Document:

ThermoEnergy
Corporation

    

    Securities
Purchase Agreement

    

    This Securities Purchase Agreement
(this “Agreement”) is
dated as of August 9, 2010, by and among ThermoEnergy Corporation, a
Delaware corporation (the
“Company”), and the investors identified on the signature pages hereto
(each, an “Investor” and
collectively, the
“Investors”).

    

    WHEREAS, subject to the terms and
conditions set forth in this Agreement and pursuant to Section 4(2) of the
Securities Act (as defined below) and Rule 506 promulgated thereunder, the
Company desires to issue and sell to each Investor, and each Investor, severally
and not jointly, desires to purchase from the Company certain securities of the
Company, as more fully described in this Agreement.

    

    NOW, THEREFORE, IN CONSIDERATION of the
mutual covenants contained in this Agreement, and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the
Company and the Investors agree as follows:

    

    ARTICLE
1

    

    Definitions

    

    Section 1.1.  Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms have the meanings indicated in this Section
1.1:

    

    “Action” means any action,
suit, inquiry, notice of violation, proceeding (including any partial proceeding
such as a deposition) or investigation pending or threatened in writing against
or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency,
regulatory authority (federal, state, county, local or foreign), stock market,
stock exchange or trading facility.

    

    “Affiliate” means any Person
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a Person, as such terms are used
in and construed under Rule 144.

    

    “Business Day” means any day
except Saturday, Sunday and any day which is a federal legal holiday or a day on
which banking institutions in the City of New York are authorized or required by
law or other governmental action to close.

    

    “CASTion” means CASTion
Corporation, a Massachusetts corporation.

    

    “Certificate of Increase” has
the meaning set forth in Section 2.1.

    

    “Claim” has the meaning set
forth in Section 4.6(c).

    

    “Closing” means the closing of
the purchase and sale of the Shares and the Warrants pursuant to Article
2.  In the event there is more than one closing, the term “Closing” shall apply to each
such closing unless otherwise specified.

    

    “Closing Date” means the
Initial Closing Date and, in the event there is more than one Closing, that date
of each subsequent Closing unless otherwise specified.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Commission” means the
Securities and Exchange Commission.

    

    “Common Stock” means the
common stock of the Company, par value $0.001 per share, and any securities into
which such common stock may hereafter be reclassified.

    

    “Common Stock Equivalents”
means any securities of the Company or any Subsidiary which entitle the holder
thereof to acquire Common Stock at any time, including without limitation, any
debt, preferred stock, rights, options, warrants or other instrument that is at
any time convertible into or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock or other securities that entitle the holder to
receive, directly or indirectly, Common Stock.

    

    “Company Counsel” means Nixon
Peabody, LLP.

    

    “Company Deliverables” has the
meaning set forth in Section 2.2(a).

    

    “Company Stock Options” has the
meaning set forth in Section 3.1(g).

    

    “Contingent Obligations” has
the meaning set forth in Section 3.1(r).

    

    “Conversion Shares” means the
shares of Common Stock issuable upon conversion of the Shares.

    

    “Convertible Securities” has
the meaning set forth in Section 3.1(g).

    

    “Effective Date” means the
date that any Registration Statement filed pursuant to Article 4 is first
declared effective by the Commission.

    

    “Environmental Law” has the
meaning set forth in Section 3.1(aa).

    

    “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder.

     

    “ERISA Affiliate” means any
trade or business, whether or not incorporated, that together with the Company
would be deemed to be a single employer for purposes of Section 4001 of ERISA or
Sections 414(b), (c), (m), (n) or (o) of the Internal Revenue Code of 1986, as
amended.

     

    “Evaluation Date” has the
meaning set forth in Section 3.1(r).

    

    “Event” has the meaning set
forth in Section 4.8.

    

    “Event Date” has the meaning
set forth in Section 4.8.

    

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

    

    “Filing Date” has the meaning
set forth in Section 4.1.

    

    “GAAP” means generally
accepted accounting principles as in effect from time to time in the United
States of America.

    

    “Governmental Authority” has
the meaning set forth in Section 3.1(e).

    
      
         

      

      
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    “Hazardous Substance” has the
meaning set forth in Section 3.1(aa).

    

    “Indebtedness” has the meaning
set forth in Section 3.1(r).

    

    “Indemnified Party” has the
meaning set forth in Section 4.6(c).

    

    “Indemnified Person” has the
meaning set forth in Section 4.6(a).

    

    “Indemnifying Party” has the
meaning set forth in Section 4.6(c).

    

    “Initial Closing” means the
Closing that occurs on the Initial Closing Date.

    

    “Initial Closing Date” means
the third Business Day immediately following the date on which all of the
conditions set forth in Sections 6.1 and 6.2 hereof are satisfied, or such other
date as the parties may agree.

    

    “Intellectual Property Rights”
has the meaning set forth in Section 3.1(o).

    

    “Investment Amount” means,
with respect to each Investor, the Investment Amount indicated on such
Investor’s signature page to this Agreement (subject to the Company’s right, in
its sole discretion, to reduce or cut back such amount).

    

    “Investor Deliverables” has
the meaning set forth in Section 2.2(b).

    

    “Investor Party” has the
meaning set forth in Section 5.7.

    

    “Legend Removal Date” has the
meaning set forth in Section 5.1(a).

    

    “Lien” means any lien, charge,
encumbrance, security interest, right of first refusal or other restrictions of
any kind.

    

    “Losses” has the meaning set
forth in Section 5.7.

    

    “Material Adverse Effect”
means any of (i) a material and adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material and adverse effect
on the results of operations, assets, prospects, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) a material impairment of the Company’s ability to perform on a timely
basis its obligations under any Transaction Document.

    

    “New York Courts” means the
state and federal courts sitting in the State of New York.

    

    “Non-Responsive Investor” has
the meaning set forth in Section 4.4(a).

    

    “OFAC” has the meaning set
forth in Section 3.1(ee).

    

    “Outside Date” means September
30, 2010.

    

    “Per Unit Purchase Price”
equals $2.40.

    
      
         

      

      
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    “Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

    

    “Preferred Stock” means the
preferred stock of the Company, par value $0.01 per share.

    

    “Prior Investors” means the
following holders of shares of Series B Preferred Stock: Empire Capital
Partners, LP; Empire Capital Partners, Ltd; Empire Capital Partners Enhanced
Master Fund, Ltd; Scott A. Fine; Focus Fund, L.P.; The Quercus Trust; Peter J.
Richards; and Robert S. Trump.

    

    “Prior Warrants” has the
meaning set forth in Section 3.1(g).

    

    “Proceeding” means an action,
claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened.

    

    “Prospectus” has the meaning
set forth in Section 4.3.

    

    “Registrable Securities” means
the Conversion Shares and the Warrant Shares; provided, however, that the
Investors shall not be required to convert any Shares or to exercise any
Warrants in order to have the Conversion Shares issuable upon conversion of such
Shares or the Warrant Shares issuable upon exercise of such Warrants included in
any Registration Statement.

    

    “Registration Period” has the
meaning set forth in Section 4.3.

    

    “Registration Statement” means
a registration statement filed on the appropriate Form with, and declared
effective by, the Commission under the Securities Act and covering the resale by
the Investors of the Registrable Securities.

    

    “Requested Information” has
the meaning set forth in Section 4.4(a).

    

    “Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

    

    “SEC Reports” has the meaning
set forth in Section 3.1(h).

    

    “Securities” means the Shares,
the Warrants, the Conversion Shares and the Warrant Shares.

    

    “Securities Act” means the
Securities Act of 1933, as amended.

    

    “Series A Preferred Stock”
means the shares of the Preferred Stock that have been designated as “Series A
Convertible Preferred Stock.”

    

    “Series B Preferred Stock”
means the shares of the Preferred Stock that have been designated as “Series B
Convertible Preferred Stock.”

    

    “Shares” means the shares of
Series B Preferred Stock issued or issuable to the Investors pursuant to this
Agreement.

    

    “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps and
similar arrangements (including on a total return basis), and sales and other
transactions through non-US broker dealers or foreign regulated
brokers.

    
      
         

      

      
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    “Subsidiary” means any
“significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X
promulgated by the Commission under the Exchange Act.

    

    “Trading Day” means (i) a day
on which the Common Stock is traded on a Trading Market, or (ii) if the Common
Stock is not listed on a Trading Market, a day on which the Common Stock is
traded in the over-the-counter market, as reported by the OTC Bulletin Board, or
(iii) if the Common Stock is not then listed or quoted on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business
Day.

    

    “Trading Market” means
whichever of the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market, or the Nasdaq Capital Market, if any, on which the
Common Stock is listed or quoted for trading on the date in
question.

    

    “Transaction Documents” means
this Agreement, the Warrants and any other documents or agreements executed in
connection with the transactions contemplated hereunder.

    

    “Warrant Exercise Price”
equals $0.30 per Warrant Share.

    

    “Warrants” means the Common
Stock Purchase Warrants in the form of Exhibit A, which
are issuable to the Investors at the Closing.

    

    “Warrant Shares” means the
shares of Common Stock issuable upon exercise of the Warrants.

    

    ARTICLE
2

    

    Purchase and
Sale

    

    Section 2.1.  Increase
in Authorized Series B Preferred Stock.  The Company shall adopt and file
with the Secretary of State of the State of Delaware on or before the Initial
Closing Date a Certificate of Increase, in the form of Exhibit B
attached to this Agreement, designating an additional 2,083,334 shares of the
authorized and previously undesignated Preferred Stock as Series B Preferred
Stock (the “Certificate of
Increase”).

    

    Section
2.2  Closings.  Subject to the
terms and conditions set forth in this Agreement, at each Closing the Company
shall issue and sell to each Investor purchasing Shares and Warrants at such
Closing, and each Investor shall, severally and not jointly, purchase from the
Company by delivering such Investor’s Investment Amount, the Shares and the
Warrants representing such Investor’s Investment Amount. The Closings shall take
place at the offices of  Nixon Peabody, LLP, 100 Summer Street,
Boston, Massachusetts 02110 on the Closing Date or at such other location or
time as the parties may agree.  After the Initial Closing, the Company
may sell, to one or more additional Investors, pursuant to this Agreement,
additional Shares and Warrants, provided that (i) such subsequent sale is
consummated prior to the Outside Date, (ii) any such additional Investor shall
become a party to this Agreement by executing and delivering a counterpart
signature page to this Agreement and (iii) the Company gives all Investors prompt notice of the Closing of such
subsequent sale.  Except as provided in the foregoing sentence, after
the Initial Closing the Company will not offer, issue or sell any shares of
Series B Preferred Stock.

    
      
         

      

      
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    Section 2.3.  Closing
Deliveries.

    

    
      	
               
      

            	
              (a)

            	
              At
      each Closing, the Company shall deliver or cause to be delivered to each
      Investor purchasing Shares and Warrants at such Closing the following
      (the “Company
      Deliverables”):

            

    

    

    
      	
               
      

            	
              (i)

            	
              A
      certificate evidencing a number of Shares equal to such Investor’s
      Investment Amount divided by the Per Unit Purchase Price, registered in
      the name of such Investor;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              A
      Warrant, registered in the name of such Investor, pursuant to which such
      Investor shall have the right to acquire the number of Warrant Shares
      equal to (a) (i) such Investor’s Investment Amount multiplied by (ii) 2.0,
      divided by (b)
      the Warrant Exercise Price (which number of Warrant Shares shall be
      subject to adjustment in accordance with the
  Warrant);

            

    

    

    
      	
               
      

            	
              (iii)

            	
              The
      legal opinion of Company Counsel, in agreed form, addressed to the
      Investors;

            

    

    

    
      	
               
      

            	
              (iv)

            	
              Copies
      of each of the following documents:

            

    

    

    
      	
               
      

            	
              (A)

            	
              the
      Certificate of Incorporation of the Company, together with all amendments
      thereto (including the Certificate of Increase), certified by the
      Secretary of State of the State of Delaware as of a date not more than
      five Business Days prior to the Closing
Date;

            

    

    

    
      	
               
      

            	
              (B)

            	
              resolutions
      of the board of directors of the Company approving the execution, delivery
      and performance of the Transaction Documents and the transactions
      contemplated thereby, certified by the Secretary of the Company to be in
      full force and effect on the Closing
Date;

            

    

    

    
      	
               
      

            	
              (C)

            	
              a
      good standing certificate of the Company issued by the Secretary of State
      of the State of Delaware dated as of a date no earlier than five Business
      Days prior to the Closing Date;

            

    

    

    
      	
               
      

            	
              (D)

            	
              the
      By-laws of the Company, certified by the Secretary of the Company to be in
      full force and effect on the Closing Date;
and

            

    

    

    
      	
               
      

            	
              (E)

            	
              irrevocable
      instructions to the Company’s transfer agent as to the reservation and
      issuance of the Conversion Shares and the Warrant
  Shares.

            

    

    

    
      	
               
      

            	
              (b)

            	
              At
      each Closing, each Investor purchasing Shares and Warrants at such Closing
      shall deliver or cause to be delivered to the Company its Investment
      Amount, in United States dollars in immediately available funds, by wire
      transfer to an account designated in writing by the Company for such
      purpose.

            

    

    
      
         

      

      
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    ARTICLE
3

    

    Representations and
Warranties

    

    Section 3.1.  Representations
and Warranties of the Company. The Company hereby makes the
following representations and warranties to each Investor:

    

    
      	
               
      

            	
              (a)

            	
              Subsidiaries. The Company has no
      direct or indirect Subsidiaries other than as specified in the SEC
      Reports. Except as disclosed in the SEC Reports, the Company owns,
      directly or indirectly, all of the capital stock of each
      Subsidiary.  The shares of the capital stock of CASTion owned by
      the Company are subject to a Lien granted to Spencer Trask Specialty
      Group, LLC, as agent for itself and certain other secured parties,
      pursuant to a certain Stock Pledge Agreement dated as of July 2,
      2007.  The Company’s ownership interests in all of the other
      Subsidiaries are subject to a Lien granted to The Quercus Trust, as agent
      for itself and certain other Prior Investors, pursuant to a certain
      Security Agreement dated as of March 1, 2010.  All the issued
      and outstanding shares of capital stock of each Subsidiary are validly
      issued and are fully paid, non-assessable and free of preemptive and
      similar rights.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Organization
      and Qualification. Each of the Company
      and each Subsidiary is duly incorporated or otherwise organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      incorporation or organization (as applicable), with the requisite power
      and authority to own and use its properties and assets and to carry on its
      business as currently conducted. Neither the Company nor any Subsidiary is
      in violation of any of the provisions of its respective certificate or
      articles of incorporation, bylaws or other organizational or charter
      documents. Each of the Company and each Subsidiary is duly qualified to
      conduct its respective business and is in good standing as a foreign
      corporation or other entity in each jurisdiction in which the nature of
      the business conducted or property owned by it makes such qualification
      necessary, except where the failure to be so qualified or in good
      standing, as the case may be, could not, individually or in the aggregate,
      have or reasonably be expected to result in a Material Adverse Effect, and
      no proceedings have been instituted in any such jurisdiction revoking,
      limiting or curtailing, or seeking to revoke, such power and authority or
      qualification.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Authorization;
      Enforcement. The Company has the
      requisite corporate power and authority to enter into and to consummate
      the transactions contemplated by each of the Transaction Documents and
      otherwise to carry out its obligations thereunder. The execution and
      delivery of each of the Transaction Documents by the Company and the
      consummation by it of the transactions contemplated thereby have been duly
      authorized by all necessary action on the part of the Company and no
      further action is required by the Company in connection therewith. Each
      Transaction Document has been (or upon delivery will have been) duly
      executed by the Company and, when delivered in accordance with the terms
      hereof, will constitute the valid and binding obligation of the Company
      enforceable against the Company in accordance with its terms, except as
      such enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally the enforcement of, creditors’ rights and remedies or
      by other equitable principles of general
  application.

            

    

    
      
         

      

      
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              (d)

            	
              No
      Conflicts.
      The execution, delivery and performance of the Transaction Documents by
      the Company and the consummation by the Company of the transactions
      contemplated thereby do not and will not (i) conflict with or violate any
      provision of the Company’s or any Subsidiary’s certificate or articles of
      incorporation, bylaws or other organizational or charter documents, or
      (ii) conflict with, or constitute a default (or an event that with notice
      or lapse of time or both would become a default) under, or give to others
      any rights of termination, amendment, acceleration or cancellation (with
      or without notice, lapse of time or both) of, or result in the imposition
      of any Lien upon any of the material properties or assets of the Company
      or of any Subsidiary pursuant to, any agreement, credit facility, debt or
      other instrument (evidencing a Company or Subsidiary debt or otherwise) or
      other understanding to which the Company or any Subsidiary is a party or
      by which any property or asset of the Company or any Subsidiary is bound
      or affected, or (iii) result in a violation of any law, rule, regulation,
      order, judgment, injunction, decree or other restriction of any court or
      governmental authority to which the Company or a Subsidiary is subject
      (including federal and state securities laws and regulations), or by which
      any property or asset of the Company or a Subsidiary is bound or affected;
      except in the case of each of clauses (ii) and (iii), such as could not,
      individually or in the aggregate, have or reasonably be expected to result
      in a Material Adverse Effect.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Filings,
      Consents and Approvals. The Company is not
      required to obtain any consent, waiver, authorization or order of, give
      any notice to, or make any filing or registration with, any court or other
      federal, state, local or other governmental authority (a “Governmental
      Authority”) or other Person in connection with the execution,
      delivery and performance by the Company of the Transaction Documents and
      the consummation of the transactions contemplated thereby, other than (i)
      the filing with the Secretary of State of the State of Delaware, on or
      prior to the Initial Closing Date, of the Certificate of Increase, (ii)
      the filing with the Commission of one or more Registration Statements in
      accordance with the requirements of Article  4 of this
      Agreement, (iii) filings required by state securities laws, (iv) the
      filing of a Notice of Sale of Securities on Form D with the Commission
      under Regulation D of the Securities Act, (v) the filing of a Form 8-K with the Commission
      to announce the transaction with appropriate exhibits attached,
      (vi) any filings required in accordance with Section 4.3(d), and
      (vii) those that have been made or
      obtained prior to the date of this
Agreement.

            

    

    

    
      	
               
      

            	
              (f)

            	
              Issuance
      of the Securities. The Securities have
      been duly authorized.  The Shares and Warrants, when issued and
      paid for in accordance with this Agreement, will be duly and validly
      issued, fully paid and nonassessable, free and clear of all Liens. The
      Company has reserved and set aside from its duly authorized capital stock
      a sufficient number of shares of Common Stock to satisfy in full the
      Company’s obligations (i) to issue the Warrant Shares upon exercise of the
      Warrants and (ii) to issue the Conversion Shares upon conversion of the
      Shares.  The Warrants Shares, when issued and paid for upon
      exercise of the Warrants in accordance with their terms, and the
      Conversion Shares, when issued upon conversion of the Shares in accordance
      with their terms, will be duly and validly issued, fully paid and
      nonassessable, free and clear of all
Liens.

            

    

    
      
         

      

      
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              (g)

            	
              Capitalization. The authorized capital
      stock of the Company consists of 300,000,000 shares of Common Stock and
      20,000,000 shares of Preferred Stock, of which 10,000,000 shares have been
      designated as Series A Preferred Stock, 6,454,621 shares have been
      designated as Series B Preferred Stock, and 3,545,379 shares remain
      undesignated.  As of the close of business on the Business Day
      immediately prior to the date hereof, (i) 208,334 shares of Series A
      Preferred Stock were issued and outstanding, (ii) 3,829,622 shares of
      Series B Preferred Stock were issued and outstanding, and (iii) 53,621,887
      shares of Common Stock were issued and outstanding, all of which are
      validly issued, fully-paid and non-assessable.  As of the close of
      business on the Business Day immediately prior to the date hereof, (i)
      133,797 shares of Common Stock were held by the Company in Treasury, (ii)
      22,615,402 shares of Common Stock were reserved for issuance upon exercise
      of outstanding options granted to employees, directors, and consultants of
      the Company (the “Company
      Stock Options”); (iii) 3,380,898 shares of Common Stock were
      reserved for issuance under the Company’s 2008 Incentive Stock Plan upon
      exercise of options and other rights not yet granted under such plan (iv)
      55,519,710 shares of Common Stock were reserved for issuance upon exercise
      of outstanding warrants to purchase Common Stock (the “Prior Warrants”); (v)
      208,334 shares of Common Stock were reserved for issuance upon conversion
      of outstanding shares of Series A Preferred Stock, (vi) 38,296,220 shares
      of Common Stock were reserved for issuance upon conversion of outstanding
      shares of Series B Preferred Stock, and (vii) 22,253,693 shares of Common
      Stock were reserved for issuance upon conversion of outstanding
      convertible notes, debentures or securities (“Convertible
      Securities”). The Company has not issued any capital stock since
      its most recently filed SEC Report.  Except for the Prior
      Investors (who hold rights of first refusal pursuant to that certain
      Securities Purchase Agreement dated November 19, 2009 among the Company
      and the Prior Investors, which rights have been effectively waived with
      respect to the transactions contemplated by the Transaction Documents), no
      Person has any right of first refusal, preemptive right, right of
      participation, or any similar right to participate in the transactions
      contemplated by the Transaction Documents.  Except pursuant to the
      outstanding shares of Series A Preferred Stock, the outstanding shares of
      Series B Preferred Stock, the Company Stock Options or the Prior Warrants
      or as a result of the purchase and sale of the Securities as contemplated
      by this Agreement, there are no outstanding options, warrants, rights to
      subscribe to, calls or commitments of any character whatsoever relating
      to, or securities, rights or obligations convertible into or exchangeable
      for, or giving any Person any right to subscribe for or acquire, any
      shares of Common Stock, or contracts, commitments, understandings or
      arrangements by which the Company or any Subsidiary is or may become bound
      to issue additional shares of Common Stock or Common Stock
      Equivalents.  The issue and sale of the Securities will not obligate
      the Company to issue shares of Common Stock or other securities to any
      Person (other than the Investors) and will not result in a right of any
      holder of Company securities to adjust the exercise, conversion, exchange
      or reset price under such securities. All of the outstanding shares of
      capital stock of the Company are validly issued, fully paid and
      nonassessable, have been issued in compliance with all federal and state
      securities laws, and none of such outstanding shares was issued in
      violation of any preemptive rights or similar rights to subscribe for or
      purchase securities.  No further approval or authorization of any
      stockholder, the Board of Directors of the Company or others is required
      for the issuance and sale of the Securities.  Except for a certain
      Voting Agreement dated November 19, 2009 among the Company and the Prior
      Investors, there are no stockholders agreements, voting agreements or
      other similar agreements with respect to the Company’s capital stock to
      which the Company is a party or, to the knowledge of the Company, between
      or among any of the Company’s
stockholders.

            

    

    
      
         

      

      
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              (h)

            	
              SEC
      Reports; Financial Statements.  The Company
      has filed all reports required to be filed by it under the Securities Act
      and the Exchange Act, including pursuant to Section 13(a) or 15(d)
      thereof, since November 15, 2009 (the foregoing materials, being
      collectively referred to herein as the “SEC Reports”) on a
      timely basis or has timely filed a valid extension of such time of filing
      and has filed any such SEC Reports prior to the expiration of any such
      extension.  As of their respective dates, the SEC Reports
      complied in all material respects with the requirements of the Securities
      Act and the Exchange Act and the rules and regulations of the Commission
      promulgated thereunder, and none of the SEC Reports, when filed, contained
      any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary in order to make the
      statements therein, in light of the circumstances under which they were
      made, not misleading.  The financial statements of the Company
      included in the SEC Reports comply in all material respects with
      applicable accounting requirements and the rules and regulations of the
      Commission with respect thereto as in effect at the time of
      filing.  Such financial statements have been prepared in
      accordance with GAAP applied on a consistent basis during the periods
      involved, except as may be otherwise specified in such financial
      statements or the notes thereto, and fairly present in all material
      respects the financial position of the Company and its consolidated
      Subsidiaries as of and for the dates thereof and the results of operations
      and cash flows for the periods then ended, subject, in the case of
      unaudited statements, to normal, immaterial, year-end audit
      adjustments.

            

    

    

    
      	
               
      

            	
              (i)

            	
              Material
      Changes.
      Since the date of the latest audited financial statements included within
      the SEC Reports, except as specifically disclosed in the SEC Reports, (i)
      there has been no event, occurrence or development that has had or that
      could reasonably be expected to result in a Material Adverse Effect, (ii)
      the Company has not incurred any liabilities (contingent or otherwise)
      other than (A) trade payables, accrued expenses and other liabilities
      incurred in the ordinary course of business consistent with past practice
      and (B) liabilities not required to be reflected in the Company’s
      financial statements pursuant to GAAP or required to be disclosed in
      filings made with the Commission, (iii) the Company has not altered its
      method of accounting or the identity of its auditors, (iv) the Company has
      not declared or made any dividend or distribution of cash or other
      property to its stockholders or purchased, redeemed or made any agreements
      to purchase or redeem any shares of its capital stock, and (v) the Company
      has not issued any equity securities to any officer, director or
      Affiliate, except pursuant to existing Company stock option plans. The
      Company does not have pending before the Commission any request for
      confidential treatment of
information.

            

    

    

    
      	
               
      

            	
              (j)

            	
              Litigation. There is no Action
      which (i) adversely affects or challenges the legality, validity or
      enforceability of any of the Transaction Documents or the Securities or
      (ii) except as specifically disclosed in writing to the Investors, could,
      if there were an unfavorable decision, individually or in the aggregate,
      have or reasonably be expected to result in a Material Adverse Effect.
      Neither the Company nor any Subsidiary, nor any director or officer
      thereof (in his or her capacity as such), is or has been the subject of
      any Action involving a claim of violation of or liability under federal or
      state securities laws or a claim of breach of fiduciary duty. There has
      not been, and to the knowledge of the Company, there is not pending any
      investigation by the Commission involving the Company or any current or
      former director or officer of the Company (in his or her capacity as
      such). The Commission has not issued any stop order or other order
      suspending the effectiveness of any registration statement filed by the
      Company or any Subsidiary under the Exchange Act or the Securities
      Act.  There are no outstanding comments by the Staff of the
      Commission on any filing by the Company or any Subsidiary under the
      Exchange Act or the Securities Act.

            

    

    

    
      	
               
      

            	
              (k)

            	
              Labor
      Relations.
      No material labor dispute exists or, to the knowledge of the Company, is
      imminent with respect to any of the employees of the
    Company.

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (l)

            	
              Compliance. Except as specifically
      disclosed in writing to the Investors, neither the Company nor any
      Subsidiary (i) is in default under or in violation of (and no event has
      occurred that has not been waived that, with notice or lapse of time or
      both, would result in a default by the Company or any Subsidiary under),
      nor has the Company or any Subsidiary received notice of a claim that it
      is in default under or that it is in violation of, any indenture, loan or
      credit agreement or any other agreement or instrument to which it is a
      party or by which it or any of its properties is bound (whether or not
      such default or violation has been waived), (ii) is in violation of any
      order of any court, arbitrator or governmental body, or (iii) is or has
      been in violation of any statute, rule or regulation of any governmental
      authority, including without limitation all foreign, federal, state and
      local laws relating to taxes, environmental protection, occupational
      health and safety, product quality and safety and employment and labor
      matters, except in each case as could not, individually or in the
      aggregate, have or reasonably be expected to result in a Material Adverse
      Effect.

            

    

    

    
      	
               
      

            	
              (m)

            	
              Regulatory
      Permits.
      The Company and the Subsidiaries possess all certificates, authorizations
      and permits issued by the appropriate federal, state, local or foreign
      regulatory authorities necessary to conduct their respective businesses as
      described in the SEC Reports, except where the failure to possess such
      permits could not, individually or in the aggregate, have or reasonably be
      expected to result in a Material Adverse Effect, and neither the Company
      nor any Subsidiary has received any notice of proceedings relating to the
      revocation or modification of any such
permits.

            

    

    

    
      	
               
      

            	
              (n)

            	
              Title
      to Assets.
      The Company and the Subsidiaries have good and marketable title in fee
      simple to all real property owned by them that is material to their
      respective businesses and good and marketable title in all personal
      property owned by them that is material to their respective businesses, in
      each case free and clear of all Liens, except for (i) the Lien on
      substantially all of the Company’s assets (other than the shares of the
      capital stock of CASTion owned beneficially or of record by the Company)
      granted to The Quercus Trust, as agent for itself and certain other Prior
      Investors, pursuant to a certain Security Agreement dated as of March 1,
      2010 and (ii) the Lien on the shares of the capital stock of CASTion owned
      by the Company granted to Spencer Trask Specialty Group, LLC, as agent for
      itself and certain other secured parties, pursuant to a certain Stock
      Pledge Agreement dated as of July 2, 2007. Any real property and
      facilities held under lease by the Company and the Subsidiaries are held
      by them under valid, subsisting and enforceable leases of which the
      Company and the Subsidiaries are in compliance, except as could not,
      individually or in the aggregate, have or reasonably be expected to result
      in a Material Adverse Effect.

            

    

    

    
      	
               
      

            	
              (o)

            	
              Patents
      and Trademarks. The Company and the
      Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade
      names, copyrights, licenses and other similar rights that are necessary or
      material for use in connection with their respective businesses as
      described in the SEC Reports and which the failure to so have could,
      individually or in the aggregate, have or reasonably be expected to result
      in a Material Adverse Effect (collectively, the “Intellectual Property
      Rights”). The SEC Reports describe all claims and Actions made or
      filed by others against the Company deemed material by the Company to the
      effect that Intellectual Property Rights used by the Company or any
      Subsidiary violate or infringe upon the rights of such claimant. Except as
      set forth in the SEC Reports, to the knowledge of the Company, all of the
      Intellectual Property Rights are enforceable and there is no existing
      infringement by another Person of any of the Intellectual Property
      Rights.

            

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (p)

            	
              Insurance. The Company and the
      Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are
      prudent and customary in the businesses in which the Company and the
      Subsidiaries are engaged. The Company has no reason to believe that it
      will not be able to renew its and the Subsidiaries’ existing insurance
      coverage as and when such coverage expires or to obtain similar coverage
      from similar insurers as may be necessary to continue its business on
      terms consistent with market for the Company’s and such Subsidiaries’
      respective lines of business.

            

    

    

    
      	
               
      

            	
              (q)

            	
              Transactions
      With Affiliates and Employees. Except as set forth in
      the SEC Reports, none of the officers or directors of the Company and, to
      the knowledge of the Company, none of the employees of the Company is a
      party to any transaction with the Company or any Subsidiary (other than
      for services as employees, officers and directors), including any
      contract, agreement or other arrangement providing for the furnishing of
      services to or by, providing for rental of real or personal property to or
      from, or otherwise requiring payments to or from any officer, director or
      such employee or, to the knowledge of the Company, any entity in which any
      officer, director, or any such employee has a substantial interest or is
      an officer, director, trustee or
partner.

            

    

    

    
      	
               
      

            	
              (r)

            	
              Sarbanes-Oxley;
      Internal Accounting Controls.  The Company is
      in material compliance with all provisions of the Sarbanes-Oxley Act of
      2002 (including the rules and regulations of the Commission adopted
      thereunder) which are applicable to it as of the Closing Date.  The
      Company’s certifying officers have evaluated the effectiveness of the
      Company’s controls and procedures as of the date prior to the filing date
      of the most recently filed periodic report under the Exchange Act (such
      date, the “Evaluation
      Date”).  The Company presented in its most recently filed
      periodic report under the Exchange Act the conclusions of the certifying
      officers about the effectiveness of the disclosure controls and procedures
      based on their evaluations as of the Evaluation Date.  Since the
      Evaluation Date, there have been no significant changes in the Company’s
      internal controls (as such term is defined in Item 307(b) of Regulation
      S-K under the Exchange Act) or, to the Company’s knowledge, in other
      factors that could significantly affect the Company’s internal
      controls.

            

    

    

    
      	
               
      

            	
              (s)

            	
              Solvency. Based on the financial
      condition of the Company as of the Closing Date (and assuming that the
      Closing shall have occurred), (i) the Company’s assets do not constitute
      unreasonably small capital to carry on its business for the current fiscal
      year as now conducted and as proposed to be conducted including its
      capital needs taking into account the particular capital requirements of
      the business conducted by the Company, and projected capital requirements
      and capital availability thereof; and (ii) the current cash flow of the
      Company, together with the proceeds the Company would receive, were it to
      liquidate all of its assets, after taking into account all anticipated
      uses of the cash, would be sufficient to pay all amounts on or in respect
      of its debt when such amounts are required to be paid. The Company does
      not intend to incur indebtedness beyond its ability to pay such debts as
      they mature (taking into account the timing and amounts of cash to be
      payable on or in respect of its
debt).

            

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (t)

            	
              Certain
      Fees. No
      brokerage or finder’s fees or commissions are or will be payable by the
      Company to any broker, financial advisor or consultant, finder, placement
      agent, investment banker, bank or other Person with respect to the
      transactions contemplated by this Agreement except that (a) a fee in an
      amount equal to 6% of the aggregate Investment Amount is payable by the
      Company to McNamee
      Lawrence Securities, LLC and (b) the Company is obligated to issue to
      McNamee
      Lawrence Securities, LLC a warrant for the purchase, at an exercise price
      of $0.01 per share, of that number of shares of Series B Preferred Stock
      determined by dividing (i) 2% of the aggregate Investment Amount by (ii)
      $2.40. The Investors shall have no obligation with respect to any fees or
      with respect to any claims (other than such fees or commissions owed by an
      Investor pursuant to written agreements executed by such Investor which
      fees or commissions shall be the sole responsibility of such Investor)
      made by or on behalf of other Persons for fees of a type contemplated in
      this Section that may be due in connection with the transactions
      contemplated by this Agreement.

            

    

    

    
      	
               
      

            	
              (u)

            	
              Certain
      Registration Matters. Assuming the accuracy
      of the Investors’ representations and warranties set forth in Section
      3.2(b)-(e), no registration under the Securities Act is required for the
      offer and sale of the Securities by the Company to the Investors under the
      Transaction Documents.  Except as specified in the SEC Reports,
      the Company has not granted or agreed to grant to any Person any rights
      (including “piggy-back” registration rights) to have any securities of the
      Company registered with the Commission or any other governmental authority
      that have not been satisfied.

            

    

    

    
      	
               
      

            	
              (v)

            	
              Investment
      Company.
      The Company is not, and is not an Affiliate of, and immediately following
      the Closing will not have become, an “investment company” within the
      meaning of the Investment Company Act of 1940, as
  amended.

            

    

    

    
      	
               
      

            	
              (w)

            	
              Application
      of Anti-Takeover Protections. The Company has taken all necessary action, if
      any, in order to render inapplicable any control share acquisition,
      business combination, poison pill (including any distribution under a
      rights agreement) or other similar anti-takeover provision under the
      Company’s Articles of Incorporation or the laws of its state of
      incorporation that is or could become applicable to the Investors as a
      result of the Investors and the Company fulfilling their obligations or
      exercising their rights under the Transaction Documents, including without
      limitation the Company’s issuance of the Securities and the Investors’
      ownership of the Securities.

            

    

    

    
      	
               
      

            	
              (x)

            	
              No
      Additional Agreements. The Company does not
      have any agreement or understanding with any Investor with respect to the
      transactions contemplated by the Transaction Documents other than as
      specified in the Transaction
Documents.

            

    

    

    
      	
               
      

            	
              (y)

            	
              Material
      Non-Public Information. The Company confirms
      that neither it nor any Person acting on its behalf has provided any
      Investor or its respective agents or counsel with any information that the
      Company believes constitutes material, non-public information except
      insofar as the existence and terms of the proposed transactions hereunder
      may constitute such information.  The Company understands and
      confirms that the Investors will rely on the foregoing representations and
      covenants in effecting transactions in securities of the
      Company.

            

    

    

    
      	
               
      

            	
              (z)

            	
              Full
      Disclosure.  All
      disclosure provided to the Investors regarding the Company, its business
      and the transactions contemplated hereby, furnished by or on behalf of the
      Company (including the Company’s representations and warranties set forth
      in this Agreement) are true and correct and do not contain any untrue
      statement of a material fact or omit to state any material fact necessary
      in order to make the statements made therein, in light of the
      circumstances under which they were made, not
  misleading.

            

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (aa)

            	
              Environmental
      Matters.  To the Company’s knowledge: (i) the Company and
      its Subsidiaries have complied with all applicable Environmental Laws;
      (ii) the properties currently owned or operated by Company (including
      soils, groundwater, surface water, buildings or other structures) are not
      contaminated with any Hazardous Substances; (iii) the properties formerly
      owned or operated by Company or its Subsidiaries were not contaminated
      with Hazardous Substances during the period of ownership or operation by
      Company and its Subsidiaries; (iv) Company and its Subsidiaries are not
      subject to liability for any Hazardous Substance disposal or contamination
      on any third party property; (v) Company and its Subsidiaries have not
      been associated with any release or threat of release of any Hazardous
      Substance; (vi) Company and its Subsidiaries have not received any notice,
      demand, letter, claim or request for information alleging that Company and
      its Subsidiaries may be in violation of or liable under any Environmental
      Law; and (vii) Company and its Subsidiaries are not subject to any orders,
      decrees, injunctions or other arrangements with any Governmental Authority
      or subject to any indemnity or other agreement with any third party
      relating to liability under any Environmental Law or relating to Hazardous
      Substances.

            

    

     

    As used in this Agreement, the term “Environmental Law” means any federal, state, local or foreign law,
regulation, order, decree, permit, authorization, opinion, common law or agency
requirement relating to: (A) the protection, investigation or restoration of the
environment, health and safety, or natural resources; (B) the handling, use,
presence, disposal, release or threatened release of any Hazardous Substance or
(C) noise, odor, wetlands, pollution, contamination or any injury or threat of
injury to persons or property.

     

    As used in this Agreement, the term “Hazardous Substance” means any substance that is: (i) listed, classified or
regulated pursuant to any Environmental Law; (ii) any petroleum product or
by-product, asbestos-containing material, lead-containing paint or plumbing,
polychlorinated biphenyls, radioactive materials or radon; or (iii) any other
substance which is the subject of regulatory action by any Governmental
Authority pursuant to any Environmental Law.

     

    
      	
               
      

            	
              (bb)

            	
              Taxes.  Except as specifically
      disclosed in writing to the Investors, the Company and its Subsidiaries have filed all
      necessary federal, state and foreign income and franchise tax returns when
      due (or obtained appropriate extensions for filing) and have paid or
      accrued all taxes shown as due thereon, and the Company has no knowledge
      of a tax deficiency which has been or might be asserted or threatened
      against it or any Subsidiary which would have a Material Adverse
      Effect.

            

    

     

    
      	
               
      

            	
              (cc)

            	
              Private
      Offering.  Assuming the correctness of the
      representations and warranties of the Investors set forth in this
      Agreement, the offer and sale of the Shares and the Warrants hereunder
      are, and upon (i) exercise of the Warrants, the issuance of the Warrant
      Shares and (ii) upon conversion of the Shares, the issuance of the
      Conversion Shares will be, exempt from registration under the Securities
      Act.  Neither the Company nor any person acting on behalf of the
      Company has offered or sold any of the Shares or the Warrants by any form
      of general solicitation or general advertising.  The Company has
      offered the Shares and Warrants for sale only to the Investors and certain
      other “accredited investors” within the meaning of Rule 501 under the
      Securities Act.

            

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (dd)

            	
              ERISA.  Neither the Company nor any ERISA
      Affiliate maintains, contributes to or has any liability or contingent
      liability with respect to any employee benefit plan subject to
      ERISA.

            

    

     

    
      	
               
      

            	
              (ee)

            	
              Foreign
      Assets Control Regulations and Anti-Money Laundering.

            

    

     

    (i)        
OFAC.  Neither the issuance of the Shares and
Warrants to the Investors, nor the use of the respective proceeds thereof, shall
cause the Investors to violate the U.S. Bank Secrecy Act, as amended, and any
applicable regulations thereunder or any of the sanctions programs administered
by the U.S. Department of the Treasury’s Office of Foreign Assets Control
(“OFAC”) of the United States Department of Treasury, any
regulations promulgated thereunder by OFAC or under any affiliated or successor
governmental or quasi-governmental office, bureau or agency and any enabling
legislation or executive order relating thereto.  Without limiting the
foregoing, neither the Company nor any Subsidiary (i) is a person whose property
or interests in property are blocked or subject to blocking pursuant to
Section 1 of Executive Order 13224 of September 23, 200l Blocking Property
and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or
transactions prohibited by Section 2 of such executive order, or is
otherwise associated with any such person in any manner violative of
Section 2, or (iii) is a person on the list of Specially Designated
Nationals and Blocked Persons or subject to the limitations or prohibitions
under any other OFAC regulation or executive order.

     

    (ii)       
USA
PATRIOT Act.  Each of the Company
and each of its Subsidiaries are in compliance, in all material respects, with
the Uniting and Strengthening of America by Providing the Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001.  No part of
the proceeds of the sale of the Shares and the Warrants hereunder will be used,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as
amended.

    

    Section
3.2.  Representations
and Warranties of the Investors.  Each Investor
hereby, for itself and for no other Investor, represents and warrants to the
Company as follows:

    

    
      	
               
      

            	
              (a)

            	
              Organization;
      Authority.
      Such Investor is an entity duly organized, validly existing and in good
      standing under the laws of the jurisdiction of its organization with the
      requisite corporate or partnership power and authority to enter into and
      to consummate the transactions contemplated by the applicable Transaction
      Documents and otherwise to carry out its obligations thereunder. The
      execution, delivery and performance by such Investor of the transactions
      contemplated by this Agreement has been duly authorized by all necessary
      corporate or, if such Investor is not a corporation, such partnership,
      limited liability company or other applicable like action, on the part of
      such Investor. This Agreement has been duly executed by such Investor, and
      when delivered by such Investor in accordance with terms hereof, will
      constitute the valid and legally binding obligation of such Investor,
      enforceable against it in accordance with its terms, except as such
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally the enforcement of, creditors’ rights and remedies or
      by other equitable principles of general
  application.

            

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              Investment
      Intent.
      Such Investor is acquiring the Securities as principal for its own account
      for investment purposes only and not with a view to or for distributing or
      reselling such Securities or any part thereof, without prejudice, however,
      to such Investor’s right at all times to sell or otherwise dispose of all
      or any part of such Securities in compliance with applicable federal and
      state securities laws. Subject to the immediately preceding sentence,
      nothing contained herein shall be deemed a representation or warranty by
      such Investor to hold the Securities for any period of time. Such Investor
      is acquiring the Securities hereunder in the ordinary course of its
      business. Such Investor does not have any agreement or understanding,
      directly or indirectly, with any Person to distribute any of the
      Securities.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Investor
      Status. At
      the time such Investor was offered the Securities, it was, and at the date
      hereof it is, and on each date on which it exercises Warrants it will be,
      an “accredited investor” as defined in Rule 501(a) under the Securities
      Act. Such Investor is not a registered broker-dealer under Section 15 of
      the Exchange Act.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Access
      to Information. Such Investor
      acknowledges that it has reviewed the SEC Reports and has been afforded
      (i) the opportunity to ask such questions as it has deemed necessary of,
      and to receive answers from, representatives of the Company concerning the
      terms and conditions of the offering of the Shares and the merits and
      risks of investing in the Securities; (ii) access to information about the
      Company and the Subsidiaries and their respective financial condition,
      results of operations, business, properties, management and prospects
      sufficient to enable it to evaluate its investment; and (iii) the
      opportunity to obtain such additional information that the Company
      possesses or can acquire without unreasonable effort or expense that is
      necessary to make an informed investment decision with respect to the
      investment. Neither such inquiries nor any other investigation conducted
      by or on behalf of such Investor or its representatives or counsel shall
      modify, amend or affect such Investor’s right to rely on the truth,
      accuracy and completeness of the SEC Reports and the Company’s
      representations and warranties contained in the Transaction
      Documents.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Certain
      Trading Activities. Such Investor has not
      directly or indirectly, nor has any Person acting on behalf of or pursuant
      to any understanding with such Investor, engaged in any transactions in
      the securities of the Company (including, without limitations, any Short
      Sales involving the Company’s securities) since the earlier to occur of
      (i) the time that such Investor was first contacted by the Company or any
      other Person regarding an investment in the Company and (ii) the 30th
      day prior to the date of this Agreement. Such Investor covenants that
      neither it nor any Person acting on its behalf or pursuant to any
      understanding with it will engage in any transactions in the securities of
      the Company (including Short Sales) prior to the time that the
      transactions contemplated by this Agreement are publicly
      disclosed.

            

    

    

    
      	
               
      

            	
              (f)

            	
              Independent
      Investment Decision. Such Investor has
      independently evaluated the merits of its decision to purchase Securities
      pursuant to the Transaction Documents, and such Investor confirms that it
      has not relied on the advice of any other Investor’s business and/or legal
      counsel in making such decision. Such Investor has not relied on the
      business or legal advice of the Company or any of its agents, counsel or
      Affiliates in making its investment decision hereunder, and confirms that
      none of such Persons has made any representations or warranties to such
      Investor in connection with the transactions contemplated by the
      Transaction Documents.

            

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              The
      Company acknowledges and agrees that no Investor has made or makes any
      representations or warranties with respect to the transactions
      contemplated hereby other than those specifically set forth in this
      Section 3.2.

            

    

    

    ARTICLE
4

    

    Registration
Rights

     

    Section
4.1.        Registration
Statement.  The Company shall prepare and file with the
Commission not later than November 30, 2010 (the “Filing Date”) a Registration
Statement relating to the offer and sale from time
to time on a continuous basis by the Investors of the Registrable
Securities and shall use commercially reasonable efforts to cause the Commission
to declare such Registration Statement effective under the Securities Act as
promptly as practicable, but in no event later than 120 days after the Filing
Date.  Notwithstanding the foregoing, the Company shall not be
obligated to register more Registrable Securities than permitted under the
Securities Act or any rule or regulation of the Commission promulgated
thereunder or any interpretation thereof by the Staff of the
Commission.  In the event the Company is unable to register all of the
Registrable Securities, the number of Registrable Securities to be registered
for the account of each Investor shall be reduced, pro rata, based on the total
number of Registrable Securities proposed to be registered and, as soon as
practical thereafter, the Company shall file another Registration Statement
covering the remaining Registrable Securities.  The Company shall not
include any securities other than the Registrable Securities in the Registration
Statement; provided, however, that the Company may include in the Registration
Statement securities for the accounts of other persons who hold contractual
“piggyback” registration rights pursuant to agreements entered into prior to the
date of this Agreement, so long as the inclusion of such securities in the
Registration Statement does not limit the ability of the Company to register all
of the Registrable Securities on such Registration Statement.

     

    Section
4.2.        Registration
Process.  The Company shall promptly (and, in any event, no
more than 24 hours after it receives comments from the Commission), notify the
Investors whose Registrable Securities are covered by the Registration Statement filed pursuant to this
Article 4 when and if it receives any comments from the Commission on such
Registration Statement or any amendment thereof
and promptly forward a copy of such comments, if they are in writing, to
such Investors.  At such time as the Commission indicates, either
orally or in writing, that it has no further comments with respect to such
Registration Statement or any amendment
thereof or that it is willing to entertain appropriate requests for
acceleration of effectiveness of such Registration Statement or any amendment thereof, the Company shall
promptly, and in no event later than two Business Days after receipt of such
indication from the Commission, request that the effectiveness of such
Registration Statement or any amendment thereof
be accelerated within 48 hours of the Commission’s receipt of such
request.  Within 24 hours of such declaration by the Commission, the
Company shall notify the Investors whose Registrable Securities are covered by
such Registration Statement that such Registration Statement or any amendment thereof has been declared
effective by the Commission.

    
      
         

      

      
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     Section
4.3.        Obligations
of the Company.  In connection with the registration of the
Registrable Securities, the Company shall:

     

    (a)       
Prepare and file the Registration Statement in
accordance with the time period set forth in Section 4.1 and promptly
prepare and file with the Commission such amendments (including post-effective
amendments) to the Registration Statement and supplements to the prospectus
included therein (a “Prospectus”) as may be necessary to
keep the Registration Statement continuously effective and in compliance with
the provisions of the Securities Act applicable thereto so as to permit the
Prospectus forming part thereof to be current and useable by Investors for
resales of the Registrable Securities until such
date as is the earlier of (x) the date when all Registrable Securities
covered by such Registration Statement have
been sold or (y) the date on which the
Registrable Securities may be sold without
any restriction (including volume limitations) pursuant to Rule 144
(the “Registration Period”) and take all lawful action
such that the Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, not misleading and that the Prospectus forming part of the
Registration Statement, and any amendment or supplement thereto, does not at any
time during the Registration Period include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.;

     

    (b)       
During the Registration Period, comply with
the provisions of the Securities Act with respect to the Registrable Securities
covered by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the Investors as set forth in the Prospectus forming part of the
Registration Statement;

     

    (c)       
Prior to the filing with the Commission of the Registration Statement (including any
amendments thereto) and the distribution or delivery of any Prospectus
(including any supplements thereto), provide draft copies thereof to the
Investors and reflect in such documents all such comments as the Investors (and
their counsel) reasonably may propose and furnish to each Investor whose
Registrable Securities are included in the Registration Statement and its legal
counsel identified to the Company, (i) promptly after the same is prepared
and publicly distributed, filed with the Commission, or received by the Company,
one copy of the Registration Statement, each Prospectus, and each amendment or
supplement thereto, and (ii) such number of copies of the Prospectus and
all amendments and supplements thereto and such other documents, as such
Investor may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor;

     

    (d)       
(i) register or qualify the Registrable Securities covered by the
Registration Statement under such securities or “blue sky” laws of such
jurisdictions as the Investors reasonably request, (ii) prepare and file in
such jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof at all times during the Registration Period,
(iii) take all such other lawful actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all such other lawful actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided,
however, that the Company shall not be required in connection therewith
or as a condition thereto to (A) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify, (B) subject itself to
general taxation in any such jurisdiction or (C) file a general consent to
service of process in any such jurisdiction;

    
      
         

      

      
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    (e)       
As promptly as practicable after becoming aware of such event, notify each
Investor of the occurrence of any event, as a result of which the Prospectus
included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and promptly prepare
an amendment to the Registration Statement and supplement to the Prospectus to
correct such untrue statement or omission, and deliver a number of copies of
such supplement and amendment to each Investor as such Investor may reasonably
request;

     

    (f)        
As promptly as practicable after becoming aware of such event, notify each
Investor who holds Registrable Securities being sold (or, in the event of an
underwritten offering, the managing underwriters) of the issuance by the
Commission of any stop order or other suspension of the effectiveness of the
Registration Statement and take all lawful action to effect the withdrawal,
rescission or removal of such stop order or
other suspension;

     

    (g)       
Take all such other lawful actions reasonably necessary to expedite and
facilitate the disposition by the Investors of their Registrable Securities in
accordance with the intended methods therefor provided in the Prospectus which
are customary under the circumstances;

     

    (h)       
Make generally available to its security holders as soon as practicable, but in
any event not later than eighteen (18) months after (i) the Effective Date of
the Registration Statement, and (ii) the effective date of each
post-effective amendment to the Registration Statement, as the case may be, an
earnings statement of the Company and its subsidiaries complying with
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder;

     

    (i)        
In the event of an underwritten offering, promptly include or incorporate in a
Prospectus supplement or post-effective amendment to the Registration Statement
such information as the underwriters reasonably agree should be included therein
and to which the Company does not reasonably object and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
practicable after it is notified of the matters to be included or incorporated
in such Prospectus supplement or post-effective amendment;

     

    (j)        
Make reasonably available for inspection by the Investors, any underwriter
participating in any disposition pursuant to the Registration Statement, and any
attorney, accountant or other agent retained by such Investors or any such
underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and
(ii) cause the Company’s officers, directors and employees to supply all
information reasonably requested by such Investors or any such underwriter,
attorney, accountant or agent in connection with the Registration Statement, in
each case, as is customary for similar due diligence examinations; provided, however, that all
records, information and documents that are designated in writing by the
Company, in good faith, as confidential, proprietary or containing any nonpublic
information shall be kept confidential by such Investors and any such
underwriter, attorney, accountant or agent (pursuant to an appropriate
confidentiality agreement in the case of any such holder or agent), unless such
disclosure is made pursuant to judicial process in a court proceeding (after
first giving the Company an opportunity promptly to seek a protective order or
otherwise limit the scope of the information sought to be disclosed) or is
required by law, or such records, information or documents become available to
the public generally or through a third party not in violation of an
accompanying obligation of confidentiality; and provided, further, that, if
the foregoing inspection and information gathering would otherwise disrupt the
Company’s conduct of its business, such inspection and information gathering
shall, to the maximum extent possible, be coordinated on behalf of the Investors
and the other parties entitled thereto by one firm of counsel designated by and on behalf of the majority in
interest of Investors and other parties;

    
      
         

      

      
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    (k)       
In connection with any offering, make such representations and warranties to the
Investors participating in such offering and to the underwriters if an underwritten offering, in
form, substance and scope as are customarily made by the Company to underwriters
in secondary underwritten offerings;

     

    (l)        
In connection with the Registration
Statement, obtain opinions of counsel to the Company (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
Investors) addressed to the Investors and the underwriters, if any, covering such matters as are
customarily covered in opinions requested in secondary underwritten offerings
(it being agreed that the matters to be covered by such opinions shall include,
without limitation, as of the date of the opinion and as of the Effective Time
of the Registration Statement or most recent post-effective amendment thereto,
as the case may be, the absence from the Registration Statement and the
Prospectus, including any documents incorporated by reference therein, of an
untrue statement of a material fact or the omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which they were made) not
misleading, subject to customary limitations);

     

    (m)       
In connection with the Registration
Statement, obtain “cold comfort” or
“procedures” letters and updates thereof from the independent public
accountants of the Company (and, if necessary, from the independent public
accountants of any subsidiary of the Company or of any business acquired by the
Company, in each case for which financial statements and financial data are, or
are required to be, included in the Registration Statement), addressed to each
Investor and each underwriter, if any, participating in an underwritten, if
any, in customary form and covering matters of the type customarily
covered in such letters in connection with
secondary offerings;

     

    (n)       
In connection with any underwritten offering, deliver such documents and
certificates as may be reasonably required by the managers, if any;

     

    (o)       
Cooperate with the Investors to facilitate
the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant
to the Registration Statement, which certificates shall, if required under the
terms of this Agreement, be free of all restrictive legends, and to enable such
Registrable Securities to be in such
denominations and registered in such names as any Investor may request and
maintain a transfer agent for the Common Stock; and

     

    (p)       
Use its commercially reasonable efforts to
cause all Registrable Securities covered by
the Registration Statement to be listed or qualified for trading on the
principal Trading Market, if any, on which the Common Stock is traded or listed
on the Effective Date of the Registration Statement.

    
      
         

      

      
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     Section
4.4.        Obligations
and Acknowledgements of the Investors.  In connection with the
registration of the Registrable Securities, the Investors shall have the
following obligations and hereby make the following
acknowledgements:

     

    (a)       
It shall be a condition precedent to the obligations of the Company to include the Registrable Securities of a
particular Investor in the Registration
Statement that such Investor (i) shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable Securities
and (ii) shall execute such documents in connection with such registration
as the Company may reasonably request.  At least ten Business Days
prior to the first anticipated filing date of a Registration Statement, the
Company shall notify each Investor of the information the Company requires from
such Investor (the “Requested Information”) if such Investor elects to
have any of its Registrable Securities included in the Registration
Statement.  If at least two Business Days prior to the anticipated
filing date the Company has not received the Requested Information from an
Investor (a “Non-Responsive Investor”), then the Company may file
the Registration Statement without including any Registrable Securities of such
Non-Responsive Investor and the Company shall have no further obligations under
this Article 4 to the Non-Responsive Investor
after such Registration Statement has been declared effective.  If
such Non-Responsive Investor notifies the Company and provides the Company the
information required hereby prior to the time the Registration Statement is
declared effective, the Company will file an amendment to the Registration
Statement that includes the Registrable Securities of such Non-Responsive
Investor; provided,
however, that the Company shall not be required to file such amendment to
the Registration Statement at any time after the earlier of (i) the Effective
Date of such Registration Statement or (ii) 115 days after the Filing
Date.

     

    (b)       
Each Investor agrees to cooperate with the Company in connection with the
preparation and filing of a Registration Statement hereunder, unless such
Investor has notified the Company in writing of its election to exclude all of
its Registrable Securities from such Registration Statement;

     

    (c)       
Each Investor agrees that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in Section 4.3(e) or 4.3(f),
it shall immediately discontinue its disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Investor’s receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 4.3(e) and, if so directed by the
Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor’s possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice; and

     

    (d)       
Each Investor acknowledges that it may be deemed to be a statutory underwriter
within the meaning of the Securities Act with respect to the Registrable
Securities being registered for resale by it, and each Investor which includes
Registrable Securities for offer and sale within a Registration Statement hereby
consents to the inclusion in such Registration Statement of a disclosure to such
effect.

    
      
         

      

      
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     Section
4.5.       Expenses
of Registration.  All expenses, other than underwriting
discounts and commissions, incurred in connection with registrations, filings or
qualifications pursuant to this Article 4, including, without limitation,
all registration, listing, and qualifications fees, printing and engraving fees,
accounting fees, and the fees and disbursements of counsel for the Company, and
(with respect to the preparation and filing of the Registration Statement) the
reasonable fees of one firm of legal counsel for the Investors (selected by
Investors holding a majority of the Registrable Securities being included in
the Registration Statement) shall be borne
by the Company.

     

     Section
4.6.        Indemnification
and Contribution.

     

    (a)       
Indemnification
by the Company.  The Company
shall indemnify and hold harmless each Investor and each underwriter, if any,
which facilitates the disposition of Registrable Securities, and each of their
respective officers and directors and each Person who controls such Investor or
underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (each such Person being sometimes
hereinafter referred to as an
“Indemnified
Person”) from
and against any losses, claims, damages or liabilities, joint or several, to
which such Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement or
an omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, not misleading, or
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Prospectus or an omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company hereby agrees to
reimburse such Indemnified Person for all reasonable legal and other expenses
incurred by them in connection with investigating or defending any such action
or claim as and when such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or alleged untrue statement made in, or
an omission or alleged omission from, such Registration Statement or Prospectus
in reliance upon and in conformity with written information furnished to the
Company by such Indemnified Person expressly for use therein or (ii) in the
case of the occurrence of an event of the type specified in Section 4.3(e),
the use by the Indemnified Person of an outdated or defective Prospectus after
the Company has provided to such Indemnified Person an updated Prospectus
correcting the untrue statement or alleged untrue statement or omission or
alleged omission giving rise to such loss, claim, damage or
liability.

     

    (b)       
Indemnification
by the Investors and Underwriters.  Each Investor
agrees, severally and not jointly, as a
consequence of the inclusion of any of its Registrable Securities in a
Registration Statement, and each underwriter, if any, which facilitates the
disposition of Registrable Securities shall agree, severally and not jointly, as a consequence of
facilitating such disposition of Registrable Securities to (i) indemnify
and hold harmless the Company, its directors (including any person who, with his
or her consent, is named in the Registration Statement as a director nominee of
the Company), its officers who sign any Registration Statement and each Person,
if any, who controls the Company within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities to which the Company or such other persons may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in such Registration Statement or Prospectus or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
light of the circumstances under which they were made, in the case of the
Prospectus), not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such holder or underwriter expressly for use
therein, and (ii) reimburse the Company for
any legal or other expenses incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided,
however, that no Investor or underwriter shall be liable under this
Section 4.6(b) for any amount in excess of the net proceeds paid to such
Investor or underwriter in respect of shares sold by it.

    
      
         

      

      
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    (c)       
Notice of
Claims, etc.  Promptly after receipt
by a Person seeking indemnification pursuant to this Section 4.6 (an “Indemnified Party”) of written notice of any
investigation, claim, proceeding or other action in respect of which
indemnification is being sought (each, a “Claim”), the Indemnified Party
promptly shall notify the Person against whom indemnification pursuant to this
Section 4.6 is being sought (the “Indemnifying Party”) of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such
failure.  In connection with any Claim as to which both the
Indemnifying Party and the Indemnified Party are parties, the Indemnifying Party
shall be entitled to assume the defense thereof.  Notwithstanding the
assumption of the defense of any Claim by the Indemnifying Party, the
Indemnified Party shall have the right to employ separate legal counsel and to
participate in the defense of such Claim, and the Indemnifying Party shall bear
the reasonable fees, out-of-pocket costs and expenses of such separate legal
counsel to the Indemnified Party if (and only if): (i) the Indemnifying
Party shall have agreed to pay such fees, costs and expenses, (ii) the
Indemnified Party shall reasonably have concluded that representation of the
Indemnified Party by the Indemnifying Party by the same legal counsel would not
be appropriate due to actual or, as reasonably determined by legal counsel to
the Indemnified Party, potentially differing interests between such parties in
the conduct of the defense of such Claim, or if there may be legal defenses
available to the Indemnified Party that are in addition to or disparate from
those available to the Indemnifying Party, or (iii) the Indemnifying Party
shall have failed to employ legal counsel reasonably satisfactory to the
Indemnified Party within a reasonable period of time after notice of the
commencement of such Claim.  If the Indemnified Party employs separate
legal counsel in circumstances other than as described in the preceding
sentence, the fees, costs and expenses of such legal counsel shall be borne
exclusively by the Indemnified Party.  Except as provided above, the
Indemnifying Party shall not, in connection with any Claim in the same
jurisdiction, be liable for the fees and expenses of more than one firm of
counsel for the Indemnified Party (together with appropriate local
counsel).  The Indemnified Party shall not, without the prior written
consent of the Indemnifying Party (which consent shall not unreasonably be
withheld), settle or compromise any Claim or consent to the entry of any
judgment that does not include an unconditional release of the Indemnifying
Party from all liabilities with respect to such Claim or judgment or contain any admission of
wrongdoing.

     

    (d)       
Contribution.  If
the indemnification provided for in this Section 4.6 is unavailable to or
insufficient to hold harmless an Indemnified Party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each Indemnifying Party shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party and the Indemnified
Party in connection with the statements or omissions or alleged statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations.  The relative
fault of such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by such Indemnifying Party or by such
Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.  The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 4.6(d) were determined
by pro rata allocation (even if the Investors or any underwriters were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in this
Section 4.6(d).  The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such Indemnified Party in connection
with investigating or defending any such action or claim.  No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.  The obligations of
the Investors and any underwriters in this Section 4.6(d) to contribute
shall be several in proportion to the percentage of Registrable Securities
registered or underwritten, as the case may be, by them and not
joint.

    
      
         

      

      
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    (e)       
Limitation
on Investors’ and Underwriters’ Obligations.  Notwithstanding
any other provision of this Section 4.6, in no event shall any
(i) Investor have any liability under
this Section 4.6 for any amounts in excess of the dollar amount of the
proceeds actually received by such Investor
from the sale of such Investor’s Registrable Securities (after deducting any
fees, discounts and commissions applicable thereto) pursuant to any Registration
Statement under which such Registrable Securities are registered under the
Securities Act and (ii) underwriter be required to undertake liability to
any Person hereunder for any amounts in excess of the aggregate discount,
commission or other compensation payable to such underwriter with respect to the
Registrable Securities underwritten by it and distributed pursuant to the
Registration Statement.

     

    (f)       
Other
Liabilities.  The obligations of the Company under this
Section 4.6 shall be in addition to any liability which the Company may
otherwise have to any Indemnified Person and the obligations of any Indemnified
Person under this Section 4.6 shall be in addition to any liability which
such Indemnified Person may otherwise have to the Company.  The
remedies provided in this Section 6 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to an indemnified party
at law or in equity. 

     

    Section
4.7.        Rule
144.  With a view to making
available to the Investors the benefits of Rule 144, the Company agrees to use
its best efforts to:

     

    (i)        
comply with the provisions of paragraph
(c)(1) of Rule 144; and

     

    (ii)       
file with the Commission in a timely manner
all reports and other documents required to be filed by the Company pursuant to
Section 13 or 15(d) under the Exchange Act; and, if at any time it is not
required to file such reports but in the past had been required to or did file
such reports, it will, upon the request of any Investor, make available other
information as required by, and so long as necessary to permit sales of, its
Registrable Securities pursuant to Rule 144.

     

    Section
4.8.         Common
Stock Issued Upon Stock Split, etc.  The provisions of this Article 4 shall
apply to any shares of Common Stock or any other securities issued as a dividend
or distribution in respect of the Conversion Shares or the Warrant
Shares.

    

    Section 4.9.    
Subsequent
Registrations.  Other than pursuant to the Registration
Statement, prior to the Effective Date of the Registration Statement, the
Company may not file any registration statement (other than on Form S-8) with
the Commission with respect to any securities of the
Company.

    
      
         

      

      
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    ARTICLE
5

    

    Other Agreements of the
Parties

    

    Section 5.1.  Certificates;
Legends.

    

    
      	
               
      

            	
              (a)

            	
              Securities
      may only be transferred in compliance with state and federal securities
      laws. In connection with any transfer of the Securities other than
      pursuant to an effective registration statement, to the Company, to an
      Affiliate of an Investor or in connection with a pledge as contemplated in
      Section 5.1(b), the Company may require the transferor thereof to provide
      to the Company an opinion of counsel selected by the transferor (which may
      be such transferor’s in-house counsel), the form and substance of which
      opinion shall be reasonably satisfactory to the Company, to the effect
      that such transfer does not require registration of such transferred
      Securities under the Securities
Act.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Certificates
      evidencing the Shares and the Warrants to be delivered at the Closing and
      certificates evidencing the Conversion Shares and the Warrant Shares to be
      delivered upon conversion of the Shares or exercise of the Warrants, as
      the case may be, will contain appropriate legends referring to
      restrictions on transfer relating to the registration requirements of the
      Securities Act and applicable state securities
  laws.

            

    

    

    The
Company acknowledges and agrees that an Investor may from time to time pledge,
and/or grant a security interest in some or all of the Securities pursuant to a
bona fide margin agreement in connection with a bona fide margin account and, if
required under the terms of such agreement or account, such Investor may
transfer pledged or secured Securities to the pledgees or secured parties. Such
a pledge or transfer would not be subject to approval or consent of the Company
and no legal opinion of legal counsel to the pledgee, secured party or pledgor
shall be required in connection with the pledge, but such legal opinion may be
required in connection with a subsequent transfer following default by the
Investor transferee of the pledge. No notice shall be required of such pledge.
At the appropriate Investor’s expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Securities may
reasonably request in connection with a pledge or transfer of the Securities
including the preparation and filing of any required prospectus supplement under
Rule 424(b)(3) promulgated under the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of selling
stockholders thereunder.

    

    
      	
               
      

            	
              (c)

            	
              Certificates
      evidencing the Registrable Securities shall not contain any legend
      (including the legend referred to in Section 5.1(b)), (i) while a
      Registration Statement covering the resale of such Security is effective
      under the Securities Act, or (ii) following any sale of such Registrable
      Securities pursuant to Rule 144, or (iii) if such Registrable Securities
      are eligible for sale without restriction under Rule 144, or (iv) if such
      legend is not required under applicable requirements of the Securities Act
      (including judicial interpretations and pronouncements issued by the Staff
      of the Commission) and such lack of requirement is confirmed by a legal
      opinion satisfactory to the Company.  If all or any portion of a
      Warrant is exercised at a time when there is an effective Registration
      Statement to cover the resale of the Warrant Shares, or if such Warrant
      Shares may be sold without restriction under Rule 144 or if such legend is
      not otherwise required under applicable requirements of the Securities Act
      (including judicial interpretations thereof) then such Warrant Shares
      shall be issued free of all legends.  The Company agrees that
      following the Effective Date or at such time as such legend is no longer
      required under this Section 5.1(c), it will, no later than three Trading
      Days following the delivery by a Investor to the Company or the Company’s
      transfer agent of a certificate representing Registrable Securities issued
      with a restrictive legend (such date, the “Legend Removal Date”),
      deliver or cause to be delivered to such Investor a certificate
      representing such Securities that is free from all restrictive and other
      legends.  The Company may not make any notation on its records or
      give instructions to any transfer agent of the Company that enlarge the
      restrictions on transfer set forth in this
  Section.

            

    

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (d)

            	
              Each
      Investor, severally and not jointly with the other Investors, agrees that
      the removal of the restrictive legend from certificates representing
      Securities as set forth in this Section 5.1 is predicated upon the
      Company’s reliance that the Investor will sell any Securities pursuant to
      either the registration requirements of the Securities Act, including any
      applicable prospectus delivery requirements, or an exemption
      therefrom.

            

    

    

    Section 5.2.  Furnishing
of Information.  As long as any
Investor owns the Securities, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act. Upon reasonable request of such holder of Securities, the
Company shall deliver to such holder a written certification of a duly
authorized officer as to whether it has complied with the preceding
sentence.

    

    Section 5.3.  Integration.  The Company has
not and shall not, and shall use its best efforts to ensure that no Affiliate of
the Company shall, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities in a
manner that would require the registration under the Securities Act of the sale
of the Securities to the Investors, or that would be integrated with the offer
or sale of the Securities for purposes of the rules and regulations of any
Trading Market in a manner that would require stockholder approval of the sale
of the securities to the Investors.

    

    Section 5.4.  Securities
Laws Disclosure; Publicity.  By 9:00 a.m. (New
York time) on the Trading Day following the execution of this Agreement, and by
5:00 p.m. (New York time) on the Initial Closing Date, the Company shall issue
press releases disclosing the transactions contemplated hereby and the Closing.
On the Trading Day following the execution of this Agreement the Company will
file a Current Report on Form 8-K disclosing the material terms of the
Transaction Documents (and attach as exhibits thereto the Transaction
Documents), and on the Initial Closing Date the Company will file an additional
Current Report on Form 8-K to disclose the Initial Closing. In addition, the
Company will make such other filings and notices in the manner and time required
by the Commission and the Trading Market on which the Common Stock is listed.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Investor, or include the name of any Investor in any filing with the
Commission (other than the Registration Statement and any filings made in
respect of this transaction in accordance with filing requirements under the
Exchange Act) or any regulatory agency or Trading Market, without the prior
written consent of such Investor, except to the extent such disclosure is
required by law or Trading Market regulations.

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    Section 5.6.  Indemnification
of Investors.  In addition to
the indemnity provided in Article 4, the Company will indemnify and hold the
Investors and their directors, officers, shareholders, partners, employees and
agents (each, an “Investor
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation (collectively, “Losses”) that any such
Investor Party may suffer or incur as a result of or relating to: (a) any
misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the Company in any Transaction Document; and/or
(b) any cause of action, suit or claim brought or made against such Investor
Party and arising solely out of or solely resulting from the Investor’s
execution, delivery, performance or enforcement of this Agreement or any of the
other Transaction Documents and without causation by any other activity,
obligation, condition or liability pertaining to such Investor. In addition to
the indemnity contained herein, the Company will reimburse each Investor Party
for its reasonable legal and other expenses (including the cost of any
investigation, preparation and travel in connection therewith) incurred in
connection therewith, as such expenses are incurred.

    

    Section 5.7.  Non-Public
Information.  The Company
covenants and agrees that, from and after the date of this Agreement, neither it
nor any other Person acting on its behalf will provide any Investor or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Investor shall have
executed a written agreement regarding the confidentiality and use of such
information. The Company understands and confirms that each Investor shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.

    

    Section 5.8.  Net
Proceeds.  Except as
otherwise disclosed in the SEC Reports, the Company shall use the net proceeds
from the sale of the Securities hereunder for working capital purposes, to
purchase fixed assets used in the development or production of the Company’s
products or for investment in new technologies related to the Company’s
business, for the satisfaction of the Company’s debt or to settle any
outstanding litigation.

    

    ARTICLE
6

    

    Conditions Precedent to
Closing

    

    Section 6.1.  Conditions
Precedent to the Obligations of the Investors to Purchase Securities.  The obligation of
each Investor to acquire Securities at the Closing is subject to the
satisfaction or waiver by such Investor, at or before the Closing, of each of
the following conditions:

    

    
      	
               
      

            	
              (a)

            	
              Representations
      and Warranties. The Company shall have
      delivered a certificate of the Company’s Chief Executive Officer
      certifying that the representations and warranties of the Company
      contained herein shall be true and correct in all material respects as of
      the date when made and as of the Closing as though made on and as of such
      date;

            

    

    

    
      	
               
      

            	
              (b)

            	
              Performance. The Company shall have
      performed, satisfied and complied in all material respects with all
      covenants, agreements and conditions required by the Transaction Documents
      to be performed, satisfied or complied with by it at or prior to the
      Closing;

            

    

    

    
      	
               
      

            	
              (c)

            	
              No
      Injunction.
      No statute, rule, regulation, executive order, decree, ruling or
      injunction shall have been enacted, entered, promulgated or endorsed by
      any court or governmental authority of competent jurisdiction that
      prohibits the consummation of any of the transactions contemplated by the
      Transaction Documents;

            

    

    

    
      	
               
      

            	
              (d)

            	
              No
      Adverse Changes. Since the date of
      execution of this Agreement, no event or series of events shall have
      occurred that reasonably could have or result in a Material Adverse
      Effect;

            

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (e)

            	
              No
      Suspensions of Trading in Common Stock. From the date hereof
      to the Closing Date, trading in the Common Stock shall not have been
      suspended by the Commission (except for any suspension of trading of
      limited duration agreed to by the Company, which suspension shall be
      terminated prior to the Closing), and, at any time prior to the Closing
      Date, trading in securities generally as reported by Bloomberg Financial
      Markets shall not have been suspended or limited, or minimum prices shall
      not have been established on securities whose trades are reported by such
      service, or on any Trading Market, nor shall a banking moratorium have
      been declared either by the United States or New York State authorities
      nor shall there have occurred any material outbreak or escalation of
      hostilities or other national or international calamity of such magnitude
      in its effect on, or any material adverse change in, any financial market
      which, in each case, in the reasonable judgment of each Investor, makes it
      impracticable or inadvisable to purchase the Shares and the Warrants at
      the Closing; and

            

    

    

    
      	
               
      

            	
              (f)

            	
              Company
      Deliverables. The Company shall have
      delivered the Company Deliverables in accordance with Section
      2.2(a).

            

    

    

    Section 6.2.  Conditions
Precedent to the Obligations of the Company to Sell Securities.  The obligation of
the Company to sell Securities at the Closing is subject to the satisfaction or
waiver by the Company, at or before the Closing, of each of the following
conditions:

    

    
      	
               
      

            	
              (a)

            	
              Representations
      and Warranties. The representations
      and warranties of each Investor contained herein shall be true and correct
      in all material respects as of the date when made and as of the Closing
      Date as though made on and as of such
date;

            

    

    

    
      	
               
      

            	
              (b)

            	
              Performance. Each Investor shall
      have performed, satisfied and complied in all material respects with all
      covenants, agreements and conditions required by the Transaction Documents
      to be performed, satisfied or complied with by such Investor at or prior
      to the Closing;

            

    

    

    
      	
               
      

            	
              (c)

            	
              No
      Injunction.
      No statute, rule, regulation, executive order, decree, ruling or
      injunction shall have been enacted, entered, promulgated or endorsed by
      any court or governmental authority of competent jurisdiction that
      prohibits the consummation of any of the transactions contemplated by the
      Transaction Documents; and

            

    

    

    
      	
               
      

            	
              (d)

            	
              Investors
      Deliverables. Each Investor shall
      have delivered its Investment Amount in accordance with Section 2.2(b);
      and

            

    

    

    ARTICLE
7

    

    Miscellaneous

    

    Section 7.1.  Fees and
Expenses.  Each party shall
pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of the Transaction
Documents. The Company shall pay all stamp and other taxes and duties levied in
connection with the sale of the Shares.

    

    Section 7.2.  Entire
Agreement.  The Transaction
Documents, together with the Exhibits thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and supersede all prior
agreements, understandings, discussions and representations, oral or written,
with respect to such matters, which the parties acknowledge have been merged
into such documents and exhibits.

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    Section 7.3.  Notices.  Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or communication
is delivered via e-mail or other means of electronic communication prior to 6:30
p.m. (New York City time) on a Trading Day, (provided the sender sends a copy of
such notice or communication to the recipient by a nationally recognized
overnight courier service no later than the Trading Day immediately following
the date of  transmission), (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via e-mail or other
means of electronic communication on a day that is not a Trading Day or later
than 6:30 p.m. (New York City time) on any Trading Day (provided the sender
sends a copy of such notice or communication to the recipient by a nationally
recognized overnight courier service no later than the Trading Day immediately
following the date of  transmission), (c) the Trading Day following
the date of mailing, if sent by a nationally recognized overnight courier
service, (d) the third Business Day after mailing if sent by U.S. Mail, or (e)
upon actual receipt by the party to whom such notice is given. The address for
such notices and communications shall be as follows:

    

    
      
        	
                If
      to the Company:

              	 
      	
                ThermoEnergy
      Corporation

              
	 
      	 
      	
                Attn:  President
      and CEO

              
	 
      	 
      	
                10
      New Bond Street

              
	 
      	 
      	
                Worcester,
      MA  01606

              
	 
      	 
      	 
      
	 
      	 
      	
                Telephone:  (508)
      854-1628

              
	    	 
      	      
                Fax:  (508)
      854-1753

              
	 
      	 
      	
                e-mail:  Cary.Bullock@thermoenergy.com

              
	 
      	 
      	 
      
	
                With
      a copy to:

              	 
      	
                Nixon
      Peabody, LLP

              
	 
      	 
      	
                Attn.:  William
      E. Kelly

              
	 
      	 
      	
                100
      Summer Street

              
	 
      	 
      	
                Boston,
      MA  02110-2131

              
	 
      	 
      	 
      
	 
      	 
      	
                Telephone:  (617)
      345-1195

              
	 
      	 
      	
                Fax:
      (866) 743-4899

              
	 
      	 
      	
                e-mail:  wkelly@nixonpeabody.com

              
	 
      	 
      	 
      
	
                If
      to an Investor:

              	
                  

              	
                To
      the address set forth under such Investor’s name on such Investor’s
      Counterpart Signature Page
hereto;

              

      

    

    

    
      or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

    

    

    Section 7.4.  Amendments;
Waivers; No Additional Consideration.  No provision of
this Agreement may be waived or amended except in a written instrument signed by
the Company and by Investors holding at least sixty-six and two-thirds percent
(66-2/3%) of the
then outstanding Shares.  No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right. No consideration shall be offered or paid
to any Investor to amend or consent to a waiver or modification of any provision
of any Transaction Document unless the same consideration is also offered to all
Investors who then hold Shares.

    

    Section 7.5  Termination.  This Agreement
may be terminated prior to Closing:

    

    
      	
               
      

            	
              (a)

            	
              by
      written agreement of the Investors and the
  Company;

            

    

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              by
      the Company or an Investor (as to itself but no other Investor) upon
      written notice to the other, if the Closing shall not have taken place by
      6:30 p.m. Eastern time on the Outside Date; provided, that
      the right to terminate this Agreement under this Section 7.5(b) shall not
      be available to any Person whose failure to comply with its obligations
      under this Agreement has been the cause of or resulted in the failure of
      the Closing to occur on or before such
time;

            

    

    

    
      	
               
      

            	
              (c)

            	
              by
      an Investor (as to itself but no other Investor) if it concludes in good
      faith that any of the conditions precedent contained in Section 7.1 shall
      have been breached or shall not be capable of being satisfied by the
      Outside Date despite the assumed best efforts of the
    Company.

            

    

    

    In the event of a termination pursuant
to this Section, the Company shall promptly notify all non-terminating
Investors. Upon a termination in accordance with this Section 7.5, the Company
and the terminating Investor(s) shall have no further obligation or liability
(including as arising from such termination) to the other and no Investor will
have any liability to any other Investor under the Transaction Documents as a
result therefrom.

    

    Section 7.6.  Construction.  The headings
herein are for convenience only, do not constitute a part of this Agreement and
shall not be deemed to limit or affect any of the provisions hereof. The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will
be applied against any party. This Agreement shall be construed as if drafted
jointly by the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement or any of the Transaction Documents.

    

    Section 7.7.  Successors
and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties and their
successors and permitted assigns. The Company may not assign this Agreement or
any rights or obligations hereunder without the prior written consent of the
Investors. Any Investor may assign any or all of its rights under this Agreement
to any Person to whom such Investor assigns or transfers any Securities,
provided such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions hereof that apply to the
“Investors.”

    

    Section 7.8.  No
Third-Party Beneficiaries.  This Agreement is
intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in
Article 4. or Section 5.7 (with respect to rights to indemnification and
contribution).

    

    Section 7.9.  Governing
Law.  All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and of the transactions contemplated by this
Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective Affiliates, employees or agents) shall be commenced
exclusively in the New York Courts. Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of the any
of the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document, then
the prevailing party in such Proceeding shall be reimbursed by the other party
for its reasonable attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such
Proceeding.

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    Section 7.10.  Survival.  The
representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Securities.

    

    Section 7.11.  Execution.  This Agreement
may be executed in two or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile transmission, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile signature page were an original thereof.

    

    Section 7.12.  Severability.  If any provision
of this Agreement is held to be invalid or unenforceable in any respect, the
validity and enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affected or impaired thereby and the parties
will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

    

    Section 7.13.  Rescission
and Withdrawal Right.  Notwithstanding
anything to the contrary contained in (and without limiting any similar
provisions of) the Transaction Documents, whenever any Investor exercises a
right, election, demand or option under a Transaction Document and the Company
does not timely perform its related obligations within the periods therein
provided, then such Investor may rescind or withdraw, in its sole discretion
from time to time upon written notice to the Company, any relevant notice,
demand or election in whole or in part without prejudice to its future actions
and rights.

    

    Section 7.14.  Replacement
of Securities.  If any
certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Securities.
If a replacement certificate or instrument evidencing any Securities is
requested due to a mutilation thereof, the Company may require delivery of such
mutilated certificate or instrument as a condition precedent to any issuance of
a replacement.

    

    Section 7.15.  Remedies.  In addition to
being entitled to exercise all rights provided herein or granted by law,
including recovery of damages, each of the Investors and the Company will be
entitled to specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be
adequate.

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    Section 7.16.  Payment
Set Aside.  To the extent
that the Company makes a payment or payments to any Investor pursuant to any
Transaction Document or an Investor enforces or exercises its rights thereunder,
and such payment or payments or the proceeds of such enforcement or exercise or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be
refunded, repaid or otherwise restored to the Company, a trustee, receiver or
any other person under any law (including, without limitation, any bankruptcy
law, state or federal law, common law or equitable cause of action), then to the
extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred.

    

    Section 7.17.  Independent
Nature of Investors’ Obligations and Rights.  The obligations
of each Investor under any Transaction Document are several and not joint with
the obligations of any other Investor, and no Investor shall be responsible in
any way for the performance of the obligations of any other Investor under any
Transaction Document. The decision of each Investor to purchase Securities
pursuant to the Transaction Documents has been made by such Investor
independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Transaction Documents for the purpose of closing
a transaction with multiple Investors and not because it was required or
requested to do so by any Investor.

    

    Section 7.18.  Limitation
of Liability.  Notwithstanding
anything herein to the contrary, the Company acknowledges and agrees that the
liability of an Investor arising directly or indirectly, under any Transaction
Document of any and every nature whatsoever shall be satisfied solely out of the
assets of such Investor, and that no trustee, officer, other investment vehicle
or any other Affiliate of such Investor or any investor, shareholder or holder
of shares of beneficial interest of such a Investor shall be personally liable
for any liabilities of such Investor.

    

    IN WITNESS WHEREOF, the parties hereto
have caused this Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

     

    
      
        	
                ThermoEnergy
      Corporation

              
	 
      
	
                By:  

              	
                /s/  Cary G.
    Bullock

              
	 
      	
                Cary
      G. Bullock

              
	 
      	
                President
      and CEO

              

      

    

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    COUNTERPART
SIGNATURE PAGES FOR INVESTORS FOLLOW]

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    Investor’s
Counterpart Signature Page to Securities Purchase Agreement

     

    The undersigned hereby agrees to become
a party as an Investor to the Securities Purchase Agreement dated as of August
5, 2010 among ThermoEnergy Corporation (the “Company”) and the Investors
named therein (the “Purchase
Agreement”), agreeing to invest the Investment Amount (as such term is
defined in the Purchase Agreement) set forth below.  The undersigned
hereby authorizes the Company to attach this Counterpart Signature Page to the
Purchase Agreement.

    

    
      
        
          
            
              
                	
                            
      

                      	 
      	      
                        NAME
      OF INVESTOR

                      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                              

                      
	 
      	 
      	 
      	 
      	 
      
	
                        Date:
      _____________

                      	 
      	
                        By:

                      	
                             

                      
	 
      	 
      	 
      	 
      	
                        Signature

                      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        Name:  

                      	
                             

                      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        Title:

                      	
                             

                      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        Investment
      Amount:  

                      	
                           

                      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        Tax
      ID No.:  

                      	
                             

                      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                        ADDRESS
      FOR NOTICE

                      	 
      	
                        DELIVERY
      INSTRUCTIONS

                      
	 
      	 
      	 
      	
                        (if
      different from above)

                      
	 
      	 
      	 
      	 
      	 
      
	
                        Street:

                      	
                           

                      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        c/o:

                      	
                           

                      
	
                        City:

                      	
                           

                      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        Street:

                      	
                           

                      
	
                        State/Zip:  

                      	
                           

                      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        City:

                      	
                           

                      
	
                        Attn.:

                      	
                           

                      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        State/Zip:

                      	
                           

                      
	
                        Tel.:

                      	
                           

                      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        Attn.:

                      	
                           

                      
	
                        Fax:

                      	
                           

                      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        Tel.:

                      	
                           

                      
	
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        33EXHIBIT
10.22

     

    EXECUTION
COPY

       

    
      

    

     

    CFC ADVANTAGE,
LLC,

    as
Depositor

     

    NATIONAL
RURAL UTILITIES

    COOPERATIVE
FINANCE CORPORATION,

    as Master
Servicer

     

    and

     

    U.S.
BANK NATIONAL ASSOCIATION,

    as
Trustee

     

    and

     

    FEDERAL
AGRICULTURAL MORTGAGE CORPORATION,

    as
Calculation and Paying Agent

     

    
      
        

      

    

     

    MASTER
TRUST, SALE AND SERVICING AGREEMENT

     

    
      
 

    Dated
as of October 20, 2006

     

    
      
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    MASTER
TRUST, SALE AND SERVICING AGREEMENT made and entered into as of October 20, 2006
by and among the CFC ADVANTAGE, LLC, a Delaware limited liability company, as
depositor (in such capacity, the “Depositor”), NATIONAL
RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, a cooperative association
organized and existing under the laws of the District of Columbia, as master
servicer (in such capacity, the “Master Servicer”),
U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee (in
such capacity, the “Trustee”), and
FEDERAL AGRICULTURAL MORTGAGE CORPORATION, a federally chartered instrumentality
of the United States, as calculation and paying agent (in such capacity, the
“Calculation and
Paying Agent”).

     

    WITNESSETH

     

    WHEREAS,
National Rural Utilities Cooperative Finance Corporation (“CFC”) owns or will
from time to time own certain Qualified Loans.

     

    WHEREAS,
CFC desires from time to time to assemble pools of Qualified Loans and, pursuant
to the Master Loan Purchase Agreement, by and between CFC and the Depositor (the
“Master Loan Purchase
Agreement”), to sell to the Depositor the Qualified Loans identified in
connection with the execution and delivery of each Master Loan Purchase
Agreement Supplement upon the terms and subject to the conditions set forth
therein.

     

    WHEREAS,
contemporaneously with the sale by CFC to the Depositor of such Loans, the
Depositor will sell such Loans to the Trustee in connection with the execution
and delivery of each Issue Supplement upon the terms and subject to the
conditions set forth herein.

     

    WHEREAS,
each of the Trusts created pursuant to this Master Agreement and the related
Issue Supplement shall issue a series of Rural Utilities MBS Certificates,
backed by certain Loans identified in the related Issue Supplement, and bearing
the designation specified in each such Issue Supplement.

     

    NOW,
THEREFORE, the parties to this Master Agreement, in the capacities hereinabove
set forth, in consideration of the agreements and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, do hereby
undertake and otherwise agree as follows:

     

    
      ARTICLE
I

      Defined
Terms

       

      Section
1.01. General
Definitions.  Whenever
used in this Master Agreement, the following words and phrases shall have the
following meanings:

       

      Additional
Collateral Documents:  With respect to any Loan, any security
documents (including any UCC-1, UCC-2 or UCC-3 financing statement), other than
those listed in clauses (i) through (iv) of Section 2.02(b), that evidence the
creation or perfection of a security interest in the related Mortgaged Property
and are in the possession of or within the control of the
Depositor.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Affiliate:  With
respect to any particular Person, (a) any Person that, directly or indirectly,
is in control of, is controlled by, or is under common control with, such Person
or (b) any person who is a director or officer or general partner (i) of such
Person, (ii) of any subsidiary of such Person, or (iii) of any Person described
in clause (a) above.  For purposes of this definition, control of a
Person shall mean the power, direct or indirect, (i) to vote 5% or more of the
securities having ordinary voting power to elect the directors of such Person,
or (ii) to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.

       

      Aggregate
Certificate Principal Balance:  With respect to any date of
determination, the aggregate Certificate Principal Balance of all Certificates
of a Series as of the date of determination.

       

      Authenticating
Agent:  The meaning ascribed to such term in Section
3.02.

       

      Authorized
Officer:  The Chairman of the Board, the President or any Vice
President.

       

      Available
Interest:  With respect to any Distribution Date, the sum of
the following amounts received during the related Collection
Period:  (i) that portion of all collections on the Loans other
than Defaulted Loans allocable to interest including, without limitation,
interest paid at default rates, penalties and late payment fees, and
(ii) Cash Liquidation Proceeds to the extent allocable to interest (net of
the sum of any amounts expended by the Master Servicer for the account of the
Borrower and not already netted from the amount of Available Principal for such
Distribution Period) received on a Defaulted Loan in accordance with the Master
Servicer’s Customary Servicing Procedures.

       

      Available
Principal:  With respect to any Distribution Date, the sum of
the following amounts received during the related Collection
Period:  (i) that portion of all collections on the Loans other
than Defaulted Loans allocable to principal, (ii) Cash Liquidation Proceeds
to the extent allocable to principal (net of the sum of any amount expended by
the Master Servicer for the account of the Borrower) due on Defaulted Loans in
accordance with the Master Servicer’s Customary Servicing Procedures, and
(iii) any Substitution Adjustment Principal Amount.

       

      Borrower:  The
obligor or obligors under a Loan.

       

      Business
Day:  Any day other than (i) a Saturday or a Sunday, (ii) a day
on which the Federal Reserve Bank of New York authorizes banking institutions in
the Second Federal Reserve District to be closed, (iii) a day on which banking
institutions in the District of Columbia or the State of New York are required
or authorized by law to be closed, or (iv) a day on which the principal offices
of the Trustee, the Calculation and Paying Agent or the Master Servicer are
closed.

       

      Cash Liquidation
Proceeds:  All cash proceeds recovered by the Master Servicer
with respect to the termination of any Defaulted Loan, including all Other
Insurance Proceeds, Condemnation Proceeds and other payments or recoveries
whether made at one time or over a period of time, in connection with the sale
or assignment of such Defaulted Loan, trustee’s sale, foreclosure sale or
otherwise.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Certificate:  A
Rural Utilities MBS Certificate, which is issued pursuant to the terms of this
Master Agreement and the applicable Issue Supplement.

       

      Certificate
Account:  With respect to any Series, the account created and
maintained with respect to the Certificates of such Series pursuant to Section
6.01.

       

      Certificate
Account Deposit Date:  With respect to any Distribution Date,
the 20th day of the month of such Distribution Date relating to such Series, or
if not a Business Day, the Business Day immediately preceding such
date.

       

      Certificate
Distribution Amount: With respect to any Series, the meaning ascribed to
such term in the related Issue Supplement.

       

      Certificate
Distribution Amount Determination Date:  With respect to a
Series and any Distribution Date relating to such Series, the 10th Business Day
during the month of such Distribution Date.

       

      Certificate
Principal Balance:  With respect to any Certificate prior to
the initial Distribution Date for the related Series, the Denomination thereof
and, as to any Certificate subsequent to such initial Distribution Date, the
Denomination thereof multiplied by the Certificate Principal Factor applicable
to such Class of Certificate.

       

      Certificate
Principal Factor:  With respect to any date of determination
and as to any Class of Certificates, a fraction, the numerator of which is (i)
the aggregate of the Denominations of all Certificates of such Class less (ii) the
aggregate amount of all Principal Distribution Amounts, if any, allocable to
such Class prior to such date of determination, and the denominator of which is
the aggregate of the Denominations of all of the Certificates of such
Class.

       

      Certificate
Registrar:  The meaning ascribed to such term in Section
3.03.

       

      Certificate
Register:  The meaning ascribed to such term in Section
3.03.

       

      Certificateholder
or Holder:  With respect to each Series, the person in whose
name a certificate is registered in the Certificate Register.

       

      Class:  With
respect to any Series, all Certificates of such Series with the same
terms.

       

      Class A
Distributable Amount:  With respect to any Distribution Date,
the sum of the Class A Principal Distributable Amount and the Class A Interest
Distributable Amount.

       

      Class A Interest
Carryover Shortfall: As of the close of business on any Distribution
Date, the excess, if any, of the Class A Interest Distributable Amount for such
Distribution Date plus any outstanding unpaid interest owed to holders of Class
A Certificates from the preceding Distribution Date, plus interest on such
outstanding unpaid interest amount, to the extent permitted by law, at the
Class A Pass-Through Rate from such preceding Distribution Date to but not
including such current Distribution Date, over the amount of interest that the
holders of the Class A Certificates actually received on such current
Distribution Date.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      Class A Interest
Distributable Amount: With respect to any Series, the meaning ascribed to
such term in the related Issue Supplement.

       

      Class A
Pass-Through Rate:  With respect to any Series, the meaning
ascribed to such term in the related Issue Supplement.

       

      Class A
Percentage:  With respect to any Distribution Date,
99%.

       

      Class A Principal
Carryover Shortfall: As of the close of business on any Distribution
Date, the excess, if any, of the Class A Principal Distributable Amount for such
Distribution Date plus any outstanding unpaid principal owed to holders of Class
A Certificates from preceding Distribution Dates over the amount of principal
that the holders of the Class A Certificates actually received on such current
Distribution Date.

       

      Class A Principal
Distributable Amount: With respect to any Distribution Date, the Class A
Percentage of the sum of:  (i) the principal portion of all
collections on the Loans, including prepayments of principal received during the
related Collection Period, (ii) the aggregate of all Substitution
Adjustment Principal Amounts received in connection with the substitution of
Loans during the related Collection Period, (iii) the principal portion of the
Repurchase Price received with respect to any Defective Loan during the related
Collection Period and (iv) the aggregate outstanding principal balance as
of the beginning of the related Collection Period of all Loans that became
Defaulted Loans during the related Collection Period (without duplication of
amounts referred to in clauses (i) and (ii) above).

       

      Class B
Distributable Amount:  With respect to any Distribution Date,
the sum of the Class B Principal Distributable Amount and the Class B Interest
Distributable Amount.

       

      Class B Interest
Carryover Shortfall: As of the close of business on any Distribution
Date, the excess, if any, of the Class B Interest Distributable Amount for such
Distribution Date plus any outstanding unpaid interest owed to holders of Class
B Certificates from the preceding Distribution Date plus interest on such
outstanding unpaid interest amount, to the extent permitted by law, at the
Class B Pass-Through Rate from such preceding Distribution Date to but not
including such Distribution Date, over the amount of interest that the holders
of the Class B Certificates actually received on such current Distribution
Date.

       

      Class B Interest
Distributable Amount: With respect to any Series, the meaning ascribed to
such term in the related Issue Supplement.

       

      Class B
Pass-Through Rate:  With respect to any Series, the meaning
ascribed to such terms in the related Issue Supplement.

       

      Class B
Percentage:  With respect to any Distribution Date,
1%.

       

      Class B Principal
Carryover Shortfall:  As of the close of any Distribution Date,
the excess, if any, of the Class B Principal Distributable Amount plus any
outstanding unpaid principal owed to holders of Class B Certificates from the
preceding Distribution Date over the amount of principal that the holders of the
Class B Certificates actually received on such current Distribution
Date.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      Class B Principal
Distributable Amount:  means, with respect to any Distribution
Date, the Class B Percentage of the sum of:  (i) the principal
portion of all collections on the Loans, including prepayments of principal
received during the related Collection Period, (ii) the aggregate of all
Substitution Adjustment Principal Amounts received in connection with the
substitution of Loans during the related Collection Period, (iii) the principal
portion of the Repurchase Price received with respect to any Defective Loan
during the related Collection Period and (iv)  the aggregate outstanding
principal balance as of the beginning of the related Collection Period of
all Loans that became Defaulted Loans during the related Collection Period
(without duplication of amounts referred to in clauses (i) and
(ii) above).

       

      Class Certificate
Principal Balance:  With respect to any Class at any time, the
aggregate of the Certificate Principal Balances of all Certificates of such
Class.

       

      Code:  The
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder.

       

      Collection
Period:  With respect to any Series and any Distribution Date,
the 6 calendar months immediately preceding the month in which such Distribution
Date falls.

       

      Compliance
Certification:  The annual certification by a Borrower to CFC
under the related Loan Agreement.

       

      Condemnation
Proceeds: All awards or settlements in respect of a taking of an entire
Mortgaged Property by exercise of the power of eminent domain or
condemnation.

       

      Customary
Servicing Procedures:  With respect to the Master Servicer, the
customary and usual standards of practice employed by the Master Servicer when
servicing and administering loans in the Master Servicer’s portfolio of a type
comparable to the loans included in each applicable Trust Fund.

       

      Cut-Off
Date:  With respect to any Loan, the last day of the month
preceding the month of the Series Closing Date on which such Loan became a part
of the Trust Fund established on that Series Closing Date.

       

      Custodial
Account:  With respect to any Series, the account created and
maintained by the applicable Master Servicer pursuant to Section 5.02(b) with
respect to the Loans within the Trust Fund relating to such Series.

       

      Cut-Off Date
Principal Balance:  With respect to any Loan other than an
Eligible Substitute Loan, the unpaid principal balance thereof at the Cut-Off
Date after giving effect to all installments of principal due on or prior
thereto, whether or not received.  As to any Eligible Substitute Loan,
the unpaid principal balance thereof as of the date such Eligible Substitute
Loan is sold to the Trustee hereunder.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      Defaulted
Loan: Any
Loan as to which (i) any payment or part thereof, remains unpaid for 30
days or more after the original due date for such payment, (ii)  the
related Borrower is subject to any bankruptcy or insolvency proceeding, (iii)
the lien of the related Mortgage has been foreclosed, the related Mortgaged
Property has been sold pursuant to a power of sale or trustee’s sale or
repossessed, or proceedings for foreclosure, sale or repossession have been
commenced, or (iv) the Master Servicer has determined, consistent with Customary
Servicing Procedures, that such Loan is not collectible.

       

      Defective
Loan:  Any Loan which is required to be cured, repurchased or
substituted for pursuant to Section 2.02 or Section 4.02.

       

      Denomination:  With
respect to any Certificate, the principal balance of such Certificate as of the
Series Closing Date on which such Certificate was issued.

       

      Distribution
Date:  With respect to any Series, the dates specified in the
related Issue Supplement as a Distribution Date for the Certificates of such
Series.

       

      DSC
Ratio:  The DSC Coverage Ratio for any Borrower, for any
calendar year means the ratio determined by adding such Borrower’s Patronage
Capital and Operating Margins, Non-Operating Margins – Interest, cash received
in respect of generation and transmission and other capital credits, Interest
Expense with respect to Long-Term Debt and Depreciation and Amortization Expense
for such year, and dividing the sum so obtained by the sum of all payments of
principal and interest expense required to be made during such year on account
of such Borrower’s Long-Term Debt (but in the event any portion of such
Borrower’s Long-Term Debt is refinanced during such year the payments of
principal and interest expense required to be made during such year in respect
thereof shall be based  (in lieu of actual payments thereon) upon the
larger of (x) an annualization of such payments required to be made with respect
to the refinancing debt during the portion of such year such refinancing debt is
outstanding and (y) the payments of principal and interest expense required to
be made during the following year on account of such refinancing debt);
Patronage Capital and Operating Margins, Interest Expense with respect to
Long-Term Debt, Depreciation and Amortization Expense, principal and interest
expense, Non-Operating Margins – Interest and Long-Term Debt being determined in
accordance with the Uniform System of Accounts prescribed at the time by RUS or,
if such Borrower is not required to maintain its accounts in accordance with
said Uniform System of Accounts, otherwise determined in accordance with GAAP,
except that in computing Interest Expense with respect to Long-Term Debt, and
payments of interest required to be made on account of Long-Term Debt, for the
purpose of the foregoing definition, there shall be added, to the extent not
otherwise included, an amount equal to 33-1/3% of the excess of the Restricted
Rentals paid by such Borrower for such year over 2% of such Borrower’s Equities
and Margins for such year as defined in the Uniform System of Accounts
prescribed by RUS or, if such Borrower is not required to maintain its accounts
in accordance with said Uniform System of Accounts, otherwise determined in
accordance with GAAP.

       

      Due
Date:  With respect to any Loan, any date upon which any
Installment Payment is due in accordance with the terms of the related Mortgage
Note.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      Eligible
Account:  An account that is a segregated account (including a
securities account) with an Eligible Depository.

       

      Eligible
Depository:  Any Reserve Bank, the Trustee or any other
depository institution or trust company approved in writing by an Authorized
Officer of the Calculation and Paying Agent incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by federal or state banking authorities.

       

      Eligible
Substitute Loan:  A Qualified Loan
that is substituted for a Defective Loan pursuant to Section 2.02(d), Section
4.02 or Section 4.04.

       

      Farmer
Mac:  The Federal Agricultural Mortgage Corporation, a
federally chartered instrumentality of the United States, together with its
successors and assigns.

       

      Form
7:  The reporting form designated as such by RUS, or in the
event a Borrower does not borrow from RUS, the reporting form designated as such
by CFC for its Class A distribution system members.

       

      Final
Distribution Date:  With respect to any Class, the Distribution
Date specified in the related Issue Supplement as being the Distribution Date on
or before which the Certificate Principal Balance of each Certificate within
such Class shall have been reduced to zero.

       

      GAAP:  Generally
accepted accounting principles in the United States as in effect from time to
time.

       

      Governmental
Authority:  Any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.

       

      Initial Closing
Date:  The date specified in the preamble to this Master
Agreement.

       

      Installment
Payment:  With respect to any Loan and any Due Date, any
payment of principal and/or interest thereon in accordance with the amortization
schedule of such Loan (after adjustment for any curtailments occurring prior to
the Due Date but before adjustment to such amortization schedule by reason of
any bankruptcy or similar proceeding or any moratorium or similar waiver or
grace period).

       

      Interest Accrual
Period:  With respect to any Class and Distribution Date, the
period prior thereto specified in the related Issue Supplement.

       

      Issue
Supplement:  An instrument executed by the parties hereto
pursuant to Section 2.01, which supplements this Master Agreement and identifies
and establishes, among other things, a particular Trust and issues a particular
Series of Certificates related to such Trust.

       

      Investment
Company Act:  The Investment Company Act of 1940, as
amended.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      Investment
Letter: A
letter substantially in the applicable form attached as an exhibit to the Issue
Supplement in respect of a particular Series (with such changes and
modifications as the Depositor, the Trustee and the Calculation and Paying Agent
shall agree).

       

      Key Ratio Trend
Analysis:  An annual report
generated by the Seller containing key financial and operating ratios and other
growth indicators for each Borrower.

       

      Loan
Agreement:  An original loan agreement to which the applicable
Borrower is a party and providing for the Loan which is evidenced by the related
Mortgage Note and secured by the related Mortgage.

       

      Loan Interest
Rate:  With respect to any Loan, the per annum rate of interest
borne thereby as specified in the Mortgage Note or the Loan Agreement relating
to such Loan.

       

      Loans:  With respect to each
Trust Fund, the Qualified Loans identified on the Schedule of Qualified Loans
relating to the Issue Supplement applicable to such Trust Fund.

       

      Master
Agreement:  This Master Trust, Sale and Servicing Agreement, as
it may be modified, amended or supplemented in accordance with the applicable
provisions hereof.

       

      Mortgage:  An
original mortgage, deed of trust or other instrument that constitutes a first
lien on an interest in real property securing a Mortgage Note.  Such
Mortgage may be an RUS form of mortgage, a CFC form of mortgage or the form
specified by another lender and agreed to by CFC.  It is understood
that the Mortgages provide that one or more promissory notes may be secured by
such Mortgage without being specifically identified in such Mortgage and without
such Mortgage being amended to reflect such fact.

       

      Mortgage
File:  The mortgage documents listed in Section 2.02(b)
pertaining to the applicable Loan.

       

      Mortgage
Note:  The originally executed note or other evidence of
indebtedness of a Borrower under a Loan, together with all riders thereto and
amendments thereof.

       

      Mortgaged
Property:  The underlying property, which includes real
property and may include improvements thereon, securing a Loan.

       

      Net Loan Interest
Rate:  With respect to any Loan, the Loan Interest Rate
applicable to such Loan, net of the Servicing Fee Rate applicable to such
Loan.

       

      Officers’
Certificate:  With respect to any Person, a certificate signed
by the Governor, the Chairman of the Board, the Vice Chairman of the Board, the
President, any Executive Vice President, Senior Vice President, Vice President
or Second Vice President, and any of the Treasurer, the Secretary, or any of the
Assistant Treasurers or Assistant Secretaries of such Person delivered pursuant
to this Master Agreement.

       

      Opinion of
Counsel:  A written opinion of counsel of a law firm reasonably
acceptable to the recipient thereof.  Any Opinion of Counsel may be
provided by in-house counsel of a Person if reasonably acceptable to the
addressee thereof.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      Other Insurance
Proceeds:  Proceeds of any hazard policy or other insurance
policy covering a Mortgaged Property, to the extent such proceeds are not to be
applied to the restoration of such Mortgaged Property or released to the
Borrower in accordance with the procedures that the Master Servicer would follow
in servicing Qualified Loans held for its own account.

       

      Permitted
Investments:  One or more of the following:

       

      (i)           obligations
of, or guaranteed as to principal and interest by, Farmer Mac or the United
States or any agency or instrumentality thereof;

       

      (ii)           repurchase
agreements on obligations specified in clause (i), which repurchase agreements
will mature not later than the day preceding the immediately following
Distribution Date, provided that (a) the unsecured short-term obligations of the
party agreeing to repurchase such obligations are at the time rated not less
than A-1 by Standard & Poor's and not less than Prime-1 by Moody's, (b) such
repurchase agreements are effected with a primary dealer recognized by a Federal
Reserve Bank or (c) such repurchase agreements are secured by obligations
specified in clause (i) above at not less than 102% of market value determined
on a daily basis;

       

      (iii)           demand
and time deposits in, certificates of deposit of, or bankers' acceptances
maturing in not more than 60 days and issued by, any depository institution or
trust company incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal and/or state
banking authorities, so long as at the time of such investment or contractual
commitment providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust company (or
in the case of a depository institution that is the principal subsidiary of a
holding company, the commercial paper or other short-term obligations of such
holding company) have rating of not less than A-1 from Standard & Poor's and
a rating of not less than Prime-1 from Moody's;

       

      (iv)           commercial
paper (having remaining maturities of not more than 60 days) of any corporation
incorporated under the laws of the United States or any state thereof, which on
the date of acquisition has been rated not less than A-1by Standard & Poor's
and not less than Prime-1 by Moody's;

       

      (v)           securities
bearing interest or sold at a discount issued by any corporation incorporated
under the laws of the United States of America or any state thereof if such
securities are rated in the highest  long-term unsecured rating
categories at the time of investment or the contractual commitment providing for
such investment by Standard & Poor's and Moody's; provided, however, that
securities issued by any particular corporation will not be Permitted
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation and held
as part of the Custodial Account for any Series to exceed 10% of the outstanding
principal balance of the Qualified Loans included in the Trust for such Series
(it being understood that the entity directing the investment shall be
responsible for compliance with the foregoing restriction on
investments);

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (vi)           units
of a taxable money-market portfolio rated "P-1" by Moody's and "AAAm" by
Standard & Poor's and restricted to investments in obligations issued or
guaranteed by the United States of America or entities whose obligations are
backed by the full faith and credit of the United States of America and
repurchase agreements collateralized by such obligations (for which U.S. Bank
National Association or an Affiliate thereof may act as portfolio
advisor);

       

      (vii)           units
of a taxable money-market portfolio restricted to investments which would be
“Permitted Investments” under paragraphs (i) through (vi) of this definition of
“Permitted Investments”; and

       

      (viii)          other
obligations or securities that are specified in the Issue
Supplement;

       

      provided that any
Permitted Investment shall mature not later than the next applicable Certificate
Account Deposit Date (or on the next Distribution Date, in the case of Permitted
Investments maintained in the Certificate Account); provided further,
that a Permitted Investment may not be an investment which is subject to any
deduction or withholding of tax with respect to a Certificateholder that is not
a “United States person” under the Code.  Each Permitted Investment
may be purchased by the Trustee or through an Affiliate of the
Trustee.

       

      Person:  Any
legal person, including any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
Governmental Authority.

       

      Prepayment
Premium:  With respect to any Loan, any premium or yield
maintenance payment paid or payable, as the context requires, by the related
Borrower in connection with any Principal Prepayment.

       

      Principal
Distribution Amount:  With respect to a particular Series and
Distribution Date, the sum of the Class A Principal Distributable Amount and the
Class B Principal Distributable Amount, each with respect to such series and
such Distribution Date.

       

      Principal
Prepayment:  Any payment or other recovery of principal on a
Loan which is received in advance of its scheduled Due Date, which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of
prepayment.

       

      Qualified
Loan:  A loan that satisfies the following
criteria:

       

      
        	
                 
      

              	
                1.

              	
                The
      Borrower is a Class A Member of CFC; a distribution system eligible to
      borrow from RUS and serving primarily in communities of less than 50,000
      residents.

              

      

       

      
        	
                 
      

              	
                2.

              	
                Such
      loan is a fixed or variable rate term loan that was closed by
      CFC.  At the time of sale, such loan has an outstanding
      principal amount in the range of $1 million to $22.5 million and a
      remaining period until maturity in the range of 3 to 35 years, provided
      that if such loan provides for an interest rate reset, the resets shall
      occur no more frequently than once every three years.  Such loan
      is secured by substantially all of the assets of the Borrower, which must
      include real estate.  Such assets may also secure one or more
      prior or future loans made by CFC, RUS or another party to the same
      Borrower.

              

      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                3.

              	
                Such
      loan is payable in full upon maturity or amortizes on a level principal or
      level debt service basis.

              

      

       

      
        	
                 
      

              	
                4.

              	
                Interest
      is payable on such loan semi-annually.  A 30/360 day year is
      used for calculation purposes.

              

      

       

      
        	
                 
      

              	
                5.

              	
                The
      documentation for such loan provides that in the event of prepayment of a
      fixed rate loan on any date other than an interest reset date, the
      Borrower must pay a premium equivalent to a market make whole
      amount.

              

      

       

      
        	
                 
      

              	
                6.

              	
                The
      full amount of such loan is advanced by the time of sale and no further
      draws are permitted.

              

      

       

      
        	
                 
      

              	
                7.

              	
                The
      Borrower’s ratio of equity to total assets, measured as of the end of the
      most recent calendar year prior to the time of sale, is at least
      20%.

              

      

       

      
        	
                 
      

              	
                8.

              	
                The
      Borrower’s ratio of Long-Term Debt to net utility plant, measured as of
      the end of the most recent calendar year prior to the time of sale, does
      not exceed 90% (Net utility plant to be determined in accordance with the
      Uniform Systems of Accounts prescribed at the time by RUS); provided, that
      Long-Term Debt is determined in accordance with the Uniform System of
      Accounts prescribed at the time by RUS or, if such Borrower is not
      required to maintain its accounts in accordance with said Uniform System
      of Accounts, otherwise determined in accordance with
  GAAP.

              

      

       

      
        	
                 
      

              	
                9.

              	
                The
      average of the Borrower’s two highest annual DSC Ratios during the most
      recent three calendar years prior to the time of sale is not less than
      1.4:1.

              

      

       

      
        	
                 
      

              	
                10.

              	
                At
      the time of the sale, CFC will have at least one other loan to the same
      Borrower in CFC’s portfolio.  In addition, at the time of sale,
      it will be the intention of CFC to maintain a credit relationship with
      such Borrower until such time as the Loan to such Borrower purchased by
      the Trustee pursuant to this Master Agreement and the related Issue
      Supplement is repaid in full.

              

      

       

      
        	
                 
      

              	
                11.

              	
                No
      event of default with respect to such loan shall have been declared by CFC
      and be continuing at the time of
sale.

              

      

       

      
        	
                 
      

              	
                12.

              	
                Such
      loan shall have been documented in accordance with CFC’s existing
      practices and procedures at the time such loan was closed, provided that
      prior to its sale hereunder to the Trustee, the Mortgage Note and related
      Loan Agreement will be prepared and will include all of the provisions of
      a Qualified Loan contemplated by this Master
  Agreement.

              

      

       

      Record
Date:  With respect to any Distribution Date, the last day of
the month immediately preceding the month of such Distribution
Date.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      REO
Property:  A Mortgaged Property acquired on behalf of the
applicable Trust Fund through foreclosure or deed-in-lieu of foreclosure in
connection with a Defaulted Loan.

       

      Repurchase
Price:  With respect to any Loan, the unpaid principal balance
thereof together with accrued and unpaid interest thereon at the Loan Interest
Rate to the Due Date next preceding the Distribution Date upon which the net
proceeds of such Repurchase Price are to be distributed to the applicable
Certificateholders.

       

      Required
Certificateholder:  With respect to any Series, the Class B
Certificateholder.

       

      Reserve
Bank:  Any U.S. Federal Reserve Bank, including its
branches.

       

      Responsible
Officer:  When used with respect to the Trustee, the
Calculation and Paying Agent, the Depositor or the Master Servicer, any officer
of such Person, including any Governor, Chairman or any President, any Vice
President, any Assistant Vice President, any Assistant Treasurer, any Assistant
Secretary or any other officer of such party customarily performing functions
similar to those performed by the persons who at the time shall be such officers
and, in respect of the Trustee in each case, who is responsible for the
administration of this Master Agreement.

       

      Restricted
Rentals:  All rentals required to be paid under finance leases
and charged to income, exclusive of any amounts paid under any such lease
(whether or not designated therein as rental or additional rental) for
maintenance or repairs, insurance, taxes, assessments, water rates or similar
charges.  For the purpose of this definition the term “finance lease” shall
mean any lease having a rental term (including the term for which such lease may
be renewed or extended at the option of the lessee) in excess of 3 years and
covering property having an initial cost in excess of $250,000 other than
automobiles, trucks, trailers, tractors, other vehicles (including without
limitation aircraft and ships), office, garage and warehouse space and office
equipment (including without limitation computers).

       

      Rule
144A:  The meaning ascribed to such term in Section
3.03(d).

       

      RUS:  Means
the Rural Utilities Service of the United States Department of Agriculture,
acting by and through the Administrator of the Rural Utilities Service, and
including any successor agencies or departments.

       

      Schedule of
Qualified Loans:  With respect to each Trust, the list of Loans
transferred to the Trustee with respect to such Trust on the applicable Series
Closing Date and incorporated into and made part of the applicable Issue
Supplement, which list may be amended pursuant to Section 4.04 upon conveyance
of an Eligible Substitute Loan.  Such schedule may consist of multiple
reports that collectively set forth all of the requisite
information.

       

      Scheduled
Principal Balance:  With respect to any Eligible Substitute
Loan and the related date of substitution, the principal balance of such
Eligible Substitute Loan as of such date of substitution.

       

      Securities
Act:  The Securities Act of 1933, as amended.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      Series:  A separate series
of Certificates issued pursuant to this Master Agreement and the related Issue
Supplement.

       

      Series Closing
Date:  With respect to any Series, the date specified in the
related Issue Supplement, which date shall coincide with the Pool Closing Date
specified in the PA Supplement for the related Loans.

       

      Servicer
Default:  An event described in Section 5.15.

       

      Servicing
Advances:  With respect to each Loan, all customary and
reasonable costs and expenses (including the reasonable fees and disbursements
of counsel to the Master Servicer) incurred in accordance with the Customary
Servicing Procedures of the Master Servicer in the performance by the Master
Servicer of its servicing obligations consisting of or relating to (i) the
preservation, restoration and protection of the related Mortgaged Property, (ii)
any enforcement or remedial activities or judicial proceedings, including
foreclosures and (iii) the amendment, modification, restructuring or work-out of
such Loan.

       

      Servicing
Certificate:  With respect to each Trust, a certificate
completed and executed by a Servicing Officer on behalf of the Master Servicer
in accordance with Section 5.13(a).  Each Servicing Certificate shall
be substantially in the form of Exhibit A (with such changes and modifications
as the Master Servicer, the Trustee and the Calculation and Paying Agent shall
agree).

       

      Servicing
Fee:  With respect to each Loan, the product of (i) the
Servicing Fee Rate with respect to such Loan, and (ii) the outstanding principal
amount of such Loan, as determined in the following sentence.  The
Servicing Fee shall be payable on the Due Date that interest on such Loan is
payable and computed on the basis of the same time period with respect to which
interest on such Loan is computed, without giving effect to any principal amount
of such Loan paid or payable on the applicable Due Date.

       

      Servicing Fee
Rate:  With respect to each Loan within a Trust Fund, the rate
per annum set forth in the applicable Issue Supplement or, if applicable, the
Schedule of Qualified Loans relating to such Issue Supplement.

       

      Servicing
File:  The following
documents pertaining to each Loan:

       

      
        	
                 
      

              	
                1.

              	
                a
      copy of the most recent Compliance Certification  by an officer
      of the related Borrower;

              

      

       

      
        	
                 
      

              	
                2.

              	
                the
      most recent fiscal year-end certified audit of such
    Borrower;

              

      

       

      
        	
                 
      

              	
                3.

              	
                a
      copy of the most recent unaudited annual financial statements of such
      Borrower (which may be set forth on a Seller form or Form 7);
      and

              

      

       

      
        	
                 
      

              	
                4.

              	
                the
      most recent Key Ratio Trend Analysis, as
  available.

              

      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      Servicing
Officer:  Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Loans whose name and
specimen signature appears on a list of Servicing Officers furnished to the
Trustee by the Master Servicer on the applicable Series Closing Date, as such
list may from time to time be amended by delivery of written notice by an
existing Servicing Officer.

       

      Stated Principal
Balance:  With respect to any Loan and date, the unpaid
principal balance of such Loan as of the Due Date immediately preceding such
date as specified in the amortization schedule at the time relating thereto
(before any adjustment to such amortization schedule by reason of any moratorium
or similar waiver or grace period) after giving effect to any previous partial
Principal Prepayments and Cash Liquidation Proceeds allocable to principal and
to the payment of principal due on such Due Date and irrespective of any
delinquency in payment by the related Borrower.

       

      Substitution
Adjustment Principal Amount:  With respect to any date of
substitution, the amount, if any, by which the unpaid principal balance of any
Defective Loan for which one or more Eligible Substitute Loans are substituted
on such date of substitution, exceeds the aggregate Scheduled Principal Balances
of such Eligible Substitute Loans.

       

      Total Available
Amount: means, for each Distribution Date, the sum of the Available
Interest and the Available Principal.

       

      Trust:  Each
separate trust created pursuant to this Master Agreement and each Issue
Supplement.

       

      Trust
Fund:  With respect to any particular Series, the corpus of the
Trust created by this Master Agreement and the Issue Supplement applicable
thereto, consisting (without duplication) of (i) the Loans identified on the
Schedule of Qualifying Loans relating to the applicable Issue Supplement,
together with all proceeds thereof, (ii) the Mortgage Files and other documents
delivered pursuant to Section 2.02(b), (iii) the rights in the Custodial Account
relating to the applicable Trust and in all cash and investments therein from
time to time, and (iv) the Certificate Account relating to the Certificates
representing beneficial interests in such Trust Fund and in all cash and
investments held therein.

       

      Trustee:  The
meaning ascribed to such term in the preamble to this Master
Agreement.

       

      Section
1.02. Other
Definitional Provisions.

       

      (a)           All
terms defined in this Master Agreement shall have the defined meanings when used
in any Issue Supplement, certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.

       

      (b)           As
used in this Master Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Master Agreement or in any such Issue Supplement, certificate or other document,
and accounting terms partly defined in this Master Agreement or in any such
Issue Supplement, certificate or other document to the extent not defined, shall
have the respective meanings given to them under GAAP.  To the extent
that the definitions of accounting terms in this Master Agreement or in any such
Issue Supplement, certificate or other document are inconsistent with the
meanings of such terms under GAAP in effect on the date hereof, the definitions
contained in this Master Agreement or in any such Issue Supplement certificate
or other document shall control.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      (c)           The
words “hereof,” “herein,” “hereunder,” and words of similar import when used in
this Master Agreement shall refer to this Master Agreement as a whole and not to
any particular provision of this Master Agreement; Section and Exhibit
references contained in this Master Agreement are references to Sections and
Exhibits in or to this Master Agreement unless otherwise specified; and the term
“including” shall mean “including without limitation.”

       

      (d)           The
definitions contained in this Master Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.

       

      ARTICLE
II

      Applicable
Documentation; Sale of Qualifying Loans

       

      Section
2.01. Trust
Established.  An
Issue Supplement establishing a Trust, selling the applicable Loans and issuing
the Certificates evidencing beneficial ownership interests in the Trust Fund of
such Trust shall be executed by the Trustee, the Calculation and Paying Agent,
the Depositor and the Master Servicer on each Series Closing
Date.  Each Issue Supplement shall identify and relate to a particular
Series of Certificates and establish a distinct Trust and a distinct Trust
Fund.

       

      Section
2.02. Sale of
Loans.

       

      (a)           On
each Series Closing Date, pursuant to the execution and delivery of the
applicable Issue Supplement and concurrently with the delivery of the Series of
Certificates issued on such Series Closing Date, the Depositor shall sell,
transfer, assign, set-over and otherwise convey to the Trustee and the Trustee
shall purchase from the Depositor, without recourse except as specifically set
forth herein or in the Issue Supplement, all the right, title and interest of
the Depositor in, to and under the Loans identified on the Schedule of Qualified
Loans incorporated into such Issue Supplement.  The Loans identified
on the Schedule of Qualified Loans incorporated into each Issue Supplement shall
be identical to the Loans identified on the Schedule of Qualified Loans
incorporated into the PA Supplement relating to such Series.  Each
Issue Supplement shall specify the Servicing Fee Rate applicable to the Loans
identified on the Schedule of Qualified Loans incorporated into such Issue
Supplement.  In connection with such sale, the Depositor assigns to
the Trustee or Trustees for the benefit of the Certificateholders all (but not
less than all) of the Depositor's right, title and interest in, to and under any
PA Supplement, together with all of its right, title and interest in, to and
under the Master Loan Purchase Agreement as it relates to such PA Supplement, as
provided in Section 4.05.  Such rights assigned to the Trustee
include, but are not limited to, the rights of the Depositor under Section 2.01,
Section 4.01 and Section 5.01 of the Master Loan Purchase
Agreement.

       

      (b)           In
connection with such sale, transfer, assignment, setting over and conveyance
described in Section 2.02(a), the Depositor will deliver to, or deposit with,
the Trustee the following documents or instruments with respect to each Loan so
sold, transferred, assigned, set over and otherwise conveyed:

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (i)           the
Mortgage Note, endorsed, without recourse, to the Trustee, with all necessary
intervening endorsements showing a complete chain of endorsement from the
originator to the Depositor, if applicable;

       

      (ii)          a
copy of the applicable Mortgage;

       

      (iii)         an
original of each amendment to the Mortgage Note and a copy of each amendment to
the Mortgage in CFC’s possession;

       

      (iv)         the
original Loan Agreement;

       

      (v)          the
original Opinion of Counsel of Borrower’s counsel; and

       

      (vi)         copies
of any Additional Collateral Documents.

       

      The
Depositor acknowledges and understands that ownership of each document in a
Mortgage File is vested in the Trust.  Neither the Depositor nor the
Master Servicer shall take any action inconsistent with such
ownership.  Each of the Depositor and the Master Servicer (as the
originator of the Loans) agrees to indicate on its books and records at each
Series Closing Date that the Loans sold pursuant to Section 2.02(a) on such
Series Closing Date have been sold to the Trustee, and to advise all inquiring
parties that such Loans have been sold to the Trustee.

       

      The
Trustee acknowledges receipt of those documents referred to in this Section
2.02(b) and declares that it holds and will hold such documents and the other
documents delivered to it constituting the Mortgage Files in trust for the
exclusive use and benefit of all present and future
Certificateholders.

       

      (c)           The
Depositor shall execute, acknowledge and deliver all other documents furnished
to the Depositor by the Trustee as may be necessary to effectuate the transfer
contemplated by this Section 2.02 and the applicable Issue Supplement to the
Trustee of all right, title and interest of the Depositor in and to the Loans
and the related Mortgages.

       

      (d)           If
within 90 days of the applicable Series Closing Date, the Trustee finds any
document or documents constituting a part of a Mortgage File to be missing,
mutilated, torn, damaged or defective on its face, the Trustee shall, as
assignee of the rights of the Depositor under the Master Loan Purchase Agreement
and the PA Supplements, notify the Depositor and CFC of such fact in
writing.  CFC shall then correct or cure the subject matter of such
notice within one year from the date of such notice.  If (x) CFC does
not correct or cure
the subject matter of such notice within such one year period and (y) such
omission or defect relates to any document identified in Section 2.02(b)(i),
(ii), (iii), (iv) or (vi), the Trustee shall direct CFC to replace the related
Defective Loan with one or more Eligible Substitute Loans in the manner and
subject to the conditions set forth in Section 4.03 of the Master Loan Purchase
Agreement.  Upon receipt of such Eligible Substitute Loan or Eligible
Substitute Loans, the Trustee promptly shall deliver to the Depositor the
related Mortgage File, and shall also execute and deliver such instruments of
transfer or assignment prepared by the Depositor, in each case without recourse,
as may be necessary to effectuate the transfer to the Depositor of all right,
title and interest of the Trustee in and to each applicable Loan.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      Section
2.03.  Delivery and
Payment.  With
respect to each Series, the Depositor shall deliver to the Trustee on the
related Series Closing Date, all of the documents referred to in Section 2.02(b)
with respect to the applicable Loans, together with all interest and principal
received on or with respect to the applicable Loans from and after the Cut-Off
Date (other than payments due on such Loans on or before the Cut-Off Date and
other than that portion of any payment of interest received after the Cut-Off
Date that represents interest accruing on or prior to the Cut-Off
Date).  Such delivery shall be made against payment to the Depositor
of the Purchase Price for the applicable Loans as defined and set forth in the
applicable Issue Supplement.

       

      Section
2.04.  Safekeeping and Release of
Required Documents.  The
Mortgage Files and all other documents with respect to the Loans constituting
part of a Trust Fund delivered by the Depositor pursuant to this Master
Agreement and the applicable Issue Supplement shall be kept by the Trustee or an
agent of the Trustee (appointed after consultation with the Depositor) on its
behalf in trust for the exclusive use and benefit of all present and future
Holders of Certificates of the applicable Series.

       

      Section
2.05. Authorized
Officers.  The
manual or facsimile signature of any individual appearing on this Master
Agreement, any Issue Supplement or any document or certificate issued pursuant
to this Master Agreement, and which is designated as the signature of a
Responsible Officer of any Person, shall constitute conclusive evidence that
such individual is, in fact, authorized to execute such document,
notwithstanding that such authorization may have lapsed prior to the effective
date of such document.

       

      Section
2.06. Delivery of
Instruments.  The
Trustee shall furnish to each Certificateholder, upon request, without
attachments, copies of this Master Agreement, the Issue Supplement relating to
such Certificateholder and the Certificate or Certificates held by such
Holder.

       

      Section
2.07. Agreed
Treatment of Trusts and Certificates.  The
parties hereto and, by acceptance or acquisition of a Certificate, the Holder of
each Certificate, intend to treat each Trust as a grantor trust for United
States federal, state and local tax purposes, and to treat the Certificates
(including all payments and proceeds with respect to such Certificates) as
undivided beneficial ownership interests in the related Trust Fund for United
States federal, state and local tax purposes.  The provisions of this
Master Agreement shall be applied and interpreted to further this intention and
agreement of the parties, including, without limitation, so as to circumscribe
any right to exercise discretion granted to the Master Servicer, the Trustee or
the Calculation and Paying Agent herein as to matters relating to the
Loans.

       

      Section
2.08. Notice of
Sale of Loans.  Promptly
following each Series Closing Date, CFC shall notify the Borrower under each
Loan identified on the related Schedule of Qualified Loans that such Loan has
been conveyed to the Trust identified on such schedule.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      ARTICLE
III

      The
Certificates

       

      Section
3.01. Certificates Issuable in
Classes; General Provisions with Respect to Principal and Interest
Distributions.  (a)  The
Certificates may consist of only one Class or may be divided into two or more
Classes and shall be designated generally as Rural Utilities MBS Certificates,
with such particular designations added or incorporated into such title for the
Certificates of any particular Class as specified in the related Issue
Supplement.

       

      (b)           Distributions
on the Certificates shall be made in such amounts as among Classes of
Certificates, and subject to such other conditions, as are provided in the Issue
Supplement with respect to such Class.  Each Certificate will share
ratably in all rights of the related Class.

       

      Section
3.02. Issuance
and Authentication of Certificates.  (a)  The
Certificates shall be issued in definitive, fully registered form only,
substantially in the form attached to each Issue Supplement.  The
Certificates shall be executed by manual or facsimile signature on behalf of the
Certificate Registrar by an authorized officer.

       

      (b)           No
Certificate shall be entitled to any benefit under this Master Agreement, or be
valid for any purpose, unless there appears on such Certificate a certificate of
authentication executed by an authentication agent appointed by the Trustee (the
“Authenticating
Agent”) by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder.  The
Trustee is hereby initially appointed to act as the Authenticating Agent with
power to act on the Trustee’s behalf in the authentication and delivery of the
Certificates in connection with transfers and exchanges as herein
provided.  If the Authenticating Agent resigns or is terminated, the
Trustee shall appoint a successor Authenticating Agent which may be the Trustee
or an affiliate thereof.

       

      (c)           Except
as limited by this Master Agreement, the Certificates of any Class shall be
subject to the provisions of the related Issue Supplement.

       

      Section
3.03. Registration of Transfer and
Exchange of Certificates; Transfer Restrictions.  (a)  At
all times during the term of this Master Agreement, there shall be maintained at
the office of a registrar appointed by the Trustee (the “Certificate
Registrar”) a register (the “Certificate
Register”) in which, subject to such reasonable regulations as the
Certificate Registrar may prescribe, the Certificate Registrar shall provide for
the registration of Certificates and transfers and exchanges of Certificates as
herein provided.  The Trustee is hereby initially appointed as
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided.  The Trustee may
appoint any other bank or trust company to act as Certificate Registrar under
such conditions as the Trustee may prescribe; provided that the Trustee shall
not be relieved of any of its duties or responsibilities hereunder as
Certificate Registrar by reason of such appointment.  If the Trustee
resigns or is removed in accordance with the terms hereof, the successor trustee
shall immediately succeed to its predecessor’s duties as Certificate
Registrar.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      (b)           In
the event that there is a discrepancy between (i) the Certificate Principal
Balance as noted on the grid attached to a Certificate and (ii) the Certificate
Principal Balance reflected in the Certificate Register, the Certificate
Register shall be controlling in the absence of manifest error.  No
service charge shall be made to a Holder for any registration of transfer or
exchange of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of
Certificates.

       

      (c)           The
Certificates shall contain the following restrictive legends:

       

      THIS
CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITY
LAW.  THE HOLDER HEREOF AGREES THAT, FOR THE BENEFIT OF THE TRUST,
NEITHER THIS CERTIFICATE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND
ANNIVERSARY OF THE ISSUANCE HEREOF OR (Y) AT ANY TIME BY ANY TRANSFEROR THAT WAS
AN AFFILIATE OF THE TRUST DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
OFFER, RESALE, PLEDGE OR OTHER TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE
TRUST, (2) TO A PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
(“RULE 144A”) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER, IN EACH CASE, TO WHOM NOTICE IS GIVEN THAT THE OFFER,
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, THAT,
PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE WITH AN INVESTMENT LETTER RELATING
TO THE TRANSFER OF THIS CERTIFICATE, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR
(AS THAT TERM IS DESCRIBED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE WITH AN
INVESTMENT LETTER RELATING TO THE TRANSFER OF THIS CERTIFICATE, (4) TO NON-U.S.
PERSONS IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT, THAT, PRIOR TO THE TRANSFER, FURNISHES THE TRUSTEE WITH AN
INVESTMENT LETTER RELATING TO THE TRANSFER OF THIS CERTIFICATE, (5) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, INCLUDING THAT PROVIDED BY RULE 144 (IF AVAILABLE) UNDER THE
SECURITIES ACT, PROVIDED THAT, PRIOR TO THE TRANSFER, THE TRANSFEREE FURNISHES
THE TRUSTEE WITH AN INVESTMENT LETTER RELATING TO THE TRANSFER OF THIS
CERTIFICATE, OR (6) FOLLOWING THE REGISTRATION OF THIS CERTIFICATE UNDER THE
SECURITIES ACT, AND IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAW OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION.

       

      NO
TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION OF THIS CERTIFICATE OR INTEREST
THEREIN SHALL BE MADE UNLESS THAT TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION
WILL NOT CAUSE THE TRUST TO BECOME SUBJECT TO REGISTRATION UNDER THE INVESTMENT
COMPANY ACT OF 1940 (THE “INVESTMENT COMPANY ACT”) OR EXCEPT AS PROVIDED IN
CLAUSE (6) ABOVE, TO BECOME SUBJEC TO REGISTRATION UNDER THE SECURITIES
ACT.

       

      
        
          
          

        

        
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      NO
TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION OF THIS CERTIFICATE OR INTEREST
THEREIN MAY BE MADE TO ANY EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT WHICH IS
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, OR TO AN ENTITY WHOSE UNDERLYING ASSETS
ARE SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986.

       

      (d)           No
Certificate, nor any interest or participation therein, may be offered, resold,
pledged or otherwise transferred (i) prior to the second anniversary of the
issuance hereof or (ii) at any time by any transferor that was an affiliate
of the applicable Trust during the three months preceding the date of such
offer, resale, pledge or other transfer, in either case, other than (1) to such
Trust, (2) to a person whom the transferor reasonably believes is a qualified
institutional buyer within the meaning of Rule 144A under the Securities Act
(“Rule 144A”),
purchasing for its own account or for the account of a qualified institutional
buyer, in each case, to whom notice is given that the offer, resale, pledge or
other transfer is being made in reliance on Rule 144A, that prior to the
transfer of any Certificate, furnishes the Trustee with an Investment Letter
relating to the transfer of such Certificate, (3) to an institutional accredited
investor (as that term is described in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that prior to the transfer of any Certificate, furnishes the
Trustee with an Investment Letter relating to the transfer of such Certificate,
(4) to a non-U.S. person in an offshore transaction in accordance with
regulation S under the Securities Act that prior to the transfer of any
Certificate, furnishes the Trustee with an Investment Letter relating to the
transfer of such Certificate, (5) pursuant to another available exemption from
the registration requirements under the Securities Act, including that provided
by Rule 144 (if available) under the Securities Act, provided that the
transferee provide a written opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee opining as to such exemption, or (6)
following the registration of the Certificates under the Securities Act, in each
case, in accordance with any applicable securities Law of any state of the
United States or any other applicable jurisdiction.  No transfer,
sale, pledge or other disposition of any Certificate or interest therein shall
be made unless that transfer, sale, pledge or other disposition will not cause
the applicable Trust to become subject to registration under either the
Securities Act or the Investment Company Act.  To the extent that any
purported transfer, sale, pledge or other disposition of a Certificate or
interest therein is made in contravention of the terms contained in this Section
3.03(d), such transfer shall be deemed null and void ab initio, shall have no
effect hereunder and shall not be effective to grant or transfer any rights to
the purported transferee.

       

      (e)           No
transfer, sale, pledge or other disposition of any Certificate or interest
therein may be made to any employee benefit plan, trust or account which is
subject to the Employee Retirement Income Security Act of 1974, as amended, or
section 4975 of the Code, or to an entity whose underlying assets are subject to
the Employee Retirement Income Security Act of 1974 or section 4975 of the
Code.  The Calculation and Paying Agent hereby indemnifies and holds
harmless the Depositor and CFC from and against all costs, expenses, fines,
penalties, tax consequences, liabilities, obligations and losses, including
without limitation reasonable attorneys’ fees and expenses, incurred by the
Depositor , CFC or both as a result of, relating to, or as a consequence of the
violation of the covenant in the preceding sentence.

       

      
        
          
          

        

        
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      Section
3.04. Mutilated,
Destroyed, Lost or Stolen Certificates.  If
(i) any mutilated Certificate is surrendered to the Trustee or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as may be required by the Trustee, the Depositor or the Master
Servicer to save the Trustee, the Depositor and the Master Servicer harmless,
then, in the absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor, class and percentage
interest.  Upon the issuance of any new Certificate under this Section
3.04, the Trustee may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.  Any duplicate Certificate issued pursuant to this Section
3.04 shall constitute complete and indefeasible evidence of ownership in the
Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

       

      Section
3.05. Persons
Deemed Owners.  The
Trustee, the Depositor, the Master Servicer and any agent thereof may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 6.04
and for all other purposes whatsoever.

       

      ARTICLE
IV

      Representations
and Warranties

       

      Section
4.01.  Representations and
Warranties of the Calculation and Paying Agent.  The
Calculation and Paying Agent represents and warrants as of the Initial Closing
Date and each Series Closing Date as follows:

       

      (a)           The
Calculation and Paying Agent is a federally chartered instrumentality of the
United States duly organized, validly existing and in good standing under the
laws governing its creation and existence and with corporate power and authority
to conduct its business as it is currently being conducted; the Calculation and
Paying Agent holds all licenses, certificates and permits necessary for the
conduct of its business as it is currently being conducted.

       

      (b)           The
Calculation and Paying Agent has the requisite power and authority to execute
and deliver this Master Agreement and each Issue Supplement and to perform its
duties thereunder and to take all other actions and execute and deliver all
other documents which are requisite or pertinent to the performance of such
duties; the persons signing such documents and taking such actions on behalf of
the Calculation and Paying Agent, respectively, have been duly authorized to do
so and such documents and actions are valid, legally binding and enforceable
against it in accordance with their terms.

       

      (c)           No
action, suit or proceeding is pending or, to the best of Calculation and Paying
Agent’s knowledge, threatened against it that would prohibit its entering into
this Master Agreement or any Issue Supplement or performing its obligations
under this Master Agreement or any Issue Supplement or, in the reasonable
opinion of the Calculation and Paying Agent has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by this
Master Agreement or any Issue Supplement.

       

      
        
          
          

        

        
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      (d)           The
Calculation and Paying Agent is not required to obtain the consent of any other
Person or any consents, licenses, approvals or authorizations from, or
registrations or declarations with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Master Agreement, any Issue Supplement or any of the
other agreements executed in connection therewith, except for such consents,
licenses, approvals or authorizations, or registrations or declarations, as
shall have been obtained or filed, as the case may be.

       

      (e)           The
Calculation and Paying Agent is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default would reasonably be expected to
have consequences that would materially and adversely affect the condition
(financial or otherwise) or operations of the Calculation and Paying Agent or
its respective properties or would reasonably be expected to have consequences
that would materially adversely affect the performance of the Calculation and
Paying Agent hereunder or under any Issue Supplement.

       

      (f)           The
execution and delivery of this Master Agreement by the Calculation and Paying
Agent and the performance and compliance with the terms of this Master
Agreement  or any Issue Supplement by the Calculation and Paying Agent
will not violate the statues and regulations which govern the operation of the
Calculation and Paying Agent, or constitute a material default (or an event
which, with notice or lapse of time, or both, would constitute a material
default) under, or result in the material breach of, any material contract,
agreement or other instrument to which the Calculation and Paying Agent is a
party or which may be applicable to the Calculation and Paying Agent, or any of
its assets.

       

      (g)           The
Calculation and Paying Agent is not in default hereunder and no event or
circumstance has occurred or exists which, with notice or lapse of time or both,
would constitute a default by the Calculation and Paying Agent
hereunder.

       

      Upon
discovery by any party hereto of a breach of any of the representations and
warranties set forth in this Section 4.01, such discovering party shall give
prompt written notice to the other parties.  It is understood and
agreed by the parties hereto that the representations and warranties set forth
in this Section 4.01 shall survive delivery of the respective Mortgage Files to
the Trustee.

       

      Section
4.02. Representations, Warranties
and Agreement of the Depositor.  The
Depositor hereby represents and warrants as of the Initial Closing Date and each
Series Closing Date as follows:

       

      (a)           The
Depositor is a Delaware limited liability company duly organized, validly
existing and in good standing under the laws governing its creation and
existence and with the requisite power and authority to conduct its business as
it is currently being conducted; the Depositor holds all licenses, certificates
and permits necessary for the conduct of its business as it is currently being
conducted.

       

      
        
          
          

        

        
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      (b)           The
Depositor has the requisite power and authority to execute and deliver this
Master Agreement and each Issue Supplement, to transfer, assign and deliver all
the Loans identified on each applicable Schedule of Qualified Loans to the
Trustee and to take all other actions and execute and deliver all other
documents which are requisite or pertinent to the transactions described in this
Master Agreement and each Issue Supplement.  The persons signing such
documents and taking such actions on its behalf have been duly authorized to do
so and such documents and actions are valid, legally binding and enforceable
against the Depositor in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors’ rights and to general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law).

       

      (c)           The
Depositor is not required to obtain the consent of any other Person or any
consents, licenses, approvals or authorizations from, or registrations or
declarations with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Master Agreement or any Issue Supplement except for such consents, licenses,
approvals or authorizations, or registrations or declarations, as shall have
been obtained or filed, as the case may be.

       

      (d)           No
action, suit or proceeding is pending or, to the best of the Depositor’s
knowledge, threatened against it that would prohibit it from entering into this
Master Agreement or any Issue Supplement or performing its obligations under
this Master Agreement and each Issue Supplement or, in the reasonable opinion of
the Depositor has a reasonable likelihood of resulting in a material adverse
effect on the transactions contemplated by this Master Agreement or any Issue
Supplement.

       

      (e)           The
Depositor is not in default with respect to any order or decree of any court or
any order, regulation or demand of any federal, state, municipal or governmental
agency, which default would reasonably be expected to have consequences that
would materially and adversely affect the condition (financial or otherwise) or
operations of the Depositor or its properties or would reasonably be expected to
have consequences that would materially adversely affect its performance
hereunder or under any Issue Supplement.

       

      (f)           This
Master Agreement constitutes a valid transfer and assignment to the Trustee of
all right, title and interest of the Depositor in and to the Loans, and the
other property conveyed pursuant to this Master Agreement and each Issue
Supplement.

       

      (g)           The
execution and delivery of this Master Agreement and each Issue Supplement by the
Depositor and the performance and compliance with the terms of this Master
Agreement and each Issue Supplement by the Depositor will not violate the
organizational and operational documents of the Depositor, or constitute a
material default (or an event which, with notice or lapse of time, or both,
would constitute a material default) under, or result in the material breach of,
any material contract, agreement or other instrument to which the Depositor is a
party or which may be applicable to the Depositor, or any of its
assets.

       

      
        
          
          

        

        
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      (h)           Following
payment in full for the Loans identified on a Schedule of Qualified Loans, the
Depositor will have no right, title or interest in, to or under any such Loans,
or the related Trust Fund or the assets and properties thereof.

       

      Upon
discovery by any party hereto of a breach of any of the representations and
warranties set forth in this Section 4.02, such discovering party shall give
prompt written notice thereof to the other parties.

       

      If any
party to this Master Trust Agreement becomes aware of any breach of any
representation or warranty set forth in Section 4.01(i) of the Master Loan
Purchase Agreement that materially and adversely affects the interests of the
Trust Fund in the related Qualified Loan, that party shall promptly notify each
of the other parties to this Master Agreement and the Required Certificateholder
of such breach and the Trustee shall direct CFC to comply with its obligations
under the Master Loan Purchase Agreement to either (i) cure such breach in all
material respects, (ii) purchase the Defective Loan in question from the Trustee
by the deposit of the Repurchase Price into an account designated by the
Trustee, or (iii) replace such Defective Loan with one or more Eligible
Substitute Loans in the manner and subject to the conditions set forth in Master
Loan Purchase Agreement; provided, that CFC
may only replace a Defective Loan with one or more Eligible Substitute Loans on
or before the date which is two (2) years following the Series Closing Date
relating to the Trust Fund which contains such Defective Loan.

       

      It is
understood and agreed by the parties hereto that the representations and
warranties set forth in this Section 4.02 shall survive delivery of the
respective Mortgage Files to the Trustee.

       

      Section
4.03. Representations and
Warranties of the Master Servicer.  The
Master Servicer hereby represents and warrants as of the Initial Closing Date
and each Series Closing Date as follows:

       

      (a)           The
Master Servicer is a cooperative association duly organized, validly existing
and in good standing under the laws governing its creation and existence and
with the requisite power and authority to conduct its business as it is
currently being conducted; the Master Servicer holds all licenses, certificates
and permits necessary for the conduct of its business as it is currently being
conducted and is or will be in compliance with the laws of each state in which
any Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Loan.

       

      (b)           The
Master Servicer has the requisite power and authority to execute and deliver
this Master Agreement and each Issue Supplement, to service and administer all
the Loans identified on each applicable Schedule of Qualified Loans in
accordance with the terms of this Master Agreement and each Issue Supplement, as
applicable, and to take all other actions and execute and deliver all other
documents which are requisite or pertinent to the transactions described in this
Master Agreement and each Issue Supplement.  The persons signing such
documents and taking such actions on its behalf have been duly authorized to do
so and such documents and actions are valid, legally binding and enforceable
against the Master Servicer in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors’ rights and to general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law).

       

      
        
          
          

        

        
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      (c)           The
Master Servicer is not required to obtain the consent of any other Person or any
consents, licenses, approvals or authorizations from, or registrations or
declarations with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Master Agreement, any Issue Supplement or any of the other Transaction
Documents, except for such consents, licenses, approvals or authorizations, or
registrations or declarations, as shall have been obtained or filed, as the case
may be.

       

      (d)           No
action, suit or proceeding is pending or, to the best of the Master Servicer’s
knowledge, threatened against it that would prohibit it from entering into this
Master Agreement or any Issue Supplement or performing its obligations under
this Master Agreement and each Issue Supplement or, in the reasonable opinion of
the Master Servicer has a reasonable likelihood of resulting in a material
adverse effect on the transactions contemplated by this Master Agreement or any
Issue Supplement.

       

      (e)           The
Master Servicer is not in default with respect to any order or decree of any
court or any order, regulation or demand of any federal, state, municipal or
governmental agency, which default would reasonably be expected to have
consequences that would materially and adversely affect the condition (financial
or otherwise) or operations of the Master Servicer or its respective properties
or would reasonably be expected to have consequences that would materially
adversely affect the performance of the Master Servicer hereunder or under any
Issue Supplement.

       

      (f)           The
execution and delivery of this Master Agreement by the Master Servicer and the
performance and compliance with the terms of this Master Agreement  or
any Issue Supplement by the Master Servicer will not violate the Articles of
Incorporation or Bylaws of the Master Servicer, or constitute a material default
(or an event which, with notice or lapse of time, or both, would constitute a
material default) under, or result in the material breach of, any material
contract, agreement or other instrument to which the Master Servicer is a party
or which may be applicable to the Master Servicer, or any of its
assets.

       

      (g)           No
Servicer Default has occurred and is continuing and no event or circumstance has
occurred or exists which, with notice or lapse of time or both, would constitute
a Servicer Default.

       

      Upon
discovery by any party hereto of a breach of any of the representations and
warranties set forth in this Section 4.03, such discovering party shall give
prompt written notice to the other parties.  It is understood and
agreed by the parties hereto that the representations and warranties set forth
in this Section 4.03 shall survive delivery of the respective Mortgage Files to
the Trustee.

       

      
        
          
          

        

        
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      Section
4.04.  Substitution or Repurchase
of Loans.

       

      (a)           If
CFC elects to substitute an Eligible Substitute Loan or Loans for a Defective
Loan pursuant to the Master Loan Purchase Agreement, the Trustee shall direct
CFC, on each date of substitution, to:

       

      (i)           convey
the Eligible Substitute Loans and deliver the related Mortgage Files to the
Trustee as provided in Section 2.01(b) and Section 2.01(c) of the Master Loan
Purchase Agreement and Section 2.02(b) and Section 2.02(c) hereof;

       

      (ii)           deposit
or cause to be deposited into the applicable Custodial Account no later than the
date of substitution (A) the related Substitution Adjustment Principal Amount,
if any, plus (B) interest on such Substitution Adjustment Principal Amount at
the Loan Interest Rate of the related Defective Loan being replaced from the
previous Due Date for such Defective Loan (or, if there has been no Due Date for
such Loan subsequent to the Cut-Off Date, from the Cut-Off Date) to the Due Date
next preceding the first Distribution Date to occur after such substitution, at
which time such Substitution Adjustment Principal Amount and related interest is
to be distributed to the applicable Certificateholders; and

       

      (iii)           deliver
to the Trustee an Officer’s Certificate certifying that the requirements of the
Master Loan Purchase Agreement with respect to the replacement of the Defective
Loans in question have been met.

       

      (b)           The
Depositor shall amend the Schedule of Qualified Loans to reflect the repurchase
or transfer to CFC of each Loan that has become a Defective Loan and the
substitution of the Eligible Substitute Loan or Loans and the Depositor shall
deliver the amended Schedule of Qualified Loans to the Trustee.  Upon
such substitution, each Eligible Substitute Loan shall be subject to the terms
of this Master Agreement and the related Issue Supplement in all respects and
all rights of the Depositor under the Master Loan Purchase Agreement with
respect to such Eligible Substitute Loan shall be and hereby are assigned to the
Trustee for the benefit of the Certificateholders.  Upon any such
substitution and the deposit to the Custodial Account of the Repurchase Price or
of any required Substitution Adjustment Principal Amount, the Trustee promptly
shall deliver the Mortgage File relating to such Defective Loan to CFC and shall
execute and deliver at CFC’s direction such instruments of transfer or
assignment prepared by CFC, in each case without recourse, as shall be necessary
to transfer to CFC, or its designee, any Defective Loan substituted for or
repurchased pursuant to this Section 4.04(b).

       

      Section
4.05.  Assignment of Interest in
the Master Loan Purchase Agreement.  The
Depositor hereby assigns to the Trustee for the benefit of the
Certificateholders all (but not less than all) of the Depositor’s right, title
and interest in, to and under any PA Supplement, together with all of its
rights, title and interest in, to and under the Master Loan Purchase Agreement
as it relates to such PA Supplement, to the Trustee or Trustees for the benefit
of the Certificateholders.  The rights assigned under the Master Loan
Purchase Agreement shall include, but not be limited to, the rights under
Section 2.01, Section 4.01 and Section 5.01 of the Master Loan Purchase
Agreement.  Insofar as such assignment relates to representations and
warranties in the Master Loan Purchase Agreement and any remedies provided
thereunder for any breach of such representations and warranties (including the
provisions of Section 2.01(d), Section 4.01 and Section 4.02 of the Master Loan
Purchase Agreement), such right, title and interest may be enforced by the
Trustee on behalf of the Certificateholders.

       

      
        
          
          

        

        
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      ARTICLE
V

      Administration
And Servicing of Loans

       

      Section
5.01.  Servicing of the
Loans.  (a) 
The Master Servicer hereby agrees to service and administer the Loans sold
pursuant to this Master Agreement and each Issue Supplement in accordance with
the terms of this Master Agreement, the applicable Issue Supplement, applicable
law and the terms of the Loans.  In connection with such servicing and
administration, the Master Servicer shall have full power and authority, acting
alone and/or through sub-servicers, to do or cause to be done any and all
things, in connection with such servicing and administration, that the Master
Servicer may deem necessary or desirable and consistent with the terms of this
Master Agreement including, but not limited to, the power and authority, subject
to the terms hereof, (a) to execute and deliver, on behalf of the Trustee or the
Certificateholders, customary consents or waivers and other instruments and
documents, (b) to consent to transfers of any Mortgaged Property and assumptions
of the Mortgage Notes and related Mortgages (but only in the manner provided in
this Master Agreement), (c) to collect any Other Insurance Proceeds and other
Cash Liquidation amounts, and (d) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Loan.  In
servicing and administering the Loans, the Master Servicer shall employ
procedures in accordance with the Customary Servicing Procedures of the Master
Servicer.  The Master Servicer will exercise the same care in
servicing the Loans that it exercises in servicing loans to the same Borrower
held in the Master Servicer’s portfolio.  The Master Servicer will act
in the best interest of the Trust Fund in servicing Loans held in such Trust
Fund.  Without limiting the generality of the foregoing, the Master
Servicer, in its own name or in the name of the Trustee, is hereby authorized
and empowered by the Trustee, when the Master Servicer believes it appropriate
in its reasonable judgment, to execute and deliver on behalf of the Trustee any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Loans and with respect to the related Mortgaged Properties.  The
Master Servicer shall prepare and deliver to the Trustee such documents
requiring execution and delivery by it as is necessary or appropriate to enable
the Master Servicer to service and administer the Loans to the extent that the
Master Servicer is not permitted to execute and deliver such documents pursuant
to the preceding sentence.  In addition to the foregoing, the Trustee
shall provide a power of attorney or other appropriate authorization as shall be
necessary or desirable, in the Master Servicer’s judgment, to enable the Master
Servicer to act as the agent of the Trustee as the mortgagee under each Mortgage
and as the secured party under each Additional Collateral
Document.  Upon receipt of such documents, the Trustee, upon the
direction of the Master Servicer, shall promptly execute such documents and
deliver them to the Master Servicer.

       

      (b)           With
respect to each Loan as to which the Master Servicer holds one or more loans to
the same Borrower in the Master Servicer’s portfolio on the applicable Series
Closing Date (the “Master Servicer’s
Loans”), the Master Servicer will provide the following information about
each such Master Servicer’s Loan to the Trustee and the Required
Certificateholder on such Series Closing Date:  (i) the type of
credit involved in such Master Servicer’s Loan, (ii) whether such Master
Servicer’s Loan is secured by some or all of the collateral which secures the
Loan, (iii) the principal amount of such Master Servicer’s Loan,
(iv) whether any Event of Default (as defined in such Master Servicer’s
Loan) has occurred and is continuing, and (v) the maturity date of such
Master Servicer’s Loan.

       

      
        
          
          

        

        
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      (c)           The
relationship of the Master Servicer (and of any successor to the Master Servicer
as servicer under this Master Agreement) to each Trust, the Depositor, the
Trustee and the Calculation and Paying Agent under this Master Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venture, partner or agent.

       

      (d)           In
accordance with the terms of this Master Agreement, the Master Servicer may
waive, modify, amend or vary any term of any Loan or consent to the postponement
of strict compliance with any such term or in any manner grant indulgence to any
Borrower if in the Master Servicer’s judgment such waiver, modification,
consent, postponement or indulgence will make it more likely that such Borrower
will be able to successfully repay the Loan in question; provided, however, that the
Master Servicer will notify the Trustee and the Required Certificateholder of
each event of default (as such term is defined in the documentation for the
applicable Loan) that has occurred and is continuing under the documentation for
such Loan, and the Master Servicer shall not:  (i) waive any event of
default under such Loan documents, (ii) reduce the Loan Interest Rate applicable
to such Loan or forgive any principal, (iii) postpone any date for the payment
of principal or interest on account of such Loan, (iv) extend the maturity date
of such Loan, or (v) implement a workout plan, commence a foreclosure
proceeding, accept a deed in lieu of foreclosure, conduct a pre-foreclosure sale
or seek a deficiency judgment without, in each such case, giving the Trustee and
the Required Certificateholder at least 10 Business Day’s prior written notice
of its intention to do so (each such notice, a “10 Business Day
Notice”).  In addition to the foregoing, if one or more loans
in the Master Servicer’s own portfolio present the same issue or issues as the
Loan which is the subject of a 10 Business Day Notice but the Master Servicer
does not propose to handle such issues under such loans in a manner similar to
the proposal submitted to the Trustee and the Required Certificateholder, the
Master Servicer will so state in the 10 Business Day Notice and include a
description of how such issues will be handled in such loans.  If by
the end of the applicable 10 Business Day Notice period, the Master Servicer has
not received written notice from the Required Certificateholder disapproving of
the proposal set forth in the applicable 10 Business Day Notice, the Master
Servicer may proceed to implement such proposal.  If the Required
Certificateholder notifies the Master Servicer within the applicable 10 Business
Day Notice period that it disapproves of any such proposal with respect to a
Loan, the Master Servicer and the Required Certificateholder will consult with
one another as to the best way to proceed and the Required Certificateholder’s
decision with respect to such Loan will be binding on the Master Servicer; provided, however,
that the Master Servicer shall have the right to handle such issues under the
loans in its own portfolio in such manner as the Master Servicer deems
appropriate or desirable.

       

      (e)           Without
limiting the generality of the foregoing, the Master Servicer is hereby
authorized and empowered to execute and deliver on behalf of itself and the
Trustee, all agreements and instruments as may be necessary or desirable in
connection with the performance of its rights and obligations pursuant to this
Section 5.01.  If reasonably required by the Master Servicer, the
Trustee shall furnish the Master Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Master Servicer to carry out
its servicing and administrative duties under this Master Agreement, the
Mortgages and the other documentation pertaining to the loans.

       

      
        
          
          

        

        
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      (f)           In
the ordinary course of business, the Master Servicer at any time may delegate
any of its duties hereunder to any Person, including any of its Affiliates, who
agrees to conduct such duties in accordance with this Master Agreement and each
applicable Issue Supplement including those standards set forth in this Section
5.01.  Any such delegation may include entering into subservicing
agreements with any Person or Persons, for the servicing and administration of
the Loans or a portion thereof. Such delegation shall not relieve the Master
Servicer of its liabilities and responsibilities with respect to such duties and
shall not constitute a resignation.  Notwithstanding anything to the
contrary contained herein, or in any agreement relating to any such delegation,
the Master Servicer shall remain obligated and liable to the Trustee and the
Certificateholder for the servicing and administration of the Loans in
accordance with the provisions of this Master Agreement and each applicable
Issue Supplement to the same extent and under the same terms and conditions as
if it alone were servicing and administering the Loans. The Master Servicer
shall provide the Trustee with written notice of delegation of any of its duties
to any Person other than any of the Master Servicer’s Affiliates or their
respective successors and assigns on the later of the respective Series Closing
Date or 60 days prior to such delegation.

       

      Section
5.02. Collection
of Loan Payments; Establishment of Series Custodial
Accounts.

       

      (a)           Continuously
from the date hereof until the principal and interest on all Loans is paid in
full, the Master Servicer will proceed diligently, in accordance with this
Master Agreement, to collect all payments due under each of the Loans it
services when the same shall become due and payable.

       

      (b)           On
each Series Closing Date, the Master Servicer shall establish and maintain a
Custodial Account with respect to such Series, which shall be an Eligible
Account.  The Master Servicer shall deposit or cause to be deposited
into each applicable Custodial Account, all on a daily basis within two Business
Days of receipt, except as otherwise specifically provided herein or in an
applicable Issue Supplement, the following payments and collections received by
the Master Servicer in respect of the Loans relating to such Series subsequent
to the Cut-Off Date (other than in respect of interest accruing on the Loans on
or before the Cut-Off Date applicable to such Series and principal due on the
Loans on or before the Cut-Off Date applicable to such Series, which collections
shall be paid to CFC) and the following amounts required to be deposited
hereunder with respect to the Loans it services:

       

      (i)           all
payments on account of principal of the Loans in the Trust Fund of such Series,
including Principal Prepayments with respect to such related Loans;

       

      (ii)          all
payments on account of interest on the Loans in the Trust Fund of such Series,
net of the Servicing Fee with respect to such related Loans;

       

      (iii)         all
Other Insurance Proceeds and Cash Liquidation Proceeds, each with respect to the
Loans in the Trust Fund of such Series;

       

      
        
          
          

        

        
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      (iv)         all
Repurchase Prices and all Substitution Adjustment Principal Amounts received by
the Master Servicer with respect to the Loans in the Trust Fund of such Series;
and

       

      (v)          any
other amounts required to be deposited hereunder.

       

      If the
Master Servicer shall deposit in any Custodial Account any amount not required
to be deposited, it may at any time withdraw or direct the institution
maintaining the applicable Custodial Account to withdraw such amount from the
applicable Custodial Account, any provision herein to the contrary
notwithstanding.  The Master Servicer shall maintain adequate records
with respect to all withdrawals made pursuant to this Section
5.02.  Except as otherwise provided in Section 5.02(c), all funds
required to be deposited in any Custodial Account shall be held in trust for the
applicable Certificateholder of the related Trust until withdrawn in accordance
with Section 5.04.

       

      (c)           Each
institution at which a Custodial Account is maintained for such Series shall
invest the funds therein as directed in writing by the Required
Certificateholder for such related Series in Permitted Investments, which shall
mature not later than the next applicable Certificate Account Deposit Date and
shall not be sold or disposed of prior to its maturity unless such Permitted
Investments are in default.  All such Permitted Investments shall be
made in the name of the Trustee of the related Trust.  All income or
gain (net of any losses) realized from any such investment of funds on deposit
in any Custodial Account shall, unless otherwise provided in the applicable
Issue Supplement, on each Distribution Date be paid to the Required
Certificateholder as provided in Section 7.02.

       

      (d)           The
Master Servicer shall give notice to the Trustee and the Calculation and Paying
Agent of any proposed change of the location of any Custodial Account maintained
by the Master Servicer not later than 2 days and not more than 45 days prior to
any change thereof.

       

      Section
5.03.  Realization Upon Defaulted
Loans.  The
Master Servicer shall use reasonable efforts to realize upon Defaulted Loans, in
such manner as in the Master Servicer’s judgment will maximize the receipt of
principal and interest by the Trustee.  The Master Servicer is
obligated to make every effort it deems reasonable to work out a troubled Loan
before proposing foreclosure, a deed in lieu of foreclosure, a pre-foreclosure
sale or other remedial action.  The Master Servicer shall use
reasonable efforts to foreclose upon or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments.  The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage, the Master Servicer shall not be required to expend its own funds toward
the restoration of such Mortgaged Property.

       

      The
decision of the Master Servicer to foreclose on a Defaulted Loan shall be
subject to a determination by the Master Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a
proceeding.

       

      
        
          
          

        

        
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      The
proceeds from any liquidation of a Mortgage Loan will be applied in the
following order of priority:  first, to reimburse the Master Servicer
for any related unreimbursed Servicing Advances and Servicing Fees with respect
to the related Loan; second, to reimburse the Trustee for any amounts incurred
by it in connection with such Loan; third, to accrued and unpaid interest on the
Loan at the Net Loan Rate to the Due Date occurring in the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of such Loan.

       

      In the
event that, as a result of or in connection with the exercise of remedies with
respect to a Loan, the Trust becomes the owner of real estate, the Master
Servicer will immediately commence appropriate procedures, on behalf of the
Trust, to liquidate such real estate.

       

      Section
5.04.  Permitted Withdrawals From
the Custodial Accounts.  The
Master Servicer may, from time to time, and with respect to clause (i) below,
shall, withdraw funds from the applicable Custodial Accounts for the following
purposes:

       

      (i)           on
or prior to the close of business on the Certificate Account Deposit Date
relating to each Distribution Date, to withdraw an amount equal to the related
Certificate Distribution Amount with respect to the related Series on such
Distribution Date, and deposit such amount into the Certificate Account relating
to such Series on such Certificate Account Deposit Date;

       

      (ii)           to
pay to the Master Servicer (to the extent not previously retained) the servicing
compensation to which it is entitled pursuant to Section 5.07;

       

      (iii)          to
reimburse the Master Servicer for unreimbursed Servicing Advances made by it in
connection with the Loans in the Trust Fund relating to such Custodial Account,
such right of reimbursement pursuant to this clause (iii) being limited to
amounts received on the Loans in respect of which any such Servicing Advance was
made;

       

      (iv)          to
pay to the Depositor, with respect to each Loan that has been repurchased or
substituted for pursuant to Section 2.02(d) or Section 4.02, all amounts
received thereon after the date of such repurchase or substitution (excluding
any Installment Payment due on any Due Date prior to such date of
repurchase);

       

      (v)           to
withdraw any amount deposited in such Custodial Account and not required to be
deposited therein;

       

      (vi)          to
clear and terminate such Custodial Account upon termination of the related
Series; and

       

      (vii)         to
reimburse the Master Servicer for expenses incurred by and reimbursable pursuant
to Section 5.17.

       

      Section
5.05.  Fidelity Bond,
Insurance.  The
Master Servicer shall maintain insurance coverage and financial institution bond
protection consistent with that maintained by the Master Servicer as of the date
of this Master Agreement.  Such insurance coverage shall include
coverage in the amount of $4,000,000 insuring the Master Servicer against losses
on account of employee dishonesty, loss inside the premises coverage, loss
outside the premises coverage, money orders and counterfeit paper currency
coverage and depositors forgery coverage.  Such financial institution
bond protection shall include $6,000,000 single loss limit of liability coverage
on account of forgery or alteration, securities, computer systems fraud,
telefacsimile transfer fraud and voice initiated transfer fraud.

       

      
        
          
          

        

        
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      Section
5.06.  Satisfaction of Mortgages
and Release of Mortgage Files.  Upon
the payment in full of any Loan, or the receipt by the Master Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Master Servicer shall immediately notify the
Trustee.  Such notice shall include a statement to the effect that all
amounts received or to be received in connection with such payment, which are
required to be deposited in the related Custodial Account pursuant to Section
5.02, have been or will be so deposited, and shall request delivery to the
Master Servicer of the portion of the Mortgage File held by the
Trustee.  Upon receipt of such notice and request, the Trustee shall,
within five (5) Business Days, deliver or cause to be delivered to the Master
Servicer the related Mortgage File and the Master Servicer shall prepare and
process any satisfaction or release that may be necessary.  In the
event that the Trustee fails to deliver or cause to be delivered to the Master
Servicer the related Mortgage File within five (5) Business Days of the Master
Servicer’s request therefor, the Trustee shall be liable to the Master Servicer
for any additional expenses or costs, including, but not limited to, outsourcing
fees and penalties, incurred by the Master Servicer resulting from such
failure.

       

      From time
to time and as appropriate for the servicing or foreclosure of a Loan, the
Trustee shall, within five (5) Business Days of the Master Servicer’s request
and delivery to the Trustee of a servicing receipt signed by a Servicing
Officer, deliver or cause to be delivered to the Master Servicer the portion of
the Mortgage File held by the Trustee.  Pursuant to the servicing
receipt, the Master Servicer shall be obligated to return to the Trustee the
related Mortgage File when the Master Servicer no longer needs such file, unless
the Loan has been liquidated and the Cash Liquidation Proceeds relating to such
Loan have been deposited in the applicable Custodial Account or the Mortgage
File or a portion thereof has been delivered to an attorney, or to a public
trustee or other public official as required by law, for purposes of initiating
or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non-judicially.  In the event
that the Trustee fails to deliver or cause to be delivered to the Master
Servicer the portion of the Mortgage File held by the Trustee or its designee
within five (5) Business Days of the Master Servicer’s request therefor, the
Trustee shall be liable to the Master Servicer for any additional expenses or
costs, including, but not limited to, outsourcing fees and penalties, incurred
by the Master Servicer resulting from such failure.  Upon receipt of
notice from the Master Servicer stating that such Loan was liquidated, the
Trustee shall release the Master Servicer from its obligations under the related
servicing receipt.

       

      Section
5.07.  Servicing Compensation and
Reimbursement.  With
respect to each Distribution Date, the Master Servicer shall be entitled, out of
the interest portion of amounts collected by the Master Servicer with respect to
each Loan, to retain or withdraw from the applicable Custodial Account an amount
equal to the Servicing Fee for such Distribution Date.

       

      Additional
servicing compensation in the form of assumption fees, and all other customary
and ancillary income and fees shall be retained by the Master Servicer to the
extent not required to be deposited in the Custodial Account pursuant to Section
5.02.  The Master Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement therefor except that the Master Servicer is
entitled to reimbursement for all Servicing Advances and as otherwise provided
in this Master Agreement or any Issue Supplement.

       

      
        
          
          

        

        
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      Section
5.08.  RUS.  The
rights and obligations of the Depositor, Master Servicer, the Trustee, the
Calculation and Paying Agent and any other Persons with respect to the
administration and servicing of the Loans are subject in all respects to
applicable law and  to the rights of RUS and all other Persons secured
by any Mortgage. 

       

      Section
5.09.  Documents, Records and Funds
in Possession of the Master Servicer to be Held for the
Trustee.  The Master
Servicer shall account fully to the Trustee for any funds received by the Master
Servicer or which otherwise are collected by the Master Servicer, including any
Cash Liquidation Proceeds, in respect of any Loan.  All Mortgage Files
and funds collected or held by, or under the control of, the Master Servicer in
respect of any Loans, whether from the collection of principal and interest
payments or from Cash Liquidation Proceeds, including but not limited to any
funds on deposit in the applicable Custodial Account, shall be held by the
Master Servicer for and on behalf of the Trustee and shall be and remain the
sole and exclusive property of the Trustee, subject to the applicable provisions
of this Master Agreement and the Issue Supplement.  The Master
Servicer also agrees that it shall not knowingly create, incur or subject any
Mortgage File or any funds that are deposited in any Custodial Account or any
Certificate Account, or any funds that otherwise are or may become due or
payable to the Trustee or the Calculation and Paying Agent, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance
created by the Master Servicer, or assert by legal action or otherwise any claim
or right of setoff against any Mortgage File or any funds collected on, or in
connection with, a Loan, except, however, that the Master Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Master Servicer under this Master
Agreement.

       

      Section
5.10.  Rights of the Trustee in
Respect of the Master Servicer.  The
Trustee may, but is not obligated to, enforce the obligations of the Master
Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any obligation of the Master Servicer hereunder upon the
occurrence and during the continuation of a Servicer Default, and in connection
with the performance of any such obligation to exercise the related rights of
the Master Servicer hereunder; provided that the Master Servicer shall not be
relieved of any of its obligations hereunder by virtue of such performance by
the Trustee or its designee.  None of the Trustee or the Calculation
and Paying Agent shall have any responsibility or liability for any action or
failure to act by the Master Servicer nor shall either of the Trustee or the
Calculation and Paying Agent be obligated to supervise the performance of the
Master Servicer hereunder or otherwise.

       

      Section
5.11.  Annual Statement as to
Compliance.  The
Master Servicer shall deliver to the Trustee and the Calculation and Paying
Agent on or before the date which is 120 days after the end of the Master
Servicer’s fiscal year, commencing with its 2007 fiscal year, an Officer’s
Certificate stating, as to the signer thereof, that (a) a review of the
activities of the Master Servicer during the preceding fiscal year and of the
performance of the Master Servicer under this Master Agreement has been made
under such officer’s supervision, and (b) to the best of such officer’s
knowledge, based on such review, the Master Servicer has fulfilled all its
obligations under this Master Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.

       

      
        
          
          

        

        
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      Section
5.12.  Annual Independent Public
Accountants’ Servicing Statement; Financial Statements.  The
Master Servicer shall, at its own expense, on or before 120 days after the end
of the Master Servicer’s fiscal year, commencing with the fiscal year, if any,
during which the Certificates of a Series are registered under the Securities
Act and each fiscal year thereafter during which such Certificates are subject
to a reporting obligation under Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, cause a firm of independent public accountants (who may
also render other services to the Master Servicer or any affiliate thereof)
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Trustee to the effect that such firm has, with
respect to the Master Servicer’s servicing operations under this Master
Agreement with respect to such Series, examined such operations in accordance
with the requirements of Item 1122 of Regulation AB, stating such firm’s
conclusions relating thereto.  If the Trustee is asked by such
accountants to approve the procedures used in such report, the Trustee shall do
so only upon the direction of the Master Servicer.

       

      Section
5.13.  Statements to
Certificateholders.

       

      (a)           With
respect to each Trust and each Distribution Date, on the related Certificate
Distribution Amount Determination Date, the Master Servicer shall forward the
Servicing Certificate applicable to each Trust to the Calculation and Paying
Agent and the Calculation and Paying Agent shall make such Servicing Certificate
available, on a secure basis on its website or otherwise, to each applicable
Certificateholder and the Trustee, but not to any other Person or
Persons.

       

      If a
Servicer Default shall occur, on the Business Day following the related
Certificate Distribution Amount Determination Date, the Master Servicer shall
forward to the Calculation and Paying Agent, and the Calculation and Paying
Agent shall forward or cause to be forwarded by mail or otherwise make
available, on its website or otherwise, to each Certificateholder and the
Trustee, a statement to such effect, including the nature
thereof.  Such statement may be included in, or separate from, the
regular statement sent to Certificateholders.

       

      (b)           The
Master Servicer shall forward to the Calculation and Paying Agent any other
information reasonably requested by the Calculation and Paying Agent necessary
to make distributions pursuant to Section 6.03 and Section 6.04.  The
determination by the Master Servicer of the information contained in each
Servicing Certificate shall, in the absence of obvious error, be deemed to be
presumptively correct for all purposes hereunder, and the Trustee and the
Calculation and Paying Agent shall be protected in relying upon the same without
any independent check or verification.

       

      Section
5.14.  Tax
Returns.  The
Master Servicer shall prepare or cause to be prepared for execution by the
Trustee, and after execution shall file or cause to be filed, all tax and
information returns of the each Trust Fund.

       

      
        
          
          

        

        
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      Section
5.15.  Servicer
Default.  With
respect to any Trust Fund, each of the following events shall constitute a
servicer default (each, a “Servicer
Default”):

       

      (a)           any
failure by the Master Servicer to make any payment, deposit or transfer required
to be made under the terms of this Master Agreement or the applicable Issue
Supplement which continues unremedied for a period of five days after the date
upon which written notice of such failure, requiring the same to be remedied,
shall have been:  (i) received by the Master Servicer from the Trustee
or the Calculation and Paying Agent, or (ii) received by the Master Servicer and
the Trustee from the Required Certificateholder; or

       

      (b)           failure
on the part of the Master Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Master
Servicer in this Master Agreement or the applicable Issue Supplement which
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been:  (i) received by the Master Servicer from the Trustee or the
Calculation and Paying Agent, or (ii) received by the Master Servicer and the
Trustee from the Required Certificateholder; or

       

      (c)           a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Master Servicer and such decree or
order shall have remained in force undischarged or unstayed for a period of 60
days; or

       

      (d)           consent
by the Master Servicer to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings relating to the Master Servicer or to all or
substantially all of its property; or

       

      (e)           The
Master Servicer’s admission in writing of its inability to pay its debts
generally as they become due, filing of a petition to invoke any applicable
insolvency or reorganization statute, making of an assignment for the benefit of
its creditors, or voluntarily suspending payment of its
obligations.

       

      With
respect to any Trust Fund, upon the occurrence of a Servicer Default, and so
long as such Servicer Default shall not have been remedied, the Trustee or the
Required Certificateholder may (a) terminate all obligations and duties imposed
upon the Master Servicer under this Master Agreement and the related Issue
Supplement, and (b) name and appoint a successor or successors to succeed to and
assume all of such obligations and duties of the Master
Servicer.  Such actions shall be effected by notice in writing to the
Master Servicer and shall become effective upon receipt of such notice by the
Master Servicer and the acceptance of such appointment by such successor or
successors.

       

      On and
after the receipt by the Master Servicer of such written notice and the
acceptance by the successor or successors to the Master Servicer, all
obligations and duties imposed upon the Master Servicer under this Master
Agreement and each related Issue Supplement shall pass to and vest in the
successor or successors named in the notice, and such successor or successors
shall be authorized, and hereby are authorized, to take all such action and
execute and deliver all such instruments and documents on behalf of the Master
Servicer, as attorney in fact or otherwise, as may be necessary and appropriate
to effect the purposes of such written notice.  The Master Servicer
shall pay the reasonable costs and expenses relating to a transition to a
successor Master Servicer.

       

      
        
          
          

        

        
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      Section
5.16.  Inspection
Rights.  The
Master Servicer shall, once per calendar year (or, if a Servicer Default has
occurred and is continuing, as often as the Required Certificateholder deems
necessary or appropriate), upon three Business Days’ prior written request from
the Required Certificateholder, during normal business hours, permit the
Required Certificateholder to examine the Servicing Files which relate to Loans
in the Trust Funds; provided, that,
notwithstanding such annual examination, if the Farm Credit Administration (as
the Governmental Authority that regulates the Required Certificateholder) so
requests, the Master Servicer shall, upon three Business Day’s prior written
request from the Required Certificateholder (with evidence of such request by
the Farm Credit Administration) or from the Farm Credit Administration, permit
the Required Certificateholder to reexamine or permit the Farm Credit
Administration to examine the Servicing File which relates to Loans in the Trust
Funds, and provided, further, that any
Person obtaining such information from the Master Servicer pursuant to this
Section 5.16 shall be required to maintain the confidentiality thereof and use
such information solely in connection with the transactions contemplated by this
Master Agreement or as otherwise required by law, unless otherwise agreed to in
writing by such Person and the Master Servicer, with such agreement by the
Master Servicer not to be unreasonably withheld.

       

      Section
5.17.  Limitation on Liability of
the Depositor, the Master Servicer and Others.

       

      (a)           Neither
the Depositor, the Master Servicer nor any of the directors, officers, employees
or agents of the Depositor or the Master Servicer shall be under any liability
to the Trustee, the Trust Fund, the Calculation of Paying Agent or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith and without gross negligence pursuant to this Master
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of  duties or by reason of disregard of
obligations and duties hereunder.  The Depositor, the Master Servicer
and any director, officer, employee or agent of the Depositor or the Master
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising
hereunder.  The Depositor, the Master Servicer and any director,
officer, employee or agent of the Depositor or the Master Servicer shall be
indemnified by the Trust Fund and held harmless by the Trust Fund against any
loss, liability or expense incurred in connection with any legal action relating
to this Master Agreement, any Issue Supplement, the transactions contemplated
hereby or thereby, the Certificates, or the Depositor’s or the Master Servicer’s
duties in connection therewith, other than any loss, liability or expense
related to any specific Loan or Loans and any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of disregard of obligations and
duties hereunder.

       

      
        
          
          

        

        
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      (b)           Neither
the Depositor nor the Master Servicer shall be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its
respective duties under this Master Agreement and for which it will not be
reimbursed or indemnified hereunder; provided, however, that each of the
Depositor and the Master Servicer may in its discretion undertake any such
action it may deem necessary or desirable in respect to this Master Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder.  In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust Fund, and the Depositor and the Master
Servicer shall be entitled to be reimbursed therefore out of amounts
attributable to the Qualified Loans on deposit in the Custodial Account as
provided by Section 5.04.

       

      (c)           The
Master Servicer and its directors, officers, employees and agents shall be
deemed to have exercised the degree of skill and care appropriate hereunder if
such Person has acted in accordance with Customary Servicing Procedures and in
good faith in (i) managing, administering, servicing, making collections,
foreclosing, counseling with respect to, and supervising the Qualified Loans;
(ii) administering, interpreting, and enforcing the Mortgages, Mortgage
Notes and all forms, documents and certificates required thereunder;
(iii) fulfilling all obligations hereunder; and (iv) all duties,
obligations and actions taken in respect of the Mortgage Property.

       

      ARTICLE
VI

      Series
Certificate Accounts, Distributions 

       

      Section
6.01.  Series Certificate
Accounts.  (a)  On
or before each Series Closing Date, the Calculation and Paying Agent shall
either (i) open with an Eligible Depository one or more trust accounts in the
name of the Trustee applicable to the related Trust Fund created on such Series
Closing Date that shall be the “Certificate Account” for such Series or (ii) in
lieu of maintaining any such account or accounts, maintain the Certificate
Account for the related Trust Fund by means of appropriate entries on its books
and records designating all amounts credited thereto in respect of the Loans as
being held by it for the benefit of the Holders of Certificates evidencing
beneficial ownership interests in such Trust Fund.  To the extent that
any Certificate Account for any Trust Fund is maintained by the Calculation and
Paying Agent in the manner provided in clause (ii) above, all references
herein to deposits and withdrawals from such Certificate Account shall be deemed
to refer to credits and debits to the related books of the Calculation and
Paying Agent.

       

      (b)           The
Calculation and Paying Agent shall deposit into each Certificate Account all
amounts remitted to it by the Master Servicer representing withdrawals from the
related Custodial Account.  All amounts deposited by the Calculation
and Paying Agent from time to time in a Certificate Account, and all investments
made with such moneys, including all income or other gain from such investments,
shall be held by the Calculation and Paying Agent in the Certificate Account as
part of the Trust Fund as herein provided, subject to withdrawal by the
Calculation and Paying Agent for the purposes set forth in Section
6.03.

       

      
        
          
          

        

        
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      (c)           All
or a portion of amounts on deposit in the Certificate Account shall be invested
and reinvested by Calculation and Paying Agent in one or more Permitted
Investments bearing interest or sold at a discount.  No such
investment shall mature later than the Business Day immediately preceding the
next applicable Distribution Date; provided, however, that any
investment on which the Eligible Depository, in its commercial capacity, the
Trustee or the Calculation and Paying Agent is the obligor, may mature on the
related Distribution Date.  No Permitted Investment may be sold while
in a Certificate Account.

       

      Section
6.02.  Calculation of Certificate
Distribution Amount; Publication of Certificate Principal
Factors.  On
or before each Certificate Distribution Amount Determination Date, the
Calculation and Paying Agent shall calculate the Available Interest, the
Available Principal, the Class A Distributable Amount and the Class B
Distributable Amount, each with respect to the related Distribution Date and,
based on the Total Available Amount for such Distribution Date and the other
distributions to be made on such Distribution Date, determine the amount
distributable to Certificateholders of each class.  Immediately
following each such calculation, the Calculation and Paying Agent shall notify
the Trustee in writing as to the amount so calculated.  As soon as
practicable thereafter, the Calculation and Paying Agent shall make available
generally to the Certificateholder the Certificate Principal Factor for each
Class of Certificates after giving effect to the distribution of the Class A
Principal Distribution Amount and the Class B Principal Distribution Amount on
the following Distribution Date.  All computations of interest accrued
on any Certificate shall be made as specified in the applicable Issue
Supplement.

       

      Section
6.03.  Withdrawals from the
Certificate Account.  The
rights of the Class B Certificateholders to receive distributions in
respect of the Class B Certificates shall be and hereby are subordinated to the
rights of the Class A Certificateholders to receive distributions in respect of
the Class A Certificates as provided below.  Amounts on deposit on any
Distribution Date in any Certificate Account shall be withdrawn therefrom by the
Calculation and Paying Agent, in the amounts required, to the extent funds are
available therefor, for application as follows:

       

      (i)           first,
to the Class A Certificateholders, from Available Interest, an amount equal to
the sum of the Class A Interest Distributable Amount and any outstanding
Class A Interest Carryover Shortfall as of the close of business on the
preceding Distribution Date; and if such Available Interest is insufficient, the
Class A Certificateholders will receive such shortfall, to the extent
available, from the Class B Percentage of Available Principal;

       

      (ii)           second,
to the Class A Certificateholders, from Available Principal, an amount equal to
the sum of the Class A Principal Distributable Amount and any outstanding Class
A Principal Carryover Shortfall as of the close of business on the preceding
Distribution Date; and if such Available Principal is insufficient, the
Class A Certificateholders will receive such shortfall from Available
Interest (as such Available Interest has been reduced as described in
clause (i) above);

       

      (iii)           third,
to the Class B Certificateholders, from Available Interest (as such Available
Interest has been reduced by the distributions described above in clauses (i)
and (ii) above), an amount equal to the sum of the Class B Interest
Distributable Amount and any outstanding Class B Interest Carryover Shortfall as
of the close of business on the preceding Distribution Date; and

       

      
        
          
          

        

        
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      (iv)           fourth,
to the Class B Certificateholders, from Available Principal (as such Available
Principal has been reduced as described in clauses (ii) above), an amount equal
to the sum of the Class B Principal Distributable Amount and any outstanding
Class B Principal Carryover Shortfall as of the close of business on the
preceding Distribution Date; and if such Available Principal is insufficient,
the Class B Certificateholders will receive such shortfall from Available
Interest (as such Available Interest has been reduced as described in
clauses (i), (ii) and (iii) above).

       

      Section
6.04.  Distributions on
Certificates.  As
provided in Section 6.03, on each Distribution Date, the Calculation and Paying
Agent shall withdraw from each applicable Certificate Account to the extent of
funds available therefor, the Certificate Distribution Amount applicable to each
Series for such Distribution Date previously calculated by it pursuant to
Section 6.02.  Any installment of interest or principal that is
payable on any Certificate and that is on deposit in the applicable Certificate
Account on the applicable Distribution Date, shall be paid to the
Certificateholder of record thereof on the immediately preceding Record Date by
wire transfer to an account specified in writing by such Certificateholder (or,
if any Certificateholder shall not have specified such account in writing at
least 3 Business Days prior to any Payment Date, by check or money order mailed
to such Certificateholder at such Certificateholder’s address appearing in the
Note Register); provided that the
Calculation and Paying Agent shall not be required to pay to any such
Certificateholder any amounts required to be withheld from a payment to such
Certificateholder by any applicable tax law.

       

      ARTICLE
VII

      Concerning
the Calculation and Paying Agent

       

      Section
7.01.  Duties of the Calculation
and Paying Agent.  Farmer
Mac, in its individual capacity, agrees to perform the following duties in
connection with the Trust, subject to the terms of the related Issue Supplement
and the Certificates:

       

      (a)           Act
as Calculation and Paying Agent, and in particular calculating amounts payable
and remittance of payments to Certificateholders of each Series as required by
Section 6.02 and Section 6.04 of this Master Agreement and making such
verification as it deems necessary of the amounts deposited in each Custodial
Account and Certificate Account, in each case by the Master Servicer
hereunder;

       

      (b)           Upon
receipt of the Servicing Certificates as described in Section 5.13, make such
Servicing Certificates available to each applicable Certificateholder and the
Trustee as provided in Section 5.13.

       

      Section
7.02.  Calculation and Paying Agent
Compensation.  As
compensation for its activities and obligations hereunder, with respect to each
Series, unless otherwise provided in the Issue Supplement, the Calculation and
Paying Agent shall on each Distribution Date for such Series, be entitled to all
income or gain (net of any losses) realized from investment of funds on deposit
in the applicable Custodial Account.

       

      
        
          
          

        

        
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      (b)           The
Calculation and Paying Agent shall pay all expenses incurred by it hereunder in
connection with its activities and shall, except for any reimbursable expenses
as may be set forth herein, not be entitled to reimbursement
therefor.

       

      Section
7.03.  Resignation.  The
Calculation and Paying Agent shall not resign from the duties imposed upon it by
the terms of this Master Agreement or, without the consent of the Master
Servicer, voluntarily assign any of its rights or duties hereunder to any other
Person.

       

      Section
7.04.  Merger or
Consolidation.  Any
corporation or other entity into which the Calculation and Paying Agent is
merged or consolidated, or any corporation or other entity resulting from any
merger, conversion or consolidation to which the Calculation and Paying Agent
shall be a party or any entity which shall by statute be a successor to the
Calculation and Paying Agent shall succeed to and assume all duties imposed upon
the Calculation and Paying Agent by the terms of this Master Agreement, without
the filing of any instrument or the performance of any further act by the
Calculation and Paying Agent or any Certificateholder.  The
Calculation and Paying Agent promptly shall furnish written notice of such
succession to the Trustee and all Certificateholders.

       

      Section
7.05.  Calculation and Paying Agent
as Holder.  Calculation
and Paying Agent, in its individual or any other capacity, shall have the right
to purchase and hold for its own account any Certificate issued pursuant to the
terms of this Master Agreement and any Issue Supplement, notwithstanding the
rights and duties conferred and imposed upon the Calculation and Paying Agent by
this Master Agreement and any such applicable Issue Supplement.

       

      ARTICLE
VIII

      Concerning
the Trustee

       

      Section
8.01.  Duties of
Trustee.  (a)
The Trustee, prior to the occurrence of a Servicer Default and after the curing
of all Servicer Defaults that may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Master
Agreement.  If a Servicer Default occurs and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this Master
Agreement and use the same degree of care and skill in their exercise as a
prudent investor would exercise or use under the circumstances in the conduct of
such investor’s own affairs.  Any permissive right of the Trustee
contained in this Master Agreement shall not be construed as a
duty.

       

      (b)           The
Trustee, upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the Trustee, which
are specifically required to be furnished pursuant to any provision of this
Master Agreement, shall examine them to determine whether they conform to the
requirements of this Master Agreement.  If any such instrument is
found not to conform to the requirements of this Master Agreement in a material
manner, the Trustee shall take action as it deems appropriate to have the
instrument corrected and, if the instrument is not corrected to the Trustee’s
satisfaction, the Trustee will provide notice thereof to the applicable
Certificateholders.

       

      
        
          
          

        

        
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      (c)           No
provision of this Master Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own misconduct; provided, however,
that:

       

      (i)           prior
to the occurrence of a Servicer Default, and after the curing of all such
Servicer Defaults that may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this Master
Agreement and each Issue Supplement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Master Agreement, and each Issue Supplement, no implied covenants or
obligations shall be read into this Master Agreement or any Issue Supplement
against the Trustee and, in the absence of bad faith on the part of the Trustee,
the 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 Trustee and conforming to the requirements of this Master
Agreement and each Issue Supplement;

       

      (ii)           the
Trustee shall not be personally liable for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts;

       

      (iii)          the
Trustee shall not be personally liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction of the Calculation and Paying Agent as to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Master
Agreement or any Issue Supplement, and

       

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

       

      (d)           For
all purposes of this Master Agreement, the Trustee shall not be deemed to have
knowledge of any Servicer Default or event that, with notice or lapse of time,
or both, would become a Servicer Default, unless a Responsible Officer of the
Trustee shall have received written notice thereof from a Certificateholder, the
Calculation and Paying Agent or a Responsible Officer of the Trustee shall have
actual knowledge thereof, and in the absence of such written notice or
knowledge, no provision hereof requiring the taking of any action or the
assumption of any duties or responsibility by the Trustee following the
occurrence of any Servicer Default or event which, with notice or lapse of time,
or both, would become a Servicer Default, shall be effective as to the
Trustee.

       

      Section
8.02.  Certain Matters Affecting
the Trustee.  Except
as otherwise provided in Section 8.01:

       

      (a)           The
Trustee may request and rely upon, and shall be protected in acting or
refraining from acting upon, any resolution, Officer’s Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
prima facie in proper form and believed by it to be genuine and to have been
signed or presented by the proper party or parties;

       

      
        
          
          

        

        
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      (b)           The
Trustee may consult with counsel (including counsel for the Calculation and
Paying Agent) and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;

       

      (c)           The
Trustee shall be under no obligation to exercise any of the trusts or powers
vested in it by this Master Agreement or any Issue Supplement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders or the Calculation and
Paying Agent, pursuant to the provisions of this Master Agreement or any Issue
Supplement, unless such Certificateholders or the Calculation and Paying Agent,
as applicable, shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of a Servicer Default (which has not been
cured), to exercise such of the rights and powers vested in it by this Master
Agreement, and to use the same degree of care and skill in their exercise as a
prudent investor would exercise or use under the circumstances in the conduct of
such investor’s own affairs;

       

      (d)           The
Trustee shall not be personally liable for any action taken, suffered or omitted
by it in good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Master Agreement or any applicable
Issue Supplement;

       

      (e)           Prior
to the occurrence of a Servicer Default hereunder and after the curing of all
Servicer Defaults that may have occurred, the 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, consent,
order, approval, bond or other paper or document, unless requested in writing so
to do by the Calculation and Paying Agent or by the Required Certificateholder;
provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Master Agreement, the Trustee may
require reasonable indemnity against such expense or liability as a condition to
so proceeding the reasonable expense of every such investigation shall be paid
by the Calculation and Paying Agent or the requesting Certificateholders, as
applicable; and

       

      (f)           The
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys.

       

      
        
          
          

        

        
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      Section
8.03.  Trustee Not Liable for
Certificates or Loans.  Except
as otherwise expressly provided herein, the Trustee shall not be accountable for
the use or application by the Master Servicer or the Calculation and Paying
Agent of any funds paid to the Master Servicer or the Calculation and Paying
Agent, in respect of the Loans or deposited in or withdrawn from any Custodial
Account or any Certificate Account by the Master Servicer or the Calculation and
Paying Agent, as the case may be.  The Trustee makes no
representations or warranties as to the validity or sufficiency of the
Certificates or of any Loan or related document, except that the Trustee
represents that this Master Agreement has been duly authorized, executed and
delivered by it and, assuming due execution and delivery by the other parties
hereto, constitutes its valid and binding obligation, enforceable against it in
accordance with its terms, except that such enforceability may be subject to (i)
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally, and (ii) general principles of
equity regardless of whether such enforcement is considered in a proceeding in
equity or at law.

       

      Section
8.04.  Trustee May Own
Certificates.  The
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates of any Series with the same rights it would have if it were not
Trustee.

       

      Section
8.05.  Indemnification of the
Trustee.  Each
Trust shall indemnify the Trustee in its individual capacity and as Trustee and
any director, officer, employee or agent of the Trustee in its individual
capacity and as Trustee for, and hold each of them harmless against, any loss or
liability incurred by any of them in connection with such Trust without
negligence or bad faith on the part of the Trustee in its individual capacity
and as Trustee or any such director, officer, employee or agent of the Trustee
in its individual capacity and as Trustee and arising out of or in connection
with the acceptance or administration of the Trust created pursuant to this
Master Agreement and each Issue Supplement, including the costs and expenses of
defending the Trustee in its individual capacity and as Trustee or any such
director, officer, employee or agent of the Trustee in its individual capacity
and as Trustee against any claim or liability incurred by any of them in
connection with the exercise or performance of any of their powers or duties
hereunder without negligence or bad faith on its or their part and including any
liability for any environmental hazards or issues relating to any Mortgaged
Property, but not including any expenses incurred in the ordinary course of
performing the Trustee’s duties as set forth herein.

       

      Section
8.06.  Eligibility Requirements for
Trustee.  The
Trustee hereunder shall at all times be a corporation having its principal
office in a state and city acceptable to the Calculation and Paying Agent and
organized and doing business under the laws of such state or the United States
of America, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000, and subject to
supervision or examination by federal or state authority.  If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 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.  In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07.  The Trustee shall secure an Opinion
of Counsel (which shall be an expense of the Trustee) to the effect that, to the
extent that the Trust is not subject to federal income taxation, the Trust Fund
is not subject to state and local taxation in the jurisdiction where the Trustee
is located.

       

      
        
          
          

        

        
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      Section
8.07.  Resignation and Removal of
the Trustee.  (a)
The Trustee may at any time resign and be discharged from the trusts created
pursuant to this Master Agreement by giving written notice of resignation to the
Master Servicer and the Calculation and Paying Agent.  Upon receiving
such notice of resignation, the Calculation and Paying Agent, after consultation
with the Master Servicer, shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee with a copy of such
instrument delivered to the Master Servicer.  If no successor trustee
shall have been so appointed and have accepted appointment within 90 days after
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor
trustee.

       

      (b)           If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.06 and shall fail to resign after written request
therefor by the Calculation and Paying Agent, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged a bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Calculation and Paying Agent may remove the Trustee and, after consultation with
the Master Servicer, appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, with a copy of such instrument
delivered to the Master Servicer, and the Calculation and Paying Agent shall
give written notice thereof to the
Certificateholders.  Notwithstanding the foregoing, any liability of
the Trustee under this Master Agreement arising prior to such termination shall
survive such termination.

       

      (c)           The
Calculation and Paying Agent may at any time remove the Trustee solely pursuant
to this Master Agreement and, after consultation with the Master Servicer,
appoint a successor trustee by written instrument or instruments within 90 days
of such predecessor trustee’s removal.  If no successor trustee shall
have been so appointed and have accepted appointment within 90 days after the
giving of such notice of removal, the predecessor trustee may petition any court
of competent jurisdiction for the appointment of a successor
trustee.

       

      (d)           Any
resignation or removal of the Trustee and appointment of a successor trustee
pursuant to any of the provisions of this Section shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08
but in no event shall it become effective until a successor has been appointed
and has accepted the duties of the Trustee.

       

      Section
8.08.  Successor
Trustee.  (a)
Any successor trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to its predecessor trustee (with copies delivered to the
Calculation and Paying Agent and the Master Servicer) an instrument accepting
such appointment hereunder, and the successor trustee shall secure an Opinion of
Counsel (which shall be an expense of such successor trustee) to the effect
that, to the extent that the Trust is not subject to federal income taxation,
the Trust Fund is not subject to state and local taxation in the jurisdiction
where the successor trustee is located, whereupon the resignation or removal of
the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein.  The
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.

       

      
        
          
          

        

        
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      (b)           No
successor trustee shall accept appointment as provided in this Section unless at
the time of such acceptance such successor trustee shall be eligible under the
provisions of Section 8.06.

       

      Section
8.09.  Merger or Consolidation of
Trustee.  Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such
corporation shall be eligible under the provisions of Section 8.06, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.

       

      Section
8.10.  Appointment of Co-Trustee or
Separate Trustee.  (a)Notwithstanding
any other provisions hereof, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of a Trust Fund or property
securing the same may at the time be located, the Calculation and Paying Agent
(after consultation with the Master Servicer) and the Trustee, acting jointly,
shall have the power to execute and deliver all instruments to appoint one or
more Persons approved by the Trustee to act as co-trustee or co-trustees,
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the related Trust Fund, and to vest in such Person or Persons, in
such capacity, such title to such Trust Fund, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as Calculation and Paying Agent and the Trustee may consider
necessary or desirable.  No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06.  Except as specifically provided in the first sentence
of this paragraph, the Trustee shall have no other rights to appoint a
co-trustee.

       

      (b)           In
the case of any appointment of a co-trustee or separate trustee pursuant to this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or performed
by the Trustee and such separate trustee or co-trustee jointly, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed, the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to any Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.

       

      (c)           Any
notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as effectively
as if given to each of them.  Every instrument appointing any separate
trustee and co-trustee shall refer to this Master Agreement and the conditions
of this ARTICLE VIII.  Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Master Agreement, specifically including every provision of this Master
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee.  Every such instrument shall be filed with
the Trustee.

       

      (d)           Any
separate trustee and co-trustee may at any time constitute the Trustee its agent
or attorney-in-fact, with full power and authority, to the extent not prohibited
by law, to do any lawful act under or in respect of this Master Agreement on its
behalf and in its name.  If any separate trustee or co-trustee shall
die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

       

      
        
          
          

        

        
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      Section
8.11.  Trustee
Fees.  As
compensation for its services hereunder, the Trustee shall be entitled to
receive from the Trust fees at such times, and in such amounts, as shall be
specified in the related Issue Supplement.  The Trustee’s compensation
shall not be limited by any law on compensation of a trustee of an express
trust.

       

      ARTICLE
IX

      Termination

       

      Section
9.01.  Termination upon Purchase or
Liquidation of All Loans.  The
respective obligations and responsibilities of the Depositor, the Master
Servicer, the Calculation and Paying Agent and the Trustee with respect to any
Series of Certificates created hereby (other than the obligation of the
Calculation and Paying Agent to make certain payments to Certificateholders
after the Final Distribution Date) shall terminate upon the last action required
to be taken by the Calculation and Paying Agent on the Final Distribution Date
pursuant to this Article IX following the earlier of (a) the purchase of all the
Loans and all REO Property remaining in the Trust Fund by the Master Servicer at
a price equal to the sum of (i) 100% of the unpaid principal balance of each
Loan in the applicable Trust Fund (other than any Loan as to which REO Property
has been acquired and whose fair market value is included pursuant to clause
(ii) below), (ii) the fair market value of such REO Property, plus any accrued
and unpaid interest through the last day of the month of such purchase at the
related Loan Interest Rate on the unpaid principal balance of each Loan
(including any Loan as to which REO Property has been acquired) and (iii) any
Repurchase Price owed to the applicable Trust Fund pursuant to Section 4.02 or
(b) the final payment or other liquidation (or any advance with respect thereto)
of the last Loan remaining in the Trust Fund or the disposition of all REO
Property.

       

      The
Master Servicer may not exercise its purchase option for the Loans until all
Repurchase Prices for the Defective Loans have been paid.

       

      Regardless
of the foregoing, in no event shall any Trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, the late ambassador of the United States to the
Court of St. James’s, living on the date hereof.

       

      The right
of the Master Servicer to purchase the Loans in any Trust Fund is conditioned
upon the aggregate Stated Principal Balance of the Loans in such Trust Fund
being less than 10% of the unpaid principal balance of the Loans in such Trust
Fund at the applicable Cut-off Date.  

       

      If such
right is exercised with respect to any Series by the Master Servicer, the
Trustee shall, promptly following payment of the cleanup purchase price, deliver
to the Master Servicer, or its respective designees, the Mortgage Files
pertaining to such Loans applicable to such Series being purchased.

       

      
        
          
          

        

        
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      Notice of
the exercise of any purchase option by the Master Servicer and notice of any
termination of any Trust, specifying the Final Distribution Date with respect to
such Trust or the applicable Distribution Date, upon which the applicable
Certificateholders may surrender their Certificates to the Calculation and
Paying Agent for payment of the final distribution and for cancellation, shall
be given promptly by the Calculation and Paying Agent by letter to the
applicable Certificateholders mailed not earlier than the 10th day and not later
than the 15th day of the month next preceding the month of such final
distribution specifying (1)  the Final Distribution Date for such
Series or the applicable Distribution Date, upon which final payment of the
applicable Certificates will be made upon presentation and surrender of the
Certificates of such Series at the office or agency of the Calculation and
Paying Agent therein designated, (2) the amount of any such final payment
and (3) that the Record Date otherwise applicable to such Distribution Date is
not applicable, payments being made only upon presentation and surrender of the
applicable Certificates at the office or agency of the Calculation and Paying
Agent therein specified.  The Master Servicer exercising its call
right shall remit to the Calculation and Paying Agent for deposit to the
Distribution Account on or before the Final Distribution Date or the applicable
Distribution Date, in immediately available funds an amount equal to the amount
necessary to make the amount, if any, on deposit in the Distribution Account on
such Final Distribution Date or Distribution Date, as applicable, equal to the
purchase price for the related assets of the Trust Fund or any portion of the
Trust Fund computed as above provided, together with a statement as to the
amount to be distributed on each applicable Class of Certificates pursuant to
the next succeeding paragraph.

       

      Upon
presentation and surrender of the applicable Certificates, the Calculation and
Paying Agent shall cause to be distributed to the applicable Certificateholders
of each Class, in the order set forth in Section 6.03 hereof, on the Final
Distribution Date applicable to such Series or the applicable Distribution Date,
and in proportion to their respective percentage interests, with respect to
Certificateholders of the same Class, an amount equal, as to each such Class of
Certificates, the Class Certificate Principal Balance thereof plus accrued
interest thereon in the case of an interest-bearing Certificate.

       

      If some
or all Certificateholders do not surrender their Certificates for final payment
and cancellation on or before the Final Distribution Date for the applicable
Series, the Calculation and Paying Agent shall on such date cause all funds in
the applicable Certificate Account not distributed in final distribution to such
Certificateholders to continue to be held by the Calculation and Paying Agent in
such Certificate Account for the benefit of such Certificateholders and the
Calculation and Paying Agent shall give a second written notice to the remaining
applicable Certificateholders to surrender their Certificates for cancellation
and receive a final distribution with respect thereto.  If within one
year after the second notice all the applicable Certificates shall not have been
surrendered for cancellation, the Calculation and Paying Agent may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining applicable Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds on deposit in
such applicable Certificate Account.

       

      Upon the
exercise of the purchase option by the Master Servicer with respect to any Trust
Fund, the applicable Trust Fund shall be terminated in accordance with
applicable law.

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

       

      ARTICLE
X

      Supplemental
Agreements

       

      Section
10.01.  Permissible Without Action
by Certificateholders.  The
Depositor, the Master Servicer, the Calculation and Paying Agent and the
Trustee, from time to time and at any time, may, without the consent of or
notice (other than pursuant to Section 10.01(b)) to any Holder of a Certificate,
enter into an agreement or other instrument supplemental hereto and which
thereafter shall form a part hereof (so long as no such agreement or instrument
affects the permitted activities of the Trust), for any one or more of the
following purposes:

       

      (a)           to
add to the covenants of any part hereto, whether applicable to one or more
Trusts;

       

      (b)           to
evidence the succession pursuant to ARTICLE VIII of another Person or Persons to
the Trustee and the assumption by such successor or successors of the
obligations of the Trustee hereunder;

       

      (c)           to
eliminate any right reserved to or conferred upon any party hereto;

       

      (d)           to
take such action to cure any ambiguity or correct or supplement any provision in
this Master Agreement; or

       

      (e)           to
modify, eliminate or add to the provisions of this Master Agreement to such
extent as shall be necessary so that the Trust is not subject to federal income
taxation and state taxation; provided that (i)
there shall have been delivered to the Trustee an Opinion of Counsel to the
effect that such action is necessary or advisable to maintain such status, and
(ii) such amendment shall not have any of the effects described in paragraphs
(a) and (b) of the proviso to Section 10.02;

       

      Section
10.02.  Waivers and Supplemental
Agreements with Consent of Holders.  To
the extent not permitted by Section 10.01, with the consent of the Required
Certificateholder with respect to each Series which is affected thereby, (i)
compliance by the Master Servicer or the Trustee with any of the terms of this
Master Agreement may be waived or (ii) the parties hereto may enter into
any supplemental agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Master
Agreement and any Issue Supplement or of modifying in any manner the rights of
the Holders of the Certificates issued under this Master Agreement; provided that no such
waiver or supplemental agreement shall:

       

      (a)           without
the consent of all Certificateholders affected thereby, reduce in any manner the
amount of, or delay the timing of, distributions which are required to be made
on any Certificate; or

       

      (b)           without
the consent of all Certificateholders, remove the aforesaid consent of the
Required Certificateholder to any waiver or any supplemental agreement;
or

       

      (c)           without
the consent of all Certificateholders, alter the classification of the Trust
Fund as a grantor trust for federal income tax purposes.

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

       

      It shall
not be necessary for Holders to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Holders shall approve
the substance thereof.

       

      Promptly
after the execution of any supplemental agreement pursuant to this Section, the
Calculation and Paying Agent shall give notice thereof to Holders of
Certificates.  Any failure of the Calculation and Paying Agent to give
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental agreement.

       

      ARTICLE
XI

      Miscellaneous

       

      Section
11.01.  Holders.  (a)
The death or incapacity of any Holder of a Certificate shall not operate to
terminate this Master Agreement or any Issue Supplement, nor entitle such
Holder’s legal representative or heirs to claim an accounting or to take any
action or proceeding in any court for a partition or winding up of the affairs
of the related Trust, nor otherwise affect the rights, duties and obligations of
any of the parties to this Master Agreement.

       

      (b)           No
Holder shall have any right to control or to participate in the control and
administration of any Trust, nor shall any of the terms of this Master Agreement
be construed to constitute the Holders and the Depositor, the Master Servicer,
the Trustee or the Calculation and Paying Agent or the Calculation and Paying
Agent as partners or members of an association, nor shall any Holder have any
duty or liability to any third person by reason of any action taken by the
parties to this Master Agreement pursuant to the provisions hereof and
thereof.

       

      (c)           No
Holder shall have any right by virtue of any provision of this Master Agreement
or any Issue Supplement to institute any suit, action or proceeding in equity or
at law upon or under or with respect to this Master Agreement.  For
the protection and enforcement of the provisions of this Section, each and every
Holder and the Trustee shall be entitled to such relief as can be given either
at law or in equity.

       

      Section
11.02.  Governing
Law.  The
terms of this Master Agreement and any Certificates issued hereunder shall be
governed by, and construed in accordance with, the laws of the State of New
York.

       

      Section
11.03.  Demands, Notices,
Communications.  All
formal demands, notices and communications by and between the Depositor, the
Master Servicer, the Trustee, the Calculation and Paying Agent and the Holder of
any Certificate shall be in writing and delivered in person or by first-class
mail, postage prepaid (a) if to the Calculation and Paying Agent, to
919 18th Street, N.W., Washington, D.C. 20006, or to such other address as
shall be set forth in a notification to Holders (b) if to the Depositor, to
2201 Cooperative Way, Herndon, VA  20171-3025, (c) if to the
Master Servicer, to 2201 Cooperative Way, Herndon, VA  20171-3025,
(d) if to the Trustee, to EP-MN-WS3D, 60 Livingston Ave., St. Paul,
Minnesota 55107, Attn:  Structured Finance - CFC, or (e) if to
the Holder of a Certificate, to the appropriate Holder at the address provided
to the Certificate Registrar by such Holder.  Any notice so mailed
within the time prescribed in this Master Agreement shall be conclusively
presumed to have been duly given whether or not the Holder receives such
notice.

       

      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

       

      Section
11.04.  Severability of
Provisions.  If
any one or more of the covenants, agreements, provisions or terms of this Master
Agreement shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Master Agreement and shall in
no way affect the validity or enforceability of the other provisions of this
Master Agreement or of the Certificates or the rights of the Holders
thereof.

       

      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS WHEREOF, the parties hereto hereby execute this Master Agreement as of
the day and year first above written.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 
      	
                                      CFC
      ADVANTAGE, LLC, as Depositor

                                    
	
                                      SEAL

                                    	 
      	 
      
	 	 	 
	 
      	
                                      By:

                                    	 
      
	
                                      Attest:

                                    	
                                      Name:

                                    
	 
      	
                                      Title:

                                    
	 
      	 
      	 
      
	 
      	
                                      FEDERAL
      AGRICULTURAL MORTGAGE

                                      CORPORATION,
      as Calculation and Paying

                                      Agent

                                    
	
                                      SEAL

                                    	 
      	 
      
	 	 	 
	 
      	
                                      By:

                                    	 
      
	
                                      Attest:

                                    	
                                      Name:

                                      Title:

                                    
	 
      
	 
      	 
      	 
      
	 
      	
                                      NATIONAL
      RURAL UTILITIES COOPERATIVE

                                      FINANCE
      CORPORATION, as Master

                                      Servicer

                                    
	
                                      SEAL

                                    	 
      	 
      
	 	 	 
	 
      	
                                      By:

                                    	 
      
	
                                      Attest:

                                    	
                                      Name:

                                      Title:

                                    
	 
      
	 
      	 
      	 
      
	 
      	
                                      U.S.
      BANK NATIONAL ASSOCIATION,

                                    
	 
      	
                                      as
      Trustee

                                    
	
                                      SEAL

                                    	 
      	 
      
	 	 	 
	 
      	
                                      By:

                                    	 
      
	
                                      Attest:

                                    	
                                      Name:

                                      Title:

                                    
	 
      

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      [Signature
Page to Master Trust, Sale and Servicing Agreement]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        
           

          TABLE
OF CONTENTS

           

          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                	 
      	 
      	
                                                                                        Page

                                                                                      
	 
	
                                                                                        ARTICLE
      I

                                                                                      
	
                                                                                        Defined
      Terms

                                                                                      
	 
      	 
      	 
      
	
                                                                                        Section
      1.01.

                                                                                      	
                                                                                        General
      Definitions.

                                                                                      	
                                                                                        1

                                                                                      
	
                                                                                        Section
      1.02.

                                                                                      	
                                                                                        Other
      Definitional Provisions.

                                                                                      	
                                                                                        14

                                                                                      
	 
      
	
                                                                                        ARTICLE
      II

                                                                                      
	
                                                                                        Applicable
      Documentation; Sale of Qualifying Loans

                                                                                      
	 
      	 
      	 
      
	
                                                                                        Section
      2.01.

                                                                                      	
                                                                                        Trust
      Established.

                                                                                      	
                                                                                        15

                                                                                      
	
                                                                                        Section
      2.02.

                                                                                      	
                                                                                        Sale
      of Loans.

                                                                                      	
                                                                                        15

                                                                                      
	
                                                                                        Section
      2.03.

                                                                                      	
                                                                                        Delivery
      and Payment.

                                                                                      	
                                                                                        17

                                                                                      
	
                                                                                        Section
      2.04.

                                                                                      	
                                                                                        Safekeeping
      and Release of Required Documents.

                                                                                      	
                                                                                        17

                                                                                      
	
                                                                                        Section
      2.05.

                                                                                      	
                                                                                        Authorized
      Officers.

                                                                                      	
                                                                                        17

                                                                                      
	
                                                                                        Section
      2.06.

                                                                                      	
                                                                                        Delivery
      of Instruments.

                                                                                      	
                                                                                        17

                                                                                      
	
                                                                                        Section
      2.07.

                                                                                      	
                                                                                        Agreed
      Treatment of Trusts and Certificates.

                                                                                      	
                                                                                        17

                                                                                      
	
                                                                                        Section
      2.08.

                                                                                      	
                                                                                        Notice
      of Sale of Loans.

                                                                                      	
                                                                                        17

                                                                                      
	 
      
	
                                                                                        ARTICLE
      III

                                                                                      
	
                                                                                        The
      Certificates

                                                                                      
	 
      	 
      	 
      
	
                                                                                        Section
      3.01.

                                                                                      	
                                                                                        Certificates
      Issuable in Classes; General Provisions with Respect to Principal and
      Interest Distributions.

                                                                                      	
                                                                                        18

                                                                                      
	
                                                                                        Section
      3.02.

                                                                                      	
                                                                                        Issuance
      and Authentication of Certificates.

                                                                                      	
                                                                                        18

                                                                                      
	
                                                                                        Section
      3.03.

                                                                                      	
                                                                                        Registration
      of Transfer and Exchange of Certificates; Transfer
      Restrictions.

                                                                                      	
                                                                                        18

                                                                                      
	
                                                                                        Section
      3.04.

                                                                                      	
                                                                                        Mutilated,
      Destroyed, Lost or Stolen Certificates.

                                                                                      	
                                                                                        21

                                                                                      
	
                                                                                        Section
      3.05.

                                                                                      	
                                                                                        Persons
      Deemed Owners.

                                                                                      	
                                                                                        21

                                                                                      
	 
      
	
                                                                                        ARTICLE
      IV

                                                                                      
	
                                                                                        Representations
      and Warranties

                                                                                      
	 
      	 
      	 
      
	
                                                                                        Section
      4.01.

                                                                                      	
                                                                                        Representations
      and Warranties of the Calculation and Paying Agent.

                                                                                      	
                                                                                        21

                                                                                      
	
                                                                                        Section
      4.02.

                                                                                      	
                                                                                        Representations,
      Warranties and Agreement of the Depositor.

                                                                                      	
                                                                                        22

                                                                                      
	
                                                                                        Section
      4.03.

                                                                                      	
                                                                                        Representations
      and Warranties of the Master Servicer.

                                                                                      	
                                                                                        24

                                                                                      
	
                                                                                        Section
      4.04.

                                                                                      	
                                                                                        Substitution
      or Repurchase of Loans.

                                                                                      	
                                                                                        26

                                                                                      
	
                                                                                        Section
      4.05.

                                                                                      	
                                                                                        Assignment
      of Interest in the Master Loan Purchase Agreement.

                                                                                      	
                                                                                        26

                                                                                      
	 
      
	
                                                                                        ARTICLE
      V

                                                                                      
	
                                                                                        Administration
      And Servicing of Loans

                                                                                      
	 
      	 
      	 
      
	
                                                                                        Section
      5.01.

                                                                                      	
                                                                                        Servicing
      of the Loans.

                                                                                      	
                                                                                        27

                                                                                      
	
                                                                                        Section
      5.02.

                                                                                      	
                                                                                        Collection
      of Loan Payments; Establishment of Series Custodial
    Accounts.

                                                                                      	
                                                                                        29

                                                                                      
	
                                                                                        Section
      5.03.

                                                                                      	
                                                                                        Realization
      Upon Defaulted Loans.

                                                                                      	
                                                                                        30

                                                                                      

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

           

          
            
              
              

            

            
              -i-

              
                

              

            

            
              
              

            

          

           

          TABLE
OF CONTENTS

          (continued)

          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	 
      	 
      	
                                                Page

                                              
	 
      	 
      	 
      
	
                                                Section
      5.04.

                                              	
                                                Permitted
      Withdrawals From the Custodial Accounts.

                                              	
                                                31

                                              
	
                                                Section
      5.05.

                                              	
                                                Fidelity
      Bond, Insurance.

                                              	
                                                31

                                              
	
                                                Section
      5.06.

                                              	
                                                Satisfaction
      of Mortgages and Release of Mortgage Files.

                                              	
                                                32

                                              
	
                                                Section
      5.07.

                                              	
                                                Servicing
      Compensation and Reimbursement.

                                              	
                                                32

                                              
	
                                                Section
      5.08.

                                              	
                                                RUS.

                                              	
                                                33

                                              
	
                                                Section
      5.09.

                                              	
                                                Documents,
      Records and Funds in Possession of the Master Servicer to be Held for the
      Trustee.

                                              	
                                                33

                                              
	
                                                Section
      5.10.

                                              	
                                                Rights
      of the Trustee in Respect of the Master Servicer.

                                              	
                                                33

                                              
	
                                                Section
      5.11.

                                              	
                                                Annual
      Statement as to Compliance.

                                              	
                                                33

                                              
	
                                                Section
      5.12.

                                              	
                                                Annual
      Independent Public Accountants’ Servicing Statement; Financial
      Statements.

                                              	
                                                34

                                              
	
                                                Section
      5.13.

                                              	
                                                Statements
      to Certificateholders.

                                              	
                                                34

                                              
	
                                                Section
      5.14.

                                              	
                                                Tax
      Returns.

                                              	
                                                34

                                              
	
                                                Section
      5.15.

                                              	
                                                Servicer
      Default.

                                              	
                                                35

                                              
	
                                                Section
      5.16.

                                              	
                                                Inspection
      Rights.

                                              	
                                                36

                                              
	
                                                Section
      5.17.

                                              	
                                                Limitation
      on Liability of the Depositor, the Master Servicer and
    Others.

                                              	
                                                36

                                              
	 
      
	
                                                ARTICLE
      VI

                                              
	
                                                Series
      Certificate Accounts, Distributions

                                              
	 
      	 
      	 
      
	
                                                Section
      6.01.

                                              	
                                                Series
      Certificate Accounts.

                                              	
                                                37

                                              
	
                                                Section
      6.02.

                                              	
                                                Calculation
      of Certificate Distribution Amount; Publication of Certificate Principal
      Factors.

                                              	
                                                38

                                              
	
                                                Section
      6.03.

                                              	
                                                Withdrawals
      from the Certificate Account.

                                              	
                                                38

                                              
	
                                                Section
      6.04.

                                              	
                                                Distributions
      on Certificates.

                                              	
                                                39

                                              
	 
      
	
                                                ARTICLE
      VII

                                              
	
                                                Concerning
      the Calculation and Paying Agent

                                              
	 
      	 
      	 
      
	
                                                Section
      7.01.

                                              	
                                                Duties
      of the Calculation and Paying Agent.

                                              	
                                                39

                                              
	
                                                Section
      7.02.

                                              	
                                                Calculation
      and Paying Agent Compensation.

                                              	
                                                39

                                              
	
                                                Section
      7.03.

                                              	
                                                Resignation.

                                              	
                                                40

                                              
	
                                                Section
      7.04.

                                              	
                                                Merger
      or Consolidation.

                                              	
                                                40

                                              
	
                                                Section
      7.05.

                                              	
                                                Calculation
      and Paying Agent as Holder.

                                              	
                                                40

                                              
	 
      
	
                                                ARTICLE
      VIII

                                              
	
                                                Concerning
      the Trustee

                                              
	 
      	 
      	 
      
	
                                                Section
      8.01.

                                              	
                                                Duties
      of Trustee.

                                              	
                                                40

                                              
	
                                                Section
      8.02.

                                              	
                                                Certain
      Matters Affecting the Trustee.

                                              	
                                                41

                                              
	
                                                Section
      8.03.

                                              	
                                                Trustee
      Not Liable for Certificates or Loans.

                                              	
                                                42

                                              
	
                                                Section
      8.04.

                                              	
                                                Trustee
      May Own Certificates.

                                              	
                                                43

                                              
	
                                                Section
      8.05.

                                              	
                                                Indemnification
      of the Trustee.

                                              	
                                                43

                                              
	
                                                Section
      8.06.

                                              	
                                                Eligibility
      Requirements for Trustee.

                                              	
                                                43

                                              

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

           

          
            
              
              

            

            
              -ii-

              
                

              

            

            
              
              

            

          

           

          TABLE
OF CONTENTS

          (continued)

          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	 
      	 
      	
                                            Page

                                          
	 
      	 
      	 
      
	
                                            Section
      8.07.

                                          	
                                            Resignation
      and Removal of the Trustee.

                                          	
                                            44

                                          
	
                                            Section
      8.08.

                                          	
                                            Successor
      Trustee.

                                          	
                                            44

                                          
	
                                            Section
      8.09.

                                          	
                                            Merger
      or Consolidation of Trustee.

                                          	
                                            45

                                          
	
                                            Section
      8.10.

                                          	
                                            Appointment
      of Co-Trustee or Separate Trustee.

                                          	
                                            45

                                          
	
                                            Section
      8.11.

                                          	
                                            Trustee
      Fees.

                                          	
                                            46

                                          
	 
      
	
                                            ARTICLE
      IX

                                          
	
                                            Termination

                                          
	 
      	 
      	 
      
	
                                            Section
      9.01.

                                          	
                                            Termination
      upon Purchase or Liquidation of All Loans.

                                          	
                                            46

                                          
	 
      
	
                                            ARTICLE
      X

                                          
	
                                            Supplemental
      Agreements

                                          
	 
      	 
      	 
      
	
                                            Section
      10.01.

                                          	
                                            Permissible
      Without Action by Certificateholders.

                                          	
                                            48

                                          
	
                                            Section
      10.02.

                                          	
                                            Waivers
      and Supplemental Agreements with Consent of Holders.

                                          	
                                            48

                                          
	 
      
	
                                            ARTICLE
      XI

                                          
	
                                            Miscellaneous

                                          
	 
      	 
      	 
      
	
                                            Section
      11.01.

                                          	
                                            Holders.

                                          	
                                            49

                                          
	
                                            Section
      11.02.

                                          	
                                            Governing
      Law.

                                          	
                                            49

                                          
	
                                            Section
      11.03.

                                          	
                                            Demands,
      Notices, Communications.

                                          	
                                            49

                                          
	
                                            Section
      11.04.

                                          	
                                            Severability
      of Provisions.

                                          	
                                            50

                                          

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

           

          
            
              
              

            

            
              -iii-

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