1 EXHIBIT 4.7 GUARANTEE AGREEMENT

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EXHIBIT 4.7

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GUARANTEE AGREEMENT

BETWEEN

TELEBANC FINANCIAL CORPORATION
(AS GUARANTOR)

AND

WILMINGTON TRUST COMPANY
(AS TRUSTEE)

DATED AS OF

__________________, 1998

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TABLE OF CONTENTS

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ARTICLE I. DEFINITIONS .................................................. 1
SECTION 1.1. Definitions ......................................... 1

ARTICLE II. TRUST INDENTURE ACT ......................................... 4
SECTION 2.1. Trust Indenture Act; Application .................... 4
SECTION 2.2. List of Holders ..................................... 4
SECTION 2.3. Reports by the Guarantee Trustee .................... 4
SECTION 2.4. Periodic Reports to the Guarantee Trustee ........... 4
SECTION 2.5. Evidence of Compliance with Conditions
Precedent ........................................... 5
SECTION 2.6. Events of Default; Waiver ........................... 5
SECTION 2.7. Event of Default; Notice ............................ 5
SECTION 2.8. Conflicting Interests ............................... 5

ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE ......... 6
SECTION 3.1. Powers and Duties of the Guarantee Trustee .......... 6
SECTION 3.2. Certain Rights of Guarantee Trustee ................. 7
SECTION 3.3. Indemnity ........................................... 9

ARTICLE IV. GUARANTEE TRUSTEE .......................................... 9
SECTION 4.1. Guarantee Trustee: Eligibility ...................... 9
SECTION 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee ........................................ 9

ARTICLE V. GUARANTEE .................................................... 10
SECTION 5.1. Guarantee ........................................... 10
SECTION 5.2. Waiver of Notice and Demand ......................... 10
SECTION 5.3. Obligations Not Affected ............................ 10
SECTION 5.4. Rights of Holders ................................... 11
SECTION 5.5. Guarantee of Payment ................................ 12
SECTION 5.6. Subrogation ......................................... 12
SECTION 5.7. Independent Obligations ............................. 12

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ARTICLE VI. COVENANTS AND SUBORDINATION ................................ 12
SECTION 6.1. Subordination ....................................... 12
SECTION 6.2. Pari Passu Guarantees ............................... 12

ARTICLE VII. TERMINATION ................................................ 13
SECTION 7.1. Termination ......................................... 13

ARTICLE VIII. MISCELLANEOUS ............................................. 13
SECTION 8.1. Successors and Assigns .............................. 13
SECTION 8.2. Amendments .......................................... 13
SECTION 8.3. Notices ............................................. 13
SECTION 8.4. Benefit ............................................. 14
SECTION 8.5. Interpretation ...................................... 14
SECTION 8.6. Governing Law ....................................... 15

GUARANTEE AGREEMENT

This GUARANTEE AGREEMENT, dated as of ___________, 1998, is executed and
delivered by TELEBANC FINANCIAL CORPORATION, a Delaware corporation (the
"Guarantor") having its principal office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and WILMINGTON TRUST COMPANY, a Delaware banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Series A Capital Securities
and Series A Common Securities (each as defined herein and together, the
"Securities") of TeleBanc Capital Trust II, a Delaware statutory business trust
(the "Issuer").

WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of
____________, 1998 (the "Trust Agreement"), among the Guarantor, as Depositor,
the Property Trustee, the Delaware Trustee and the Administrative Trustees named
therein and the Holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing $25,000,000 aggregate
Liquidation Amount (as defined in the Trust Agreement) of its __% Beneficial
Unsecured Securities, Series A, Liquidation Amount $25.00 per preferred
security, representing preferred undivided beneficial interests in the assets of
the Issuer and having the terms set forth in the Trust Agreement (the "Series A
Capital Securities");

WHEREAS, the Series A Capital Securities will be issued by the Issuer and
the proceeds thereof, together with the proceeds from the issuance of the
Issuer's Series A Common Securities, will be used to purchase the Series A
Subordinated Debentures (as defined in the Trust Agreement) of the Guarantor
which will be deposited with Wilmington Trust Company, as Property Trustee under
the Trust Agreement, as trust assets; and

WHEREAS, as incentive for the Holders to purchase Securities the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth
herein, to pay to the Holders of the Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.

NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Securities.

ARTICLE I. DEFINITIONS

SECTION 1.1. Definitions.

As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
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"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to be an Affiliate of the Issuer. For the purposes
of this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

"Board of Directors" means either the board of directors of the Guarantor
or any committee of that board duly authorized to act hereunder or any directors
or officers of the Guarantor to whom such board of directors or such committee
shall have duly delegated its authority.

"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 90 days after receipt of such notice.

"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on the Securities, to
the extent the Issuer shall have funds on hand available therefor at such time,
(ii) the redemption price, including all accrued and unpaid Distributions to the
date of redemption (the "Redemption Price"), with respect to any Securities
called for redemption by the Issuer, to the extent the Issuer shall have funds
on hand available therefor at such time, and (iii) upon a voluntary or
involuntary termination, winding up or liquidation of the Issuer, unless Series
A Subordinated Debentures are distributed to the Holders, the lesser of (a) the
aggregate of the Liquidation Amount plus accrued and unpaid Distributions to the
date of payment and (b) the amount of assets of the Issuer remaining available
for distribution to Holders in liquidation of the Issuer after satisfaction of
liabilities to creditors of the Issuer as required by applicable law (in either
case, the "Liquidation Distribution").

"Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.

"Holder" means any holder, as registered on the books and records of the
Issuer, of any Securities; provided, however, that in determining whether the
holders of the requisite percentage of Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor,
the Guarantee Trustee, or any Affiliate of the Guarantor or the Guarantee
Trustee.

"Indenture" means the Junior Subordinated Indenture dated as of
_________________, 1998, as supplemented and amended between the Guarantor and
Wilmington Trust Company, as trustee.

"List of Holders" has the meaning specified in Section 2.2(a).

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"Majority in Aggregate Liquidation Amount of the Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the aggregate Liquidation Amount of
all then outstanding Securities issued by the Issuer.

"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman or Vice Chairman of the Board of Directors of such Person
or the President, a Managing Director or a Vice President of such Person, and by
the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of such Person, and delivered to the
Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:

(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;

(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;

(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.

"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

"Responsible Officer" when used with respect to the Guarantee Trustee
means any officer of the Guarantee Trustee assigned by the Guarantee Trustee
from time to time to administer its corporate trust matters.

"Series A Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.

"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.

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ARTICLE II. TRUST INDENTURE ACT

SECTION 2.1. Trust Indenture Act; Application.

(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.

(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

SECTION 2.2. List of Holders.

(a) The Guarantor will furnish or cause to be furnished to the Guarantee
Trustee:

(i) semi-annually, not more than 15 days after January 1 and July
1 in each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders as of such
January 1 and July 1, and

(ii) at such other times as the Guarantee Trustee may request in
writing, within 30 days after the receipt by the Guarantor of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished,

excluding from any such list names and addresses received by the Guarantee
Trustee in its capacity as Securities Registrar.

(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.

SECTION 2.3. Reports by the Guarantee Trustee.

The Guarantee Trustee shall transmit to Holders such reports concerning
the Guarantee Trustee and its actions under this Guarantee Agreement as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust Indenture
Act, the Guarantee Trustee shall, within sixty days after each May 15 following
the date of this Guarantee Agreement deliver to Holders a brief report, dated as
of such May 15, which complies with the provisions of such Section 313(a).

SECTION 2.4. Periodic Reports to the Guarantee Trustee.

The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the

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Trust Indenture Act. Delivery of such reports, information and documents to the
Guarantee Trustee is for informational purposes only and the Guarantee Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein, including the Guarantor's compliance with any of its
covenants hereunder (as to which the Guarantee Trustee is entitled to rely
exclusively on Officers' Certificates).

SECTION 2.5. Evidence of Compliance with Conditions Precedent.

The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.

SECTION 2.6. Events of Default; Waiver.

The Holders of a Majority in Aggregate Liquidation Amount of the
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.

SECTION 2.7. Event of Default; Notice.

(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default actually known to the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided, that,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.

(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.

SECTION 2.8. Conflicting Interests.

The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.

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ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 3.1. Powers and Duties of the Guarantee Trustee.

(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.

(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.

(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:

(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:

(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee Agreement,
and the Guarantee Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Guarantee Agreement; and

(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any provision hereof or
of the Trust Indenture Act are specifically required to be furnished to
the Guarantee Trustee, the Guarantee Trustee

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shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Guarantee Agreement;

(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;

(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Aggregate
Liquidation Amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and

(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or liability
is not reasonably assured to it.

SECTION 3.2. Certain Rights of Guarantee Trustee.

(a) Subject to the provisions of Section 3.1:

(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.

(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.

(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.

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(iv) The Guarantee Trustee may consult with legal counsel of its
selection, and the advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion.
Such legal counsel may be legal counsel to the Guarantor or any of its
Affiliates and may be one of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.

(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such adequate security and indemnity as
would satisfy a reasonable person in the position of the Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee Agreement.

(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.

(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.

(viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive written
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Guarantee Trustee (A) may request instructions
from the Holders, (B) may refrain from enforcing such remedy or right or
taking such other action until such written instructions are received, and
(C) shall be protected in acting in accordance with such written
instructions.

(ix) The Guarantee Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Guarantee Agreement.

(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the

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Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Guarantee Trustee shall be construed to be a duty to act in accordance with such
power and authority.

SECTION 3.3. Indemnity.

The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Guarantee Trustee, arising out of
or in connection with the acceptance or administration of this Guarantee
Agreement, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.

ARTICLE IV. GUARANTEE TRUSTEE

SECTION 4.1. Guarantee Trustee: Eligibility.

(a) There shall at all times be a Guarantee Trustee which shall:

(i) not be an Affiliate of the Guarantor; and

(ii) be a Person that is eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of
Section 310(a) of the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority, then, for the
purposes of this Section and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.

(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).

(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.

SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.

(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.

(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such

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Successor Guarantee Trustee and delivered to the Guarantor. If an instrument of
acceptance by a Successor Guarantee Trustee shall not have been delivered to the
Guarantee Trustee within 30 days after such removal, the Guarantee Trustee being
removed may petition any court of competent jurisdiction for the appointment of
a Successor Guarantee Trustee.

(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

ARTICLE V. GUARANTEE

SECTION 5.1. Guarantee.

The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.

SECTION 5.2. Waiver of Notice and Demand.

The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

SECTION 5.3. Obligations Not Affected.

The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:

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(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Issuer;

(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Series A Subordinated Debentures as provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms of the
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Securities;

(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Securities, or any action
on the part of the Issuer granting indulgence or extension of any kind;

(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;

(e) any invalidity of, or defect or deficiency in, the Securities;

(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.

There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.

SECTION 5.4. Rights of Holders.

The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in Aggregate
Liquidation Amount of the Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv)
any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against the Guarantee Trustee, the Issuer or any other Person.

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SECTION 5.5. Guarantee of Payment

This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Series A Subordinated Debentures to
Holders as provided in the Trust Agreement.

SECTION 5.6. Subrogation.

The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.

SECTION 5.7. Independent Obligations.

The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Securities and that the
Guarantor shall be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.3 hereof.

ARTICLE VI. COVENANTS AND SUBORDINATION

SECTION 6.1. Subordination.

The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt (as defined in the Indenture) of
the Guarantor, except those made pari passu or subordinate to such obligations
expressly by their terms in the same manner as set forth in Article XIII of the
Indenture.

SECTION 6.2. Pari Passu Guarantees.

The obligations of the Guarantor under this Guarantee Agreement shall rank
pari passu with the obligations of the Guarantor under any similar guarantee
agreements issued by the

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Guarantor on behalf of the holders of preferred securities issued by any Trust
(as defined in the Indenture).

ARTICLE VII. TERMINATION

SECTION 7.1. Termination.

This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Securities, (ii) the
distribution of the Series A Subordinated Debentures to the Holders in exchange
for all of the Securities or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to the Securities or this
Guarantee Agreement.

ARTICLE VIII. MISCELLANEOUS

SECTION 8.1. Successors and Assigns.

All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Securities then
outstanding. Except in connection with a consolidation, merger or sale involving
the Guarantor that is permitted under Article VIII of the Indenture and pursuant
to which the successor or assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.

SECTION 8.2. Amendments.

Except with respect to any changes which do not adversely affect the
rights of the Holders or the Guarantee Trustee in any material respect (in which
case no consent of the Holders or the Guarantee Trustee, as the case may be,
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in Aggregate Liquidation
Amount of the Securities and of the Guarantee Trustee. The provisions of Article
VI of the Trust Agreement concerning meetings of the Holders shall apply to the
giving of such approval.

SECTION 8.3. Notices.

Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:

(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:

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TeleBanc Financial Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer

(b) if given to the Issuer, in care of the Guarantor, at the Issuer's (and
the Guarantor's) address set forth below or such other address as the Guarantee
Trustee on behalf of the Issuer may give notice to the Holders:

TeleBanc Capital Trust II
c/o TeleBanc Financial Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer

with a copy to:

Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration

All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

SECTION 8.4. Benefit.

This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Securities.

SECTION 8.5. Interpretation.

In this Guarantee Agreement, unless the context otherwise requires:

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(a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.1;

(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;

(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;

(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;

(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;

(f) a reference to the singular includes the plural and vice versa; and

(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.

SECTION 8.6. Governing Law.

THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

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This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.

TELEBANC FINANCIAL CORPORATION

By:_____________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice Chairman of the Board,
Chief Executive Officer and President

WILMINGTON TRUST COMPANY

By:_____________________________________
Name:
Title:

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CROSS-REFERENCE TABLE*

Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
------------------- -------------------

310(a)............................................................ 4.1(a)
310(b)............................................................ 4.1(c), 2.8
310(c)............................................................ Inapplicable
311(a)............................................................ 2.2(b)
311(b)............................................................ 2.2(b)
311(c)............................................................ Inapplicable
312(a)............................................................ 2.2(a)
312(b)............................................................ 2.2(b)
313............................................................... 2.3
314(a)............................................................ 2.4
314(b)............................................................ Inapplicable
314(c)............................................................ 2.5
314(d)............................................................ Inapplicable
314(e)............................................................ 1.1, 2.5, 3.2
314(f)............................................................ 2.1, 3.2
315(a)............................................................ 3.1(d)
315(b)............................................................ 2.7
315(c)............................................................ 3.1
315(d)............................................................ 3.1(d)
316(a)............................................................ 1.1, 2.6, 5.4
316(b)............................................................ 5.3
316(c)............................................................ 8.2
317(a)............................................................ Inapplicable
317(b)............................................................ Inapplicable
318(a)............................................................ 2.1(b)
318(b)............................................................ 2.1
318(c)............................................................ 2.1(a)

* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.

1 EXHIBIT 4.7 GUARANTEE AGREEMENT

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