default,
      Farmer Mac shall be entitled to take such other action as is provided for
      by law, in this Agreement, or in any of the other Note Documents,
      including injunctive or other equitable relief.

	
       
    
	
      8

	
      

    

	
      Note Purchase Agreement

	
         
    
	
      ARTICLE VIII

	
       
    
	
      
      
      MISCELLANEOUS

	
       
    
	
                SECTION 8.01. GOVERNING LAW. THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
      WITH, THE LAWS OF THE UNITED STATES OF AMERICA, TO THE EXTENT APPLICABLE,
      AND OTHERWISE THE LAWS OF THE DISTRICT OF COLUMBIA.

	
       
    
	
                SECTION 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. The address, telephone number, or facsimile number for any
      party may be changed at any time and from time to time upon written notice
      given by such changing party to the other parties hereto. A properly
      addressed notice or other communication shall be deemed to have been
      delivered at the time it is sent by facsimile (fax) transmission to the
      party or parties to which it is given.

	
       
    
	
                SECTION 8.04. Benefit of Agreement. This
      Agreement shall become effective when it shall have been executed by
      Farmer Mac and CFC, 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 Schedule I hereto and Annexes A to C
      hereto, and the other Note Documents, constitutes the entire agreement
      between the parties hereto concerning the matters contained herein and
      supersedes all prior oral and written agreements and understandings
      between the parties.

	
          
	
                SECTION 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 and CFC. 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 or CFC in exercising any
      power or right hereunder shall operate as a waiver thereof, nor shall any
      single or partial exercise

	
       
    
	
      9

	
      

    

	
      Note Purchase Agreement

	
        
    
	
      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 CFC
      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 CFC
      in any case shall entitle CFC 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.

10

  
          IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly
executed, all as of the day and year first above written.
  

 

	
      FEDERAL AGRICULTURAL

      MORTGAGE CORPORATION,

	   	   
	
      By:
	
      /s/ Henry D. Edelman

	
            
            Name:
      
	
      Henry D. Edelman

	
            
            Title:
      
	
      President

  

 

 

	
      NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION,

	   	   
	
      By:
	
      /s/ Steven L. Lilly

	
      Name:
	
      Steven L. Lilly

	
      Title:
	
      Sr. Vice President & Chief Financial Officer

 

[Signature Page to Registration Rights Agreement]

  

 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 Farmer Mac:

      

            Federal Agricultural Mortgage Corporation

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

            Washington, DC 20036

            Fax: 202-872-7713

            Attention of: Nancy E. Corsiglia, Chief Financial Officer

            
            

            
            With a copy to:

            

            Federal Agricultural Mortgage Corporation

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

            Washington, DC 20036

            Fax: 202-872-7713

            Attention of: Jerome G. Oslick, Vice President - General Counsel

      

If to CFC:

      
        
            National Rural Utilities Cooperative Finance Corporation

            2201 Cooperative Way

            Herndon, VA 20171-3025

            Telephone: 703-709-6718

            Fax: 703-709-6819

            Attention of: Steven L. Lilly, Chief Financial Officer

            

            With a copy to:

            

            National Rural Utilities Cooperative Finance Corporation

            2201 Cooperative Way

            Herndon, VA 20171-3025

            Telephone: 703-709-6712

            Fax: 703-709-6811

            Attention of: John J. List, Esq., General Counsel

        

      

    

  

1

    

  	
        ANNEX A

    	
           
	
        [FORM OF NOTE]

	    
	NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
	    
	
        4.656% Senior Note due 2008

	    
	
      Washington, D.C.

	
      
July 29, 2005

	   
	
          FOR VALUE RECEIVED, the undersigned, NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION ("CFC"), a District of Columbia cooperative
association, hereby promises to pay to FEDERAL AGRICULTURAL MORTGAGE CORPORATION
("Farmer Mac"), or registered assigns, the principal sum of
FIVE HUNDRED MILLION DOLLARS on July 29, 2008, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) from the date hereof
on the unpaid balance thereof at the rate of 4.656% per annum, payable
semiannually on January 29 and July 29 in each year, until the principal hereof
shall have become due and payable, and (b) on any overdue payment of
principal and any overdue payment of interest, payable semiannually as aforesaid
(or, at the option of the registered holder hereof, on demand) at a rate per
annum from time to time equal to 5.656%.

          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 CFC from the registered holder of this Note as
provided in the Note Purchase Agreement referred to below.

          This Note is one of a series of Notes issued pursuant to a Note Purchase
Agreement dated as of July 28, 2005 (as from time to time amended, the
"Note Purchase Agreement") between CFC and Farmer Mac and is
entitled to the benefits thereof. This Note is also entitled to the benefits of
the Pledge Agreement dated as of July 28, 2005, among CFC, Farmer Mac and
the Collateral Agent named therein.

          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,
CFC 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 CFC
will not be affected by any notice to the contrary.

          This Note may not be prepaid.

          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.

    
	   
	
      A-1

	   

    

 

  
          This Note shall be construed and enforced in accordance with, and the rights
of CFC 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:

    

 A-2

    

  	
        ANNEX B
      

	
           
      
	
        

Opinion of Counsel to CFC

      

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

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

          (3) Neither the execution nor the delivery by CFC of any of the Note
Documents to which CFC is a party nor the consummation by CFC 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 CFC 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 CFC
or any law or any regulation or any order known to Counsel currently applicable
to CFC of any court, regulatory body, administrative agency or governmental body
having jurisdiction over CFC or the terms of any indenture, deed of trust, note,
note agreement or instrument known to Counsel to which CFC is a party or by
which CFC 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 CFC is required for any
consummation by CFC 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 Notes
after the date hereof.

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

      
	   
	
        B-1

	   

  

    

 

  	
        ANNEX C

    	   
	
        Officers' Certificate

      

    	    
	TO:    Federal Agricultural Mortgage Corporation.
	    
	
          We,
[                           ],
Governor, and
[                           ],
Chief Financial Officer, of National Rural Utilities Cooperative Finance
Corporation ("CFC"), pursuant to the Note Purchase Agreement
dated as of July 28, 2005, between CFC and Federal Agricultural Mortgage
Corporation (the "Note Purchase Agreement"), hereby certify on
behalf of CFC that as at the date hereof:

          (1) CFC 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 rural electric distribution cooperative
Members for rural electrification and related purposes;

          (2) no material adverse change has occurred in the financial condition of CFC
between the date of the end of CFC's most recently completed Fiscal Year for
which Financial Statements have been made publicly available and the date
hereof;

          (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 _______________, 200__.

      
	      
	
                                               NATIONAL RURAL UTILITIES

	
        
                                                                  COOPERATIVE FINANCE
      CORPORATION,

	  
	
        ___________________________________

	
                                                     Governor

	  
	
        ___________________________________

	
                    Chief
        Financial
        Officer                                 

	  
	
        C-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]