Unassociated Document


    FIRST
      HORIZON ASSET SECURITIES INC.

     

    Depositor

     

    FIRST
      HORIZON HOME LOAN CORPORATION

     

    Master
      Servicer

     

    and

     

    THE
      BANK
      OF NEW YORK

     

    Trustee

     

    _____________________________________________________

     

    POOLING
      AND SERVICING AGREEMENT

     

    Dated
      as
      of March 1, 2007

     

    _____________________________________________________

     

    FIRST
      HORIZON MORTGAGE PASS-THROUGH TRUST 2007-AR1

     

    MORTGAGE
      PASS-THROUGH CERTIFICATES, SERIES 2007-AR1

     


    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    



    TABLE
      OF
      CONTENTS

     

    
      	
              ARTICLE
                I DEFINITIONS

            	
              5

            
	 	 
	
              ARTICLE
                II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
                WARRANTIES

            	
              36

            
	 	
              SECTION
                2.1

            	
              Conveyance
                of Mortgage Loans.

            	
              36

            
	 	
              SECTION
                2.2

            	
              Acceptance
                by Trustee of the Mortgage Loans.

            	
              40

            
	 	
              SECTION
                2.3

            	
              Representations
                and Warranties of the Master Servicer; Covenants of the
                Seller.

            	
              42

            
	 	
              SECTION
                2.4

            	
              Representations
                and Warranties of the Depositor as to the Mortgage Loans.

            	
              45

            
	 	
              SECTION
                2.5

            	
              Delivery
                of Opinion of Counsel in Connection with Substitutions.

            	
              45

            
	 	
              SECTION
                2.6

            	
              Execution
                and Delivery of Certificates.

            	
              46

            
	 	
              SECTION
                2.7

            	
              REMIC
                Matters.

            	
              46

            
	 	
              SECTION
                2.8

            	
              Covenants
                of the Master Servicer.

            	
              46

            
	 	 
	
              ARTICLE
                III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

            	
              49

            
	 	
              SECTION
                3.1

            	
              Master
                Servicer to Service Mortgage Loans.

            	
              49

            
	 	
              SECTION
                3.2

            	
              Subservicing;
                Enforcement of the Obligations of Servicers.

            	
              50

            
	 	
              SECTION
                3.3

            	
              Rights
                of the Depositor and the Trustee in Respect of the Master
                Servicer.

            	
              51

            
	 	
              SECTION
                3.4

            	
              Trustee
                to Act as Master Servicer.

            	
              51

            
	 	
              SECTION
                3.5

            	
              Collection
                of Mortgage Loan Payments; Certificate Account; Distribution
                Account.

            	
              52

            
	 	
              SECTION
                3.6

            	
              Collection
                of Taxes, Assessments and Similar Items; Escrow Accounts.

            	
              55

            
	 	
              SECTION
                3.7

            	
              Access
                to Certain Documentation and Information Regarding the Mortgage
                Loans.

            	
              55

            
	 	
              SECTION
                3.8

            	
              Permitted
                Withdrawals from the Certificate Account and Distribution
                Account.

            	
              56

            
	 	
              SECTION
                3.9

            	
              Maintenance
                of Hazard Insurance; Maintenance of Primary Insurance
                Policies.

            	
              57

            
	 	
              SECTION
                3.10

            	
              Enforcement
                of Due-on-Sale Clauses; Assumption Agreements.

            	
              59

            
	 	
              SECTION
                3.11

            	
              Realization
                Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
                Loans.

            	
              60

            
	 	
              SECTION
                3.12

            	
              Trustee
                to Cooperate; Release of Mortgage Files.

            	
              63

            
	 	
              SECTION
                3.13

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

            	
              63

            
	 	
              SECTION
                3.14

            	
              Master
                Servicing Compensation.

            	
              64

            
	 	
              SECTION
                3.15

            	
              Access
                to Certain Documentation.

            	
              64

            
	 	
              SECTION
                3.16

            	
              Annual
                Statement as to Compliance.

            	
              65

            
	 	
              SECTION
                3.17

            	
              Errors
                and Omissions Insurance; Fidelity Bonds.

            	
              65

            
	 	
              SECTION
                3.18

            	
              Notification
                of Adjustments.

            	
              65

            
	 	 
	
              ARTICLE
                IV DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER

            	
              66

            
	 	
              SECTION
                4.1

            	
              Advances.

            	
              66

            
	 	
              SECTION
                4.2

            	
              Priorities
                of Distribution.

            	
              66

            
	 	
              SECTION
                4.3

            	
              Method
                of Distribution.

            	
              71

            


    


    
      
         

      

      
        i

        
          

        

      

      
         

      

    


    


    
      	 	
              SECTION
                4.4

            	
              Allocation
                of Losses.

            	
              72

            
	 	
              SECTION
                4.5

            	
              [RESERVED]

            	
              73

            
	 	
              SECTION
                4.6

            	
              Monthly
                Statements to Certificateholders.

            	
              73

            
	 	 
	
              ARTICLE
                V THE CERTIFICATES

            	
              75

            
	 	
              SECTION
                5.1

            	
              The
                Certificates.

            	
              75

            
	 	
              SECTION
                5.2

            	
              Certificate
                Register; Registration of Transfer and Exchange of
                Certificates.

            	
              76

            
	 	
              SECTION
                5.3

            	
              Mutilated,
                Destroyed, Lost or Stolen Certificates.

            	
              83

            
	 	
              SECTION
                5.4

            	
              Persons
                Deemed Owners.

            	
              83

            
	 	
              SECTION
                5.5

            	
              Access
                to List of Certificateholders’ Names and Addresses.

            	
              83

            
	 	
              SECTION
                5.6

            	
              Maintenance
                of Office or Agency.

            	
              84

            
	 	 
	
              ARTICLE
                VI THE DEPOSITOR AND THE MASTER SERVICER

            	
              84

            
	 	
              SECTION
                6.1

            	
              Respective
                Liabilities of the Depositor and the Master Servicer.

            	
              84

            
	 	
              SECTION
                6.2

            	
              Merger
                or Consolidation of the Depositor or the Master Servicer.

            	
              84

            
	 	
              SECTION
                6.3

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

            	
              84

            
	 	
              SECTION
                6.4

            	
              Limitation
                on Resignation of Master Servicer.

            	
              85

            
	 	 	 
	
              ARTICLE
                VII DEFAULT

            	
              85

            
	 	
              SECTION
                7.1

            	
              Events
                of Default.

            	
              85

            
	 	
              SECTION
                7.2

            	
              Trustee
                to Act; Appointment of Successor.

            	
              88

            
	 	
              SECTION
                7.3

            	
              Notification
                to Certificateholders.

            	
              89

            
	 	 
	
              ARTICLE
                VIII CONCERNING THE TRUSTEE

            	
              89

            
	 	
              SECTION
                8.1

            	
              Duties
                of Trustee.

            	
              89

            
	 	
              SECTION
                8.2

            	
              Certain
                Matters Affecting the Trustee.

            	
              91

            
	 	
              SECTION
                8.3

            	
              Trustee
                Not Liable for Certificates or Mortgage Loans.

            	
              93

            
	 	
              SECTION
                8.4

            	
              Trustee
                May Own Certificates.

            	
              93

            
	 	
              SECTION
                8.5

            	
              Trustee’s
                Fees and Expenses.

            	
              93

            
	 	
              SECTION
                8.6

            	
              Eligibility
                Requirements for Trustee.

            	
              94

            
	 	
              SECTION
                8.7

            	
              Resignation
                and Removal of Trustee.

            	
              94

            
	 	
              SECTION
                8.8

            	
              Successor
                Trustee.

            	
              95

            
	 	
              SECTION
                8.9

            	
              Merger
                or Consolidation of Trustee.

            	
              96

            
	 	
              SECTION
                8.10

            	
              Appointment
                of Co-Trustee or Separate Trustee.

            	
              96

            
	 	
              SECTION
                8.11

            	
              Tax
                Matters.

            	
              97

            
	 	 
	
              ARTICLE
                IX TERMINATION

            	
              99

            
	 	
              SECTION
                9.1

            	
              Termination
                upon Liquidation or Purchase of all Mortgage Loans.

            	
              99

            
	 	
              SECTION
                9.2

            	
              Final
                Distribution on the Certificates.

            	
              100

            
	 	
              SECTION
                9.3

            	
              Additional
                Termination Requirements.

            	
              101

            
	 	 
	
              ARTICLE
                X EXCHANGE ACT REPORTING

            	
              102

            
	 	
              SECTION
                10.1

            	
              Filing
                Obligations.

            	
              102

            
	 	
              SECTION
                10.2

            	
              Form
                10-D Filings.

            	
              102

            
	 	
              SECTION
                10.3

            	
              Form
                8-K Filings.

            	
              103

            
	 	
              SECTION
                10.4

            	
              Form
                10-K Filings.

            	
              103

            


    


    
      
         

      

      
        ii

        
          

        

      

      
         

      

    


    


    
      	 	
              SECTION
                10.5

            	
              Sarbanes-Oxley
                Certification.

            	
              104

            
	 	
              SECTION
                10.6

            	
              Form
                15 Filing.

            	
              105

            
	 	
              SECTION
                10.7

            	
              Report
                on Assessment of Compliance and Attestation.

            	
              105

            
	 	
              SECTION
                10.8

            	
              Use
                of Subservicers and Subcontractors.

            	
              106

            
	 	
              SECTION
                10.9

            	
              Amendments.

            	
              107

            
	 	 
	
              ARTICLE
                XI MISCELLANEOUS PROVISIONS

            	
              107

            
	 	
              SECTION
                11.1

            	
              Amendment.

            	
              107

            
	 	
              SECTION
                11.2

            	
              Recordation
                of Agreement; Counterparts.

            	
              109

            
	 	
              SECTION
                11.3

            	
              Governing
                Law.

            	
              109

            
	 	
              SECTION
                11.4

            	
              Intention
                of Parties.

            	
              109

            
	 	
              SECTION
                11.5

            	
              Notices.

            	
              110

            
	 	
              SECTION
                11.6

            	
              Severability
                of Provisions.

            	
              111

            
	 	
              SECTION
                11.7

            	
              Assignment.

            	
              111

            
	 	
              SECTION
                11.8

            	
              Limitation
                on Rights of Certificateholders.

            	
              111

            
	 	
              SECTION
                11.9

            	
              Inspection
                and Audit Rights.

            	
              112

            
	 	
              SECTION
                11.10

            	
              Certificates
                Nonassessable and Fully Paid.

            	
              112

            
	 	
              SECTION
                11.11

            	
              Limitations
                on Actions; No Proceedings.

            	
              112

            
	 	
              SECTION
                11.12

            	
              Acknowledgment
                of Seller.

            	
              113

            


    

    


    SCHEDULES

     

    
      	
              Schedule
                I:

            	
              Mortgage
                Loan Schedule

            	
              S-I-1

            
	
              Schedule
                II:

            	
              Representations
                and Warranties of the Master Servicer

            	
              S-II-1

            
	
              Schedule
                III:

            	
              Form
                of Monthly Master Servicer Report

            	
              S-III-1

            


    

    EXHIBITS

     

    
      	
              Exhibit
                A:

            	
              Form
                of Senior Certificate

            	
              A-1

            
	
              Exhibit
                B:

            	
              Form
                of Subordinated / Regulation S Certificate

            	
              B-1

            
	
              Exhibit
                C:

            	
              Form
                of Residual Certificate

            	
              C-1

            
	
              Exhibit
                D:

            	
              Form
                of Reverse of Certificates

            	
              D-1

            
	
              Exhibit
                E:

            	
              Form
                of Initial Certification

            	
              E-1

            
	
              Exhibit
                F:

            	
              Form
                of Delay Delivery Certification

            	
              F-1

            
	
              Exhibit
                G:

            	
              Form
                of Subsequent Certification of Custodian

            	
              G-1

            
	
              Exhibit
                H:

            	
              Transfer
                Affidavit

            	
              H-1

            
	
              Exhibit
                I-1:

            	
              Form
                of Transferor Certificate

            	
              I-1

            
	
              Exhibit
                J:

            	
              Form
                of Investment Letter [Non-Rule 144A]

            	
              J-1

            
	
              Exhibit
                K:

            	
              Form
                of Rule 144A Letter

            	
              K-1

            
	
              Exhibit
                L:

            	
              Request
                for Release (for Trustee)

            	
              L-1

            
	
              Exhibit
                M:

            	
              Request
                for Release (Mortgage Loan)

            	
              M-1

            
	
              Exhibit
                N-1:

            	
              Form
                of Annual Certification (Subservicer)

            	
              N-1-1

            
	
              Exhibit
                N-2:

            	
              Form
                of Annual Certification (Trustee)

            	
              N-2-1

            
	
              Exhibit
                O:

            	
              Form
                of Servicing Criteria to be Addressed in Assessment of
                Compliance

            	
              O-1

            
	
              Exhibit
                P:

            	
              List
                of Item 1119 Parties

            	
              P-1

            
	
              Exhibit
                Q:

            	
              Form
                of Sarbanes-Oxley Certification

            	
              Q-1

            


    

    


    



    
      
         

      

      
        iii

        
          

        

      

      
         

        
        

      

    



    THIS
      POOLING AND SERVICING AGREEMENT, dated as of March 1, 2007, among FIRST HORIZON
      ASSET SECURITIES INC., a Delaware corporation, as depositor (the “Depositor”),
      FIRST HORIZON HOME LOAN CORPORATION, a Kansas corporation, as master servicer
      (the “Master Servicer”), and THE BANK OF NEW YORK, a banking corporation
      organized under the laws of the State of New York, as trustee (the
“Trustee”).

     

    WITNESSETH
      THAT

     

    In
      consideration of the mutual agreements herein contained, the parties hereto
      agree as follows:

     

    PRELIMINARY
      STATEMENT

     

    The
      Depositor is the owner of the Trust Fund that is hereby conveyed to the Trustee
      in return for the Certificates. The Trust Fund for federal income tax purposes
      will consist of two separate REMICs. The Certificates will represent the entire
      beneficial ownership interest in the Trust Fund. The Regular Certificates will
      represent “regular interests” in the Upper REMIC. The Class I-A-R Certificates
      will represent the residual interests in the Lower REMIC and Upper REMIC, as
      described in Section 2.7. The “latest possible maturity date” for federal income
      tax purposes of each REMIC regular interest created hereby will be the Latest
      Possible Maturity Date.

     

    The
      following table sets forth characteristics of the Certificates, together with
      the minimum denominations and integral multiples in excess thereof in which
      such
      Classes shall be issuable (except that one Certificate of each Class of
      Certificates may be issued in a different amount and, in addition, one Residual
      Certificate representing the Tax Matters Person Certificate may be issued in
      a
      different amount):

     

    


    


    


    [Remainder
      of Page Intentionally Left Blank]

     

    


     


    
      
         

      

      
        1

        
          

        

      

      
         

        
        

      

    



    
      	
              Class
                Designation

            	 	
              Initial
                Class Certificate Balance

            	 	
              Initial

              Pass
                Through Rate

            	 	
              Minimum
                Denomination

            	 	
              Integral
                Multiples in Excess Minimum

            	 	
              Final
                Scheduled Distribution Date(1)

            	 
	
              Class
                I-A-1

            	 	
              $

            	
              193,851,130.00

            	 	 	
              5.8664%(2

            	
              )

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 
	
              Class
                I-A-2

            	 	
              $

            	
              7,030,870.00

            	 	 	
              5.8664%(2

            	
              )

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 
	
              Class
                I-A-R

            	 	
              $

            	
              100.00

            	 	 	
              5.8664%(2

            	
              )

            	
              $

            	
              100

            	 	
              $

            	
              N/A

            	 	 	
              May
                2037 

            	 
	
              Class
                II-A-1

            	 	
              $

            	
              67,590,000.00

            	 	 	
              5.9041%(3

            	
              )

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 
	
              Class
                III-A-1

            	 	
              $

            	
              45,633,000.00

            	 	 	
              6.1106%(4

            	
              )

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 
	
              Class
                III-A-2

            	 	
              $

            	
              1,655,000.00

            	 	 	
              6.1106%(4

            	
              )

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 
	
              Class
                B-1

            	 	
              $

            	
              1,964,000.00

            	 	 	
              5.9111%(5

            	
              )

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 
	
              Class
                B-2

            	 	
              $

            	
              6,217,000.00

            	 	 	
              5.9111%(5

            	
              )

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 
	
              Class
                B-3

            	 	
              $

            	
              1,308,000.00

            	 	 	
              5.9111%(5

            	
              )

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 
	
              Class
                B-4

            	 	
              $

            	
              655,000.00

            	 	 	
              5.9111%(5

            	
              )

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 
	
              Class
                B-5

            	 	
              $

            	
              654,000.00

            	 	 	
              5.9111%(5

            	
              )

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 
	
              Class
                B-6

            	 	
              $

            	
              655,172.16

            	 	 	
              5.9111%(5

            	
              )

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              May
                2037 

            	 


    

    


     

    (1)
      The
      actual final payment on the Certificates could occur earlier or later than
      the
      Final Scheduled Distribution Date.

     

    (2)
      The
      Pass-Through Rates for the Class I-A-1, Class I-A-2 and Class I-A-R Certificates
      for each subsequent Distribution Date will equal the Weighted Average Adjusted
      Net Mortgage Rate for Pool I, as of the first day of the month immediately
      prior
      to the month in which the relevant Distribution Date occurs, after taking into
      account scheduled payments of principal on that date and any Principal
      Prepayments received on or after such date and distributed to Certificateholders
      on the prior Distribution Date.

     

    (3)
      The
      Pass-Through Rates for the Class II-A-1 Certificates for each subsequent
      Distribution Date will equal the Weighted Average Adjusted Net Mortgage Rate
      for
      Pool II, as of the first day of the month immediately prior to the month in
      which the relevant Distribution Date occurs, after taking into account scheduled
      payments of principal on that date and any Principal Prepayments received on
      or
      after such date and distributed to Certificateholders on the prior Distribution
      Date.

     

    (4)
      The
      Pass-Through Rates for the Class III-A-1 and Class III-A-2 Certificates for
      each
      subsequent Distribution Date will equal the Weighted Average Adjusted Net
      Mortgage Rate for Pool III, as of the first day of the month immediately prior
      to the month in which the relevant Distribution Date occurs, after taking into
      account scheduled payments of principal on that date and any Principal
      Prepayments received on or after such date and distributed to Certificateholders
      on the prior Distribution Date.

     

    (5)
      The
      Pass-Through Rates for the Subordinated Certificates for each subsequent
      Distribution Date will equal the weighted average of the Weighted Average
      Adjusted Net Mortgage Rates for each Mortgage Pool, weighted on the basis of
      the
      Group Subordinate Amount for each Mortgage Pool, as of the first day of the
      month immediately prior to the month in which the relevant Distribution Date
      occurs, after taking into account scheduled payments of principal on that date
      and any Principal Prepayments received on or after such date and distributed
      to
      Certificateholders on the prior Distribution Date.

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

        
        

      

    



    
      	
              Accretion
                Directed Certificates

            	
              None.

            
	
              Accrual
                Certificates

            	
              None.

            
	
              Accrual
                Components

            	
              None.

            
	
              Book-Entry
                Certificates

            	
              All
                Classes of Certificates other than the Physical
                Certificates.

            
	
              Certificate
                Group

            	
              With
                respect to Pool I, the Group I Senior Certificates, with respect
                to Pool
                II, the Group II Senior Certificates and with respect to Pool III,
                the
                Group III Senior Certificates.

            
	
              COFI
                Certificates

            	
              None.

            
	
              Component
                Certificates

            	
              None.

            
	
              Components

            	
              None.

            
	
              Delay
                Certificates

            	
              All
                interest-bearing Classes of Certificates other than the Non-Delay
                Certificates, if any.

            
	
              ERISA-Restricted
                Certificates

            	
              The
                Residual Certificates, Private Certificates and Certificates of any
                Class
                that no longer satisfy the applicable rating requirement of the
                Underwriters’ Exemption.

            
	
              Floating
                Rate Certificates

            	
              None.

            
	
              Group
                I Senior Certificates

            	
              The
                Class I-A-1, Class I-A-2, and Class I-A-R Certificates.

            
	
              Group
                II Senior Certificates

            	
              The
                Class II-A-1 Certificates.

            
	
              Group
                III Senior Certificates

            	
              The
                Class III-A-1 and Class III-A-2 Certificates.

            
	
              Insured
                Retail Certificates

            	
              None.

            
	
              Inverse
                Floating Rate Certificates

            	
               

              None.

            
	
              LIBOR
                Certificates

            	
              None.

            
	
              Non-Delay
                Certificates

            	
              None.

            
	
              Notional
                Amount Components

            	
              None.

            
	
              Notional
                Amount Certificates

            	
              None.

            
	
              Offered
                Certificates

            	
              All
                Classes of the Certificates other than the Private
                Certificates.

            
	
              Physical
                Certificates

            	
              The
                Residual Certificates and the Private Certificates.

            
	
              Planned
                Principal Classes

            	
              None.

            
	
              Principal
                Only Certificates

            	
              None.

            
	
              Private
                Certificates

            	
              The
                Class B-4, Class B-5 and Class B-6 Certificates.

            
	
              Rating
                Agencies

            	
              Fitch
                and S&P; except that, for the purposes of the Class B-1, Class B-2,
                Class B-3 and Class B-4, Fitch shall be the sole Rating Agency. The
                Class
                B-6 Certificates will not be rated.

            
	
              Regular
                Certificates

            	
              All
                Classes of Certificates, other than the Residual
                Certificates.

            
	
              Residual
                Certificates

            	
              The
                Class I-A-R Certificates.

            


    

    



    
      
         

      

      
        3

        
          

        

      

      
         

      

    


    


    
      	
              Scheduled
                Principal Classes

            	
              None.

            
	
              Senior
                Certificates

            	
              The
                Group I Senior Certificates, the Group II Senior Certificates and
                the
                Group III Senior Certificates, collectively.

            
	
              Senior
                Mezzanine Certificates

            	
              The
                Class I-A-2 and Class III-A-2 Certificates.

            
	
              Subordinated
                Certificates

            	
              The
                Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
                Certificates.

            
	
              Super
                Senior Certificates

            	
              The
                Class I-A-1 and Class III-A-1 Certificates.

            
	
              Support
                Classes

            	
              None.

            
	
              Targeted
                Principal Classes

            	
              None.

            
	
              Underwriters

            	
              Merrill
                Lynch, Pierce, Fenner & Smith Incorporated and Banc of America
                Securities LLC

            


    

    


     

    With
      respect to any of the foregoing designations as to which the corresponding
      reference is “None,” all defined terms and provisions herein relating solely to
      such designations shall be of no force or effect, and any calculations herein
      incorporating references to such designations shall be interpreted without
      reference to such designations and amounts. Defined terms and provisions herein
      relating to statistical rating agencies not designated above as Rating Agencies
      shall be of no force or effect.

     


    
      
         

      

      
        4

        
          

        

      

      
         

      

    


    


     

    ARTICLE
      I

    DEFINITIONS

     

    Whenever
      used in this Agreement, the following words and phrases, unless the context
      otherwise requires, shall have the following meanings:

     

    Accrued
      Certificate Interest: For any Class of Certificates for any Distribution Date,
      the interest accrued during the related Interest Accrual Period at the
      applicable Pass-Through Rate on the Class Certificate Balance of such Class
      of
      Certificates immediately prior to such Distribution Date, less such Class’ share
      of any Net Interest Shortfall.

     

    Additional
      Designated Information: As defined in Section 10.2.

     

    Adjusted
      Mortgage Rate: As to each Mortgage Loan, and at any time, the per annum rate
      equal to the Mortgage Rate less the Master Servicing Fee Rate.

     

    Adjusted
      Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per annum
      rate
      equal to the Mortgage Rate less the related Expense Fee Rate.

     

    Adjustment
      Date: A date specified in each Mortgage Note as a date on which the Mortgage
      Rate on the related Mortgage Loan will be adjusted.

     

    Advance:
      The payment required to be made by the Master Servicer with respect to any
      Distribution Date pursuant to Section 4.1, the amount of any such payment being
      equal to the aggregate of payments of principal and interest (net of the Master
      Servicing Fee and net of any net income in the case of any REO Property) on
      the
      Mortgage Loans that were due on the related Due Date and not received as of
      the
      close of business on the related Determination Date, less the aggregate amount
      of any such delinquent payments that the Master Servicer has determined would
      constitute a Nonrecoverable Advance if advanced.

     

    Aggregate
      Senior Percentage: For any Distribution Date, the percentage (carried to eight
      decimal places) equal to (x) the sum of the Class Certificate Balances of the
      Senior Certificates of all Certificate Groups immediately prior to such
      Distribution Date, divided by (y) the aggregate Pool Principal Balance for
      all
      of the Mortgage Pools on such Distribution Date. 

     

    Aggregate
      Subordinated Percentage: For any Distribution Date, the percentage (carried
      to
      eight decimal places) equal to (x) the sum of the Class Certificate Balances
      of
      the Subordinated Certificates immediately prior to such Distribution Date,
      divided by (y) the aggregate Pool Principal Balance for all of the Mortgage
      Pools on such Distribution Date.

     

    Agreement:
      This Pooling and Servicing Agreement and all amendments or supplements
      hereto.

     

    Allocable
      Share: With respect to any Class of Subordinated Certificates on any
      Distribution Date, such Class’ pro
      rata
      share
      (based on the Class Certificate Balance of each Class entitled thereto) of
      the
      Subordinated Optimal Principal Amount for each Mortgage Pool; provided, that,
      except as provided in this Agreement, no Subordinated Certificates (other than
      the Class of Subordinated Certificates with the highest priority of
      distribution) shall be entitled on any Distribution Date to receive
      distributions pursuant to clauses (2), (3) and (5) of the definition of
      Subordinated Optimal Principal Amount unless the Class Prepayment Distribution
      Trigger for such Class is satisfied for such Distribution Date.

     


    
      
         

      

      
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    Alternative
      Title Product: Any
      one
      of the following: (i) Lien Protection Insurance issued by Integrated Loan
      Services or ATM Corporation of America, (ii) a Mortgage Lien Report issued
      by
      EPN Solutions/ACRAnet, (iii) a Property Plus Report issued by Rapid Refinance
      Service through SharperLending.com, or (iv) such other alternative title
      insurance product that the Seller utilizes in connection with its then current
      underwriting criteria.

     

    Amount
      Held for Future Distribution: As to any Distribution Date, the aggregate amount
      held in the applicable subaccount of the Certificate Account at the close of
      business on the related Determination Date on account of (i) Principal
      Prepayments on the related Mortgage Pool received after the related Prepayment
      Period and Liquidation Proceeds in the related Mortgage Pool received in the
      month of such Distribution Date and (ii) all Scheduled Payments in the related
      Mortgage Pool due after the related Due Date.

     

    Apportioned
      Principal Balance: For any Class of Subordinated Certificates and any
      Distribution Date, an amount equal to the Class Certificate Balance of such
      Class immediately prior to that Distribution Date multiplied by a fraction,
      the
      numerator of which is the applicable Group Subordinate Amount for such
      Distribution Date and the denominator of which is the sum of the Group
      Subordinate Amounts for such Distribution Date.

     

    Appraised
      Value: With respect to any Mortgage Loan, the Appraised Value of the related
      Mortgaged Property shall be: (i) with respect to a Mortgage Loan other than
      a
      Refinancing Mortgage Loan, the lesser of (a) the value of the Mortgaged Property
      based upon the appraisal made at the time of the origination of such Mortgage
      Loan and (b) the sales price of the Mortgaged Property at the time of the
      origination of such Mortgage Loan; (ii) with respect to a Refinancing Mortgage
      Loan other than a Streamlined Documentation Mortgage Loan, the value of the
      Mortgaged Property based upon the appraisal made at the time of the origination
      of such Refinancing Mortgage Loan; and (iii) with respect to a Streamlined
      Documentation Mortgage Loan, (a) if the loan-to-value ratio with respect to
      the
      Original Mortgage Loan at the time of the origination thereof was 90% or less,
      the value of the Mortgaged Property based upon the appraisal made at the time
      of
      the origination of the Original Mortgage Loan and (b) if the loan-to-value
      ratio
      with respect to the Original Mortgage Loan at the time of the origination
      thereof was greater than 90%, the value of the Mortgaged Property based upon
      the
      appraisal (which may be a drive-by appraisal) made at the time of the
      origination of such Streamlined Documentation Mortgage Loan.

     

    Available
      Funds: For each Mortgage Pool, with respect to any Distribution Date, an amount
      equal to the sum of:

     

    
      	 	
              ·

            	
              all
                scheduled installments of interest, net of the Master Servicing Fee,
                the
                Trustee Fee and all scheduled installments of principal due in respect
                of
                the Mortgage Loans in such Mortgage Pool on the Due Date in the month
                in
                which the Distribution Date occurs and received before the related
                Determination Date, together with any Advances in respect
                thereof;

            


    

     


    
      
         

      

      
        6

        
          

        

      

      
         

      

    


    


     

    
      	 	
              ·

            	
              all
                Insurance Proceeds, Liquidation Proceeds and Unanticipated Recoveries
                received in respect of the Mortgage Loans in such Mortgage Pool during
                the
                calendar month before the Distribution Date, which in each case is
                net of
                unreimbursed expenses incurred in connection with a liquidation or
                foreclosure and unreimbursed Advances, if
                any;

            


    

     

    
      	 	
              ·

            	
              all
                Principal Prepayments received in respect of the Mortgage Loans in
                such
                Mortgage Pool during the related Prepayment Period, plus interest
                received
                thereon, net of any Prepayment Interest
                Excess;

            


    

     

    
      	 	
              ·

            	
              any
                Compensating Interest in respect of Principal Prepayments in Full
                received
                in respect of the Mortgage Loans in such Mortgage Pool during the
                related
                Prepayment Period (or, in the case of the first Distribution Date,
                from
                the Cut-off Date); and

            


    

     

    
      	 	
              ·

            	
              any
                Substitution Adjustment Amount or the Purchase Price for any Deleted
                Mortgage Loan in the related Mortgage Pool or a Mortgage Loan in
                the
                related Mortgage Pool repurchased by the Seller or the Master Servicer
                as
                of such Distribution Date, reduced by amounts in reimbursement for
                Advances previously made and other amounts that the Master Servicer
                is
                entitled to be reimbursed for out of the Certificate Account pursuant
                to
                this Agreement.

            


    

     

    Bankruptcy
      Code: The United States Bankruptcy Reform Act of 1978, as amended.

     

    Bankruptcy
      Coverage Termination Date: The date on which the Bankruptcy Loss Coverage Amount
      is reduced to zero.

     

    Bankruptcy
      Loss: With respect to any Mortgage Loan, a Deficient Valuation or Debt Service
      Reduction; provided, however, that a Bankruptcy Loss shall not be deemed a
      Bankruptcy Loss hereunder so long as the Master Servicer has notified the
      Trustee in writing that the Master Servicer is diligently pursuing any remedies
      that may exist in connection with the related Mortgage Loan and either (A)
      the
      related Mortgage Loan is not in default with regard to payments due thereunder
      or (B) delinquent payments of principal and interest under the related Mortgage
      Loan and any related escrow payments in respect of such Mortgage Loan are being
      advanced on a current basis by the Master Servicer, in either case without
      giving effect to any Debt Service Reduction or Deficient Valuation.

     

    Bankruptcy
      Loss Coverage Amount: As of any Determination Date, the Bankruptcy Loss Coverage
      Amount shall equal the Initial Bankruptcy Coverage Amount as reduced by (i)
      the
      aggregate amount of Bankruptcy Losses allocated to the Certificates since the
      Cut-off Date and (ii) any permissible reductions in the Bankruptcy Loss Coverage
      Amount as evidenced by a letter of each Rating Agency to the Trustee to the
      effect that any such reduction will not result in a downgrading of the then
      current ratings assigned to the Classes of Certificates rated by it. As of
      any
      Distribution Date on or after the Cross-over Date, the Bankruptcy Loss Coverage
      Amount will be zero.

     

    Blanket
      Mortgage: The mortgage or mortgages encumbering the Cooperative
      Property.

     


    
      
         

      

      
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    Book-Entry
      Certificates: As specified in the Preliminary Statement.

     

    Business
      Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day on which
      banking institutions in the City of Dallas, or the State of Texas or the city
      in
      which the Corporate Trust Office of the Trustee is located are authorized or
      obligated by law or executive order to be closed.

     

    Certificate:
      Any one of the Certificates executed by the Trustee in substantially the forms
      attached hereto as exhibits.

     

    Certificate
      Account: The separate Eligible Account or Accounts created and maintained by
      the
      Master Servicer pursuant to Section 3.5 with a depository institution in the
      name of the Master Servicer for the benefit of the Trustee on behalf of
      Certificateholders and designated “First Horizon Home Loan Corporation in trust
      for the registered holders of First Horizon Asset Securities Inc. Mortgage
      Pass-Through Certificates, Series 2007-AR1.”

     

    Certificate
      Group: As specified in the Preliminary Statement. 

     

    Certificate
      Owner: With respect to a Book-Entry Certificate, the Person who is the
      beneficial owner of such Book-Entry Certificate.

     

    Certificate
      Principal Balance: With respect to any Certificate and as of any Distribution
      Date, the principal balance of such Certificate on the date of the initial
      issuance of such Certificate, as reduced by:

     

    
      	 	
              (a)

            	
              all
                amounts distributed on previous Distribution Dates on such Certificate
                on
                account of principal,

            


    

     

    
      	 	
              (b)

            	
              the
                principal portion of all Realized Losses previously allocated to
                such
                Certificate, and

            


    

     

    
      	 	
              (c)

            	
              in
                the case of a Subordinated Certificate, such Certificate’s pro rata share,
                if any, of the Subordinated Certificate Writedown Amount for previous
                Distribution Dates.

            


    

     

    Certificate
      Register: The register maintained pursuant to Section 5.2 hereof.

     

    Certificateholder
      or Holder: The person in whose name a Certificate is registered in the
      Certificate Register, except that, solely for the purpose of giving any consent
      pursuant to this Agreement, any Certificate registered in the name of the
      Depositor or the Seller or any affiliate or agent of the Depositor or the Seller
      shall be deemed not to be Outstanding and the Percentage Interest evidenced
      thereby shall not be taken into account in determining whether the requisite
      amount of Percentage Interests necessary to effect such consent has been
      obtained; provided, however, that if any such Person (including the Depositor)
      owns 100% of the Percentage Interests evidenced by a Class of Certificates,
      such
      Certificates shall be deemed to be Outstanding for purposes of any provision
      hereof that requires the consent of the Holders of Certificates of a particular
      Class as a condition to the taking of any action hereunder. The Trustee is
      entitled to rely conclusively on a certification of the Depositor or any
      affiliate of the Depositor in determining which Certificates are registered
      in
      the name of an affiliate of the Depositor.

     


    
      
         

      

      
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    Certification
      Party: As defined in Section 10.5.

     

    Certifying
      Person: As defined in Section 10.5.

     

    Class:
      All Certificates bearing the same class designation as set forth in the
      Preliminary Statement.

     

    Class
      Certificate Balance: With respect to any Class of Certificates and as of any
      Distribution Date the aggregate of the Certificate Principal Balances of all
      Certificates of such Class as of such date, plus the amount of any Unanticipated
      Recoveries added to the Class Certificate Balance of such Class of Certificate
      pursuant to Section 4.2(h).

     

    Class
      Prepayment Distribution Trigger: For a Class of Subordinated Certificates (other
      than the Class of Subordinated Certificates with the highest priority of
      distribution), a trigger that is satisfied on any Distribution Date on which
      a
      fraction (expressed as a percentage), the numerator of which is the aggregate
      Class Certificate Balance of such Class and each Class subordinate thereto,
      if
      any, and the denominator of which is the aggregate Pool Principal Balance for
      all the Mortgage Pools with respect to such Distribution Date, equals or exceeds
      such percentage calculated as of the Closing Date.

     

    Closing
      Date: March 30, 2007.

     

    Code:
      The
      Internal Revenue Code of 1986, including any successor or amendatory
      provisions.

     

    COFI:
      Not
      applicable.

     

    COFI
      Certificates: Not applicable.

     

    Compensating
      Interest: As to any Distribution Date and any Principal Prepayment in respect
      of
      a Mortgage Loan that is received during the period from the sixteenth day of
      the
      month (or, in the case of the first Distribution Date, from the Cut-off Date)
      prior to the month of such Distribution Date through the last day of such month,
      an additional payment to the related Mortgage Pool made by the Master Servicer,
      to the extent funds are available from the Master Servicing Fee, equal to the
      amount of interest at the Adjusted Net Mortgage Rate for that Mortgage Loan
      from
      the date of the prepayment to the related Due Date; provided that the aggregate
      of all such payments as to the Mortgage Loans in a Mortgage Pool shall not
      exceed 0.0083% of the Pool Principal Balance of such Mortgage Pool as of the
      related Determination Date, and provided further that if a partial Principal
      Prepayment is applied on or after the first day of the month following the
      month
      of receipt, no additional payment is required for such Principal
      Prepayment.

     

    Component:
      Not applicable.

     

    Component
      Certificates: Not applicable.

     


    
      
         

      

      
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    Component
      Principal Balance: Not applicable.

     

    Cooperative
      Corporation: The entity that holds title (fee or an acceptable leasehold estate)
      to the real property and improvements constituting the Cooperative Property
      and
      which governs the Cooperative Property, which Cooperative Corporation must
      qualify as a Cooperative Housing Corporation under Section 216 of the
      Code.

     

    Coop
      Shares: Shares issued by a Cooperative Corporation.

     

    Cooperative
      Loan: Any Mortgage Loan secured by Coop Shares and a Proprietary
      Lease.

     

    Cooperative
      Property: The real property and improvements owned by the Cooperative
      Corporation, including the allocation of individual dwelling units to the
      holders of the Coop Shares of the Cooperative Corporation.

     

    Cooperative
      Unit: A single family dwelling located in a Cooperative Property.

     

    Corporate
      Trust Office: The designated office of the Trustee in the State of New York
      at
      which at any particular time its corporate trust business with respect to this
      Agreement shall be administered, which office at the date of the execution
      of
      this Agreement is located at The Bank of New York, 101 Barclay Street, 4W,
      New
      York, New York 10286 (Attn: Corporate Trust Administration—First Horizon Asset
      Securities Inc. Series 2007-AR1), facsimile no. (212) 815-3986, and which is
      the
      address to which notices to and correspondence with the Trustee should be
      directed.

     

    Corresponding
      Classes: As to any Lower REMIC Interest identified in Section 2.7, the Class
      or
      Classes that are identified in Section 2.7 as corresponding to such Lower REMIC
      Interest.

     

    Cross-over
      Date: The Distribution Date on which the respective Class Certificate Balances
      of each Class of Subordinated Certificates have been reduced to
      zero.

     

    Custodial
      Agreement: The Custodial Agreement dated as of March 30, 2007 by and among
      the
      Trustee, the Master Servicer and the Custodian.

     

    Custodian:
      First Tennessee Bank National Association, a national banking association,
      and
      its successors and assigns, as custodian under the Custodial
      Agreement.

     

    Cut-off
      Date: March 1, 2007.

     

    Cut-off
      Date Pool Principal Balance: With respect to Pool I, $208,167,960.38; with
      respect to Pool II, $70,042,197; and with respect to Pool III,
      $49,003,114.

     

    Cut-off
      Date Principal Balance: As to any Mortgage Loan, the Stated Principal Balance
      thereof as of the close of business on the Cut-off Date.

     

    Debt
      Service Reduction: With respect to any Mortgage Loan, a reduction by a court
      of
      competent jurisdiction in a proceeding under the Bankruptcy Code in the
      Scheduled Payment for such Mortgage Loan which became final and non-appealable,
      except such a reduction resulting from a Deficient Valuation or any reduction
      that results in a permanent forgiveness of principal.

     


    
      
         

      

      
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    Defective
      Mortgage Loan: Any Mortgage Loan which is required to be repurchased pursuant
      to
      Section 2.2 or 2.3.

     

    Deficient
      Valuation: With respect to any Mortgage Loan, a valuation by a court of
      competent jurisdiction of the Mortgaged Property in an amount less than the
      then-outstanding indebtedness under the Mortgage Loan, or any reduction in
      the
      amount of principal to be paid in connection with any Scheduled Payment that
      results in a permanent forgiveness of principal, which valuation or reduction
      results from an order of such court which is final and non-appealable in a
      proceeding under the Bankruptcy Code.

     

    Definitive
      Certificates: Any Certificate evidenced by a Physical Certificate and any
      Certificate issued in lieu of a Book-Entry Certificate pursuant to Section
      5.2(e).

     

    Delay
      Certificates: As specified in the Preliminary Statement.

     

    Delay
      Delivery Mortgage Loans: The Mortgage Loans for which all or a portion of a
      related Mortgage File is not delivered to the Trustee on the Closing Date.
      The
      number of Delay Delivery Mortgage Loans shall not exceed 25% of the aggregate
      number of Mortgage Loans as of the Closing Date.

     

    Deleted
      Mortgage Loan: As defined in Section 2.3(b) hereof.

     

    Denomination:
      With respect to each Certificate, the amount set forth on the face thereof
      as
      the “Initial Certificate Balance of this Certificate” or the Percentage Interest
      appearing on the face thereof.

     

    Depositor:
      First Horizon Asset Securities Inc., a Delaware corporation, or its successor
      in
      interest.

     

    Depository:
      The initial Depository shall be The Depository Trust Company, the nominee of
      which is CEDE & Co., as the registered Holder of the Book-Entry
      Certificates. The Depository shall at all times be a “clearing corporation” as
      defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State
      of
      New York.

     

    Depository
      Participant: A broker, dealer, bank or other financial institution or other
      Person for whom from time to time a Depository effects book-entry transfers
      and
      pledges of securities deposited with the Depository.

     

    Determination
      Date: As to any Distribution Date, the earlier of (i) the third Business Day
      after the 15th day of each month, and (ii) the second Business Day prior to
      the
      related Distribution Date.

     

    Distribution
      Account: The separate Eligible Account created and maintained by the Trustee
      pursuant to Section 3.5 in the name of the Trustee for the benefit of the
      Certificateholders and designated “The Bank of New York, in trust for registered
      Holders of First Horizon Asset Securities Inc. Mortgage Pass-Through
      Certificates, Series 2007-AR1.” Funds in the Distribution Account shall be held
      in trust for the Certificateholders for the uses and purposes set forth in
      this
      Agreement.

     


    
      
         

      

      
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    Distribution
      Account Deposit Date: As to any Distribution Date, 1:30 p.m. Central time on
      the
      Business Day immediately preceding such Distribution Date.

     

    Distribution
      Date: The 25th day of each calendar month after the initial issuance of the
      Certificates, or if such 25th day is not a Business Day, the next succeeding
      Business Day, commencing in April 2007.

     

    Due
      Date:
      With respect to any Distribution Date, the first day of the month in which
      the
      related Distribution Date occurs.

     

    EDGAR:
      The SEC’s Electronic Data Gathering, Analysis and Retrieval system.

     

    Eligible
      Account: Any of (i) an account or accounts maintained with a federal or state
      chartered depository institution or trust company the short-term unsecured
      debt
      obligations of which (or, in the case of a depository institution or trust
      company that is the principal subsidiary of a holding company, the debt
      obligations of such holding company) have the highest short-term ratings of
      each
      Rating Agency at the time any amounts are held on deposit therein, or (ii)
      an
      account or accounts in a depository institution or trust company in which such
      accounts are insured by the FDIC or the SAIF (to the limits established by
      the
      FDIC or the SAIF, as applicable) and the uninsured deposits in which accounts
      are otherwise secured such that, as evidenced by an Opinion of Counsel delivered
      to the Trustee and to each Rating Agency, the Certificateholders have a claim
      with respect to the funds in such account or a perfected first priority security
      interest against any collateral (which shall be limited to Permitted
      Investments) securing such funds that is superior to claims of any other
      depositors or creditors of the depository institution or trust company in which
      such account is maintained, or (iii) a trust account or accounts maintained
      with
      (a) the trust department of a federal or state chartered depository institution
      or (b) a trust company, acting in its fiduciary capacity. Eligible Accounts
      may
      bear interest, and may include, if otherwise qualified under this definition,
      accounts maintained with the Trustee.

     

    ERISA:
      The Employee Retirement Income Security Act of 1974, as amended.

     

    ERISA-Qualifying
      Underwriting: With respect to any ERISA-Restricted Certificate, a best efforts
      or firm commitment underwriting or private placement that meets the requirements
      of the Underwriters’ Exemption. 

     

    ERISA-Restricted
      Certificate: As specified in the Preliminary Statement.

     

    Escrow
      Account: The Eligible Account or Accounts established and maintained pursuant
      to
      Section 3.6(a) hereof.

     

    Event
      of
      Default: As defined in Section 7.1 hereof.

     


    
      
         

      

      
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    Excess
      Loss: The amount of any (i) Fraud Loss realized after the Fraud Loss Coverage
      Termination Date, (ii) Special Hazard Loss realized after the Special Hazard
      Coverage Termination Date or (iii) Deficient Valuation realized after the
      Bankruptcy Coverage Termination Date.

     

    Excess
      Proceeds: With respect to any Liquidated Mortgage Loan, the amount, if any,
      by
      which the sum of any Liquidation Proceeds, Insurance Proceeds and/or
      Unanticipated Recoveries in respect of such Mortgage Loan received in the
      calendar month in which such Mortgage Loan became a Liquidated Mortgage Loan,
      net of any amounts previously reimbursed to the Master Servicer as
      Nonrecoverable Advance(s) with respect to such Mortgage Loan pursuant to Section
      3.8(a)(iii), exceeds (i) the unpaid principal balance of such Liquidated
      Mortgage Loan as of the Due Date in the month in which such Mortgage Loan became
      a Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage Rate
      from
      the Due Date as to which interest was last paid or advanced (and not reimbursed)
      to Certificateholders up to the Due Date applicable to the Distribution Date
      immediately following the calendar month during which such liquidation
      occurred.

     

    Exchange
      Act: The Securities Exchange Act of 1934, as amended, and the rules and
      regulations promulgated thereunder.

     

    Exchange
      Act Reports: Any reports on Form 10-D, Form 8-K and Form 10-K required to be
      filed by the Depositor with respect to the Trust Fund under the Exchange
      Act.

     

    Expense
      Fee Rate: As to each Mortgage Loan, the sum of the related Master Servicing
      Fee
      Rate and the Trustee Fee Rate.

     

    FDIC:
      The
      Federal Deposit Insurance Corporation, or any successor thereto.

     

    FHLMC:
      The Federal Home Loan Mortgage Corporation, a corporate instrumentality of
      the
      United States created and existing under Title III of the Emergency Home Finance
      Act of 1970, as amended, or any successor thereto.

     

    Final
      Scheduled Distribution Date: For each Certificate, as specified in the
      Preliminary Statement.

     

    FIRREA:
      The Financial Institutions Reform, Recovery, and Enforcement Act of
      1989.

     

    First
      Horizon: First Horizon Home Loan Corporation, a Kansas corporation and an
      indirect wholly owned subsidiary of First Horizon National Corporation, a
      Tennessee corporation.

     

    Fitch:
      Fitch Ratings and its successors and/or assigns. If Fitch is designated as
      a
      Rating Agency in the Preliminary Statement, for purposes of Section 11.5(b)
      the
      address for notices to Fitch shall be Fitch, Inc., One State Street Plaza,
      New
      York, New York 10004, Attention: Residential Mortgage Surveillance Group, or
      such other address as Fitch may hereafter furnish to the Depositor and the
      Master Servicer.

     


    
      
         

      

      
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    FNMA:
      The
      Federal National Mortgage Association, a federally chartered and privately
      owned
      corporation organized and existing under the Federal National Mortgage
      Association Charter Act, or any successor thereto.

     

    Form
      10-D
      Disclosure Item: With respect to any Person, any material litigation or
      governmental proceedings pending against such Person, or against any of the
      Trust Fund, the Depositor, the Trustee, the Co-Trustee, the Master Servicer
      or
      any Subservicer that is material to the Certificateholders if such Person has
      actual knowledge thereof.

     

    Form
      10-K
      Disclosure Item: With respect to any Person, (a) any Form 10-D Disclosure Item,
      and (b) any affiliations or relationships between such Person and any Item
      1119
      Party other than the Depositor, the Master Servicer or any affiliate of
      either.

     

    Fraud
      Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
      occurred.

     

    Fraud
      Loss Coverage Amount: As of the Closing Date, $6,544,265. As of any Distribution
      Date from the first anniversary of the Cut-off Date and prior to the fifth
      anniversary of the Cut-off Date, the Fraud Loss Coverage Amount will equal
      $3,272,132 minus the aggregate amount of Fraud Losses that would have been
      allocated to the Subordinated Certificates in the absence of the Loss Allocation
      Limitation since the Cut-off Date. As of any Distribution Date on or after
      the
      earlier of the Cross-over Date or the fifth anniversary
      of the Cut-off Date, the Fraud Loss Coverage Amount shall be zero.

     

    Fraud
      Loss Coverage Termination Date: The date on which the Fraud Loss Coverage Amount
      is reduced to zero.

     

    Fraud
      Losses: Realized Losses on Mortgage Loans as to which a loss is sustained by
      reason of a default arising from fraud, dishonesty or misrepresentation in
      connection with the related Mortgage Loan, including a loss by reason of the
      denial of coverage under any related Primary Insurance Policy because of such
      fraud, dishonesty or misrepresentation. 

     

    Group
      Subordinate Amount: For a Mortgage Pool and any Distribution Date; the excess
      of
      (a) the Pool Principal Balance of such Mortgage Pool for such Distribution
      Date,
      over (b) the aggregate Class Certificate Balance of the Senior Certificates
      of
      the related Certificate Group immediately prior to that Distribution
      Date.

     

    Index:
      Not applicable.

     

    Indirect
      Participant: A broker, dealer, bank or other financial institution or other
      Person that clears through or maintains a custodial relationship with a
      Depository Participant.

     

    Initial
      Bankruptcy Coverage Amount: $150,000.

     

    Insurance
      Policy: With respect to any Mortgage Loan included in the Trust Fund, any
      insurance policy, including all riders and endorsements thereto in effect,
      including any replacement policy or policies for any Insurance
      Policies.

     


    
      
         

      

      
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    Insurance
      Proceeds: Proceeds paid by an insurer pursuant to any Insurance Policy, in
      each
      case other than any amount included in such Insurance Proceeds (a) in respect
      of
      Insured Expenses, (b) that is applied to the restoration of the related
      Mortgaged Property, or (c) that is released to the Mortgagor in accordance
      with
      the Master Servicer’s normal servicing procedures.

     

    Insured
      Expenses: Expenses covered by an Insurance Policy or any other insurance policy
      with respect to the Mortgage Loans.

     

    Insured
      Retail Certificates: Not applicable.

     

    Interest
      Accrual Period: With respect to each Class of Delay Certificates and any
      Distribution Date, the calendar month prior to the month of such Distribution
      Date. With respect to any Non-Delay Certificates and any Distribution Date,
      the
      one month period commencing on the 25th day of the month preceding the month
      in
      which such Distribution Date occurs and ending on the 24th day of the month
      in
      which such Distribution Date occurs.

     

    Interest
      Determination Date: Not applicable.

     

    Item
      1119
      Party: The Depositor, the Seller, the Master Servicer, the Trustee, any
      Subservicer, any originator identified in the Prospectus Supplement and any
      other material transaction party, as identified in Exhibit P hereto, as updated
      pursuant to Section 10.4.

     

    Latest
      Possible Maturity Date: As to each Class of Certificates, the Distribution
      Date
      following the third anniversary of the scheduled maturity date of the Mortgage
      Loan having the latest scheduled maturity date as of the Cut-off Date.


     

    Lender
      PMI Mortgage Loan: Not applicable.

     

    LIBOR:
      Not applicable.

     

    LIBOR
      Certificates: Not applicable.

     

    Limited
      Exchange Act Reporting Obligations: The obligations of the Master Servicer
      under
      Section 3.16(b), Section 8.7 and Section 8.9 with respect to notice and
      information to be provided to the Depositor and Article X (except Section
      10.7(a)(i) and (ii)).

     

    Liquidated
      Mortgage Loan: With respect to any Distribution Date, a defaulted Mortgage
      Loan
      (including any REO Property) which was liquidated in the calendar month
      preceding the month of such Distribution Date and as to which the Master
      Servicer has determined (in accordance with this Agreement) that it has received
      all amounts it expects to receive in connection with the liquidation of such
      Mortgage Loan, including the final disposition of an REO Property.

     

    Liquidation
      Proceeds: All cash amounts, other than Insurance Proceeds and Unanticipated
      Recoveries, received in connection with the partial or complete liquidation
      of
      defaulted Mortgage Loans, whether through trustee’s sale, foreclosure sale or
      otherwise or amounts received in connection with any condemnation or partial
      release of a Mortgaged Property and any other proceeds received in connection
      with an REO Property, less the sum of related unreimbursed Master Servicing
      Fees, Servicing Advances and Advances.

     


    
      
         

      

      
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    Loan-to-Value
      Ratio: With respect to any Mortgage Loan and as to any date of determination,
      the fraction (expressed as a percentage) the numerator of which is the principal
      balance of the related Mortgage Loan at such date of determination and the
      denominator of which is the Appraised Value of the related Mortgaged
      Property.

     

    Loss
      Allocation Limitation: As defined in Section 4.4(g).

     

    Lost
      Mortgage Note: Any Mortgage Note the original of which was permanently lost
      or
      destroyed and has not been replaced.

     

    Lower
      REMIC: The segregated pool of assets consisting of the Trust Fund but excluding,
      the Lower REMIC Interests, the RL Interest and the RU Interest.

     

    Lower
      REMIC Interests: The REMIC regular interests, within the meaning of the REMIC
      Provisions, issued by the Lower REMIC as set forth in Section 2.7.

     

    Maintenance:
      With respect to any Cooperative Unit, the rent paid by the Mortgagor to the
      Cooperative Corporation pursuant to the Proprietary Lease.

     

    Majority
      in Interest: As to any Class of Regular Certificates, the Holders of
      Certificates of such Class evidencing, in the aggregate, at least 51% of the
      Percentage Interests evidenced by all Certificates of such Class.

     

    Master
      Servicer: First Horizon Home Loan Corporation, a Kansas corporation, and its
      successors and assigns, in its capacity as master servicer
      hereunder.

     

    Master
      Servicer Advance Date: As to any Distribution Date, 1:30 p.m. Central time
      on
      the Business Day immediately preceding such Distribution Date.

     

    Master
      Servicing Fee: As to each Mortgage Loan and any Distribution Date, an amount
      payable out of each full payment of interest received on such Mortgage Loan
      and
      equal to one-twelfth of the Master Servicing Fee Rate multiplied by the Stated
      Principal Balance of such Mortgage Loan as of the Due Date in the month of
      such
      Distribution Date (prior to giving effect to any Scheduled Payments due on
      such
      Mortgage Loan on such Due Date), subject to reduction as provided in Section
      3.14.

     

    Master
      Servicing Fee Rate: A per annum rate equal to 0.244%. 

     

    MERS:
      Mortgage Electronic Registration Systems, Inc., a corporation organized and
      existing under the laws of the State of Delaware, or any successor
      thereto.

     

    MERS
      Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
      System.

     


    
      
         

      

      
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    MERS®
      System: The system of recording transfers of mortgages electronically maintained
      by MERS.

     

    MIN:
      The
      Mortgage Identification Number for any MERS Mortgage Loan.

     

    MLPA:
      The
      Mortgage Loan Purchase Agreement dated as of March 30, 2007, by and between
      First Horizon Home Loan Corporation, as seller, and First Horizon Asset
      Securities Inc., as purchaser, as related to the transfer, sale and conveyance
      of the Mortgage Loans.

     

    MOM
      Loan:
      Any Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee
      for
      the originator of such Mortgage Loan and its successors and
      assigns.

     

    Monthly
      Statement: The statement delivered to the Certificateholders pursuant to Section
      4.6.

     

    Moody’s:
      Moody’s Investors Service, Inc., and its successors and/or assigns. If Moody’s
      is designated as a Rating Agency in the Preliminary Statement, for purposes
      of
      Section 11.5(b) the address for notices to Moody’s shall be Moody’s Investors
      Service, Inc., 99 Church Street, New York, New York 10007, Attention:
      Residential Pass-Through Monitoring, or such other address as Moody’s may
      hereafter furnish to the Depositor or the Master Servicer.

     

    Mortgage:
      The mortgage, deed of trust or other instrument creating a first lien on an
      estate in fee simple or leasehold interest in real property securing a Mortgage
      Note.

     

    Mortgage
      File: The mortgage documents listed in Section 2.1(b) hereof pertaining to
      a
      particular Mortgage Loan and any additional documents delivered to the Trustee
      to be added to the Mortgage File pursuant to this Agreement.

     

    Mortgage
      Loan Schedule: The list of Mortgage Loans (as from time to time amended by
      the
      Master Servicer to reflect the addition of Substitute Mortgage Loans and the
      deletion of Deleted Mortgage Loans pursuant to the provisions of this Agreement)
      transferred to the Trustee as part of the Trust Fund and from time to time
      subject to this Agreement, attached hereto as Schedule I, setting forth the
      following information with respect to each Mortgage Loan:

     

    (1) the
      loan
      number;

     

    (2) the
      Mortgagor’s name and the street address of the Mortgaged Property, including the
      zip code;

     

    (3) the
      maturity date;

     

    (4) the
      original principal balance;

     

    (5) the
      Cut-off Date Principal Balance;

     

    (6) the
      first
      payment date of the Mortgage Loan;

     

    (7) the
      Scheduled Payment in effect as of the Cut-off Date;

     


    
      
         

      

      
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    (8) the
      Loan-to-Value Ratio at origination;

     

    (9) a
      code
      indicating whether the residential dwelling at the time of origination was
      represented to be owner-occupied;

     

    (10) a
      code
      indicating whether the residential dwelling is either (a) a detached single
      family dwelling (b) a dwelling in a de minimis PUD, (c) a condominium unit
      or
      PUD (other than a de minimis PUD), (d) a two-to-four unit residential property
      or (e) a Cooperative Unit;

     

    (11) the
      Mortgage Rate;

     

    (12) the
      purpose for the Mortgage Loan; 

     

    (13) the
      type
      of documentation program pursuant to which the Mortgage Loan was originated;
      

     

    (14) the
      Master Servicing Fee for the Mortgage Loan; and

     

    (15) a
      code
      indicating whether the Mortgage Loan is a MERS Mortgage Loan.

     

    Such
      schedule shall also set forth the total of the amounts described under (4)
      and
      (5) above for all of the Mortgage Loans.

     

    Mortgage
      Loans: Such of the mortgage loans transferred and assigned to the Trustee
      pursuant to the provisions hereof as from time to time are held as a part of
      the
      Trust Fund (including any REO Property), the mortgage loans so held being
      identified in the Mortgage Loan Schedule, notwithstanding foreclosure or other
      acquisition of title of the related Mortgaged Property.

     

    Mortgage
      Note: The original executed note or other evidence of indebtedness evidencing
      the indebtedness of a Mortgagor under a Mortgage Loan.

     

    Mortgage
      Pool: Any of Pool I, Pool II or Pool III.

     

    Mortgage
      Rate: The annual rate of interest borne by a Mortgage Note from time to time,
      net of any insurance premium charged by the mortgagee to obtain or maintain
      any
      Primary Insurance Policy.

     

    Mortgaged
      Property: The underlying property securing a Mortgage Loan, which, with respect
      to a Cooperative Loan, is the related Coop Shares and Proprietary
      Lease.

     

    Mortgagor:
      The obligor(s) on a Mortgage Note.

     

    National
      Cost of Funds Index: The National Monthly Median Cost of Funds Ratio to
      SAIF-Insured Institutions published by the Office of Thrift
      Supervision.

     

    Net
      Interest Shortfall: For any Distribution Date and each Mortgage Pool, the sum
      of
      (a) the amount of interest which would otherwise have been received for any
      Mortgage Loan in such Mortgage Pool that was the subject of (x) a Relief Act
      Reduction or (y) a Special Hazard Loss, Fraud Loss, or Deficient Valuation,
      after the exhaustion of the respective amounts of coverage for those types
      of
      losses provided by the Subordinated Certificates; and (b) any Net Prepayment
      Interest Shortfalls in respect of such Mortgage Pool.

     


    
      
         

      

      
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    Net
      Prepayment Interest Shortfalls: As to any Distribution Date and each Mortgage
      Pool, the amount by which the aggregate of Prepayment Interest Shortfalls in
      respect of the Mortgage Loans in such Mortgage Pool during the related
      Prepayment Period exceeds an amount equal to the Compensating Interest paid
      in
      respect of such Mortgage Loans, if any, for such Distribution Date.

     

    Non-Delay
      Certificates: As specified in the Preliminary Statement.

     

    Non-Excess
      Loss: Any Realized Loss other than an Excess Loss.

     

    Nonrecoverable
      Advance: Any portion of an Advance previously made or proposed to be made by
      the
      Master Servicer that, in the good faith judgment of the Master Servicer, will
      not be ultimately recoverable by the Master Servicer from the related Mortgagor,
      related Liquidation Proceeds or otherwise.

     

    Notice
      of
      Final Distribution: The notice to be provided pursuant to Section 9.2 to the
      effect that final distribution on any of the Certificates shall be made only
      upon presentation and surrender thereof.

     

    Notional
      Amount: Not applicable.

     

    Notional
      Amount Component: Not applicable.

     

    Notional
      Amount Certificates: Not applicable.

     

    Offered
      Certificates: As specified in the Preliminary Statement.

     

    Officer’s
      Certificate: A Certificate (i) signed by the Chairman of the Board, the Vice
      Chairman of the Board, the President, a Managing Director, a Vice President
      (however denominated), an Assistant Vice President, the Treasurer, the
      Secretary, or one of the Assistant Treasurers or Assistant Secretaries of the
      Depositor or the Master Servicer, or (ii), if provided for in this Agreement,
      signed by a Servicing Officer, as the case may be, and delivered to the
      Depositor and the Trustee, as the case may be, as required by this
      Agreement.

     

    Opinion
      of Counsel: A written opinion of counsel, who may be counsel for the Depositor
      or the Master Servicer, including, in-house counsel, reasonably acceptable
      to
      the Trustee; provided, however, that with respect to the interpretation or
      application of the REMIC Provisions, such counsel must (i) in fact be
      independent of the Depositor and the Master Servicer, (ii) not have any direct
      financial interest in the Depositor or the Master Servicer or in any affiliate
      of either, and (iii) not be connected with the Depositor or the Master Servicer
      as an officer, employee, promoter, underwriter, trustee, partner, director
      or
      person performing similar functions.

     


    
      
         

      

      
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    Optional
      Termination: The termination of the trust created hereunder in connection with
      the purchase of the Mortgage Loans pursuant to Section 9.1(a)
      hereof.

     

    Original
      Mortgage Loan: The Mortgage Loan refinanced in connection with the origination
      of a Refinancing Mortgage Loan.

     

    Original
      Subordinated Principal Balance: The aggregate Class Certificate Balance of
      the
      Subordinated Certificates as of the Closing Date.

     

    OTS:
      The
      Office of Thrift Supervision.

     

    Outside
      Reference Date: Not applicable.

     

    Outstanding:
      With respect to the Certificates as of any date of determination, all
      Certificates theretofore executed and authenticated under this Agreement
      except:

     

    (i) Certificates
      theretofore canceled by the Trustee or delivered to the Trustee for
      cancellation; and

     

    (ii) Certificates
      in exchange for which or in lieu of which other Certificates have been executed
      and delivered by the Trustee pursuant to this Agreement.

     

    Outstanding
      Mortgage Loan: As of any Due Date, a Mortgage Loan with a Stated Principal
      Balance greater than zero which was not the subject of a Principal Prepayment
      in
      Full prior to such Due Date and which did not become a Liquidated Mortgage
      Loan
      prior to such Due Date.

     

    Ownership
      Interest: As to any Residual Certificate, any ownership interest in such
      Certificate including any interest in such Certificate as the Holder thereof
      and
      any other interest therein, whether direct or indirect, legal or
      beneficial.

     

    Pass-Through
      Rate: For any interest bearing Class of Certificates, the per annum rate set
      forth or calculated in the manner described in the Preliminary
      Statement.

     

    Percentage
      Interest: As to any Certificate, the percentage interest evidenced thereby
      in
      distributions required to be made on the related Class, such percentage interest
      being set forth on the face thereof or equal to the percentage obtained by
      dividing the Denomination of such Certificate by the aggregate of the
      Denominations of all Certificates of the same Class.

     

    Performance
      Certification: As defined in Section 10.5.

     

    Permitted
      Investments: At any time, any one or more of the following obligations and
      securities:

     

    (i) obligations
      of the United States or any agency thereof, provided such obligations are backed
      by the full faith and credit of the United States;

     


    
      
         

      

      
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    (ii) general
      obligations of or obligations guaranteed by any state of the United States
      or
      the District of Columbia receiving the highest long-term debt rating of each
      Rating Agency;

     

    (iii) commercial
      or finance company paper which is then receiving the highest commercial or
      finance company paper rating of each Rating Agency;

     

    (iv) certificates
      of deposit, demand or time deposits, or bankers’ acceptances issued by any
      depository institution or trust company incorporated under the laws of the
      United States or of any state thereof and subject to supervision and examination
      by federal and/or state banking authorities, provided that the commercial paper
      and/or long term unsecured debt obligations of such depository institution
      or
      trust company (or in the case of the principal depository institution in a
      holding company system, the commercial paper or long-term unsecured debt
      obligations of such holding company, but only if Moody’s is not a Rating Agency)
      are then rated one of the two highest long-term and/or the highest short-term
      ratings of each Rating Agency for such securities;

     

    (v) demand
      or
      time deposits or certificates of deposit issued by any bank or trust company
      or
      savings institution to the extent that such deposits are fully insured by the
      FDIC and receiving the highest short-term debt rating of each Rating
      Agency;

     

    (vi) guaranteed
      reinvestment agreements issued by any bank, insurance company or other
      corporation and receiving the highest short-term debt rating of each Rating
      Agency and containing, at the time of the issuance of such agreements, such
      terms and conditions as will not result in the downgrading or withdrawal of
      the
      rating then assigned to the Certificates by either Rating Agency;

     

    (vii) repurchase
      obligations with respect to any security described in clauses (i) and (ii)
      above, in either case entered into with a depository institution or trust
      company (acting as principal) described in clause (iv) above;

     

    (viii) securities
      (other than stripped bonds, stripped coupons or instruments sold at a purchase
      price in excess of 115% of the face amount thereof) bearing interest or sold
      at
      a discount issued by any corporation incorporated under the laws of the United
      States or any state thereof which, at the time of such investment, have one
      of
      the two highest ratings of each Rating Agency (except if the Rating Agency
      is
      Moody’s or S&P, such rating shall be the highest commercial paper rating of
      Moody’s or S&P, as applicable, for any such securities);

     

    (ix) units
      of
      a taxable money-market portfolio having the highest rating assigned by each
      Rating Agency (except if Fitch is a Rating Agency and has not rated the
      portfolio, the highest rating assigned by Moody’s) and restricted to 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;
      and

     


    
      
         

      

      
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    (x) such
      other investments bearing interest or sold at a discount as will not result
      in
      the downgrading or withdrawal of the rating then assigned to the Certificates
      by
      either Rating Agency, as evidenced by a signed writing delivered by each Rating
      Agency;

     

    provided that
      no such
      instrument shall be a Permitted Investment if such instrument evidences the
      right to receive interest only payments with respect to the obligations
      underlying such instrument.

    


    Permitted
      Transferee: Any person other than (i) the United States, any State or political
      subdivision thereof, or any agency or instrumentality of any of the foregoing,
      (ii) a foreign government, International Organization or any agency or
      instrumentality of either of the foregoing, (iii) an organization (except
      certain farmers’ cooperatives described in section 521 of the Code) which is
      exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
      by
      section 511 of the Code on unrelated business taxable income) on any excess
      inclusions (as defined in section 860E(c)(l) of the Code) with respect to any
      Residual Certificate, (iv) rural electric and telephone cooperatives described
      in section 1381(a)(2)(C) of the Code, (v) an “electing large partnership” as
      defined in section 775 of the Code, (vi) a Person that is not (a) a citizen
      or
      resident of the United States, (b) a corporation, partnership, or other entity
      created or organized in or under the laws of the United States, any state
      thereof or the District of Columbia, (c) an estate whose income from sources
      without the United States is includible in gross income for United States
      federal income tax purposes regardless of its connection with the conduct of
      a
      trade or business within the United States or (d) a trust if a court within
      the
      United States is able to exercise primary supervision over the administration
      of
      the trust and one or more United States persons have the authority to control
      all substantial decisions of the trust, unless such Person has furnished the
      transferor and the Trustee with a duly completed Internal Revenue Service Form
      W-8ECI or any applicable successor form, and (vii) any other Person so
      designated by the Depositor based upon an Opinion of Counsel that the Transfer
      of an Ownership Interest in a Residual Certificate to such Person may cause
      any
      REMIC created hereunder to fail to qualify as a REMIC at any time that the
      Certificates are outstanding; provided, however, that if a person is classified
      as a partnership under the Code, such person shall only be a Permitted
      Transferee if all of its beneficial owners are described in subclauses (a),
      (b),
      (c) or (d) of clause (vi) and the governing documents of such person prohibits
      a
      transfer of any interest in such person to any person described in clause (vi).
      The terms “United States,” “State” and “International Organization” shall have
      the meanings set forth in section 7701 of the Code or successor provisions.
      A
      corporation will not be treated as an instrumentality of the United States
      or of
      any State or political subdivision thereof for these purposes if all of its
      activities are subject to tax and, with the exception of the Federal Home Loan
      Mortgage Corporation, a majority of its board of directors is not selected
      by
      such government unit.

     

    Person:
      Any individual, corporation, partnership, joint venture, association,
      joint-stock company, trust, unincorporated organization or government, or any
      agency or political subdivision thereof.

     


    
      
         

      

      
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    Physical
      Certificates: As specified in the Preliminary Statement.

     

    Plan:
      An
      employee benefit plan or other retirement arrangement which is subject to
      Section 406 of ERISA and/or Section 4975 of the Code or any entity whose
      underlying assets include such plan’s or arrangement’s assets by reason of their
      investment in the entity.

     

    Planned
      Balance: Not applicable.

     

    Planned
      Principal Classes: Not applicable.

     

    Pool
      I:
      The aggregate of the Mortgage Loans identified on the Mortgage Loan Schedule
      as
      being included in Pool I.

     

    Pool
      II:
      The aggregate of the Mortgage Loans identified on the Mortgage Loan Schedule
      as
      being included in Pool II.

     

    Pool
      III:
      The aggregate of the Mortgage Loans identified on the Mortgage Loan Schedule
      as
      being included in Pool III.

     

    Pool
      Principal Balance: For a Mortgage Pool, with respect to any Distribution Date,
      the aggregate of the Stated Principal Balances of the Mortgage Loans in such
      Mortgage Pool which were Outstanding Mortgage Loans on the Due Date in the
      month
      preceding the month of such Distribution Date, and for the first Distribution
      Date, as of the Closing Date, less any Principal Prepayments received on or
      after such Due Date and distributed to Certificateholders on the prior
      Distribution Date.

     

    Prepayment
      Interest Excess: As to any Principal Prepayment received by the Master Servicer
      from the first day through the fifteenth day of any calendar month (other than
      the calendar month in which the Cut-off Date occurs), all amounts paid by the
      related Mortgagor in respect of interest on such Principal Prepayment. All
      Prepayment Interest Excess shall be paid to the Master Servicer as additional
      master servicing compensation.

     

    Prepayment
      Interest Shortfall: As to any Distribution Date, Mortgage Loan and Principal
      Prepayment received (a) during the period from the sixteenth day of the month
      preceding the month of such Distribution Date (or, in the case of the first
      Distribution Date, from the Cut-off Date) through the last day of such month,
      in
      the case of a Principal Prepayment in Full, or (b) during the month preceding
      the month of such Distribution Date, in the case of a partial Principal
      Prepayment, the amount, if any, by which one month’s interest at the related
      Adjusted Mortgage Rate on such Principal Prepayment exceeds the amount of
      interest actually paid by the Mortgagor in connection with such Principal
      Prepayment.

     

    Prepayment
      Period: (a) With respect to any Principal Prepayments in Full and any
      Distribution Date, the period from the sixteenth day of the month preceding
      the
      month of such Distribution Date (or, in the case of the first Distribution
      Date,
      from the Cut-off Date) through the fifteenth day of the month of such
      Distribution Date, and (b) with respect to any other Principal Prepayments
      and
      any Distribution Date, the month preceding the month of such Distribution
      Date.

     


    
      
         

      

      
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    Primary
      Insurance Policy: Each policy of primary mortgage guaranty insurance or any
      replacement policy therefor with respect to any Mortgage Loan.

     

    Principal
      Balance Schedules: Not applicable.

     

    Principal
      Prepayment: Any payment of principal by a Mortgagor on a Mortgage Loan that
      is
      received in advance of its scheduled Due Date and is not accompanied by an
      amount representing scheduled interest due on any date or dates in any month
      or
      months subsequent to the month of prepayment. Partial Principal Prepayments
      shall be applied by the Master Servicer in accordance with the terms of the
      related Mortgage Note.

     

    Principal
      Prepayment in Full: Any Principal Prepayment made by a Mortgagor of the entire
      principal balance of a Mortgage Loan.

     

    Private
      Certificate: As specified in the Preliminary Statement.

     

    Proprietary
      Lease: With respect to any Cooperative Unit, a lease or occupancy agreement
      between a Cooperative Corporation and a holder of related Coop
      Shares.

     

    Prospectus:
      The Prospectus dated October 12, 2006 generally relating to mortgage
      pass-through certificates to be sold by the Depositor.

     

    Prospectus
      Supplement: The Prospectus Supplement, dated March 27, 2007, relating to the
      Offered Certificates.

     

    PUD:
      Planned Unit Development.

     

    Purchase
      Price: With respect to any Mortgage Loan required to be purchased by the Seller
      pursuant to Section 2.2 or 2.3 hereof or purchased at the option of the Master
      Servicer pursuant to Section 3.11, an amount equal to the sum of (i) 100% of
      the
      unpaid principal balance of the Mortgage Loan on the date of such purchase,
      (ii)
      accrued interest thereon at the applicable Mortgage Rate (or at the applicable
      Adjusted Mortgage Rate if the purchaser is the Master Servicer) from the date
      through which interest was last paid by the Mortgagor to the Due Date in the
      month in which the Purchase Price is to be distributed to Certificateholders,
      and (iii) any costs and damages incurred by the Trust in connection with the
      noncompliance of such Mortgage Loan with any specifically applicable predatory
      or abusive lending law.

     

    Qualified
      Insurer: A mortgage guaranty insurance company duly qualified as such under
      the
      laws of the state of its principal place of business and each state having
      jurisdiction over such insurer in connection with the insurance policy issued
      by
      such insurer, duly authorized and licensed in such states to transact a mortgage
      guaranty insurance business in such states and to write the insurance provided
      by the insurance policy issued by it, approved as a FNMA-approved mortgage
      insurer and having a claims paying ability rating of at least “AA” or equivalent
      rating by a nationally recognized statistical rating organization. Any
      replacement insurer with respect to a Mortgage Loan must have at least as high
      a
      claims paying ability rating as the insurer it replaces had on the Closing
      Date.

     


    
      
         

      

      
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    Rating
      Agency: Each of the Rating Agencies specified in the Preliminary Statement.
      If
      any such organization or a successor is no longer in existence, “Rating Agency”
shall be such nationally recognized statistical rating organization, or other
      comparable Person, as is designated by the Depositor, notice of which
      designation shall be given to the Trustee. References herein to a given rating
      category of a Rating Agency shall mean such rating category without giving
      effect to any modifiers.

     

    Realized
      Loss: With respect to each Liquidated Mortgage Loan, an amount (not less than
      zero or more than the Stated Principal Balance of the Mortgage Loan) as of
      the
      date of such liquidation, equal to (i) the Stated Principal Balance of the
      Liquidated Mortgage Loan as of the date of such liquidation, plus (ii) interest
      at the Adjusted Net Mortgage Rate from the Due Date as to which interest was
      last paid or advanced (and not reimbursed) to Certificateholders up to the
      Due
      Date in the month in which Liquidation Proceeds are required to be distributed
      on the Stated Principal Balance of such Liquidated Mortgage Loan from time
      to
      time, minus (iii) any Liquidation Proceeds, Insurance Proceeds and/or
      Unanticipated Recoveries received during the month in which such liquidation
      occurred (or during the calendar month preceding the related Distribution Date,
      as applicable), to the extent applied as recoveries of interest at the Adjusted
      Net Mortgage Rate and to principal of the Liquidated Mortgage Loan. With respect
      to each Mortgage Loan, other than a Liquidated Mortgage Loan, which has become
      the subject of a Deficient Valuation, if the principal amount due under the
      related Mortgage Note has been reduced, the difference between the principal
      balance of the Mortgage Loan outstanding immediately prior to such Deficient
      Valuation and the principal balance of the Mortgage Loan as reduced by the
      Deficient Valuation.

     

    Recognition
      Agreement: With respect to any Cooperative Loan, an agreement between the
      Cooperative Corporation and the originator of such Mortgage Loan which
      establishes the rights of such originator in the Cooperative
      Property.

     

    Record
      Date: With respect to any Distribution Date, the close of business on the last
      Business Day of the month preceding the month in which such Distribution Date
      occurs.

     

    Reference
      Bank: Not applicable.

     

    Refinancing
      Mortgage Loan: Any Mortgage Loan originated in connection with the refinancing
      of an existing mortgage loan.

     

    Regular
      Certificates: As specified in the Preliminary Statement.

     

    Regulation
      AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
      such clarification and interpretation as have been provided by the SEC in the
      adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518,
      70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the SEC, or as
      may
      be provided by the SEC or its staff from time to time.

     

    Regulation
      S: Regulation S promulgated under the Securities Act or any successor provision
      thereto, in each case as the same may be amended from time to time; and all
      references to any rule, section or subsection of, or definition or term
      contained in, Regulation S means such rule, section, subsection, definition
      or
      term, as the case may be, or any successor thereto, in each case as the same
      may
      be amended from time to time.

     


    
      
         

      

      
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    Relief
      Act: The Servicemembers Civil Relief Act, as amended, or any similar state
      or
      local legislation or regulations.

     

    Relief
      Act Reductions: With respect to any Distribution Date and any Mortgage Loan
      as
      to which there has been a reduction in the amount of interest collectible
      thereon for the most recently ended calendar month as a result of the
      application of the Relief Act, the amount, if any, by which interest collectible
      on such Mortgage Loan for the most recently ended calendar month is less than
      interest accrued thereon for such month pursuant to the Mortgage
      Note.

     

    REMIC:
      A
“real estate mortgage investment conduit” within the meaning of section 860D of
      the Code.

     

    REMIC
      Change of Law: Any proposed, temporary or final regulation, revenue ruling,
      revenue procedure or other official announcement or interpretation relating
      to
      REMICs and the REMIC Provisions issued after the Closing Date.

     

    REMIC
      Pool: Either of the Lower REMIC or Upper REMIC.

     

    REMIC
      Provisions: Provisions of the federal income tax law relating to real estate
      mortgage investment conduits, which appear at sections 860A through 860G of
      Subchapter M of Chapter 1 of the Code, and related provisions, and regulations
      promulgated thereunder, as the foregoing may be in effect from time to time
      as
      well as provisions of applicable state laws.

     

    REO
      Property: A Mortgaged Property acquired by the Trust Fund through foreclosure
      or
      deed-in-lieu of foreclosure in connection with a defaulted Mortgage
      Loan.

     

    Reportable
      Event: Any event required to be reported on Form 8-K, and in any event, the
      following:

     

    (a) entry
      into a definitive agreement related to the Trust Fund, the Certificates or
      the
      Mortgage Loans, or an amendment to a Transaction Document, even if the Depositor
      is not a party to such agreement (e.g., a servicing agreement with a servicer
      contemplated by Item 1108(a)(3) of Regulation AB);

     

    (b) termination
      of this Agreement or any other document entered into in connection with the
      Trust Fund, the Certificates or the Mortgage Loans (other than by expiration
      of
      the applicable agreement on its stated termination date or as a result of all
      parties completing their obligations under such agreement), even if the
      Depositor is not a party to such agreement (e.g., a servicing agreement with
      a
      servicer contemplated by Item 1108(a)(3) of Regulation AB);

     

    (c) with
      respect to the Master Servicer only, if the Master Servicer becomes aware of
      any
      bankruptcy or receivership with respect to First Horizon, the Depositor, the
      Master Servicer, any Subservicer, the Trustee, the Co-Trustee, any enhancement
      or support provider contemplated by Items 1114(b) or 1115 of Regulation AB,
      or
      any other material party contemplated by Item 1101(d)(1) of Regulation
      AB;

     


    
      
         

      

      
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    (d) with
      respect to the Trustee, the Master Servicer and the Depositor only, the
      occurrence of an early amortization, performance trigger or other event,
      including an Event of Default under this Agreement;

     

    (e) the
      resignation, removal, replacement, substitution of the Trustee, the Master
      Servicer, any Subservicer, the Trustee or any Co-Trustee;

     

    (f) with
      respect to the Master Servicer only, if the Master Servicer becomes aware that
      (i) any material enhancement or support specified in Item 1114(a)(1) through
      (3)
      of Regulation AB or Item 1115 of Regulation AB that was previously applicable
      regarding one or more classes of the Certificates has terminated other than
      by
      expiration of the contract on its stated termination date or as a result of
      all
      parties completing their obligations under such agreement; (ii) any material
      enhancement specified in Item 1114(a)(1) through (3) of Regulation AB or Item
      1115 of Regulation AB has been added with respect to one or more classes of
      the
      Certificates; or (iii) any existing material enhancement or support specified
      in
      Item 1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB
      with
      respect to one or more classes of the Certificates has been materially amended
      or modified; and 

     

    (g) with
      respect to the Trustee, the Master Servicer and the Depositor only, a required
      distribution to Holders of the Certificates is not made as of the required
      Distribution Date under this Agreement.

     

    Reporting
      Subcontractor: With respect to the Master Servicer or the Trustee, any
      Subcontractor determined by such Person pursuant to Section 10.8(b) to be
      materially “participating in the servicing function” within the meaning of Item
      1122 of Regulation AB. References to a Reporting Subcontractor shall refer
      only
      to the Subcontractor of such Person and shall not refer to Subcontractors
      generally.

     

    Request
      for Release: The Request for Release submitted by the Master Servicer to the
      Trustee, substantially in the form of Exhibits L and M, as
      appropriate.

     

    Required
      Insurance Policy: With respect to any Mortgage Loan, any insurance policy that
      is required to be maintained from time to time under this
      Agreement.

     

    Required
      Recordation States: The states of Florida, Maryland and
      Mississippi.

     

    Residual
      Certificates: As specified in the Preliminary Statement.

     

    Responsible
      Officer: When used with respect to the Trustee, any Vice President, any
      Assistant Vice President, the Secretary, any Assistant Secretary, any Trust
      Officer or any other officer of the Trustee customarily performing functions
      similar to those performed by any of the above designated officers and having
      direct responsibility for the administration of this Agreement and also to
      whom,
      with respect to a particular matter, such matter is referred because of such
      officer’s knowledge of and familiarity with the particular subject.

     


    
      
         

      

      
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    RL
      Interest: The REMIC residual interest, within the meaning of the REMIC
      Provisions, issued by the Lower REMIC, which shall be represented by the Class
      I-A-R Certificate.

     

    RU
      Interest: The REMIC residual interest, within the meaning of the REMIC
      Provisions, issued by the Upper REMIC, which shall be represented by the Class
      I-A-R Certificate.

     

    Sarbanes-Oxley
      Certification: As defined in Section 10.5.

     

    Scheduled
      Balances: Not applicable.

     

    Scheduled
      Certificates: Not applicable.

     

    Scheduled
      Payment: The scheduled monthly payment on a Mortgage Loan due on any Due Date
      allocable to principal and/or interest on such Mortgage Loan which, unless
      otherwise specified herein, shall give effect to any related Debt Service
      Reduction and any Deficient Valuation that affects the amount of the monthly
      payment due on such Mortgage Loan.

     

    Scheduled
      Principal Classes: Not applicable.

     

    SEC:
      The
      U.S. Securities and Exchange Commission.

     

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

     

    Security
      Agreement: The security agreement with respect to a Cooperative
      Loan.

     

    Seller:
      First Horizon Home Loan Corporation, a Kansas corporation, and its successors
      and assigns, in its capacity as seller of the Mortgage Loans pursuant to the
      MLPA.

     

    Senior
      Certificates: As specified in the Preliminary Statement.

     

    Senior
      Final Distribution Date: For each Certificate Group, the Distribution Date
      on
      which the Class Certificate Balance of each Class of related Senior Certificates
      has been reduced to zero.

     

    Senior
      Mezzanine Certificates: As specified in the Preliminary Statement.

     

    Senior
      Optimal Principal Amount: As to a Mortgage Pool and with respect to each
      Distribution Date, an amount equal to the sum of:

     

    (1) the
      related Senior Percentage of all Scheduled Payments of principal due on each
      Mortgage Loan in such Mortgage Pool on the first day of the month in which
      the
      Distribution Date occurs, as specified in the amortization schedule at the
      time
      applicable thereto after adjustment for previous principal prepayments and
      the
      principal portion of Debt Service Reductions after the Bankruptcy Loss Coverage
      Amount has been reduced to zero, but before any adjustment to such amortization
      schedule by reason of any other bankruptcy or similar proceeding or any
      moratorium or similar waiver or grace period;

     


    
      
         

      

      
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    (2) the
      related Senior Prepayment Percentage of the Stated Principal Balance of each
      Mortgage Loan in such Mortgage Pool which was the subject of a Principal
      Prepayment in Full received by the Master Servicer during the applicable
      Prepayment Period;

     

    (3) the
      related Senior Prepayment Percentage of the sum of (a) all partial Principal
      Prepayments in respect of each Mortgage Loan in such Mortgage Pool received
      during the applicable Prepayment Period and (b) all Unanticipated Recoveries
      received in respect of each Mortgage Loan in the related Mortgage Pool during
      the calendar month prior to such Distribution Date;

     

    (4) the
      lesser of:

     

    (a)
      the
      related Senior Prepayment Percentage of the sum of (x) the Liquidation Proceeds
      allocable to principal on each Mortgage Loan in such Mortgage Pool which became
      a Liquidated Mortgage Loan during the related Prepayment Period, other than
      Mortgage Loans described in clause (y), and (y) the principal balance of each
      Mortgage Loan in such Mortgage Pool that was purchased by a private mortgage
      insurer during the related Prepayment Period as an alternative to paying a
      claim
      under the related Insurance Policy; and

     

    (b)(i)
      the related Senior Percentage of the sum of (x) the Stated Principal Balance
      of
      each Mortgage Loan in such Mortgage Pool which became a Liquidated Mortgage
      Loan
      during the related Prepayment Period, other than Mortgage Loans described in
      clause (y), and (y) the Stated Principal Balance of each Mortgage Loan in such
      Mortgage Pool that was purchased by a private mortgage insurer during the
      related Prepayment Period as an alternative to paying a claim under the related
      Insurance Policy minus (ii) the related Senior Percentage of the principal
      portion of Excess Losses (other than Debt Service Reductions) for such Mortgage
      Pool during the related Prepayment Period; and

     

    (5) the
      related Senior Prepayment Percentage of the sum of (a) the Stated Principal
      Balance of each Mortgage Loan in such Mortgage Pool which was repurchased by
      the
      seller in connection with such Distribution Date and (b) the difference, if
      any,
      between the Stated Principal Balance of a Mortgage Loan in such Mortgage Pool
      that has been replaced by the seller with a Substitute Mortgage Loan pursuant
      to
      this Agreement in connection with such Distribution Date and the Stated
      Principal Balance of such Substitute Mortgage Loan.

     

    Senior
      Percentage: On any Distribution Date for a Certificate Group, the lesser of
      100%
      and the percentage (carried to eight places rounded up) obtained by dividing
      the
      aggregate Class Certificate Balances of all Classes of Senior Certificates of
      such Certificate Group immediately preceding such Distribution Date by the
      Pool
      Principal Balance of the related Mortgage Pool for the immediately preceding
      Distribution Date.

     

    Senior
      Prepayment Percentage: On any Distribution Date occurring during the periods
      set
      forth below, and as to each Certificate Group, the Senior Prepayment
      Percentages, described below:

     


    
      
         

      

      
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              Period
                (Dates Inclusive)

            	
              Senior
                Prepayment Percentage

            
	
              April
                2007 - March 2014

            	
              100%

            
	
              April
                2014 - March 2015

            	
              The
                related Senior Percentage plus 70% of the related Subordinated
                Percentage.

            
	
              April
                2015 - March 2016

            	
              The
                related Senior Percentage plus 60% of the related Subordinated
                Percentage.

            
	
              April
                2016 - March 2017

            	
              The
                related Senior Percentage plus 40% of the related Subordinated
                Percentage.

            
	
              April
                2017 - March 2018

            	
              The
                related Senior Percentage plus 20% of the related Subordinated
                Percentage.

            
	
              April
                2018 and thereafter

            	
              The
                related Senior Percentage.

            


    

    


     

    provided
      however,
      (i) if
      on any Distribution Date, the Aggregate Senior Percentage exceeds such
      percentage calculated as of the Closing Date, then the Senior Prepayment
      Percentage for all Certificate Groups for such Distribution Date will equal
      100%, (ii) if on any Distribution Date prior to the April 2010 Distribution
      Date, the Aggregate Subordinated Percentage is greater than or equal to twice
      such percentage calculated as of the Closing Date, then the Senior Prepayment
      Percentage for each Certificate Group for such Distribution Date will equal
      the
      Senior Percentage for such Certificate Group plus 50% of the Subordinated
      Percentage for such Certificate Group and (iii) if on or after the April 2010
      Distribution Date, the Aggregate Subordinated Percentage is greater than or
      equal to twice such percentage calculated as of the Closing Date, then the
      Senior Prepayment Percentage for each Certificate Group for such Distribution
      Date will equal the Senior Percentage for such Certificate Group.

     

    The
      reductions in the Senior Prepayment Percentage for each Certificate Group
      described above will not occur, and the Senior Prepayment Percentage or each
      Certificate Group for such prior period will be calculated without regard to
      clause (ii) or (iii) of the paragraph above, unless both of the following
      step-down conditions are satisfied with respect to each Mortgage Pool as of
      the
      last day of the month preceding the Distribution Date: 

     

    
      	 	
              (1)

            	
              the
                aggregate Stated Principal Balance of Mortgage Loans in all the Mortgage
                Pools delinquent 60 days or more (including for this purpose any
                Mortgage
                Loans in foreclosure or subject to bankruptcy proceedings and Mortgage
                Loans with respect to which the related Mortgaged Property, including
                REO
                Property, has been acquired by the Trust Fund) does not exceed 50%
                of the
                aggregate Class Certificate Balances of the Subordinated Certificates
                as
                of that date; and 

            


    

     

    
      	 	
              (2)

            	
              cumulative
                Realized Losses on the Mortgage Loans in all the Mortgage Pools do
                not
                exceed:

            


    

     

    (a) 20%
      of
      the Original Subordinated Principal Balance if such Distribution Date occurs
      between and including April 2007 and March 2010; and 

     

    (b) 30%
      of
      the Original Subordinated Principal Balance if such Distribution Date occurs
      on
      or after April 2010. 

     

    Servicing
      Advances: All customary, reasonable and necessary “out of pocket” costs and
      expenses incurred in the performance by the Master Servicer of its servicing
      obligations, including, but not limited to, the cost of (i) the preservation,
      restoration and protection of a Mortgaged Property, (ii) any expenses
      reimbursable to the Master Servicer pursuant to Section 3.11 and any enforcement
      or judicial proceedings, including foreclosures, (iii) the management and
      liquidation of any REO Property and (iv) compliance with the obligations under
      Section 3.9.

     


    
      
         

      

      
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    Servicing
      Agreement: The servicing agreement, dated as of November 26, 2002 by and
      between First Horizon Asset Securities Inc. and its assigns, as owner, and
      First
      Tennessee Mortgage Services, Inc., as servicer, as the same may be amended
      from
      time to time in accordance with its terms.

     

    Servicing
      Criteria: The “servicing criteria” set forth in Item 1122(d) of Regulation
      AB.

     

    Servicing
      Officer: Any officer of the Master Servicer involved in, or responsible for,
      the
      administration and servicing of the Mortgage Loans whose name and facsimile
      signature appear on a list of servicing officers furnished to the Trustee by
      the
      Master Servicer on the Closing Date pursuant to this Agreement, as such list
      may
      from time to time be amended.

     

    Servicing
      Rights Transfer and Subservicing Agreement: The servicing rights transfer and
      subservicing agreement, dated as of November 26, 2002, by and between First
      Horizon Home Loan Corporation, as transferor and subservicer, and First
      Tennessee Mortgage Services, Inc., as transferee and servicer, as the same
      may
      be amended from time to time in accordance with its terms.

     

    Special
      Hazard Coverage Termination Date: The date on which the Special Hazard Loss
      Coverage Amount is reduced to zero.

     

    Special
      Hazard Loss: Any Realized Loss suffered by a Mortgaged Property on account
      of
      direct physical loss but not including (i) any loss of a type covered by a
      hazard insurance policy or a flood insurance policy required to be maintained
      with respect to such Mortgaged Property pursuant to Section 3.9 to the extent
      of
      the amount of such loss covered thereby, (ii) any shortfall in Insurance
      Proceeds for partial damage due to the application of the co-insurance clauses
      contained in a hazard insurance policy, or (iii) any loss caused by or resulting
      from:

     

    (1) normal
      wear and tear;

     

    (2) fraud,
      conversion or other dishonest act on the part of the Trustee, the Master
      Servicer or any of their agents or employees (without regard to any portion
      of
      the loss not covered by any errors and omissions policy);

     

    (3) errors
      in
      design, faulty workmanship or faulty materials, unless the collapse of the
      property or a part thereof ensues and then only for the ensuing
      loss;

     

    (4) nuclear
      or chemical reaction or nuclear radiation or radioactive or chemical
      contamination, all whether controlled or uncontrolled, and whether such loss
      be
      direct or indirect, proximate or remote or be in whole or in part caused by,
      contributed to or aggravated by a peril covered by the definition of the term
      “Special Hazard Loss”;

     

    (5) hostile
      or warlike action in time of peace and war, including action in hindering,
      combating or defending against an actual, impending or expected
      attack:

     


    
      
         

      

      
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    (i) by
      any
      government or sovereign power, de jure or de facto, or by any authority
      maintaining or using military, naval or air forces;

     

    (ii) by
      military, naval or air forces; or

     

    (iii) by
      an
      agent of any such government, power, authority or forces; 

     

    (6) any
      weapon of war employing nuclear fission, fusion or other radioactive force,
      whether in time of peace or war; or

     

    (7) insurrection,
      rebellion, revolution, civil war, usurped power or action taken by governmental
      authority in hindering, combating or defending against such an occurrence,
      seizure or destruction under quarantine or customs regulations, confiscation
      by
      order of any government or public authority or risks of contraband or illegal
      transportation or trade.

     

    Special
      Hazard Loss Coverage Amount: Upon the initial issuance of the Certificates,
      $6,000,000. As of any Distribution Date, the Special Hazard Loss Coverage Amount
      shall equal the greater of

     

    (a) 1.00%
      (or
      if greater than 1.00%, the highest percentage of Mortgage Loans by principal
      balance secured by Mortgaged Properties in any single California zip code)
      of
      the outstanding principal balance of all the Mortgage Loans as of the related
      Determination Date; and

     

    (b) twice
      the
      outstanding principal balance of the Mortgage Loan which has the largest
      outstanding principal balance as of the related Determination Date, less, in
      each case, the aggregate amount of Special Hazard Losses that would have been
      previously allocated to the Subordinated Certificates in the absence of the
      Loss
      Allocation Limitation. As of any Distribution Date on or after the Cross-over
      Date, the Special Hazard Loss Coverage Amount will be zero.

     

    Special
      Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a Special Hazard
      Loss has occurred.

     

    S&P:
      Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and its
      successors and/or assigns. If S&P is designated as a Rating Agency in the
      Preliminary Statement, for purposes of Section 11.5(b) the address for notices
      to S&P shall be Standard & Poor’s, 55 Water Street, 41st Floor, New
      York, New York 10041, Attention: Mortgage Surveillance Monitoring, or such
      other
      address as S&P may hereafter furnish to the Depositor and the Master
      Servicer.

     

    Startup
      Day: The Closing Date.

     

    Stated
      Principal Balance: As to any Mortgage Loan and Due Date, the unpaid principal
      balance of such Mortgage Loan as of such Due 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 Liquidation Proceeds allocable to principal (other than with respect to
      any
      Liquidated Mortgage Loan) and to the payment of principal due on such Due Date
      and irrespective of any delinquency in payment by the related
      Mortgagor.

     


    
      
         

      

      
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    Streamlined
      Documentation Mortgage Loan: Any Mortgage Loan originated pursuant to the
      Seller’s Streamlined Loan Documentation Program then in effect.

     

    Subcontractor:
      Any vendor, subcontractor or other Person that is not responsible for the
      overall servicing (as “servicing” is commonly understood by participants in the
      mortgage-backed securities market) of Mortgage Loans but performs one or more
      discrete functions identified in Item 1122(d) of Regulation AB with respect
      to
      the Mortgage Loans under the direction or authority of the Master Servicer,
      a
      Subservicer or the Trustee, as the case may be.

     

    Subordinated
      Certificates: As specified in the Preliminary Statement.

     

    Subordinated
      Certificate Writedown Amount: As of any Distribution Date, the amount by which
      (a) the sum of the Class Certificate Balances of all of the Certificates, after
      giving effect to the distribution of principal and the allocation of Realized
      Losses in reduction of the Class Certificate Balances of all of the Certificates
      on such Distribution Date, exceeds (b) the aggregate of the Pool Principal
      Balances of all of the Mortgage Pools on the first day of the month of such
      Distribution Date, less any Deficient Valuations occurring before the Bankruptcy
      Loss Coverage Amount has been reduced to zero.

     

    Subordinated
      Optimal Principal Amount: With respect to each Mortgage Pool and each
      Distribution Date, an amount equal to the sum of the following (but in no event
      greater than the aggregate Class Certificate Balances of the Subordinated
      Certificates immediately prior to such Distribution Date):

     

    (1) the
      related Subordinated Percentage of all Scheduled Payments of principal due
      on
      each outstanding Mortgage Loan in the related Mortgage Pool on the first day
      of
      the month in which the Distribution Date occurs, as specified in the
      amortization schedule at the time applicable thereto, after adjustment for
      previous principal prepayments and the principal portion of Debt Service
      Reductions after the Bankruptcy Loss Coverage Amount has been reduced to zero,
      but before any adjustment to such amortization schedule by reason of any other
      bankruptcy or similar proceeding or any moratorium or similar waiver or grace
      period;

     

    (2) the
      related Subordinated Prepayment Percentage of the Stated Principal Balance
      of
      each Mortgage Loan in the related Mortgage Pool which was the subject of a
      Principal Prepayment in Full received by the Master Servicer during the related
      Prepayment Period;

     

    (3) the
      related Subordinated Prepayment Percentage of the sum of (a) all partial
      Principal Prepayments received in respect of each Mortgage Loan in the related
      Mortgage Pool during the related Prepayment Period, (b) all Unanticipated
      Recoveries received in respect of each Mortgage Loan in the related Mortgage
      Pool during the calendar month prior to such Distribution Date, and (c) on
      the
      Senior Final Distribution Date, 100% of any related Senior Optimal Principal
      Amount remaining undistributed on such date;

     


    
      
         

      

      
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    (4) the
      amount, if any, by which the sum of (a) the net Liquidation Proceeds allocable
      to principal received during the related Prepayment Period in respect of each
      Liquidated Mortgage Loan in the related Mortgage Pool, other than Mortgage
      Loans
      described in clause (b), and (b) the principal balance of each Mortgage Loan
      in
      the related Mortgage Pool that was purchased by a private mortgage insurer
      during the related Prepayment Period as an alternative to paying a claim under
      the related Insurance Policy exceeds (c) the sum of the amounts distributable
      to
      the Senior Certificateholders under clause (4) of the definition of applicable
      Senior Optimal Principal Amount on such Distribution Date; and

     

    (5) the
      related Subordinated Prepayment Percentage of the sum of (a) the Stated
      Principal Balance of each Mortgage Loan in the related Mortgage Pool which
      was
      repurchased by the seller in connection with such Distribution Date and (b)
      the
      difference, if any, between the Stated Principal Balance of each Mortgage Loan
      in the related Mortgage Pool that has been replaced by the seller with a
      Substitute Mortgage Loan pursuant to this Agreement in connection with such
      Distribution Date and the Stated Principal Balance of each such Substitute
      Mortgage Loan.

     

    Subordinated
      Percentage: For any Distribution Date and each Certificate Group, 100% minus
      the
      related Senior Percentage.

     

    Subordinated
      Prepayment Percentage: For any Distribution Date and each Certificate Group,
      100% minus the related Senior Prepayment Percentage.

     

    Subservicer:
      Any person to whom the Master Servicer has contracted for the servicing of
      all
      or a portion of the Mortgage Loans pursuant to Section 3.2 hereof.

     

    Substitute
      Mortgage Loan: A Mortgage Loan substituted by the Seller for a Deleted Mortgage
      Loan which must, on the date of such substitution, as confirmed in a Request
      for
      Release, substantially in the form of Exhibit L, (i) have a Stated Principal
      Balance, after deduction of the principal portion of the Scheduled Payment
      due
      in the month of substitution, not in excess of, and not more than 10% less
      than
      the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have an Adjusted
      Net Mortgage Rate not lower than the Adjusted Net Mortgage Rate of the Deleted
      Mortgage Loan, provided that the Master Servicing Fee for the Substitute
      Mortgage Loan shall be equal to or greater than that of the Deleted Mortgage
      Loan; (iii) have a maximum mortgage rate not more than 1% per annum higher
      or
      lower than the maximum mortgage rate of the Deleted Mortgage Loan; (iv) have
      a
      minimum mortgage rate specified in its related Mortgage Note not more than
      1%
      per annum higher or lower than the minimum mortgage rate of the Deleted Mortgage
      Loan; (v) have the same mortgage index, reset period and periodic rate as the
      Deleted Mortgage Loan and a gross margin not more than 1% per annum higher
      or
      lower than that of the Deleted Mortgage Loan (vi) be accruing interest at a
      rate
      no lower than and not more than 1% per annum higher than, that of the Deleted
      Mortgage Loan; (iv) have a Loan-to-Value Ratio no higher than that of the
      Deleted Mortgage Loan; (vii) have a remaining term to maturity no greater than
      (and not more than one year less than that of) the Deleted Mortgage Loan; (viii)
      not be a Cooperative Loan unless the Deleted Mortgage Loan was a Cooperative
      Loan and (ix) comply with each representation and warranty set forth in Section
      2.3 hereof.

     


    
      
         

      

      
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    Substitution
      Adjustment Amount: The meaning ascribed to such term pursuant to Section
      2.3.

     

    Super
      Senior Certificates: As specified in the Preliminary Statement.

     

    Super
      Senior Support Certificates: Not applicable.

     

    Support
      Classes: Not applicable.

     

    Targeted
      Balances: Not applicable.

     

    Targeted
      Principal Classes: Not applicable.

     

    Tax
      Matters Person: The person designated as “tax matters person” in the manner
      provided under Treasury regulation § 1.860F-4(d) and Treasury regulation §
301.6231(a)(7)-1. Initially, the Tax Matters Person shall be the
      Trustee.

     

    Tax
      Matters Person Certificate: The Class I-A-R Certificates with a Denomination
      of
      $0.01.

     

    Transfer:
      Any direct or indirect transfer or sale of any Ownership Interest in a Residual
      Certificate.

     

    Trust
      Fund: The corpus of the trust created hereunder consisting of (i) the Mortgage
      Loans and all interest and principal received on or with respect thereto after
      the Cut-off Date to the extent not applied in computing the Cut-off Date
      Principal Balance thereof; (ii) all of the Depositor’s rights as purchaser under
      the MLPA; (iii) the Certificate Account and the Distribution Account and all
      amounts deposited therein pursuant to the applicable provisions of this
      Agreement; (iv) property that secured a Mortgage Loan and has been acquired
      by
      foreclosure, deed-in-lieu of foreclosure or otherwise; and (v) all proceeds
      of
      the conversion, voluntary or involuntary, of any of the foregoing.

     

    Trustee:
      The Bank of New York and its successors and, if a successor trustee is appointed
      hereunder, such successor.

     

    Trustee
      Fee: As to any Distribution Date and a Mortgage Pool, an amount equal to
      one-twelfth of the Trustee Fee Rate multiplied by the applicable Pool Principal
      Balance with respect to such Distribution Date.

     

    Trustee
      Fee Rate: With respect to each Mortgage Loan, the per annum rate agreed upon
      in
      writing on or prior to the Closing Date by the Trustee and the
      Depositor.

     

    Unanticipated
      Recovery: As defined in Section 4.2(h).

     

    Undercollateralization
      Distribution: As defined in Section 4.2(i).

     

    Undercollateralized
      Group: With respect to any Distribution Date, the Senior Certificates of any
      Certificate Group as to which the aggregate Certificate Principal Balance
      thereof, after giving effect to distributions pursuant to Section 4.2(a) on
      such
      date, is greater than the Pool Principal Balance of the related Mortgage Pool
      for such Distribution Date.

     


    
      
         

      

      
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    Underwriters:
      As specified in the Preliminary Statement.

     

    Underwriters’
      Exemption: An individual administrative exemption granted by the U.S. Department
      of Labor to the Underwriters providing exceptions from some of the prohibited
      transaction rules of ERISA with respect to the initial purchase, the holding
      and
      the subsequent resale by employee benefit plans in certificates in pass-through
      trusts having assets and meeting conditions described therein, as amended by
      Prohibited Transaction Exemption 2000-58 (65 Fed. Reg. 67765, November 13,
      2000), as amended, and Prohibited Transaction Exemption 2002-41 (67 Fed. Reg.
      54487, August 22, 2002), as amended (or any successor thereto), or any
      substantially similar administrative exemption granted by the U.S. Department
      of
      Labor.

     

    Upper
      REMIC: The segregated pool of assets consisting of the Lower REMIC
      Interests.

     

    Voting
      Rights: The portion of the voting rights of all of the Certificates which is
      allocated to any Certificate. As of any date of determination, (a) 99.0% of
      all
      Voting Rights will be allocated among all Holders of the Certificates (other
      than the Class I-A-R Certificates) in proportion to their then outstanding
      Class
      Certificate Balance and (b) 1.0% of all Voting Rights will be allocated to
      the
      Holders of the Class I-A-R Certificates (such Voting Rights to be allocated
      among the Holders of Certificates of each such Class in accordance with their
      respective Percentage Interests).

     

    Weighted
      Average Adjusted Net Mortgage Rate: For a Mortgage Pool, the average of the
      Adjusted Net Mortgage Rates of the Mortgage Loans in the related Loan Group,
      weighted on the basis of the Stated Principal Balances thereof.

     

    ARTICLE
      II

    CONVEYANCE
      OF MORTGAGE LOANS; 

    REPRESENTATIONS
      AND WARRANTIES

     

    SECTION
      2.1  Conveyance
      of Mortgage Loans.

     

    (a) The
      Depositor, concurrently with the execution and delivery hereof, hereby sells,
      transfers, assigns, sets over and otherwise conveys to the Trustee for the
      benefit of the Certificateholders, without recourse, all the right, title and
      interest of the Depositor in and to the Trust Fund together with (i) the
      Depositor’s right to (A) require the Seller to cure any breach of a
      representation or warranty made by the Seller pursuant to the MLPA, or (B)
      repurchase or substitute for any affected Mortgage Loan in accordance herewith,
      and (ii) all right, title and interest of the Depositor in, to and under
      the Servicing Agreement, which right has been assigned to the Depositor pursuant
      to the MLPA.

     

    (b) In
      connection with the transfer and assignment set forth in clause (a) above,
      the
      Depositor has delivered or caused to be delivered to the Trustee or the
      Custodian on its behalf (or, in the case of the Delay Delivery Mortgage Loans,
      will deliver or cause to be delivered to the Trustee or the Custodian on its
      behalf within thirty (30) days following the Closing Date) for the benefit
      of
      the Certificateholders the following documents or instruments with respect
      to
      each Mortgage Loan so assigned:

     


    
      
         

      

      
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    (i)    (A)
      the
      original Mortgage Note endorsed by manual or facsimile signature in blank in
      the
      following form: “Pay to the order of ________,
      without
      recourse,” with all intervening endorsements showing a complete chain of
      endorsement from the originator to the Person endorsing the Mortgage Note (each
      such endorsement being sufficient to transfer all right, title and interest
      of
      the party so endorsing, as noteholder or assignee thereof, in and to that
      Mortgage Note); or

     

    (B)
      with
      respect to any Lost Mortgage Note, a lost note affidavit from the Seller stating
      that the original Mortgage Note was lost or destroyed, together with a copy
      of
      such Mortgage Note;

     

    (ii) except
      as
      provided below and for each Mortgage Loan that is not a MERS Mortgage Loan,
      the
      original recorded Mortgage or a copy of such Mortgage certified by the Seller
      as
      being a true and complete copy of the Mortgage, and in the case of each MERS
      Mortgage Loan, the original recorded Mortgage, noting the presence of the MIN
      of
      the Mortgage Loans and either language indicating that the Mortgage Loan is
      a
      MOM Loan if the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not
      a
      MOM Loan at origination, the original Mortgage and the assignment thereof to
      MERS, with evidence of recording indicated thereon, or a copy of the Mortgage
      certified by the Seller as being a true and complete copy of the
      Mortgage;

     

    (iii) in
      the
      case of a Mortgage Loan that is not a MERS Mortgage Loan, a
      duly
      executed assignment of the Mortgage, or a copy of such assignment certified
      by
      the Seller as being a true and complete copy of the assignment, in blank (which
      may be included in a blanket assignment or assignments), together with, except
      as provided below, all interim recorded assignments, or copies of such interim
      assignments certified by the Seller as being true and complete copies of the
      interim assignments, of such Mortgage (each such assignment, when duly and
      validly completed, to be in recordable form and sufficient to effect the
      assignment of and transfer to the assignee thereof, under the Mortgage to which
      the assignment relates); provided that, if the related Mortgage has not been
      returned from the applicable public recording office, such assignment of the
      Mortgage may exclude the information to be provided by the recording
      office;

     

    (iv) the
      original or copies of each assumption, modification, written assurance or
      substitution agreement, if any;

     

    (v) either
      the original or duplicate original title policy, or a copy of such title policy
      certified by the Seller as being a true and complete copy of the title policy
      (including all riders thereto), with respect to the related Mortgaged Property,
      if available, provided that the title policy (including all riders thereto)
      will
      be delivered as soon as it becomes available, and if the title policy is not
      available, and to the extent required pursuant to the second paragraph below
      or
      otherwise in connection with the rating of the Certificates, a written
      commitment or interim binder or preliminary report of the title issued by the
      title insurance or escrow company with respect to the Mortgaged Property, or
      in
      lieu
      thereof,
      an Alternative Title Product or a copy of such Alternative Title Product
      certified by the Seller as being a true and complete copy of the Alternative
      Title Product;
      and

     


    
      
         

      

      
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    (vi) in
      the
      case of a Cooperative Loan, the originals of the following documents or
      instruments:

     

    
      	 	
              (A)

            	
              The
                Coop Shares, together with a stock power in
                blank;

            


    

     

    
      	 	
              (B)

            	
              The
                executed Security Agreement;

            


    

     

    
      	 	
              (C)

            	
              The
                executed Proprietary Lease;

            


    

     

    
      	 	
              (D)

            	
              The
                executed Recognition Agreement;

            


    

     

    
      	 	
              (E)

            	
              The
                executed UCC-1 financing statement with evidence of recording thereon
                which have been filed in all places required to perfect the Seller’s
                interest in the Coop Shares and the Proprietary Lease;
                and

            


    

     

    
      	 	
              (F)

            	
              Executed
                UCC-3 financing statements or other appropriate UCC financing statements
                required by state law, evidencing a complete and unbroken line from
                the
                mortgagee to the Trustee with evidence of recording thereon (or in
                a form
                suitable for recordation).

            


    

     

    In
      the
      event that in connection with any Mortgage Loan that is not a MERS Mortgage
      Loan
      the Depositor cannot deliver (a) the original recorded Mortgage or (b) all
      interim recorded assignments satisfying the requirements of clause (ii) or
      (iii)
      above, respectively, concurrently with the execution and delivery hereof because
      such document or documents have not been returned from the applicable public
      recording office, the Depositor shall promptly deliver or cause to be delivered
      to the Trustee or the Custodian on its behalf such original Mortgage or such
      interim assignment, as the case may be, with evidence of recording indicated
      thereon upon receipt thereof from the public recording office, or a copy
      thereof, certified, if appropriate, by the relevant recording office, but in
      no
      event shall any such delivery of the original Mortgage and each such interim
      assignment or a copy thereof, certified, if appropriate, by the relevant
      recording office, be made later than one year following the Closing Date;
      provided, however, in the event the Depositor is unable to deliver or cause
      to
      be delivered by such date each Mortgage and each such interim assignment by
      reason of the fact that any such documents have not been returned by the
      appropriate recording office, or, in the case of each such interim assignment,
      because the related Mortgage has not been returned by the appropriate recording
      office, the Depositor shall deliver or cause to be delivered such documents
      to
      the Trustee or the Custodian on its behalf as promptly as possible upon receipt
      thereof and, in any event, within 720 days following the Closing Date. The
      Depositor shall forward or cause to be forwarded to the Trustee or the Custodian
      on its behalf (a) from time to time additional original documents evidencing
      an
      assumption or modification of a Mortgage Loan and (b) any other documents
      required to be delivered by the Depositor or the Master Servicer to the Trustee.
      In the event that the original Mortgage is not delivered and in connection
      with
      the payment in full of the related Mortgage Loan and the public recording office
      requires the presentation of a “lost instruments affidavit and indemnity” or any
      equivalent document, because only a copy of the Mortgage can be delivered with
      the instrument of satisfaction or reconveyance, the Master Servicer shall
      execute and deliver or cause to be executed and delivered such a document to
      the
      public recording office. In the case where a public recording office retains
      the
      original recorded Mortgage or in the case where a Mortgage is lost after
      recordation in a public recording office, the Depositor shall deliver or cause
      to be delivered to the Trustee or the Custodian on its behalf a copy of such
      Mortgage certified by such public recording office to be a true and complete
      copy of the original recorded Mortgage.

     


    
      
         

      

      
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    In
      addition, in the event that in connection with any Mortgage Loan the Depositor
      cannot deliver or cause to be delivered the original or duplicate original
      lender’s title policy (together with all riders thereto), satisfying the
      requirements of clause (v) above, concurrently with the execution and delivery
      hereof because the related Mortgage has not been returned from the applicable
      public recording office, the Depositor shall promptly deliver or cause to be
      delivered to the Trustee or the Custodian on its behalf such original or
      duplicate original lender’s title policy (together with all riders thereto) upon
      receipt thereof from the applicable title insurer, but in no event shall any
      such delivery of the original or duplicate original lender’s title policy be
      made later than one year following the Closing Date; provided, however, in
      the
      event the Depositor is unable to deliver or cause to be delivered by such date
      the original or duplicate original lender’s title policy (together with all
      riders thereto) because the related Mortgage has not been returned by the
      appropriate recording office, the Depositor shall deliver or cause to be
      delivered such documents to the Trustee or the Custodian on its behalf as
      promptly as possible upon receipt thereof and, in any event, within 720 days
      following the Closing Date; provided further, however, that the Depositor shall
      not be required to deliver an original or duplicate lender’s title policy
      (together with all riders thereto) if the Depositor delivers an Alternative
      Title Product in lieu thereof. Notwithstanding the preceding, in connection
      with
      any Mortgage Loan for which either the original or duplicate original title
      policy has not been delivered to the Trust, if at any time during the term
      of
      this Agreement the parent company of the Seller does not have a long term senior
      debt rating of A- or higher from S&P and A- or higher from Fitch (if rated
      by Fitch), then the Depositor shall within 30 days deliver or cause to be
      delivered to the Trustee or the Custodian on its behalf (if it has not
      previously done so) a written commitment or interim binder or preliminary report
      of the title issued by the title insurance or escrow company with respect to
      the
      Mortgaged Property.

     

    Subject
      to the immediately following sentence, as promptly as practicable subsequent
      to
      such transfer and assignment, and in any event, within thirty (30) days
      thereafter, the Master Servicer shall (i) complete each assignment of Mortgage,
      as follows: “First Horizon Mortgage Pass-Through Certificates, Series 2007-AR1,
      The Bank of New York, as trustee for the holders of the Certificates”, (ii)
      cause such assignment to be in proper form for recording in the appropriate
      public office for real property records and (iii) cause to be delivered for
      recording in the appropriate public office for real property records the
      assignments of the Mortgages to the Trustee, except that, with respect to any
      assignments of Mortgage as to which the Master Servicer has not received the
      information required to prepare such assignment in recordable form, the Master
      Servicer’s obligation to do so and to deliver the same for such recording shall
      be as soon as practicable after receipt of such information and in any event
      within thirty (30) days after receipt thereof. Notwithstanding the foregoing,
      the Master Servicer need not cause to be recorded any assignment which relates
      to a Mortgage Loan in any state other than the Required Recordation
      States.

     


    
      
         

      

      
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    In
      the
      case of Mortgage Loans that have been prepaid in full as of the Closing Date,
      the Depositor, in lieu of delivering the above documents to the Trustee or
      the
      Custodian on its behalf, will deposit in the Certificate Account the portion
      of
      such payment that is required to be deposited in the Certificate Account
      pursuant to Section 3.8 hereof.

     

    Notwithstanding
      anything to the contrary in this Agreement, within thirty days after the Closing
      Date, the Depositor shall either (i) deliver or cause to be delivered to the
      Trustee or the Custodian on its behalf the Mortgage File as required pursuant
      to
      this Section 2.1 for each Delay Delivery Mortgage Loan or (ii) (A) substitute
      or
      cause to be substituted a Substitute Mortgage Loan for the Delay Delivery
      Mortgage Loan or (B) repurchase or cause to be repurchased the Delay Delivery
      Mortgage Loan, which substitution or repurchase shall be accomplished in the
      manner and subject to the conditions set forth in Section 2.3 (treating each
      Delay Delivery Mortgage Loan as a Deleted Mortgage Loan for purposes of such
      Section 2.3), provided, however, that if the Depositor fails to deliver a
      Mortgage File for any Delay Delivery Mortgage Loan within the thirty-day period
      provided in the prior sentence, the Depositor shall use its best reasonable
      efforts to effect or cause to be effected a substitution, rather than a
      repurchase of, such Deleted Mortgage Loan and provided further that the cure
      period provided for in Section 2.2 or in Section 2.3 shall not apply to the
      initial delivery of the Mortgage File for such Delay Delivery Mortgage Loan,
      but
      rather the Depositor shall have five (5) Business Days to cure or cause to
      be
      cured such failure to deliver. At the end of such thirty-day period, the Trustee
      or the Custodian, on its behalf shall send a Delay Delivery Certification for
      the Delay Delivery Mortgage Loans delivered during such thirty-day period in
      accordance with the provisions of Section 2.2. Notwithstanding anything to
      the
      contrary contained in this Agreement, none of the Mortgage Loans in the Trust
      Fund is or will be Delay Delivery Mortgage Loans.

     

    SECTION
      2.2  Acceptance
      by Trustee of the Mortgage Loans.

     

    The
      Trustee or the Custodian, on behalf of the Trustee, acknowledges receipt of
      the
      documents identified in the Initial Certification in the form annexed hereto
      as
      Exhibit E and declares that it or the Custodian holds and will hold such
      documents and the other documents delivered to it or the Custodian, as
      applicable, constituting the Mortgage Files, and that it or the Custodian,
      as
      applicable, holds or will hold such other assets as are included in the Trust
      Fund, in trust for the exclusive use and benefit of all present and future
      Certificateholders. The Trustee acknowledges that the Custodian will maintain
      possession of the Mortgage Notes in the State of Texas, unless otherwise
      permitted by the Rating Agencies.

     

    The
      Trustee agrees to execute and deliver or to cause the Custodian to execute
      and
      deliver on the Closing Date to the Depositor and the Master Servicer an Initial
      Certification in the form annexed hereto as Exhibit E. Based on its or the
      Custodian’s review and examination, and only as to the documents identified in
      such Initial Certification, the Custodian, on behalf of the Trustee,
      acknowledges that such documents appear regular on their face and relate to
      such
      Mortgage Loan. Neither the Trustee nor the Custodian shall be under any duty
      or
      obligation to inspect, review or examine said documents, instruments,
      certificates or other papers to determine that the same are genuine, enforceable
      or appropriate for the represented purpose or that they have actually been
      recorded in the real estate records or that they are other than what they
      purport to be on their face.

     


    
      
         

      

      
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    On
      or
      about the thirtieth (30th) day after the Closing Date, the Trustee shall deliver
      or shall cause the Custodian to deliver to the Depositor and the Master Servicer
      a Delay Delivery Certification in the form annexed hereto as Exhibit F, with
      any
      applicable exceptions noted thereon. Notwithstanding anything to the contrary
      contained in this Agreement, none of the Mortgage Loans in the Trust Fund is
      or
      will be Delay Delivery Mortgage Loans.

     

    Not
      later
      than 90 days after the Closing Date, the Trustee shall deliver or shall cause
      the Custodian to deliver to the Depositor and the Master Servicer a Subsequent
      Certification in the form annexed hereto as Exhibit G, with any applicable
      exceptions noted thereon.

     

    If,
      in
      the course of such review, the Trustee or the Custodian, on behalf of the
      Trustee, finds any document constituting a part of a Mortgage File which does
      not meet the requirements of Section 2.1, the Trustee shall list or shall cause
      the Custodian to list such as an exception in the Subsequent Certification;
      provided, however that neither the Trustee nor the Custodian shall make any
      determination as to whether (i) any endorsement is sufficient to transfer all
      right, title and interest of the party so endorsing, as noteholder or assignee
      thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
      form or is sufficient to effect the assignment of and transfer to the assignee
      thereof under the mortgage to which the assignment relates. The Seller shall
      promptly correct or cure such defect within 90 days from the date it was so
      notified of such defect and, if the Seller does not correct or cure such defect
      within such period, the Seller shall either (a) substitute for the related
      Mortgage Loan a Substitute Mortgage Loan, which substitution shall be
      accomplished in the manner and subject to the conditions set forth in Section
      2.3, or (b) purchase such Mortgage Loan from the Trustee within 90 days from
      the
      date the Seller was notified of such defect in writing at the Purchase Price
      of
      such Mortgage Loan; provided, however, that in no event shall such substitution
      or purchase occur more than 540 days from the Closing Date, except that if
      the
      substitution or purchase of a Mortgage Loan pursuant to this provision is
      required by reason of a delay in delivery of any documents by the appropriate
      recording office, and there is a dispute between either the Master Servicer
      or
      the Seller and the Trustee over the location or status of the recorded document,
      then such substitution or purchase shall occur within 720 days from the Closing
      Date. The Trustee shall deliver or shall cause the Custodian to deliver written
      notice to each Rating Agency within 270 days from the Closing Date indicating
      each Mortgage Loan (a) which has not been returned by the appropriate recording
      office or (b) as to which there is a dispute as to location or status of such
      Mortgage Loan. Such notice shall be delivered every 90 days thereafter until
      the
      related Mortgage Loan is returned to the Trustee or the Custodian on its behalf.
      Any such substitution pursuant to (a) above or purchase pursuant to (b) above
      shall not be effected prior to the delivery to the Trustee of the Opinion of
      Counsel required by Section 2.5 hereof, if any, and any substitution pursuant
      to
      (a) above shall not be effected prior to the additional delivery to the Trustee
      of a Request for Release substantially in the form of Exhibit L. No substitution
      is permitted to be made in any calendar month after the Determination Date
      for
      such month. The Purchase Price for any such Mortgage Loan shall be deposited
      by
      the Seller in the Certificate Account on or prior to the Distribution Account
      Deposit Date for the Distribution Date in the month following the month of
      repurchase and, upon receipt of such deposit and certification with respect
      thereto in the form of Exhibit M hereto (delivery of which to the Custodian
      will
      be by electronic data transmission or email), the Trustee shall cause the
      Custodian to release the related Mortgage File to the Seller and shall execute
      and deliver at the Seller’s request such instruments of transfer or assignment
      prepared by the Seller, in each case without recourse, as shall be necessary
      to
      vest in the Seller, or a designee, the Trustee’s interest in any Mortgage Loan
      released pursuant hereto. If pursuant to the foregoing provisions the Seller
      repurchases a Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer
      shall either (i) cause MERS to execute and deliver an assignment of the Mortgage
      in recordable form to transfer the Mortgage from MERS to the Seller and shall
      cause such Mortgage to be removed from registration on the MERS® System in
      accordance with MERS’ rules and regulations or (ii) cause MERS to designate on
      the MERS® System the Seller as the beneficial holder of such Mortgage
      Loan.

     


    
      
         

      

      
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    The
      Trustee shall retain or shall cause the Custodian to retain possession and
      custody of each Mortgage File in accordance with and subject to the terms and
      conditions set forth herein. The Master Servicer shall promptly deliver to
      the
      Trustee or the Custodian on its behalf, upon the execution or receipt thereof,
      the originals of such other documents or instruments constituting the Mortgage
      File as come into the possession of the Master Servicer from time to
      time.

     

    It
      is
      understood and agreed that the obligation of the Seller to substitute for or
      to
      purchase any Mortgage Loan which does not meet the requirements of Section
      2.1
      above shall constitute the sole remedy respecting such defect available to
      the
      Trustee, the Depositor and any Certificateholder against the
      Seller.

     

    The
      mortgage loans permitted by the terms of this Agreement to be included in the
      Trust Fund are limited to (i) the Mortgage Loans (which the Depositor acquired
      pursuant to the MLPA, which contains, among other representations and
      warranties, a representation and warranty of the Seller that no Mortgage Loan
      is
      a “high cost loan” as defined by the specific applicable local, state or federal
      predatory and abusive lending laws, and (ii) Substitute Mortgage Loans (which,
      by definition as set forth in this Agreement and referred to in the MLPA, are
      required to conform to, among other representations and warranties, a
      representation and warranty of the Seller set forth in the MLPA that no
      Substitute Mortgage Loan is a “high cost loan” as defined by the specific
      applicable local, state or federal predatory and abusive lending laws). It
      is
      therefore understood and agreed by the parties hereto that it is not intended
      that any Mortgage Loan be included in the Trust Fund that is a “high cost loan”
as defined in the applicable local, state or federal predatory and abusive
      lending laws.

     

    SECTION
      2.3  Representations
      and Warranties of the Master Servicer; Covenants of the Seller.

     

    
      	 	
              (a)

            	
              The
                Master Servicer hereby makes the representations and warranties set
                forth
                in Schedule II hereto and by this reference incorporated herein,
                to the
                Depositor and the Trustee, as of the Closing Date, or if so specified
                therein, as of the Cut-off Date.

            


    

     


    
      
         

      

      
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              (b)

            	
              Upon
                discovery by any of the parties hereto of a breach of a representation
                or
                warranty made pursuant to Schedule B to the MLPA that materially
                and
                adversely affects the interests of the Certificateholders in any
                Mortgage
                Loan, the party discovering such breach shall give prompt notice
                thereof
                to the other parties. The Seller hereby covenants that within 90
                days of
                the earlier of its discovery or its receipt of written notice from
                any
                party of a breach of any representation or warranty made pursuant
                to
                Schedule B to the MLPA which materially and adversely affects the
                interests of the Certificateholders in any Mortgage Loan, it shall
                cure
                such breach in all material respects, and if such breach is not so
                cured,
                shall, (i) if such 90-day period expires prior to the second anniversary
                of the Closing Date, remove such Mortgage Loan (a “Deleted Mortgage Loan”)
                from the Trust Fund and substitute in its place a Substitute Mortgage
                Loan, in the manner and subject to the conditions set forth in this
                Section; or (ii) repurchase the affected Mortgage Loan or Mortgage
                Loans
                from the Trustee at the Purchase Price in the manner set forth below;
                provided, however, that any such substitution pursuant to (i) above
                shall
                not be effected prior to the delivery to the Trustee of the Opinion
                of
                Counsel required by Section 2.5 hereof, if any, and any such
                substitution pursuant to (i) above shall not be effected prior to
                the
                additional delivery to the Trustee or the Custodian on its behalf
                of a
                Request for Release substantially in the form of Exhibit M (delivery
                of
                which to the Custodian will be by electronic data transmission or
                email)
                and the Mortgage File for any such Substitute Mortgage Loan. The
                Seller
                shall promptly reimburse the Master Servicer and the Trustee for
                any
                expenses reasonably incurred by the Master Servicer or the Trustee
                in
                respect of enforcing the remedies for such breach. With respect to
                the
                representations and warranties described in this Section which are
                made to
                the best of the Seller’s knowledge, if it is discovered by either the
                Depositor, the Seller or the Trustee that the substance of such
                representation and warranty is inaccurate and such inaccuracy materially
                and adversely affects the value of the related Mortgage Loan or the
                interests of the Certificateholders therein, notwithstanding the
                Seller’s
                lack of knowledge with respect to the substance of such representation
                or
                warranty, such inaccuracy shall be deemed a breach of the applicable
                representation or warranty.

            


    

     

    With
      respect to any Substitute Mortgage Loan or Loans, the Seller shall deliver
      to
      the Trustee or the Custodian on its behalf for the benefit of the
      Certificateholders the Mortgage Note, the Mortgage, the related assignment
      of
      the Mortgage, and such other documents and agreements as are required by Section
      2.1, with the Mortgage Note endorsed and the Mortgage assigned as required
      by
      Section 2.1. No substitution is permitted to be made in any calendar month
      after
      the Determination Date for such month. Scheduled Payments due with respect
      to
      Substitute Mortgage Loans in the month of substitution shall not be part of
      the
      Trust Fund and will be retained by the Seller on the next succeeding
      Distribution Date. For the month of substitution, distributions to
      Certificateholders will include the monthly payment due on any Deleted Mortgage
      Loan for such month and thereafter the Seller shall be entitled to retain all
      amounts received in respect of such Deleted Mortgage Loan. The Master Servicer
      shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders
      to reflect the removal of such Deleted Mortgage Loan and the substitution of
      the
      Substitute Mortgage Loan or Loans and the Master Servicer shall deliver the
      amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
      Substitute Mortgage Loan or Loans shall be subject to the terms of this
      Agreement in all respects, and the Seller shall be deemed to have made with
      respect to such Substitute Mortgage Loan or Loans, as of the date of
      substitution, the representations and warranties made pursuant to Schedule
      B to
      the MLPA with respect to such Mortgage Loan. Upon any such substitution and
      the
      deposit to the Certificate Account of the amount required to be deposited
      therein in connection with such substitution as described in the following
      paragraph, the Trustee shall, upon the delivery to the Trustee of a Request
      for
      Release in the form of Exhibit L, release or shall cause the Custodian to
      release the Mortgage File held for the benefit of the Certificateholders
      relating to such Deleted Mortgage Loan to the Seller and shall execute and
      deliver at the Seller’s direction such instruments of transfer or assignment
      prepared by the Seller, in each case without recourse, as shall be necessary
      to
      vest title in the Seller, or its designee, the Trustee’s interest in any Deleted
      Mortgage Loan substituted for pursuant to this Section 2.3.

     


    
      
         

      

      
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    For
      any
      month in which the Seller substitutes one or more Substitute Mortgage Loans
      for
      one or more Deleted Mortgage Loans, the Master Servicer will determine the
      amount (if any) by which the aggregate principal balance of all such Substitute
      Mortgage Loans as of the date of substitution is less than the aggregate Stated
      Principal Balance of all such Deleted Mortgage Loans (after application of
      the
      scheduled principal portion of the monthly payments due in the month of
      substitution). The amount of such shortage (the “Substitution Adjustment
      Amount”) plus an amount equal to the aggregate of any unreimbursed Advances with
      respect to such Deleted Mortgage Loans shall be deposited in the Certificate
      Account by the Seller on or before the Distribution Account Deposit Date for
      the
      Distribution Date in the month succeeding the calendar month during which the
      related Mortgage Loan became required to be purchased or replaced
      hereunder.

     

    In
      the
      event that the Seller shall have repurchased a Mortgage Loan, the Purchase
      Price
      therefor shall be deposited in the Certificate Account pursuant to Section
      3.5
      on or before the Distribution Account Deposit Date for the Distribution Date
      in
      the month following the month during which the Seller became obligated hereunder
      to repurchase or replace such Mortgage Loan and upon such deposit of the
      Purchase Price, the delivery of the Opinion of Counsel required by Section
      2.5
      and receipt of a Request for Release in the form of Exhibit M hereto, the
      Trustee shall release or shall cause the Custodian to release the related
      Mortgage File held for the benefit of the Certificateholders to such Person,
      and
      the Trustee shall execute and deliver or shall cause the Custodian to execute
      and deliver at such Person’s direction such instruments of transfer or
      assignment prepared by such Person, in each case without recourse, as shall
      be
      necessary to transfer title from the Trustee. It is understood and agreed that
      the obligation under this Agreement of the Seller to cure, repurchase or replace
      any Mortgage Loan as to which a breach has occurred and is continuing shall
      constitute the sole remedy against the Seller respecting such breach available
      to Certificateholders, the Depositor or the Trustee on their
      behalf.

     

    After
      giving effect to the sale of the Certificates by the Depositor to the
      Underwriters, and thereafter, so long as any Certificates remain outstanding,
      the Seller, its affiliates and agents, collectively, shall not beneficially
      own
      Certificates the aggregate fair value of which would represent 90% or more
      of
      the beneficial interests in the Trust Fund.

     

    The
      representations and warranties made pursuant to this Section 2.3 shall survive
      delivery of the respective Mortgage Files to the Trustee or the Custodian for
      the benefit of the Certificateholders.

     


    
      
         

      

      
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    SECTION
      2.4  Representations
      and Warranties of the Depositor as to the Mortgage Loans.

     

    The
      Depositor hereby represents and warrants to the Trustee with respect to each
      Mortgage Loan as of the date hereof or such other date set forth herein that
      as
      of the Closing Date, and following the transfer of the Mortgage Loans to it
      pursuant to the MLPA and immediately prior to the conveyance of the Mortgage
      Loans by it to the Trustee pursuant to Section 2.1(a) hereof, the Depositor
      had
      good title to the Mortgage Loans and the Mortgage Notes were subject to no
      offsets, defenses or counterclaims.

     

    It
      is
      understood and agreed that the representations and warranties set forth in
      this
      Section 2.4 shall survive delivery of the Mortgage Files to the Trustee. Upon
      discovery by the Depositor or the Trustee of a breach of any of the foregoing
      representations and warranties set forth in this Section 2.4 (referred to herein
      as a “breach”), which breach materially and adversely affects the interest of
      the Certificateholders, the party discovering such breach shall give prompt
      written notice to the others and to each Rating Agency.

     

    SECTION
      2.5  Delivery
      of Opinion of Counsel in Connection with Substitutions.

     

    (a) Notwithstanding
      any contrary provision of this Agreement, no substitution pursuant to Section
      2.2 or Section 2.3 shall be made more than 90 days after the Closing Date unless
      the Depositor delivers to the Trustee an Opinion of Counsel, which Opinion
      of
      Counsel shall not be at the expense of either the Trustee or the Trust Fund,
      addressed to the Trustee, to the effect that such substitution will not (i)
      result in the imposition of the tax on “prohibited transactions” on the Trust
      Fund or contributions after the Startup Date, as defined in Sections 860F(a)(2)
      and 860G(d) of the Code, respectively, or (ii) cause any REMIC created hereunder
      to fail to qualify as a REMIC at any time that any Certificates are
      outstanding.

     

    (b) Upon
      discovery by the Depositor, the Master Servicer or the Trustee that any Mortgage
      Loan does not constitute a “qualified mortgage” within the meaning of Section
      860G(a)(3) of the Code, the party discovering such fact shall promptly (and
      in
      any event within five (5) Business Days of discovery) give written notice
      thereof to the other parties. In connection therewith, the Trustee shall require
      the Depositor to cause the Seller, pursuant to the MLPA and at the Seller’s
      option, to either (i) substitute, if the conditions in Section 2.3(b) with
      respect to substitutions are satisfied, a Substitute Mortgage Loan for the
      affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within
      90
      days of such discovery in the same manner as it would a Mortgage Loan for a
      breach of representation or warranty made pursuant to Section 2.3. The Trustee
      shall reconvey or shall cause the Custodian to reconvey to the Seller the
      Mortgage Loan to be released pursuant hereto in the same manner, and on the
      same
      terms and conditions, as it would a Mortgage Loan repurchased for breach of
      a
      representation or warranty contained in Section 2.3.

     


    
      
         

      

      
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    SECTION
      2.6  Execution
      and Delivery of Certificates.

     

    The
      Trustee acknowledges the transfer and assignment to it of the Trust Fund and,
      concurrently with such transfer and assignment, has executed and delivered
      to or
      upon the order of the Depositor, the Certificates in authorized denominations
      evidencing directly or indirectly the entire ownership of the Trust Fund. The
      Trustee agrees to hold the Trust Fund and exercise the rights referred to above
      for the benefit of all present and future Holders of the Certificates and to
      perform the duties set forth in this Agreement to the best of its ability,
      to
      the end that the interests of the Holders of the Certificates may be adequately
      and effectively protected.

     

    SECTION
      2.7  REMIC
      Matters.

     

    The
      Preliminary Statement sets forth the “latest possible maturity date” for federal
      income tax purposes of all REMIC regular interests created hereby. 

     

    The
      assets of the Lower REMIC shall be as set forth in the definition thereof.
      Each
      interest identified in the first table below by a designation beginning with
“L”
shall be a “regular interest” in the Lower REMIC and a Lower REMIC Interest, and
      the RL Interests shall be the sole class of residual interest in the Lower
      REMIC. The Lower REMIC Interests shall be uncertificated and shall be held
      by
      the Trustee as assets of the Upper REMIC. 

     

    The
      assets of the Upper REMIC shall be as set forth in the definition thereof.
      The
      Regular Certificates shall represent “regular interests” in the Upper REMIC. The
      RU Interest shall be the sole class of residual interest in the Upper REMIC.
      The
      Class I-A-R Certificate shall represent ownership of the RL Interest and RU
      Interest. 

     

    The
      “Startup Day” for purposes of the REMIC Provisions for each REMIC hereunder
      shall be the Closing Date. The Tax Matters Person with respect to each REMIC
      hereunder shall be the Trustee and the Trustee shall hold the Tax Matters Person
      Certificate. Each REMIC’s taxable year shall be the calendar year and its
      accounts shall be maintained using the accrual method. 

    
 

    
      
        	 	 	 	 	 	 	
                Corresponding
                  Class of Upper REMIC Interests

              	 
	
                Lower
                  REMIC Interest or Residual

              	 	
                Lower
                  REMIC Interest Balance

              	 	
                Lower
                  REMIC Interest Rate

              	 	
                Interest

              	 	
                Principal

              	 
	
                L-I-A-2

              	 	
                $

              	
                65,572.74

              	 	 	
                (2)

              	
                 

              	 	
                (1)

              	
                 

              	 	
                (1)

              	
                 

              
	
                L-I-A-2

              	 	
                $

              	
                7,285.86

              	 	 	
                (2)

              	
                 

              	 	
                (1)

              	
                 

              	 	
                (1)

              	
                 

              
	
                L-I-A-ZZZ

              	 	
                $

              	
                208,095,101.78

              	 	 	
                (2)

              	
                 

              	 	
                (1)

              	
                 

              	 	
                (1)

              	
                 

              
	
                RL

              	 	
                $

              	
                0.00

              	 	 	
                N/A

              	
              	 	
                N/A

              	
              	 	
                N/A

              	 
	
                L-II-A-1

              	 	
                $

              	
                22,069.78

              	 	 	
                (3)

              	
                 

              	 	
                (1)

              	
                 

              	 	
                (1)

              	
                 

              
	
                L-II-A-2

              	 	
                $

              	
                2,452.20

              	 	 	
                (3)

              	
                 

              	 	
                (1)

              	
                 

              	 	
                (1)

              	
                 

              
	
                L-II-A-ZZZ

              	 	
                $

              	
                70,017,675.28

              	 	 	
                (3)

              	
                 

              	 	
                (1)

              	
                 

              	 	
                (1)

              	
                 

              
	
                L-III-A-1

              	 	
                $

              	
                15,436.03

              	 	 	
                (4)

              	
                 

              	 	
                (1)

              	
                 

              	 	
                (1)

              	
                 

              
	
                L-III-A-2

              	 	
                $

              	
                1,715.11

              	 	 	
                (4)

              	
                 

              	 	
                (1)

              	
                 

              	 	
                (1)

              	
                 

              
	
                L-III-A-ZZZ

              	 	
                $

              	
                48,985,963.38

              	 	 	
                (4)

              	
                 

              	 	
                (1)

              	
                 

              	 	
                (1)

              	
                 

              
	
                Total

              	 	
                $

              	
                327,213,272.16

              	 	 	 	 	 	 	 	 	 	 


      

    


    
      
         

      

      
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    (1) The
      Lower
      REMIC Interest L-I-A-1, Lower REMIC Interest L-I-A-2 and Lower REMIC Interest
      L-I-A-ZZZ shall be Corresponding Classes to these Classes of Certificates:
      I-A-R, I-A-1, I-A-2, B-1, B-2, B-3, B-4, B-5 and B-6 (provided that with respect
      to B-1, B-2, B-3, B-4, B-5 and B-6, such Lower REMIC Interests shall only
      correspond to the portion supported by Pool I). The Lower REMIC Interest
      L-II-A-1, Lower REMIC L-II-A-2 and Lower REMIC Interest L-II-A-ZZZ shall be
      Corresponding Classes to these Classes of Certificates: II-A-1, B-1, B-2, B-3,
      B-4, B-5 and B-6 (provided that with respect to B-1, B-2, B-3, B-4, B-5 and
      B-6,
      such Lower REMIC Interests shall only correspond to the portion supported by
      Pool II). The Lower REMIC Interest L-III-A-1, Lower REMIC Interest L-III-A-2
      and
      Lower REMIC Interest L-III-A-ZZZ shall be Corresponding Classes to these Classes
      of Certificates: III-A-1, III-A-2, B-1, B-2, B-3, B-4, B-5 and B-6 (provided
      that with respect to B-1, B-2, B-3, B-4, B-5 and B-6, such Lower REMIC Interests
      shall only correspond to the portion supported by Pool III). 

     

    (2) The
      Lower
      REMIC Interest Rate for the Lower REMIC Interest L-I-A-1, L-I-A-2 and L-I-A-ZZZ
      will equal the Weighted Average Adjusted Net Mortgage Rate for Pool
      I.

     

    (3) The
      Lower
      REMIC Interest Rate for the Lower REMIC Interest L-II-A-1, L-II-A-2 and
      L-II-A-ZZZ will equal the Weighted Average Adjusted Net Mortgage Rate for Pool
      II.

     

    (4) The
      Lower
      REMIC Interest Rate for the Lower REMIC Interest L-III-A-1, L-III-A-2 and
      L-III-A-ZZZ will equal the Weighted Average Adjusted Net Mortgage Rate for
      Pool
      III.

     

    “L1
      Interests” refers to the L-I-A-1 Lower REMIC Interest, the L-II-A-1 Lower REMIC
      Interests, and L-III-A-1 Lower REMIC Interest. “L2 Interests” refers to the
      L-I-A-2 Lower REMIC Interest, L-II-A-2 Lower REMIC Interest, and L-III-A-2
      Lower
      REMIC Interest. “LZZZ Interests” refers to L-I-A-ZZZ Lower REMIC Interest,
      L-II-A-ZZZ Lower REMIC Interest, and L-III-A-ZZZ Lower REMIC Interest. Each
      L1
      Interest shall have a principal balance initially equal to 0.9% of the Group
      Subordinate Amount of its corresponding Mortgage Pool. Each L2 Interest shall
      have a principal balance initially equal to 0.1% of the Group Subordinate Amount
      of its corresponding Mortgage Pool. The initial principal balance of each
      LZZZ Interest shall equal the excess of the Pool Principal Balance of its
      corresponding Mortgage Pool over the sum of the initial principal balances
      of
      the L1 Interests and L2 Interests corresponding to such Mortgage
      Pool.

     

    Unless
      a
      Cross-over Situation (as defined below) exists, principal and Realized Losses
      arising with respect to each Mortgage Pool shall be allocated first to cause
      the
      L1 and L2 Interests corresponding to such Mortgage Pool to equal 0.9% and 0.1%
      of the Group Subordinate Amount of such Mortgage Pool as of such Distribution
      Date (after distributions of principal and allocation of Realized Losses are
      made) and all excess principal and Realized Losses shall be allocated to the
      LZZZ Interest corresponding to such Mortgage Pool. A L1, L2 or LZZZ Interest
      that is allocated principal on any Distribution Date shall receive such
      principal, and have its principal balance reduced by the amount of such
      principal, on such Distribution Date. Similarly, a L1, L2 or LZZZ Interest
      that
      is allocated a Realized Loss on any Distribution Date shall have its principal
      balance reduced by the amount of such Realized Loss on such Distribution Date.
      

     


    
      
         

      

      
        47

        
          

        

      

      
         

      

    


    


     

    A
      “Cross-over Situation” exists if on any Distribution Date (after taking into
      account distributions of principal and allocations of Realized Losses on such
      Distribution Date) the L1 and L2 Interests corresponding to any Mortgage Pool
      are in the aggregate less than 1% of the Group Subordinate Amount of the
      corresponding Mortgage Pool. If a Cross-over Situation exists on any
      Distribution Date, and the weighted average interest rate of the outstanding
      L1
      and L2 Interests is less than the Pass-Through Rate for any Class of Subordinate
      Certificates for the following Distribution Date, a Principal Reallocation
      Payment (as defined below) shall be made proportionately to the outstanding
      L1
      Interests prior to any other distributions of principal from each such Mortgage
      Pool so that the Calculation Rate equals the Pass-Through Rate for each Class
      of
      Subordinate Certificates. If a Cross-over Situation exists on any Distribution
      Date, and the weighted average rate of the outstanding L1 and L2 Interests
      is
      greater than the Pass-Through Rate for any Class of Subordinate Certificates
      for
      the following Distribution Date, a Principal Reallocation Payment shall be
      made
      proportionately to the outstanding L2 Interests prior to any other distributions
      of principal from each such Mortgage Pool so that the Calculation Rate equals
      the Pass-Through Rate for each Class of Subordinate Certificates. A “Principal
      Reallocation Payment” is a distribution of the minimum amount of principal that
      causes the Calculation Rate (as defined below) with respect to the outstanding
      L1 and L2 Interests to equal the Pass-Through Rate for each Class of Subordinate
      Certificates. The “Calculation Rate” shall equal the product of (i) 10 and (ii)
      the weighted average interest rate of the outstanding L1 and L2 Interests,
      treating each L1 Interest as capped at zero or reduced by a fixed percentage
      of
      100% of the interest accruing on such class. Principal Reallocation Payments
      shall be made from principal received on the Mortgage Loans from a Mortgage
      Pool
      and shall also consist of a proportionate allocation of Realized Losses from
      the
      Mortgage Loans of a Mortgage Pool. For purposes of making Principal Reallocation
      Payments, to the extent that the principal received during the applicable
      collection period from the related Mortgage Pool and related Realized Losses
      are
      insufficient to make the necessary reduction of principal, then interest shall
      accrue on the LZZZ Interest (and be added to its principal balance) of the
      related Mortgage Pool to allow the necessary Principal Reallocation Payment
      to
      be made. The Calculation Rate is designed to always equal the Pass-Through
      Rate
      of each Class of Subordinated Certificates.

     

    If
      a
      Cross-over Situation exists, the aggregate principal balances of the outstanding
      L1 and L2 Interests of all of the Mortgage Pools shall not be reduced below
      one
      percent of the aggregate Pool Principal Balance of all of the Mortgage Pools
      for
      the following Distribution Date in excess of the Senior Certificates as of
      the
      related Distribution Date (after taking into account distributions of principal
      and allocations of Realized Losses on such Distribution Date). To the extent
      this limitation prevents the distribution of principal to the L1 and L2
      Interests of a Mortgage Pool and the related LZZZ Interest has already been
      reduced to zero, such excess principal from such Mortgage Pool shall be paid
      proportionately to the LZZZ Interests of the Mortgage Pool or Pools whose
      aggregate L1 and L2 Interests are less than one percent of the Group Subordinate
      Amount. Any such shortfall as a result of the Mortgage Pool receiving the extra
      payment having a Weighted Average Adjusted Net Mortgage Rate lower than the
      Weighted Average Adjusted Net Mortgage Rate of the Mortgage Pool from which
      the
      payment was reallocated shall be treated as a Realized Loss and if excess arises
      as result of the Mortgage Pool receiving the extra payment having a Weighted
      Average Adjusted Net Mortgage Rate higher than the Mortgage Pool from which
      the
      payment was reallocated it shall reimburse the Upper REMIC for prior Realized
      Losses. If on any Distribution Date, the L1 Interest or L2 Interest remains
      outstanding after the related Pool Principal Balance is at zero as of the
      beginning of the Accrual Period corresponding to such Distribution Date, their
      Lower REMIC Interest Rate shall be the Weighted Average Adjusted Net Mortgage
      Rate of the Mortgage Pool with the lowest Weighted Average Adjusted Net Mortgage
      Rate that remains outstanding and the excess of interest at the Pass-Through
      Rate for the Subordinated Certificates over interest at such Weighted Average
      Adjusted Net Mortgage Rate shall be treated as paid from Lower REMIC to the
      Upper REMIC as reimbursement for prior Realized Losses.

     


    
      
         

      

      
        48

        
          

        

      

      
         

      

    


    


     

    The
      foregoing REMIC structure is intended to cause all of the cash from the Mortgage
      Loans to flow through to the Upper REMIC as cash flow on a REMIC regular
      interest, without creating any shortfall-actual or potential (other than for
      credit losses) to any REMIC regular interest. To the extent that the structure
      is believed to diverge from such intention the Trustee shall resolve ambiguities
      to accomplish such result and shall to the extent necessary rectify any drafting
      errors or seek clarification to the structure without Certificateholder approval
      (but with guidance of counsel) to accomplish such intention.

     

    SECTION
      2.8  Covenants
      of the Master Servicer.

     

    The
      Master Servicer hereby covenants to the Depositor and the Trustee as
      follows:

     

    (a) the
      Master Servicer shall comply in the performance of its obligations under this
      Agreement with all reasonable rules and requirements of the insurer under each
      Required Insurance Policy; and

     

    (b) no
      written information, certificate of an officer, statement furnished in writing
      or written report delivered to the Depositor, any affiliate of the Depositor
      or
      the Trustee and prepared by the Master Servicer pursuant to this Agreement
      will
      contain any untrue statement of a material fact or omit to state a material
      fact
      necessary to make such information, certificate, statement or report not
      misleading.

     

    ARTICLE
      III

    ADMINISTRATION
      AND SERVICING OF MORTGAGE LOANS

     

    SECTION
      3.1  Master
      Servicer to Service Mortgage Loans.

     

    For
      and
      on behalf of the Certificateholders, the Master Servicer shall service and
      administer the Mortgage Loans in accordance with the terms of (i) the
      Servicing Rights Transfer and Subservicing Agreement, pursuant to which First
      Tennessee Mortgage Services, Inc. engaged the Master Servicer to subservice
      the
      Mortgage Loans, (ii) this Agreement and (iii) the customary and usual standards
      of practice of prudent mortgage loan servicers;
      provided that if there is a conflict between the terms of the Servicing
      Agreement and the Servicing Rights Transfer and Subservicing Agreement, on
      the
      one hand, and this Agreement, on the other hand, the terms of this Agreement
      shall prevail.
      In
      connection with such servicing and administration, the Master Servicer shall
      have full power and authority, acting alone and/or through Subservicers as
      provided in Section 3.2 hereof, to do or cause to be done any and all things
      that it may deem necessary or desirable in connection with such servicing and
      administration, including but not limited to, the power and authority, subject
      to the terms hereof (i) to execute and deliver, on behalf of the
      Certificateholders and the Trustee, customary consents or waivers and other
      instruments and documents, (ii) 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 Agreement), (iii) to collect any Insurance
      Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure
      or
      other conversion of the ownership of the Mortgaged Property securing any
      Mortgage Loan; provided that the Master Servicer shall not take any action
      that
      is inconsistent with or prejudices the interests of the Trust Fund or the
      Certificateholders in any Mortgage Loan or the rights and interests of the
      Depositor, the Trustee and the Certificateholders under this Agreement. The
      Master Servicer shall represent and protect the interests of the Trust Fund
      in
      the same manner as it protects its own interests in mortgage loans in its own
      portfolio in any claim, proceeding or litigation regarding a Mortgage Loan,
      and
      shall not make or permit any modification, waiver or amendment of any Mortgage
      Loan which would cause any REMIC created hereunder to fail to qualify as a
      REMIC
      or result in the imposition of any tax under Section 860F(a) or Section 860G(d)
      of the Code. Without limiting the generality of the foregoing, the Master
      Servicer, in its own name or in the name of the Depositor and the Trustee,
      is
      hereby authorized and empowered by the Depositor and the Trustee, when the
      Master Servicer believes it appropriate in its reasonable judgment, to execute
      and deliver, on behalf of the Trustee, the Depositor, the Certificateholders
      or
      any of them, 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 Mortgage Loans, and with respect to the Mortgaged Properties
      held
      for the benefit of the Certificateholders. The Master Servicer shall prepare
      and
      deliver to the Depositor and/or the Trustee such documents requiring execution
      and delivery by either or both of them as are necessary or appropriate to enable
      the Master Servicer to service and administer the Mortgage Loans to the extent
      that the Master Servicer is not permitted to execute and deliver such documents
      pursuant to the preceding sentence. Upon receipt of such documents, the
      Depositor and/or the Trustee shall execute such documents and deliver them
      to
      the Master Servicer. The Master Servicer further is authorized and empowered
      by
      the Trustee, on behalf of the Certificateholders and the Trustee, in its own
      name or in the name of the Subservicer, when the Master Servicer or the
      Subservicer as the case may be, believes it appropriate in its best judgment
      to
      register any Mortgage Loan on the MERS® System, or cause the removal from the
      registration of any Mortgage Loan on the MERS® System, to execute and deliver,
      on behalf of the Trustee and the Certificateholders or any of them, any and
      all
      instruments of assignment and other comparable instruments with respect to
      such
      assignment or re-recording of a Mortgage in the name of MERS, solely as nominee
      for the Trustee and its successors and assigns.

     


    
      
         

      

      
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    In
      accordance with the standards of the preceding paragraph, the Master Servicer
      shall advance or cause to be advanced funds as necessary for the purpose of
      effecting the payment of taxes and assessments on the Mortgaged Properties,
      which advances shall be reimbursable in the first instance from related
      collections from the Mortgagors pursuant to Section 3.6, and further as provided
      in Section 3.8. The costs incurred by the Master Servicer, if any, in effecting
      the timely payments of taxes and assessments on the Mortgaged Properties and
      related insurance premiums shall not, for the purpose of calculating monthly
      distributions to the Certificateholders, be added to the Stated Principal
      Balances of the related Mortgage Loans, notwithstanding that the terms of such
      Mortgage Loans so permit.

     

    SECTION
      3.2  Subservicing;
      Enforcement of the Obligations of Servicers.

     

    (a) The
      Master Servicer may arrange for the subservicing of any Mortgage Loan by a
      Subservicer pursuant to a subservicing agreement; provided, however, that such
      subservicing arrangement and the terms of the related subservicing agreement
      must provide for the servicing of such Mortgage Loans in a manner consistent
      with the servicing arrangements contemplated hereunder. Unless the context
      otherwise requires, references in this Agreement to actions taken or to be
      taken
      by the Master Servicer in servicing the Mortgage Loans include actions taken
      or
      to be taken by a Subservicer on behalf of the Master Servicer. Notwithstanding
      the provisions of any subservicing agreement, any of the provisions of this
      Agreement relating to agreements or arrangements between the Master Servicer
      and
      a Subservicer or reference to actions taken through a Subservicer or otherwise,
      the Master Servicer shall remain obligated and liable to the Depositor, the
      Trustee and the Certificateholders for the servicing and administration of
      the
      Mortgage Loans in accordance with the provisions of this Agreement without
      diminution of such obligation or liability by virtue of such subservicing
      agreements or arrangements or by virtue of indemnification from the Subservicer
      and to the same extent and under the same terms and conditions as if the Master
      Servicer alone were servicing and administering the Mortgage Loans. All actions
      of each Subservicer performed pursuant to the related subservicing agreement
      shall be performed as an agent of the Master Servicer with the same force and
      effect as if performed directly by the Master Servicer.

     


    
      
         

      

      
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    (b) For
      purposes of this Agreement, the Master Servicer shall be deemed to have received
      any collections, recoveries or payments with respect to the Mortgage Loans
      that
      are received by a Subservicer regardless of whether such payments are remitted
      by the Subservicer to the Master Servicer.

     

    SECTION
      3.3  Rights
      of
      the Depositor and the Trustee in Respect of the Master Servicer.

     

    The
      Depositor 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 defaulted obligation of the Master Servicer hereunder
      and in connection with any such defaulted 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 Depositor or its designee. Neither the Trustee nor the
      Depositor shall have any responsibility or liability for any action or failure
      to act by the Master Servicer nor shall the Trustee or the Depositor be
      obligated to supervise the performance of the Master Servicer hereunder or
      otherwise.

     

    SECTION
      3.4  Trustee
      to Act as Master Servicer.

     

    In
      the
      event that the Master Servicer shall for any reason no longer be the Master
      Servicer hereunder (including by reason of an Event of Default), the Trustee
      or
      its successor shall thereupon assume all of the rights and obligations of the
      Master Servicer hereunder arising thereafter (except that the Trustee shall
      not
      be (i) liable for losses of the Master Servicer pursuant to Section 3.9 hereof
      or any acts or omissions of the predecessor Master Servicer hereunder), (ii)
      obligated to make Advances if it is prohibited from doing so by applicable
      law,
      (iii) obligated to effectuate repurchases or substitutions of Mortgage Loans
      hereunder including, but not limited to, repurchases or substitutions of
      Mortgage Loans pursuant to Section 2.2 or 2.3 hereof, (iv) responsible for
      expenses of the Master Servicer pursuant to Section 2.3 or (v) deemed to have
      made any representations and warranties of the Master Servicer hereunder).
      Any
      such assumption shall be subject to Section 7.2 hereof. If the Master Servicer
      shall for any reason no longer be the Master Servicer (including by reason
      of
      any Event of Default), the Trustee or its successor shall succeed to any rights
      and obligations of the Master Servicer under each subservicing
      agreement.

     


    
      
         

      

      
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    The
      Master Servicer shall, upon request of the Trustee, but at the expense of the
      Master Servicer, deliver to the assuming party all documents and records
      relating to each subservicing agreement or substitute subservicing agreement
      and
      the Mortgage Loans then being serviced thereunder and an accounting of amounts
      collected or held by it and otherwise use its best efforts to effect the orderly
      and efficient transfer of the substitute subservicing agreement to the assuming
      party.

     

    SECTION
      3.5  Collection
      of Mortgage Loan Payments; Certificate Account; Distribution
      Account.

     

    (a) The
      Master Servicer shall make reasonable efforts in accordance with the customary
      and usual standards of practice of prudent mortgage servicers to collect all
      payments called for under the terms and provisions of the Mortgage Loans to
      the
      extent such procedures shall be consistent with this Agreement and the terms
      and
      provisions of any related Required Insurance Policy. Consistent with the
      foregoing, the Master Servicer may in its discretion (i) waive any late payment
      charge or any prepayment charge or penalty interest in connection with the
      prepayment of a Mortgage Loan and (ii) extend the due dates for payments due
      on
      a Mortgage Note for a period not greater than 180 days; provided, however,
      that
      the Master Servicer cannot extend the maturity of any such Mortgage Loan past
      the date on which the final payment is due on the latest maturing Mortgage
      Loan
      as of the Cut-off Date. In the event of any such arrangement, the Master
      Servicer shall make Advances on the related Mortgage Loan in accordance with
      the
      provisions of Section 4.1 during the scheduled period in accordance with the
      amortization schedule of such Mortgage Loan without modification thereof by
      reason of such arrangements. The Master Servicer shall not be required to
      institute or join in litigation with respect to collection of any payment
      (whether under a Mortgage, Mortgage Note or otherwise or against any public
      or
      governmental authority with respect to a taking or condemnation) if it
      reasonably believes that enforcing the provision of the Mortgage or other
      instrument pursuant to which such payment is required is prohibited by
      applicable law.

     

    (b) The
      Master Servicer shall establish and maintain the Certificate Account. The
      Certificate Account shall consist of three separate subaccounts, each of which
      shall relate to a particular Mortgage Pool. The Master Servicer shall deposit
      or
      cause to be deposited into the appropriate subaccount of the Certificate Account
      no later than two (2) Business Days after receipt, except as otherwise
      specifically provided herein, the following payments and collections remitted
      by
      Subservicers or received by it in respect of the Mortgage Loans subsequent
      to
      the Cut-off Date (other than in respect of principal and interest due on the
      Mortgage Loans on or before the Cut-off Date) and the following amounts required
      to be deposited hereunder:

     

    (i) all
      payments on account of principal on the Mortgage Loans in the related Mortgage
      Pool, including Principal Prepayments;

     


    
      
         

      

      
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    (ii) all
      payments on account of interest on the Mortgage Loans in the related Mortgage
      Pool, net of the related Master Servicing Fee and any Prepayment Interest
      Excess;

     

    (iii) all
      Insurance Proceeds and Liquidation Proceeds in respect of the related Mortgage
      Loans in the related Mortgage Pool, other than proceeds to be applied to the
      restoration or repair of the Mortgaged Property or released to the Mortgagor
      in
      accordance with the Master Servicer’s normal servicing procedures;

     

    (iv) any
      amount required to be deposited by the Master Servicer in respect of the related
      Mortgage Pool pursuant to Section 3.5(c) in connection with any losses on
      Permitted Investments;

     

    (v) any
      amounts required to be deposited by the Master Servicer in respect of the
      related Mortgage Pool pursuant to Section 3.9(b) and 3.9(d);

     

    (vi) any
      Substitution Adjustment Amounts or the Purchase Price for any Deleted Mortgage
      Loan in the related Mortgage Pool;

     

    (vii) all
      Advances in respect of the related Mortgage Pool made by the Master Servicer
      pursuant to Section 4.1; and

     

    (viii) any
      other
      amounts required to be deposited hereunder in respect of the related Mortgage
      Pool.

     

    In
      addition, with respect to any Mortgage Loan that is subject to a buydown
      agreement, on each Due Date for such Mortgage Loan, in addition to the monthly
      payment remitted by the Mortgagor, the Master Servicer shall cause funds to
      be
      deposited into the applicable subaccount of the Certificate Account in an amount
      required to cause an amount of interest to be paid with respect to such Mortgage
      Loan equal to the amount of interest that has accrued on such Mortgage Loan
      from
      the preceding Due Date at the related Adjusted Mortgage Rate on such
      date.

     

    The
      foregoing requirements for remittance by the Master Servicer shall be exclusive,
      it being understood and agreed that, without limiting the generality of the
      foregoing, payments in the nature of prepayment penalties, late payment charges,
      assumption fees or amounts attributable to reimbursements of Advances, if
      collected, need not be remitted by the Master Servicer. In the event that the
      Master Servicer shall remit any amount not required to be remitted, it may
      at
      any time withdraw or direct the institution maintaining the Certificate Account
      to withdraw such amount from the Certificate Account, any provision herein
      to
      the contrary notwithstanding. Such withdrawal or direction may be accomplished
      by delivering written notice thereof to the Trustee or such other institution
      maintaining the Certificate Account which describes the amounts deposited in
      error in the Certificate Account. The Master Servicer shall maintain adequate
      records with respect to all withdrawals made pursuant to this Section. All
      funds
      deposited in the Certificate Account shall be held in trust for the
      Certificateholders until withdrawn in accordance with Section 3.8.

     


    
      
         

      

      
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    (c) The
      Trustee shall establish and maintain, on behalf of the Certificateholders,
      the
      Distribution Account. The Distribution Account shall consist of three separate
      subaccounts, each of which shall relate to a particular Mortgage Pool. The
      Trustee shall, promptly upon receipt, deposit in the Distribution Account and
      retain therein the following:

     

    (i) the
      aggregate amount remitted by the Master Servicer to the Trustee in respect
      of a
      Mortgage Pool pursuant to Section 3.8(a)(ix);

     

    (ii) any
      amount deposited by the Master Servicer pursuant to this Section 3.5(c) in
      connection with any losses on Permitted Investments; and

     

    (iii) any
      other
      amounts deposited hereunder which are required to be deposited in the
      Distribution Account.

     

    In
      the
      event that the Master Servicer shall remit any amount not required to be
      remitted, it may at any time direct the Trustee to withdraw such amount from
      the
      applicable subaccount of the Distribution Account, any provision herein to
      the
      contrary notwithstanding. Such direction may be accomplished by delivering
      an
      Officer’s Certificate to the Trustee which describes the amounts deposited in
      error in the Distribution Account. All funds deposited in the Distribution
      Account shall be held by the Trustee in trust for the related Certificateholders
      until disbursed in accordance with this Agreement or withdrawn in accordance
      with Section 3.8. In no event shall the Trustee incur liability for withdrawals
      from the Distribution Account at the direction of the Master
      Servicer.

     

    (iv) The
      institution at which the Certificate Account is maintained shall invest funds
      as
      directed by the Master Servicer in Permitted Investments which shall mature
      not
      later than the second Business Day next preceding the related Distribution
      Account Deposit Date (except that if such Permitted Investment is an obligation
      of the institution that maintains such account, then such Permitted Investment
      shall mature not later than the Business Day next preceding such Distribution
      Account Deposit Date) and, shall not be sold or disposed of prior to its
      maturity. If the Master Servicer does not provide such prior written investment
      direction, the funds in the Certificate Account will be held uninvested. All
      such Permitted Investments shall be made in the name of the Trustee, for the
      benefit of the Certificateholders. All income and gain net of any losses
      realized from any such investment of funds on deposit in the Certificate Account
      shall be for the benefit of the Master Servicer as servicing compensation.
      The
      amount of any losses in the Certificate Account in respect of any such
      investments shall promptly be deposited by the Master Servicer in the
      Certificate Account. The funds in the Distribution Account shall be held
      uninvested. The Trustee in its fiduciary capacity shall not be liable for the
      amount of any loss incurred in respect of any investment or lack of investment
      of funds held in the Certificate Account or the Distribution Account and made
      in
      accordance with this Section 3.5.

     


    
      
         

      

      
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    (v) The
      Master Servicer shall give notice to the Trustee, the Seller, each Rating Agency
      and the Depositor of any proposed change of the location of the Certificate
      Account prior to any change thereof. The Trustee shall give notice to the Master
      Servicer, the Seller, each Rating Agency and the Depositor of any proposed
      change of the location of the Distribution Account prior to any change
      thereof.

     

    SECTION
      3.6  Collection
      of Taxes, Assessments and Similar Items; Escrow Accounts.

     

    (a) To
      the
      extent required by the related Mortgage Note and not violative of current law,
      the Master Servicer shall establish and maintain one or more accounts (each,
      an
“Escrow Account”) and deposit and retain therein all collections from the
      Mortgagors (or advances by the Master Servicer) for the payment of taxes,
      assessments, hazard insurance premiums or comparable items for the account
      of
      the Mortgagors. Nothing herein shall require the Master Servicer to compel
      a
      Mortgagor to establish an Escrow Account in violation of applicable
      law.

     

    (b) Withdrawals
      of amounts so collected from the Escrow Accounts may be made only to effect
      timely payment of taxes, assessments, hazard insurance premiums, condominium
      or
      PUD association dues, or comparable items, to reimburse the Master Servicer
      out
      of related collections for any payments made pursuant to Sections 3.1 hereof
      (with respect to taxes and assessments and insurance premiums) and 3.9 hereof
      (with respect to hazard insurance), to refund to any Mortgagors any sums
      determined to be overages, to pay interest, if required by law or the terms
      of
      the related Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow
      Account or to clear and terminate the Escrow Account at the termination of
      this
      Agreement in accordance with Section 9.1 hereof. The Escrow Accounts shall
      not
      be a part of the Trust Fund.

     

    (c) The
      Master Servicer shall advance any payments referred to in Section 3.6(a) that
      are not timely paid by the Mortgagors on the date when the tax, premium or
      other
      cost for which such payment is intended is due, but the Master Servicer shall
      be
      required so to advance only to the extent that such advances, in the good faith
      judgment of the Master Servicer, will be recoverable by the Master Servicer
      out
      of Insurance Proceeds, Liquidation Proceeds or otherwise.

     

    SECTION
      3.7  Access
      to
      Certain Documentation and Information Regarding the Mortgage Loans.

     

    The
      Master Servicer shall afford the Depositor and the Trustee reasonable access
      to
      all records and documentation regarding the Mortgage Loans and all accounts,
      insurance information and other matters relating to this Agreement, such access
      being afforded without charge, but only upon reasonable request and during
      normal business hours at the office designated by the Master
      Servicer.

     

    Upon
      reasonable advance notice in writing, the Master Servicer will provide to each
      Certificateholder or Certificate Owner which is a savings and loan association,
      bank or insurance company certain reports and reasonable access to information
      and documentation regarding the Mortgage Loans sufficient to permit such
      Certificateholder or Certificate Owner to comply with applicable regulations
      of
      the OTS or other regulatory authorities with respect to investment in the
      Certificates; provided that the Master Servicer shall be entitled to be
      reimbursed by each such Certificateholder or Certificate Owner for actual
      expenses incurred by the Master Servicer in providing such reports and
      access.

     


    
      
         

      

      
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    SECTION
      3.8  Permitted
      Withdrawals from the Certificate Account and Distribution Account.

     

    (a) The
      Master Servicer may from time to time, or shall (in the case of Section
      3.8(a)(ix)), make withdrawals from the applicable subaccount of the Certificate
      Account for the following purposes:

     

    (i) to
      the
      extent not previously retained by the Master Servicer, to pay to the Master
      Servicer the master servicing compensation to which it is entitled pursuant
      to
      Section 3.14, and earnings on or investment income with respect to funds in
      or
      credited to the Certificate Account as additional master servicing
      compensation;

     

    (ii) to
      the
      extent not previously retained by the Master Servicer, to reimburse the Master
      Servicer for unreimbursed Advances made by it in respect of the related Mortgage
      Pool, such right of reimbursement pursuant to this subclause (ii) being limited
      to amounts received on the Mortgage Loan(s) in respect of which any such Advance
      was made;

     

    (iii) to
      reimburse the Master Servicer for any Nonrecoverable Advance previously made
      in
      respect of the related Mortgage Pool;

     

    (iv) to
      reimburse the Master Servicer for Insured Expenses from the related Insurance
      Proceeds in respect of the related Mortgage Pool;

     

    (v) to
      reimburse the Master Servicer for (a) unreimbursed Servicing Advances in respect
      of the related Mortgage Pool, the Master Servicer’s right to reimbursement
      pursuant to this clause (a) with respect to any Mortgage Loan being limited
      to
      amounts received on such Mortgage Loan(s) which represent late recoveries of
      the
      payments for which such advances were made pursuant to Section 3.1 or Section
      3.6 and (b) for unpaid Master Servicing Fees as provided in Section 3.11
      hereof;

     

    (vi) to
      pay to
      the Seller or Master Servicer, as applicable, with respect to each Mortgage
      Loan
      in respect of the related Mortgage Pool or property acquired in respect thereof
      that has been purchased pursuant to Section 2.2, 2.3 or 3.11, all amounts
      received thereon after the date of such purchase;

     

    (vii) to
      reimburse the Seller, the Master Servicer or the Depositor for expenses incurred
      by any of them and reimbursable pursuant to Section 6.3 hereof;

     


    
      
         

      

      
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    (viii) to
      withdraw any amount deposited in the Certificate Account and not required to
      be
      deposited therein;

     

    (ix) on
      or
      prior to the Distribution Account Deposit Date, to withdraw an amount equal
      to
      the related Available Funds and the Trustee Fee for such Distribution Date
      and
      remit such amount to the Trustee for deposit in the Distribution Account;
      and

     

    (x) to
      clear
      and terminate the Certificate Account upon termination of this Agreement
      pursuant to Section 9.1 hereof.

     

    The
      Master Servicer shall keep and maintain separate accounting, on a Mortgage
      Loan-by-Mortgage Loan basis and on a Mortgage Pool-by-Mortgage Pool basis,
      for
      the purpose of justifying any withdrawal from the Certificate Account pursuant
      to such subclauses (i), (ii), (iv), (v) and (vi). Prior to making any withdrawal
      from the Certificate Account pursuant to subclause (iii), the Master Servicer
      shall deliver to the Trustee an Officer’s Certificate of a Servicing Officer
      indicating the amount of any previous Advance determined by the Master Servicer
      to be a Nonrecoverable Advance and identifying the related Mortgage Loans(s),
      and their respective portions of such Nonrecoverable Advance.

     

    (b) The
      Trustee shall withdraw funds from the applicable subaccount of the Distribution
      Account for distributions to the related Certificateholders in the manner
      specified in this Agreement (and to withhold from the amounts so withdrawn,
      the
      amount of any taxes that it is authorized to withhold pursuant to the last
      paragraph of Section 8.11). In addition, the Trustee may (and with respect
      to
      clause (i) below, shall), prior to making the distribution pursuant to Section
      4.2 from time to time make withdrawals from the Distribution Account for the
      following purposes:

     

    (i) to
      pay to
      itself the Trustee Fee for the related Distribution Date;

     

    (ii) to
      withdraw and return to the Master Servicer any amount deposited in the
      Distribution Account and not required to be deposited therein; and

     

    (iii) to
      clear
      and terminate the Distribution Account upon termination of the Agreement
      pursuant to Section 9.1 hereof.

     

    SECTION
      3.9  Maintenance
      of Hazard Insurance; Maintenance of Primary Insurance Policies.

     

    (a) The
      Master Servicer shall cause to be maintained, for each Mortgage Loan, hazard
      insurance with extended coverage in an amount that is at least equal to the
      lesser of (i) the maximum insurable value of the improvements securing such
      Mortgage Loan or (ii) the greater of (y) the outstanding principal balance
      of
      the Mortgage Loan and (z) an amount such that the proceeds of such policy shall
      be sufficient to prevent the Mortgagor and/or the mortgagee from becoming a
      co-insurer. Each such policy of standard hazard insurance shall contain, or
      have
      an accompanying endorsement that contains, a standard mortgagee clause. Any
      amounts collected by the Master Servicer under any such policies (other than
      the
      amounts to be applied to the restoration or repair of the related Mortgaged
      Property or amounts released to the Mortgagor in accordance with the Master
      Servicer’s normal servicing procedures) shall be deposited in the applicable
      subaccount of the Certificate Account. Any cost incurred by the Master Servicer
      in maintaining any such insurance shall not, for the purpose of calculating
      monthly distributions to the Certificateholders or remittances to the Trustee
      for their benefit, be added to the principal balance of the Mortgage Loan,
      notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
      be recoverable by the Master Servicer out of late payments by the related
      Mortgagor or out of Liquidation Proceeds to the extent permitted by Section
      3.8
      hereof. It is understood and agreed that no earthquake or other additional
      insurance is to be required of any Mortgagor or maintained on property acquired
      in respect of a Mortgage other than pursuant to such applicable laws and
      regulations as shall at any time be in force and as shall require such
      additional insurance. If the Mortgaged Property is located at the time of
      origination of the Mortgage Loan in a federally designated special flood hazard
      area and such area is participating in the national flood insurance program,
      the
      Master Servicer shall cause flood insurance to be maintained with respect to
      such Mortgage Loan. Such flood insurance shall be in an amount equal to the
      least of (i) the original principal balance of the related Mortgage Loan, (ii)
      the replacement value of the improvements which are part of such Mortgaged
      Property, and (iii) the maximum amount of such insurance available for the
      related Mortgaged Property under the national flood insurance
      program.

     


    
      
         

      

      
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    (b) In
      the
      event that the Master Servicer shall obtain and maintain a blanket policy
      insuring against hazard losses on all of the Mortgage Loans, it shall
      conclusively be deemed to have satisfied its obligations as set forth in the
      first sentence of this Section, it being understood and agreed that such policy
      may contain a deductible clause on terms substantially equivalent to those
      commercially available and maintained by comparable servicers. If such policy
      contains a deductible clause, the Master Servicer shall, in the event that
      there
      shall not have been maintained on the related Mortgaged Property a policy
      complying with the first sentence of this Section, and there shall have been
      a
      loss that would have been covered by such policy, deposit in the applicable
      subaccount of the Certificate Account the amount not otherwise payable under
      the
      blanket policy because of such deductible clause. In connection with its
      activities as Master Servicer of the Mortgage Loans, the Master Servicer agrees
      to present, on behalf of itself, the Depositor, and the Trustee for the benefit
      of the Certificateholders, claims under any such blanket policy.

     

    (c) The
      Master Servicer shall not take any action which would result in non-coverage
      under any applicable Primary Insurance Policy of any loss which, but for the
      actions of the Master Servicer, would have been covered thereunder. The Master
      Servicer shall not cancel or refuse to renew any such Primary Insurance Policy
      that is in effect at the date of the initial issuance of the Certificates and
      is
      required to be kept in force hereunder unless the replacement Primary Insurance
      Policy for such canceled or non-renewed policy is maintained with a Qualified
      Insurer.

     


    
      
         

      

      
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    The
      Master Servicer shall not be required to maintain any Primary Insurance Policy
      (i) with respect to any Mortgage Loan with a Loan-to-Value Ratio less than
      or
      equal to 80% as of any date of determination or, based on a new appraisal,
      the
      principal balance of such Mortgage Loan represents 80% or less of the new
      appraised value or (ii) if maintaining such Primary Insurance Policy is
      prohibited by applicable law.

     

    The
      Master Servicer agrees to effect the timely payment of the premiums on each
      Primary Insurance Policy, and such costs not otherwise recoverable shall be
      recoverable by the Master Servicer from the related liquidation
      proceeds.

     

    (d) In
      connection with its activities as Master Servicer of the Mortgage Loans, the
      Master Servicer agrees to present on behalf of itself, the Trustee and
      Certificateholders, claims to the insurer under any Primary Insurance Policies
      and, in this regard, to take such reasonable action as shall be necessary to
      permit recovery under any Primary Insurance Policies respecting defaulted
      Mortgage Loans. Any amounts collected by the Master Servicer under any Primary
      Insurance Policies shall be deposited in the applicable subaccount of the
      Certificate Account.

     

    SECTION
      3.10  Enforcement
      of Due-on-Sale Clauses; Assumption Agreements.

     

    (a) Except
      as
      otherwise provided in this Section, when any property subject to a Mortgage
      has
      been conveyed by the Mortgagor, the Master Servicer shall to the extent that
      it
      has knowledge of such conveyance, enforce any due-on-sale clause contained
      in
      any Mortgage Note or Mortgage, to the extent permitted under applicable law
      and
      governmental regulations, but only to the extent that such enforcement will
      not
      adversely affect or jeopardize coverage under any Required Insurance Policy.
      Notwithstanding the foregoing, the Master Servicer is not required to exercise
      such rights with respect to a Mortgage Loan if the Person to whom the related
      Mortgaged Property has been conveyed or is proposed to be conveyed satisfies
      the
      terms and conditions contained in the Mortgage Note and Mortgage related thereto
      and the consent of the mortgagee under such Mortgage Note or Mortgage is not
      otherwise so required under such Mortgage Note or Mortgage as a condition to
      such transfer. In the event that the Master Servicer is prohibited by law from
      enforcing any such due-on-sale clause, or if coverage under any Required
      Insurance Policy would be adversely affected, or if nonenforcement is otherwise
      permitted hereunder, the Master Servicer is authorized, subject to Section
      3.10(b), to take or enter into an assumption and modification agreement from
      or
      with the person to whom such property has been or is about to be conveyed,
      pursuant to which such person becomes liable under the Mortgage Note and, unless
      prohibited by applicable state law, the Mortgagor remains liable thereon,
      provided that the Mortgage Loan shall continue to be covered (if so covered
      before the Master Servicer enters such agreement) by the applicable Required
      Insurance Policies. The Master Servicer, subject to Section 3.10(b), is also
      authorized with the prior approval of the insurers under any Required Insurance
      Policies to enter into a substitution of liability agreement with such Person,
      pursuant to which the original Mortgagor is released from liability and such
      Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
      Notwithstanding the foregoing, the Master Servicer shall not be deemed to be
      in
      default under this Section by reason of any transfer or assumption which the
      Master Servicer reasonably believes it is restricted by law from preventing,
      for
      any reason whatsoever.

     


    
      
         

      

      
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    (b) Subject
      to the Master Servicer’s duty to enforce any due-on-sale clause to the extent
      set forth in Section 3.10(a) hereof, in any case in which a Mortgaged Property
      has been conveyed to a Person by a Mortgagor, and such Person is to enter into
      an assumption agreement or modification agreement or supplement to the Mortgage
      Note or Mortgage that requires the signature of the Trustee, or if an instrument
      of release signed by the Trustee is required releasing the Mortgagor from
      liability on the Mortgage Loan, the Master Servicer shall prepare and deliver
      or
      cause to be prepared and delivered to the Trustee for signature and shall
      direct, in writing, the Trustee to execute the assumption agreement with the
      Person to whom the Mortgaged Property is to be conveyed and such modification
      agreement or supplement to the Mortgage Note or Mortgage or other instruments
      as
      are reasonable or necessary to carry out the terms of the Mortgage Note or
      Mortgage or otherwise to comply with any applicable laws regarding assumptions
      or the transfer of the Mortgaged Property to such Person. In connection with
      any
      such assumption, no material term of the Mortgage Note may be changed. In
      addition, the substitute Mortgagor and the Mortgaged Property must be acceptable
      to the Master Servicer in accordance with its underwriting standards as then
      in
      effect. Together with each such substitution, assumption or other agreement
      or
      instrument delivered to the Trustee for execution by it, the Master Servicer
      shall deliver an Officer’s Certificate signed by a Servicing Officer stating
      that the requirements of this subsection have been met in connection therewith.
      The Master Servicer shall notify the Trustee that any such substitution or
      assumption agreement has been completed by forwarding to the Trustee the
      original of such substitution or assumption agreement, which in the case of
      the
      original shall be added to the related Mortgage File and shall, for all
      purposes, be considered a part of such Mortgage File to the same extent as
      all
      other documents and instruments constituting a part thereof. Any fee collected
      by the Master Servicer for entering into an assumption or substitution of
      liability agreement will be retained by the Master Servicer as additional
      servicing compensation.

     

    SECTION
      3.11  Realization
      Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
      Loans.

     

    The
      Master Servicer shall use reasonable efforts to foreclose upon or otherwise
      comparably convert the ownership of properties securing such of the Mortgage
      Loans as come into and continue in default and as to which no satisfactory
      arrangements can be made for collection of delinquent payments. In connection
      with such foreclosure or other conversion, the Master Servicer shall follow
      such
      practices and procedures as it shall deem necessary or advisable and as shall
      be
      normal and usual in its general mortgage servicing activities and meet the
      requirements of the insurer under any Required Insurance Policy; provided,
      however, that the Master Servicer shall not be required to expend its own funds
      in connection with any foreclosure or towards the restoration of any property
      unless it shall determine (i) that such restoration and/or foreclosure will
      increase the proceeds of liquidation of the Mortgage Loan after reimbursement
      to
      itself of such expenses and (ii) that such expenses will be recoverable to
      it
      through Liquidation Proceeds (respecting which it shall have priority for
      purposes of withdrawals from the Certificate Account). The Master Servicer
      shall
      be responsible for all other costs and expenses incurred by it in any such
      proceedings; provided, however, that it shall be entitled to reimbursement
      thereof from the liquidation proceeds with respect to the related Mortgaged
      Property, as provided in the definition of Liquidation Proceeds. If the Master
      Servicer has knowledge that a Mortgaged Property which the Master Servicer
      is
      contemplating acquiring in foreclosure or by deed in lieu of foreclosure is
      located within a 1 mile radius of any site listed in the Expenditure Plan for
      the Hazardous Substance Clean Up Bond Act of 1984 or other site with
      environmental or hazardous waste risks known to the Master Servicer, the Master
      Servicer will, prior to acquiring the Mortgaged Property, consider such risks
      and only take action in accordance with its established environmental review
      procedures.

     


    
      
         

      

      
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    With
      respect to any REO Property, the deed or certificate of sale shall be taken
      in
      the name of the Trust Fund for the benefit of the Certificateholders, or its
      nominee, on behalf of the Certificateholders. The Master Servicer shall ensure
      that the title to such REO Property references the Pooling and Servicing
      Agreement and the Trust Fund’s capacity thereunder. Pursuant to its efforts to
      sell such REO Property, the Master Servicer shall either itself or through
      an
      agent selected by the Master Servicer protect and conserve such REO Property
      in
      the same manner and to such extent as is customary in the locality where such
      REO Property is located. The Master Servicer shall perform the tax reporting
      and
      withholding required by Sections 1445 and 6050J of the Code with respect to
      foreclosures and abandonments, the tax reporting required by Section 6050H
      of
      the Code with respect to the receipt of mortgage interest from individuals
      and
      any tax reporting required by Section 6050P of the Code with respect to the
      cancellation of indebtedness by certain financial entities, by preparing such
      tax and information returns as may be required, in the form required, and
      delivering the same to the Trustee for filing.

     

    In
      the
      event that the Trust Fund acquires any Mortgaged Property as aforesaid or
      otherwise in connection with a default or imminent default on a Mortgage Loan,
      the Master Servicer shall dispose of such Mortgaged Property prior to the close
      of the third taxable year after the taxable year of its acquisition by the
      Trust
      Fund unless the Trustee shall have been supplied with an Opinion of Counsel
      to
      the effect that the holding by the Trust Fund of such Mortgaged Property
      subsequent to such three-year period will not result in the imposition of taxes
      on “prohibited transactions” of any REMIC hereunder as defined in Section 860F
      of the Code or cause any REMIC created hereunder to fail to qualify as a REMIC
      at any time that any Certificates are outstanding, in which case the Trust
      Fund
      may continue to hold such Mortgaged Property (subject to any conditions
      contained in such Opinion of Counsel). Notwithstanding any other provision
      of
      this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
      (or allowed to continue to be rented) or otherwise used for the production
      of
      income by or on behalf of the Trust Fund in such a manner or pursuant to any
      terms that would (i) cause such Mortgaged Property to fail to qualify as
“foreclosure property” within the meaning of Section 860G(a)(8) of the Code or
      (ii) subject any REMIC hereunder to the imposition of any federal, state or
      local income taxes on the income earned from such Mortgaged Property under
      Section 860G(c) of the Code or otherwise, unless the Master Servicer has agreed
      to indemnify and hold harmless the Trust Fund with respect to the imposition
      of
      any such taxes.

     

    In
      the
      event of a default on a Mortgage Loan one or more of whose obligor is not a
      United States Person, as that term is defined in Section 7701(a)(30) of the
      Code, in connection with any foreclosure or acquisition of a deed in lieu of
      foreclosure (together, “foreclosure”) in respect of such Mortgage Loan, the
      Master Servicer will cause compliance with the provisions of Treasury Regulation
      Section 1.1445-2(d)(3) (or any successor thereto) necessary to assure that
      no
      withholding tax obligation arises with respect to the proceeds of such
      foreclosure except to the extent, if any, that proceeds of such foreclosure
      are
      required to be remitted to the obligors on such Mortgage Loan.

     


    
      
         

      

      
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    The
      decision of the Master Servicer to foreclose on a defaulted Mortgage 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.
      The income earned from the management of any REO Properties, net of
      reimbursement to the Master Servicer for expenses incurred (including any
      property or other taxes) in connection with such management and net of
      unreimbursed Master Servicing Fees, Advances and Servicing Advances, shall
      be
      applied to the payment of principal of and interest on the related defaulted
      Mortgage Loans (with interest accruing as though such Mortgage Loans were still
      current) and all such income shall be deemed, for all purposes in this
      Agreement, to be payments on account of principal and interest on the related
      Mortgage Notes and shall be deposited into the applicable subaccount of the
      Certificate Account. To the extent the net income received during any calendar
      month is in excess of the amount attributable to amortizing principal and
      accrued interest at the related Mortgage Rate on the related Mortgage Loan
      for
      such calendar month, such excess shall be considered to be a partial prepayment
      of principal of the related Mortgage Loan.

     

    The
      proceeds from any liquidation of a Mortgage Loan, as well as any income from
      an
      REO Property, will be applied in the following order of priority: first, to
      reimburse the Master Servicer for any related unreimbursed Servicing Advances
      and Master Servicing Fees; second, to reimburse the Master Servicer for any
      unreimbursed Advances; third, to reimburse the applicable subaccount of the
      Certificate Account for any Nonrecoverable Advances (or portions thereof) that
      were previously withdrawn by the Master Servicer pursuant to Section 3.8(a)(iii)
      that related to such Mortgage Loan; fourth, to accrued and unpaid interest
      (to
      the extent no Advance has been made for such amount or any such Advance has
      been
      reimbursed) on the Mortgage Loan or related REO Property, at the Adjusted Net
      Mortgage Rate to the Due Date occurring in the month in which such amounts
      are
      required to be distributed; and fifth, as a recovery of principal of the
      Mortgage Loan. Excess Proceeds, if any, from the liquidation of a Liquidated
      Mortgage Loan will be retained by the Master Servicer as additional servicing
      compensation pursuant to Section 3.14.

     

    The
      Master Servicer, with the consent of the Trustee, shall have the right to
      purchase for its own account from the Trust Fund any Mortgage Loan which is
      91
      days or more delinquent at a price equal to the Purchase Price. The Purchase
      Price for any Mortgage Loan purchased hereunder shall be deposited in the
      applicable subaccount of the Certificate Account and the Trustee, upon receipt
      of a certificate from the Master Servicer in the form of Exhibit M hereto,
      shall
      release or cause to be released to the purchaser of such Mortgage Loan the
      related Mortgage File and shall execute and deliver such instruments of transfer
      or assignment prepared by the purchaser of such Mortgage Loan, in each case
      without recourse, as shall be necessary to vest in the purchaser of such
      Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser
      of
      such Mortgage Loan shall succeed to all the Trustee’s right, title and interest
      in and to such Mortgage Loan and all security and documents related thereto.
      Such assignment shall be an assignment outright and not for security. The
      purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and
      all
      security and documents, free of any further obligation to the Trustee or the
      Certificateholders with respect thereto.

     


    
      
         

      

      
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    SECTION
      3.12  Trustee
      to Cooperate; Release of Mortgage Files.

     

    Upon
      the
      payment in full of any Mortgage 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 will immediately notify the Trustee by
      delivering, or causing to be delivered a “Request for Release” substantially in
      the form of Exhibit M. Upon receipt of such request, the Trustee shall or shall
      cause the Custodian to promptly release the related Mortgage File to the Master
      Servicer, and the Trustee shall at the Master Servicer’s direction execute and
      deliver to the Master Servicer the request for reconveyance, deed of
      reconveyance or release or satisfaction of mortgage or such instrument releasing
      the lien of the Mortgage in each case provided by the Master Servicer, together
      with the Mortgage Note with written evidence of cancellation thereon. Expenses
      incurred in connection with any instrument of satisfaction or deed of
      reconveyance shall be chargeable to the related Mortgagor. From time to time
      and
      as shall be appropriate for the servicing or foreclosure of any Mortgage Loan,
      including for such purpose, collection under any policy of flood insurance,
      any
      fidelity bond or errors or omissions policy, or for the purposes of effecting
      a
      partial release of any Mortgaged Property from the lien of the Mortgage or
      the
      making of any corrections to the Mortgage Note or the Mortgage or any of the
      other documents included in the Mortgage File, the Trustee shall, upon delivery
      to the Trustee of a Request for Release in the form of Exhibit L signed by
      a
      Servicing Officer, release the Mortgage File to the Master Servicer. Subject
      to
      the further limitations set forth below, the Master Servicer shall cause the
      Mortgage File or documents so released to be returned to the Trustee or its
      Custodian when the need therefor by the Master Servicer no longer exists, unless
      the Mortgage Loan is liquidated and the proceeds thereof are deposited in the
      applicable subaccount of the Certificate Account, in which case the Master
      Servicer shall deliver to the Trustee a Request for Release in the form of
      Exhibit M, signed by a Servicing Officer.

     

    If
      the
      Master Servicer at any time seeks to initiate a foreclosure proceeding in
      respect of any Mortgaged Property as authorized by this Agreement, the Master
      Servicer shall deliver or cause to be delivered to the Trustee, for signature,
      as appropriate, any court pleadings, requests for trustee’s sale or other
      documents necessary to effectuate such foreclosure or any legal action brought
      to obtain judgment against the Mortgagor on the Mortgage Note or the Mortgage
      or
      to obtain a deficiency judgment or to enforce any other remedies or rights
      provided by the Mortgage Note or the Mortgage or otherwise available at law
      or
      in equity.

     

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

     

    Notwithstanding
      any other provisions of this Agreement, the Master Servicer shall transmit
      to
      the Trustee as required by this Agreement all documents and instruments in
      respect of a Mortgage Loan coming into the possession of the Master Servicer
      from time to time and shall account fully to the Trustee for any funds received
      by the Master Servicer or which otherwise are collected by the Master Servicer
      as Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan.
      All Mortgage Files and funds collected or held by, or under the control of,
      the
      Master Servicer in respect of any Mortgage Loans, whether from the collection
      of
      principal and interest payments or from Liquidation Proceeds, including but
      not
      limited to, any funds on deposit in the Certificate 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 Agreement. The Master Servicer also agrees that it shall not create,
      incur or subject any Mortgage File or any funds that are deposited in the
      Certificate Account, Distribution Account or any Escrow Account, or any funds
      that otherwise are or may become due or payable to the Trustee for the benefit
      of the Certificateholders, to any claim, lien, security interest, judgment,
      levy, writ of attachment or other encumbrance, 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 Mortgage 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 Agreement.

     


    
      
         

      

      
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    SECTION
      3.14  Master
      Servicing Compensation.

     

    As
      compensation for its activities as Master Servicer hereunder and as a
      subservicer pursuant to the Servicing Rights Transfer and Subservicing
      Agreement, the Master Servicer shall be entitled to retain or withdraw from
      the
      Certificate Account an amount equal to the Master Servicing Fee for each
      Mortgage Loan, provided that the aggregate Master Servicing Fee with respect
      to
      any Distribution Date shall be reduced (i) by the amount of any Compensating
      Interest paid by the Master Servicer with respect to such Distribution Date,
      and
      (ii) with respect to the first Distribution Date, an amount equal to any amount
      to be deposited into the Distribution Account by the Depositor pursuant to
      Section 2.1(a) and not so deposited.

     

    Additional
      servicing compensation in the form of (i) Excess Proceeds, Prepayment Interest
      Excess and all income and gain net of any losses realized from Permitted
      Investments and (ii) prepayment penalties, assumption fees and late payment
      charges in each case under the circumstances and in the manner set forth in
      the
      applicable Mortgage Note or Mortgage shall be retained by the Master Servicer
      to
      the extent not required to be deposited in the Certificate Account pursuant
      to
      Section 3.5 hereof. The Master Servicer shall be required to pay all expenses
      incurred by it in connection with its master servicing activities hereunder
      (including payment of any premiums for hazard insurance and any Primary
      Insurance Policy and maintenance of the other forms of insurance coverage
      required by this Agreement) and shall not be entitled to reimbursement therefor
      except as specifically provided in this Agreement.

     

    SECTION
      3.15  Access
      to
      Certain Documentation.

     

    The
      Master Servicer shall provide to the OTS and the FDIC and to comparable
      regulatory authorities supervising Holders of Certificates or Certificate Owners
      and the examiners and supervisory agents of the OTS, the FDIC and such other
      authorities, access to the documentation regarding the Mortgage Loans required
      by applicable regulations of the OTS and the FDIC. Such access shall be afforded
      without charge, but only upon reasonable and prior written request and during
      normal business hours at the offices designated by the Master Servicer. Nothing
      in this Section shall limit the obligation of the Master Servicer to observe
      any
      applicable law prohibiting disclosure of information regarding the Mortgagors
      and the failure of the Master Servicer to provide access as provided in this
      Section as a result of such obligation shall not constitute a breach of this
      Section.

     


    
      
         

      

      
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    SECTION
      3.16  Annual
      Statement as to Compliance.

     

    (a) The
      Master Servicer shall deliver to the Depositor and the Trustee on or before
      March 15th of each year, commencing in 2008, an Officer’s Certificate stating,
      as to the signer thereof, that (i) a review of the activities of the Master
      Servicer during the preceding calendar year (or applicable portion thereof)
      and
      of the performance of the Master Servicer under this Agreement has been made
      under such officer’s supervision and (ii) to the best of such officer’s
      knowledge, based on such review, the Master Servicer has fulfilled all its
      obligations under this Agreement in all material respects throughout such year
      (or applicable portion thereof), or, if there has been a failure to fulfill
      any
      such obligation in any material respect, specifying each such failure known
      to
      such officer and the status thereof.

     

    (b) The
      Master Servicer shall cause each Subservicer that is a Reporting Subcontractor
      to deliver to the Depositor and the Trustee on or before March 15th of each
      year, commencing in 2008, an Officer’s Certificate stating, as to the signer
      thereof, that (i) a review of the activities of such Subservicer during the
      preceding calendar year (or applicable portion thereof) and of the performance
      of the Subservicer under the applicable Subservicing Agreement or primary
      servicing agreement, has been made under such officer’s supervision and (ii) to
      the best of such officer’s knowledge, based on such review, such Subservicer has
      fulfilled all its obligations under the applicable Subservicing Agreement or
      primary servicing agreement, in all material respects throughout such year
      (or
      applicable portion thereof), or, if there has been a failure to fulfill any
      such
      obligation in any material respect, specifying each such failure known to such
      officer and the nature and status thereof.

     

    SECTION
      3.17  Errors
      and Omissions Insurance; Fidelity Bonds.

     

    The
      Master Servicer shall for so long as it acts as master servicer under this
      Agreement, obtain and maintain in force (a) a policy or policies of insurance
      covering errors and omissions in the performance of its obligations as Master
      Servicer hereunder and (b) a fidelity bond in respect of its officers, employees
      and agents. Each such policy or policies and bond shall, together, comply with
      the requirements from time to time of FNMA or FHLMC for persons performing
      servicing for mortgage loans purchased by FNMA or FHLMC. In the event that
      any
      such policy or bond ceases to be in effect, the Master Servicer shall obtain
      a
      comparable replacement policy or bond from an insurer or issuer, meeting the
      requirements set forth above as of the date of such replacement.

     

    SECTION
      3.18  Notification
      of Adjustments.

     

    On
      each
      Adjustment Date, the Master Servicer shall make interest rate adjustments for
      each Mortgage Loan in compliance with the requirements of the related Mortgage
      and Mortgage Note and applicable regulations. The Master Servicer shall execute
      and deliver the notices required by each Mortgage and Mortgage Note and
      applicable regulations regarding interest rate adjustments. The Master Servicer
      also shall provide timely notification to the Trustee of all applicable data
      and
      information regarding such interest rate adjustments and the Master Servicer’s
      methods of implanting such interest rate adjustments. Upon the discovery by
      the
      Master Servicer or the Trustee that the Master Servicer has failed to adjust
      or
      has incorrectly adjusted a Mortgage Rate or a monthly payment pursuant to the
      terms of the related Mortgage Note and Mortgage, the Master Servicer shall
      immediately deposit in the Certificate Account from its own funds the amount
      of
      any interest loss caused thereby without reimbursement therefor; provided,
      however, the Master Servicer shall be held harmless with respect to any interest
      rate adjustments made by any servicer prior to the Master Servicer.

     


    
      
         

      

      
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    ARTICLE
      IV

    DISTRIBUTIONS
      AND ADVANCES BY THE MASTER SERVICER

     

    SECTION
      4.1  Advances.

     

    The
      Master Servicer shall determine on the Business Day prior to each Master
      Servicer Advance Date whether it is required to make an Advance pursuant to
      the
      definition thereof. If the Master Servicer determines it is required to make
      an
      Advance, it shall, on or before the Master Servicer Advance Date, either (i)
      deposit into the applicable subaccount of the Certificate Account an amount
      equal to the Advance or (ii) make an appropriate entry in its records relating
      to the applicable subaccount of the Certificate Account that any Amount Held
      for
      Future Distribution has been used by the Master Servicer in discharge of its
      obligation to make any such Advance. Any funds so applied shall be replaced
      by
      the Master Servicer by deposit in the applicable subaccount of the Certificate
      Account no later than the close of business on the Business Day preceding the
      next Master Servicer Advance Date. The Master Servicer shall be entitled to
      be
      reimbursed from the applicable subaccount of the Certificate Account for all
      Advances of its own funds made pursuant to this Section as provided in Section
      3.8. The obligation to make Advances with respect to any Mortgage Loan shall
      continue until the ultimate disposition of the REO Property or Mortgaged
      Property relating to such Mortgage Loan. As to any Distribution Date, the Master
      Servicer shall inform the Trustee in writing of the amount of the Advance to
      be
      made by the Master Servicer on each Master Servicer Advance Date no later 1:30
      p.m. Central time on the second Business Day immediately preceding such
      Distribution Date.

     

    The
      Master Servicer shall deliver to the Trustee on the related Master Servicer
      Advance Date an Officer’s Certificate of a Servicing Officer indicating the
      amount of any proposed Advance determined by the Master Servicer to be a
      Nonrecoverable Advance.

     

    SECTION
      4.2  Priorities
      of Distribution.

     

    (a) On
      each
      Distribution Date, the Trustee shall withdraw the Available Funds for each
      Certificate Group from the applicable subaccount of the Distribution Account
      and
      apply such funds to distributions on the Certificates of the related Certificate
      Group in the following order and priority and, in each case, to the extent
      of
      Available Funds remaining:

     

    (i) to
      the
      Classes of Senior Certificates of the related Certificate Group, the Accrued
      Certificate Interest on each such Class for such Distribution Date, any
      shortfall in available amounts being allocated among such Classes in proportion
      to the amount of Accrued Certificate Interest otherwise distributable thereon
      (or added to the balance thereof);

     


    
      
         

      

      
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    (ii) to
      the
      Classes of Senior Certificates of the related Certificate Group, any Accrued
      Certificate Interest thereon remaining undistributed from previous Distribution
      Dates, to the extent of remaining Available Funds from the related Mortgage
      Pool, any shortfall in available amounts being allocated among such Classes
      in
      proportion to the amount of Accrued Certificate Interest remaining undistributed
      for that Class for that Distribution Date;

     

    (iii) to
      the
      Classes of Senior Certificates of the related Certificate Group entitled to
      distributions of principal, to the extent of remaining Available Funds from
      the
      related Mortgage Pool, the related Senior Optimal Principal Amount for such
      Distribution Date and, in the case of the Group I, Group II and Group III Senior
      Certificates, in the order of priority set forth below in Sections 4.2(b),
      (c)
      and (d), respectively, until the respective Class Certificate Balances thereof
      have been reduced to zero;

     

    (iv) to
      the
      Class B-1 Certificates, to the extent of remaining Available Funds for the
      Mortgage Pools, but subject to the prior payment of amounts described under
      Section 4.2(i), in the following order: (1) the Accrued Certificate Interest
      thereon for such Distribution Date, (2) any Accrued Certificate Interest thereon
      remaining undistributed from previous Distribution Dates and (3) such Class’
Allocable Share for such Distribution Date;

     

    (v) to
      the
      Class B-2 Certificates, to the extent of remaining Available Funds for the
      Mortgage Pools, but subject to the prior payment of amounts described under
      Section 4.2(i), in the following order: (1) the Accrued Certificate Interest
      thereon for such Distribution Date, (2) any Accrued Certificate Interest thereon
      remaining undistributed from previous Distribution Dates and (3) such Class’
Allocable Share for such Distribution Date;

     

    (vi) to
      the
      Class B-3 Certificates, to the extent of remaining Available Funds for the
      Mortgage Pools, but subject to the prior payment of amounts described under
      Section 4.2(i), in the following order: (1) the Accrued Certificate Interest
      thereon for such Distribution Date, (2) any Accrued Certificate Interest thereon
      remaining undistributed from previous Distribution Dates and (3) such Class’
Allocable Share for such Distribution Date;

     

    (vii) to
      the
      Class B-4 Certificates, to the extent of remaining Available Funds for the
      Mortgage Pools, but subject to the prior payment of amounts described under
      Section 4.2(i), in the following order: (1) the Accrued Certificate Interest
      thereon for such Distribution Date, (2) any Accrued Certificate Interest thereon
      remaining undistributed from previous Distribution Dates and (3) such Class’
Allocable Share for such Distribution Date;

     


    
      
         

      

      
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    (viii) to
      the
      Class B-5 Certificates, to the extent of remaining Available Funds for the
      Mortgage Pools, but subject to the prior payment of amounts described under
      Section 4.2(i), in the following order: (1) the Accrued Certificate Interest
      thereon for such Distribution Date, (2) any Accrued Certificate Interest thereon
      remaining undistributed from previous Distribution Dates and (3) such Class’
Allocable Share for such Distribution Date; and

     

    (ix) to
      the
      Class B-6 Certificates, to the extent of remaining Available Funds for the
      Mortgage Pools, but subject to the prior payment of amounts described under
      Section 4.2(i), in the following order: (1) the Accrued Certificate Interest
      thereon for such Distribution Date, (2) any Accrued Certificate Interest thereon
      remaining undistributed from previous Distribution Dates and (3) such Class’
Allocable Share for such Distribution Date.

     

    (b) Amounts
      allocated to the Group I Senior Certificates pursuant to Section 4.2(a)(iii)
      above will be distributed to the Class I-A-R, Class I-A-1 and Class I-A-2
      Certificates, sequentially in the following order of priority:

     

    (i) to
      the
      Class I-A-R Certificates, until the Class Certificate Balance thereof has been
      reduced to zero; and

     

    (ii) concurrently,
      to the Class I-A-1 and Class I-A-2 Certificates, pro
      rata,
      until
      the respective Class Certificate Balances thereof have each been reduced to
      zero.

     

    (c) Amounts
      allocated to the Group II Senior Certificates pursuant to Section 4.2(a)(iii)
      above will be distributed to the Class II-A-1 Certificates until the Class
      Certificate Balance thereof has been reduced to zero.

     

    (d) Amounts
      allocated to the Group III Senior Certificates pursuant to Section 4.2(a)(iii)
      above will be distributed concurrently, to the Class III-A-1 and Class III-A-2
      Certificates, pro
      rata,
      until
      the respective Class Certificate Balances thereof have each been reduced to
      zero.

     

    (e) On
      each
      Distribution Date, the Trustee shall distribute to the Holders of the Class
      I-A-R Certificates, any Available Funds remaining in the related REMIC created
      hereunder for such Distribution Date after application of all amounts described
      in clauses (a), (b), (c), (d) and (f) of this Section 4.2. Any distributions
      pursuant to this subsection (e) shall not reduce the Class Certificate Balance
      of the Class I-A-R Certificates.

     

    (f) On
      and
      after the Cross-Over Date, the amount distributable to the Senior Certificates
      of the related Certificate Group pursuant to Section 4.2(a)(iii) for the related
      Distribution Date shall be allocated among the related Classes of Senior
      Certificates, pro
      rata,
      on the
      basis of their respective Class Certificate Balances, as applicable, immediately
      prior to such Distribution Date, regardless of the priorities and amounts set
      forth in Section 4.2.

     


    
      
         

      

      
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    (g) If
      on any
      Distribution Date (i) the Class Certificate Balance of any Class of Subordinated
      Certificates (other than the Class of Subordinated Certificates with the highest
      priority of distribution) for which the related Class Prepayment Distribution
      Trigger was satisfied on such Distribution Date is reduced to zero and (ii)
      amounts distributable to such Class or Classes of Subordinated Certificates
      pursuant to clauses (2), (3) and (5) of the applicable Subordinated Optimal
      Principal Amount remain undistributed on such Distribution Date after all
      amounts otherwise distributable on such date pursuant to clauses (iv) through
      (ix) of Section 4.2(a) have been distributed, such amounts, to the extent of
      such Class’ remaining Allocable Share, shall be distributed on such Distribution
      Date to the remaining Classes of Subordinated Certificates on a pro
      rata
      basis,
      subject to the priority of payments described in Section 4.2(a). 

     

    (h) In
      the
      event that in any calendar month the Master Servicer recovers an amount, net
      of
      reimbursable expenses (an “Unanticipated Recovery”), in respect of principal of
      a Mortgage Loan which had previously been allocated as a Realized Loss to any
      Class of Certificates pursuant to Section 4.4, on the Distribution Date in
      the
      next succeeding calendar month, the Trustee shall withdraw the Unanticipated
      Recovery from the Distribution Account and sequentially increase, in order
      of
      payment priority, the Class Certificate Balance of each Class of Certificates
      to
      which such Realized Losses were previously allocated by the amount of such
      Unanticipated Recovery, but not to exceed the amount of Realized Losses
      previously allocated to such Class pursuant to Section 4.4, and shall distribute
      the amount of such Unanticipated Recovery in the order of payment priority
      described in Section 4.2(a) of this Agreement. Holders of any Class of
      Certificates for which the Class Certificate Balance has been increased by
      the
      amount of any Unanticipated Recovery will not be entitled to any payment in
      respect of Accrued Certificate Interest on the amount of any such increase
      for
      any Interest Accrual Period preceding the Distribution Date on which such
      increase occurs. When the Class Certificate Balance of a Class of Certificates
      has been reduced to zero, the Holders of such Class shall not be entitled to
      any
      share of an Unanticipated Recovery, and such Unanticipated Recovery shall be
      allocated among all outstanding Classes of Certificates entitled thereto in
      accordance with the preceding sentence, subject to the remainder of this
      subsection (h). In the event that (i) any Unanticipated Recovery remains
      undistributed in accordance with the preceding sentence or (ii) the amount
      of an
      Unanticipated Recovery exceeds the amount of the Realized Loss previously
      allocated to any outstanding Classes with respect to the related Mortgage Loan,
      on the applicable Distribution Date the Trustee shall distribute such
      Unanticipated Recoveries in accordance with the priorities set forth in Section
      4.2(a). 

     

    For
      purposes of the preceding paragraph, the share of an Unanticipated Recovery
      allocable to any Class of Certificates with respect to a Mortgage Loan shall
      be
      based on its pro
      rata
      share
      (in proportion to the Class Certificate Balances) thereof with respect to such
      Distribution Date) of the principal portion of any such Realized Loss previously
      allocated with respect to such Mortgage Loan (or Loans).

     


    
      
         

      

      
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    (i) On
      any
      Distribution Date on which any Certificate Group constitutes an
      Undercollateralized Group, all amounts otherwise distributable as principal
      on
      the Subordinated Certificates, in reverse order of priority (or, following
      the
      Cross-over Date, such other amounts described in the immediately following
      sentence), will be distributed as principal to the Senior Certificates of such
      Undercollateralized Group in accordance with the priorities set forth in
      Sections 4.2(b) through (d) until the total Class Certificate Balance of such
      Senior Certificates (after giving effect to distributions to be made on that
      Distribution Date) equals the Stated Principal Balance of the related Mortgage
      Pool (such distribution, an “Undercollateralization Distribution”). If the
      Senior Certificates of a Certificate Group constitute an Undercollateralized
      Group on any Distribution Date following the Cross-over Date,
      Undercollateralization Distributions will be made from the excess of the
      Available Funds for the Mortgage Pools not related to an Undercollateralized
      Group remaining after all required amounts for that Distribution Date have
      been
      distributed to the Senior Certificates of such other Certificate Groups. In
      addition, the amount of any unpaid Accrued Certificate Interest with respect
      to
      any Undercollateralized Group on any Distribution Date (including any Accrued
      Certificate Interest for the related Distribution Date) will be distributed
      to
      the Senior Certificates of such Undercollateralized Group prior to the payment
      of any Undercollateralization Distributions from amounts otherwise distributable
      as principal on the Subordinated Certificates, in reverse order of priority
      (or,
      following the Cross-over Date, as provided in the preceding sentence). Except
      as
      provided otherwise in this Section 4.2(i), no distribution of principal will
      be
      made to any Class of Subordinated Certificates until an Undercollateralized
      Group is no longer undercollateralized. If more than one Undercollateralized
      Group on any Distribution Date is entitled to an Undercollateralization
      Distribution, such Undercollateralization Distribution shall be allocated among
      the Undercollateralized Groups, pro
      rata,
      on the
      basis of the amount by which the aggregate Class Certificate Balance of the
      related Senior Certificates is greater than the aggregate Stated Principal
      Balance of the Mortgage Loans in the related Undercollateralized Groups. If
      amounts in respect of more than one Certificate Group on any Distribution Date
      are required to make an Undercollateralization Distribution to an
      Undercollateralized Group, the payment of such Undercollateralized Distributions
      shall be allocated among such Certificate Groups, pro
      rata,
      on the
      basis of the aggregate Class Certificate Balance of the related Senior
      Certificates.

     

    In
      addition, if on any Distribution Date the total Class Certificate Balance of
      the
      Senior Certificates of a Certificate Group (after giving effect to distributions
      to be made on that Distribution Date) has been reduced to zero, all amounts
      otherwise distributable as prepayments of principal to the Subordinated
      Certificates with respect to such Certificate Group, in reverse order of
      priority, will instead be distributed as principal to the Senior Certificates
      of
      the other Certificate Groups pro
      rata,
      on the
      basis of the aggregate Class Certificate Balance of the related Senior
      Certificates, unless (a) the Aggregate Subordinated Percentage for such
      Distribution Date is at least two times the Aggregate Subordinated Percentage
      as
      of the Closing Date, (b) the aggregate Stated Principal Balance of all the
      Mortgage Loans in the Mortgage Pools delinquent 60 days or more (including
      for
      this purpose any Mortgage Loans in foreclosure or subject to bankruptcy
      proceedings and Mortgage Loans with respect to which the related Mortgaged
      Property has been acquired by the Trust Fund), averaged over the preceding
      six
      month period, as a percentage of the then current aggregate Class Certificate
      Balance of the Subordinated Certificates, is less than 50%, and (c) the
      cumulative Realized Losses in the Mortgage Pools do not exceed (i) 20% of the
      Original Subordinated Principal Balance if such Distribution Date occurs between
      and including April 2007 and March 2010, and 30% of the Original Subordinated
      Principal Balance if such Distribution Date occurs on or after April 2010.
      Except as provided otherwise in this Section 4.2(i), all distributions described
      above will be made in accordance with the priorities set forth in Section 4.2(a)
      through (d).

     


    
      
         

      

      
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    SECTION
      4.3  Method
      of
      Distribution.

     

    (a) All
      distributions with respect to each Class of Certificates on each Distribution
      Date shall be made pro
      rata
      among
      the outstanding Certificates of such Class, based on the Percentage Interest
      in
      such Class represented by each Certificate. Payments to the Certificateholders
      on each Distribution Date will be made by the Trustee to the Certificateholders
      of record on the related Record Date by check or money order mailed to a
      Certificateholder at the address appearing in the Certificate Register, or
      upon
      written request by such Certificateholder to the Trustee made not later than
      the
      applicable Record Date, by wire transfer to a U.S. depository institution
      acceptable to the Trustee, or by such other means of payment as such
      Certificateholder and the Trustee shall agree.

     

    (b) Each
      distribution with respect to a Book-Entry Certificate shall be paid to the
      Depository, which shall credit the amount of such distribution to the accounts
      of its Depository Participants in accordance with its normal procedures. Each
      Depository Participant shall be responsible for disbursing such distribution
      to
      the Certificate Owners that it represents and to each financial intermediary
      for
      which it acts as agent. Each such financial intermediary shall be responsible
      for disbursing funds to the Certificate Owners that it represents. All such
      credits and disbursements with respect to a Book-Entry Certificate are to be
      made by the Depository and the Depository Participants in accordance with the
      provisions of the applicable Certificates. Neither the Trustee nor the Master
      Servicer shall have any responsibility therefor except as otherwise provided
      by
      applicable law.

     

    (c) The
      Trustee shall withhold or cause to be withheld such amounts as it reasonably
      determines are required by the Code (giving full effect to any exemptions from
      withholding and related certifications required to be furnished by
      Certificateholders or Certificate Owners and any reductions to withholding
      by
      virtue of any bilateral tax treaties and any applicable certification required
      to be furnished by Certificateholders or Certificate Owners with respect
      thereto) from distributions to be made to Non-U.S. Persons. If the Trustee
      reasonably determines that a more accurate determination of the amount required
      to be withheld for a distribution can be made within a reasonable period after
      the scheduled date for such distribution, it may hold such distribution in
      trust
      for a Holder of a Residual Certificate until such determination can be made.
      For
      the purposes of this paragraph, a “Non-U.S. Person” is (i) an individual other
      than a citizen or resident of the United States, (ii) a partnership, corporation
      or entity treated as a partnership or corporation for U.S. federal income tax
      purposes not formed under the laws of the United States, any state thereof
      or
      the District of Columbia (unless, in the case of a partnership, Treasury
      regulations provide otherwise), (iii) any estate, the income of which is not
      subject to U.S. federal income taxation, regardless of source, and (iv) any
      trust, other than a trust that a court within the United States is able to
      exercise primary supervision over the administration of the trust and one or
      more U.S. Persons have the authority to control all substantial decisions of
      the
      trust.

     


    
      
         

      

      
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    SECTION
      4.4  Allocation
      of Losses.

     

    (a) On
      or
      prior to each Determination Date, the Master Servicer shall determine the amount
      of any Realized Loss in respect of each Mortgage Loan that occurred during
      the
      immediately preceding calendar month.

     

    (b) With
      respect to any Distribution Date, the principal portion of each Realized Loss
      (other than any Excess Loss) with respect to a Mortgage Pool shall be allocated
      in the following order of priority:

     

    (i) to
      the
      Class B-6 Certificates until the Class Certificate Balance thereof has been
      reduced to zero;

     

    (ii) to
      the
      Class B-5 Certificates until the Class Certificate Balance thereof has been
      reduced to zero;

     

    (iii) to
      the
      Class B-4 Certificates until the Class Certificate Balance thereof has been
      reduced to zero;

     

    (iv) to
      the
      Class B-3 Certificates until the Class Certificate Balance thereof has been
      reduced to zero;

     

    (v) to
      the
      Class B-2 Certificates until the Class Certificate Balance thereof has been
      reduced to zero;

     

    (vi) to
      the
      Class B-1 Certificates until the Class Certificate Balance thereof has been
      reduced to zero;

     

    (vii) to
      the
      Classes of Senior Certificates of the related Certificate Group, pro
      rata,
      in
      accordance with their Class Certificate Balances; provided,
      that
      (a) the principal portion of Realized Losses (other than Excess Losses) on
      the
      Mortgage Loans allocable to the Class I-A-1 Certificates will instead be borne
      first by the Class I-A-2 Certificates until its Class Certificate Balance is
      reduced to zero (in addition to other Realized Losses allocable to the Class
      I-A-2 Certificates), and not by the Class I-A-1 Certificates, until the Class
      Certificate Balance of the Class I-A-2 Certificates has been reduced to zero
      and
      (b) the principal portion of Realized Losses (other than Excess Losses) on
      the
      Mortgage Loans allocable to the Class III-A-1 Certificates will instead be
      borne
      first by the Class III-A-2 Certificates until its Class Certificate Balance
      is
      reduced to zero (in addition to other Realized Losses allocable to the Class
      III-A-2 Certificates), and not by the Class III-A-1 Certificates, until the
      Class Certificate Balance of the Class III-A-2 Certificates has been reduced
      to
      zero.

     

    (c) With
      respect to any Distribution Date, the principal portion of any Excess Loss
      with
      respect to a Mortgage Pool (other than Excess Bankruptcy Losses attributable
      to
      Debt Service Reductions) shall be allocated pro rata to each Class of
      Certificates of the related Certificate Group based on their respective Class
      Certificate Balances, each in the case of the Senior Certificates, or
      Apportioned Principal Balances, in the case of the Subordinated
      Certificates.

     


    
      
         

      

      
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    (d) Any
      Realized Losses allocated to a Class of Certificates pursuant to Section 4.4(b)
      or (c) shall be allocated among the Certificates of such Class in proportion
      to
      their respective Certificate Principal Balances. Any allocation of Realized
      Losses pursuant to this paragraph (d) shall be accomplished by reducing the
      Certificate Principal Balances of the related Certificates on the related
      Distribution Date in accordance with Section 4.4(e).

     

    (e) Realized
      Losses allocated in accordance with this Section 4.4 shall be allocated on
      the
      Distribution Date in the month following the month in which such loss was
      incurred and, in the case of the principal portion thereof, after giving effect
      to the distributions made on such Distribution Date.

     

    (f) On
      each
      Distribution Date, the Master Servicer shall determine the Subordinated
      Certificate Writedown Amount, if any. Any such Subordinated Certificate
      Writedown Amount shall effect, without duplication of any other provision in
      this Section 4.4 that provides for a reduction in the Class Certificate Balance
      of the Subordinated Certificates, a corresponding reduction in the Class
      Certificate Balance of the Subordinated Certificates, which reduction shall
      occur on such Distribution Date after giving effect to distributions made on
      such Distribution Date.

     

    (g) Notwithstanding
      the foregoing, no such allocation of any Realized Loss shall be made on a
      Distribution Date to a Class of Certificates to the extent that such allocation
      would result in the reduction of the aggregate Class Certificate Balances of
      all
      the Senior Certificates of a related Certificate Group as of such Distribution
      Date plus the Apportioned Principal Balances of the Subordinated Certificates
      of
      such Certificate Group as of such Distribution Date, after giving effect to
      all
      distributions and prior allocations of Realized Losses on such date, to an
      amount less than the aggregate Stated Principal Balance of the Mortgage Loans
      in
      the related Mortgage Pool as of the first day of the month of such Distribution
      Date, less any Deficient Valuations occurring on or prior to the Bankruptcy
      Coverage Termination Date (such limitation, the “Loss Allocation
      Limitation”).

     

    SECTION
      4.5  [RESERVED]

     

    SECTION
      4.6  Monthly
      Statements to Certificateholders.

     

    (a) Not
      later
      than each Distribution Date, the Trustee shall prepare and cause to be forwarded
      by first class mail to each Certificateholder, the Master Servicer, the
      Depositor and each Rating Agency a statement, that complies with Item 1121
      of
      Regulation AB, setting forth, among other things, with respect to the related
      distribution and/or may post such statement on its website located at
      www.bnyinvestorreporting.com:

     


    
      
         

      

      
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    (i) the
      amount thereof allocable to principal, separately identifying the aggregate
      amount of any Principal Prepayments and Liquidation Proceeds included
      therein;

     

    (ii) the
      amount thereof allocable to interest, the amount of any Compensating Interest
      included in such distribution and any remaining Net Interest Shortfalls after
      giving effect to such distribution;

     

    (iii) if
      the
      distribution to the Holders of such Class of Certificates is less than the
      full
      amount that would be distributable to such Holders if there were sufficient
      funds available therefor, the amount of the shortfall and the allocation thereof
      as between principal and interest;

     

    (iv) the
      Class
      Certificate Balance of each Class of Certificates after giving effect to the
      distribution of principal on such Distribution Date;

     

    (v) the
      Pool
      Principal Balance for each Mortgage Pool for the following Distribution Date;
      

     

    (vi) the
      Senior Percentage and Subordinated Percentage for each Certificate Group for
      the
      following Distribution Date;

     

    (vii) the
      amount of the Master Servicing Fees paid to or retained by the Master Servicer
      with respect to such Distribution Date;

     

    (viii) the
      Pass-Through Rate for each such Class of Certificates with respect to such
      Distribution Date;

     

    (ix) the
      amount of Advances for each Mortgage Pool included in the distribution on such
      Distribution Date and the aggregate amount of Advances for each Mortgage Pool
      outstanding as of the close of business on such Distribution Date;

     

    (x) the
      number and aggregate principal amounts of Mortgage Loans (A) delinquent
      (exclusive of Mortgage Loans in foreclosure) (1) 1 to 30 days (2) 31 to 60
      days
      (3) 61 to 90 days and (4) 91 or more days and (B) in foreclosure and delinquent
      (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more days,
      as
      of the close of business on the last day of the calendar month preceding such
      Distribution Date;

     

    (xi) with
      respect to any Mortgage Loan in a Mortgage Pool that became an REO Property
      during the preceding calendar month, the loan number and Stated Principal
      Balance of such Mortgage Loan as of the close of business on the Determination
      Date preceding such Distribution Date and the date of acquisition
      thereof;

     


    
      
         

      

      
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    (xii) the
      total
      number and principal balance of any REO Properties (and market value, if
      available) in each Mortgage Pool as of the close of business on the
      Determination Date preceding such Distribution Date;

     

    (xiii) the
      Senior Prepayment Percentage for each Certificate Group for the following
      Distribution Date;

     

    (xiv) the
      aggregate amount of Realized Losses incurred in respect of each Mortgage Pool
      during the preceding calendar month;

     

    (xv) the
      cumulative amount of Realized Losses applied in reduction of the principal
      balance of each class of Certificates since the Closing Date;

     

    (xvi) the
      Special Hazard Loss Coverage Amount, the Fraud Loss Coverage Amount and the
      Bankruptcy Loss Coverage Amount, in each case as of the related Determination
      Date; and

     

    (xvii) with
      respect to the second Distribution Date, the number and aggregate balance of
      any
      Delay Delivery Mortgage Loans not delivered within thirty days after the Closing
      Date.

     

    (b) The
      Trustee’s responsibility for disbursing the above information to the
      Certificateholders is limited to the availability, timeliness and accuracy
      of
      the information provided by the Master Servicer.

     

    (c) On
      or
      before the fifth Business Day following the end of each Prepayment Period (but
      in no event later than the third Business Day prior to the related Distribution
      Date), the Master Servicer shall deliver to the Trustee (which delivery may
      be
      by electronic data transmission) a report in substantially the form set forth
      as
      Schedule III hereto.

     

    (d) Within
      a
      reasonable period of time after the end of each calendar year, the Trustee
      shall
      cause to be furnished to each Person who at any time during the calendar year
      was a Certificateholder, a statement containing the information set forth in
      clauses (a)(i), (a)(ii) and (a)(vii) of this Section 4.6 aggregated for such
      calendar year or applicable portion thereof during which such Person was a
      Certificateholder. Such obligation of the Trustee shall be deemed to have been
      satisfied to the extent that substantially comparable information shall be
      provided by the Trustee pursuant to any requirements of the Code as from time
      to
      time in effect.

     

    ARTICLE
      V

    THE
      CERTIFICATES

     

    SECTION
      5.1  The
      Certificates.

     

    The
      Certificates shall be substantially in the forms attached hereto as exhibits.
      The Certificates shall be issuable in registered form, in the minimum
      denominations, integral multiples in excess thereof (except that one Certificate
      in each Class may be issued in a different amount which must be in excess of
      the
      applicable minimum denomination) and aggregate denominations per Class set
      forth
      in the Preliminary Statement.

     


    
      
         

      

      
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    Subject
      to Section 9.2 hereof respecting the final distribution on the Certificates,
      on
      each Distribution Date the Trustee shall make distributions to each
      Certificateholder of record on the preceding Record Date either (x) by wire
      transfer in immediately available funds to the account of such Holder at a
      bank
      or other entity having appropriate facilities therefor, if (i) such Holder
      has
      so notified the Trustee at least five Business Days prior to the related Record
      Date and (ii) such Holder shall hold (A) 100% of the Class Certificate Balance
      of any Class of Certificates or (B) Certificates of any Class with aggregate
      principal Denominations of not less than $1,000,000 or (y) by check mailed
      by
      first class mail to such Certificateholder at the address of such Holder
      appearing in the Certificate Register.

     

    The
      Certificates shall be executed by manual or facsimile signature on behalf of
      the
      Trustee by an authorized officer. Certificates bearing the manual or facsimile
      signatures of individuals who were, at the time when such signatures were
      affixed, authorized to sign on behalf of the Trustee shall bind the Trustee,
      notwithstanding that such individuals or any of them have ceased to be so
      authorized prior to the countersignature and delivery of such Certificates
      or
      did not hold such offices at the date of such Certificate. No Certificate shall
      be entitled to any benefit under this Agreement, or be valid for any purpose,
      unless countersigned by the Trustee by manual signature, and such
      countersignature upon any Certificate shall be conclusive evidence, and the
      only
      evidence, that such Certificate has been duly executed and delivered hereunder.
      All Certificates shall be dated the date of their countersignature. On the
      Closing Date, the Trustee shall countersign the Certificates to be issued at
      the
      direction of the Depositor, or any affiliate thereof.

     

    The
      Depositor shall provide, or cause to be provided, to the Trustee on a continuous
      basis, an adequate inventory of Certificates to facilitate
      transfers.

     

    SECTION
      5.2  Certificate
      Register; Registration of Transfer and Exchange of Certificates.

     

    (a) The
      Trustee shall maintain, or cause to be maintained in accordance with the
      provisions of Section 5.6 hereof, a Certificate Register for the Trust Fund
      in
      which, subject to the provisions of subsections (b) and (c) below and to such
      reasonable regulations as it may prescribe, the Trustee shall provide for the
      registration of Certificates and of transfers and exchanges of Certificates
      as
      herein provided. Upon surrender for registration of transfer of any Certificate,
      the Trustee shall execute and deliver, in the name of the designated transferee
      or transferees, one or more new Certificates of the same Class and aggregate
      Percentage Interest.

     

    At
      the
      option of a Certificateholder, Certificates may be exchanged for other
      Certificates of the same Class in authorized denominations and evidencing the
      same aggregate Percentage Interest upon surrender of the Certificates to be
      exchanged at the office or agency of the Trustee. Whenever any Certificates
      are
      so surrendered for exchange, the Trustee shall execute, authenticate, and
      deliver the Certificates which the Certificateholder making the exchange is
      entitled to receive. Every Certificate presented or surrendered for registration
      of transfer or exchange shall be accompanied by a written instrument of transfer
      in form satisfactory to the Trustee duly executed by the Holder thereof or
      his
      attorney duly authorized in writing.

     


    
      
         

      

      
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    No
      service charge to the Certificateholders shall be made for any registration
      of
      transfer or exchange of Certificates, but payment of a sum sufficient to cover
      any tax or governmental charge that may be imposed in connection with any
      transfer or exchange of Certificates may be required.

     

    All
      Certificates surrendered for registration of transfer or exchange shall be
      cancelled and subsequently destroyed by the Trustee in accordance with the
      Trustee’s customary procedures.

     

    (b) No
      transfer of a Private Certificate shall be made unless such transfer is made
      pursuant to an effective registration statement under the Securities Act and
      any
      applicable state securities laws or is exempt from the registration requirements
      under said Act and such state securities laws. In the event that a transfer
      is
      to be made in reliance upon an exemption from the Securities Act and such laws,
      in order to assure compliance with the Securities Act and such laws, any Holder
      of a Private Certificate (other than a Private Certificate that is a Book-Entry
      Certificate) desiring to effect such transfer and such Certificateholder’s
      prospective transferee shall each certify to the Trustee in writing the facts
      surrounding the transfer in substantially the forms set forth in Exhibit I
      (the
“Transferor Certificate”) and (i) deliver a letter in substantially the form of
      either Exhibit J (the “Investment Letter”) or Exhibit K (the “Rule 144A Letter”)
      or (ii) there shall be delivered to the Trustee at the expense of the transferor
      an Opinion of Counsel that such transfer may be made pursuant to an exemption
      from the Securities Act. Furthermore, in the event a Private Certificate is
      offered and sold outside of the United States to a Person who is not a U.S.
      person within the meaning of Regulation S, such Private Certificates will be
      offered and sold in reliance on Regulation S. Each Holder of a Private
      Certificate sold in reliance on Regulation S shall be deemed to have represented
      to the Trustee: (i) such Person (A) if the offer or sale was made to it
      prior to the expiration of the 40-day distribution compliance period within
      the
      meaning of Regulation S, is not a U.S. person within the meaning of Regulation
      S
      and (B) was, at the time the buy order was originated, outside the United States
      and (ii) such Person understands that such Private Certificates have not been
      registered under the Securities Act, and that (x) until the expiration of the
      40-day distribution compliance period (within the meaning of Regulation S),
      no
      offer, sale, pledge or other transfer of such Certificates or any interest
      therein shall be made in the United States or to or for the account or benefit
      of a U.S. person (each as defined in Regulation S), (y) if in the future it
      decides to offer, resell, pledge or otherwise transfer such Certificates, such
      Certificates may be offered, resold, pledged or otherwise transferred only
      (A)
      to a person which the seller reasonably believes is a “qualified institutional
      buyer” as defined in Rule 144A under the Securities Act, that is purchasing such
      Certificates for its own account or for the account of a qualified institutional
      buyer to which notice is given that the transfer is being made in reliance
      on
      Rule 144A or (B) in an offshore transaction (as defined in Regulation S) in
      compliance with the provisions of Regulation S, in each case in compliance
      with
      the requirements of this Agreement; and it will notify such transferee of the
      transfer restrictions specified in this Section.

     


    
      
         

      

      
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    Each
      Holder of a Private Certificate that is a Book-Entry Certificate, by its
      acquisition thereof (or a beneficial interest therein), shall be deemed to
      have
      represented and warranted for the benefit of the Depositor, the Servicer and
      the
      Trustee that (a) it understands that the Private Certificates are not being
      registered under the Securities Act, or any state securities laws and are being
      transferred to it in a transaction that is exempt from the registration
      requirements of the Securities Act and any such laws, (b) it has such knowledge
      and experience in financial and business matters that it is capable of
      evaluating the merits and risks of investments in the Private Certificates,
      (c)
      it has had the opportunity to ask questions of and receive answers from the
      Depositor concerning the purchase of the Private Certificates and all matters
      relating thereto or any additional information deemed necessary to its decision
      to purchase the Private Certificates, (d) neither it, nor any anyone acting
      on
      its behalf, has offered, transferred, pledged, sold or otherwise disposed of
      the
      Private Certificates or any interest therein, or solicited any offer to buy
      or
      accept a transfer, pledge or other disposition of the Private Certificates
      or
      any interest therein from, or otherwise approached or negotiated with respect
      to
      the Private Certificates or any interest therein with, any person in any manner,
      or made any general solicitation by means of general advertising or in any
      other
      manner, or taken any other action, that would constitute a distribution of
      the
      Private Certificates under the Securities Act or that would render the
      disposition of the Private Certificates a violation of Section 5 of the
      Securities Act or require registration pursuant thereto, nor will it act, nor
      has it authorized or will authorize any person to act, in such manner with
      respect to the Private Certificates, (e) it is a “qualified institutional buyer”
as that term is defined in Rule 144A under the Securities Act (“Rule 144A”), (f)
      it is aware that the sale of the Private Certificates to it is being made in
      reliance on Rule 144A, (g) it is acquiring the Private Certificates for its
      own
      account or for resale pursuant to Rule 144A and it understands that the Private
      Certificates may be resold, pledged or transferred only (A) to a person whom
      it
      reasonably believes to be a qualified institutional buyer that purchases for
      its
      own account or for the account of a qualified institutional buyer to whom notice
      is given that the resale, pledge or transfer is being made in reliance on Rule
      144A, or (B) pursuant to another exemption from registration under the
      Securities Act; and (h) it understands that no representation is made as to
      the
      availability of the exemption provided by Rule 144A for resales of the Private
      Certificates. 

     

    The
      Depositor shall provide to any Holder of a Private Certificate and any
      prospective transferee designated by any such Holder, information regarding
      the
      related Certificates and the Mortgage Loans and such other information as shall
      be necessary to satisfy the condition to eligibility set forth in Rule
      144A(d)(4) for transfer of any such Certificate without registration thereof
      under the Securities Act pursuant to the registration exemption provided by
      Rule
      144A. The Trustee and the Master Servicer shall cooperate with the Depositor
      in
      providing the Rule 144A information referenced in the preceding sentence,
      including providing to the Depositor such information regarding the
      Certificates, the Mortgage Loans and other matters regarding the Trust Fund
      as
      the Depositor shall reasonably request to meet its obligation under the
      preceding sentence. Each Holder of a Private Certificate desiring to effect
      such
      transfer shall, and by its acceptance of a Private Certificate does hereby
      agree
      to, indemnify the Trustee and the Depositor, the Seller and the Master Servicer
      against any liability that may result if the transfer is not so exempt or is
      not
      made in accordance with such federal and state laws.

     


    
      
         

      

      
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    No
      transfer of an ERISA-Restricted Certificate in the form of a Definitive
      Certificate shall be made unless the Trustee shall have received a Transferor
      Certificate from the related transferor and either (i) a representation from
      the
      transferee of such Certificate acceptable to and in form and substance
      satisfactory to the Trustee (in the event such Certificate is a Private
      Certificate, such requirement is satisfied only by the Trustee’s receipt of a
      representation letter from the transferee substantially in the form of Exhibit
      J
      or Exhibit K), to the effect that such transferee is not an employee benefit
      plan or arrangement subject to Section 406 of ERISA or a plan or arrangement
      subject to Section 4975 of the Code, nor a person acting on behalf of any such
      plan or arrangement, nor using the assets of any such plan or arrangement to
      effect such transfer, (ii) in the case of a Private Certificate (that has been
      subject to an ERISA-Qualified Underwriting), if the purchaser is an insurance
      company, a representation that the purchaser is an insurance company which
      is
      purchasing such Certificates with funds contained in an “insurance company
      general account” (as such term is defined in Section V(e) of Prohibited
      Transaction Class Exemption 95-60 (“PTCE 95-60”)) and that the purchase and
      holding of such Certificates are covered under Sections I and III of PTCE 95-60
      or (iii) in the case of any such ERISA-Restricted Certificate presented for
      registration in the name of an employee benefit plan subject to ERISA, or a
      plan
      or arrangement subject to Section 4975 of the Code (or comparable provisions
      of
      any subsequent enactments), or a trustee of any such plan or any other person
      acting on behalf of any such plan or arrangement, or using such plan’s or
      arrangement’s assets, an Opinion of Counsel satisfactory to the Trustee, which
      Opinion of Counsel shall not be an expense of either the Trustee, the Depositor,
      the Master Servicer or the Trust Fund, addressed to the Trustee to the effect
      that the purchase or holding of such ERISA-Restricted Certificate will not
      result in prohibited transactions under Title I of ERISA and Section 4975 of
      the
      Code and will not subject the Trustee, the Depositor or the Master Servicer
      to
      any obligation in addition to those expressly undertaken in this Agreement
      or to
      any liability. Notwithstanding anything else to the contrary herein, any
      purported transfer of an ERISA-Restricted Certificate to or on behalf of an
      employee benefit plan subject to ERISA or to the Code without the delivery
      to
      the Trustee of an Opinion of Counsel satisfactory to the Trustee as described
      above shall be void and of no effect.

     

    To
      the
      extent permitted under applicable law (including, but not limited to, ERISA),
      the Trustee shall be under no liability to any Person for any registration
      of
      transfer of any ERISA-Restricted Certificate that is in fact not permitted
      by
      this Section 5.2(b) or for making any payments due on such Certificate to the
      Holder thereof or taking any other action with respect to such Holder under
      the
      provisions of this Agreement so long as the transfer was registered by the
      Trustee in accordance with the foregoing requirements.

     

    Each
      Holder of a Private Certificate that is a Book-Entry Certificate, by its
      acquisition thereof (or a beneficial interest therein) shall be deemed to have
      represented and warranted for the benefit of the Depositor, the Servicer, the
      Trustee and the other Certificateholders, that (a) it is not an employee benefit
      plan or arrangement that is subject to Section 406 of ERISA, or a plan or
      arrangement that is subject to Section 4975 of the Internal Revenue Code of
      1986, as amended, nor is it acting on behalf of any such plan or arrangement
      or
      using the assets of any such plan or arrangement to effect such acquisition,
      or
      (b) if it is an insurance company, in the case of Private Certificates that
      have
      been the subject of an ERISA-Qualifying Underwriting, it is purchasing the
      Private Certificates with funds contained in an “insurance company general
      account” (as defined in Section V(e) of Prohibited Transaction Class Exemption
      95-60 (“PTCE 95-60”)) and its purchase and holding of the Private Certificates
      are covered under Sections I and III of PTCE 95-60. To the extent permitted
      under applicable law (including, but not limited to, ERISA), the Trustee shall
      be under no liability to any Person for any registration of transfer of any
      ERISA-Restricted Certificate that is in fact not permitted by this Section
      5.2(b) or for making any payments due on such Certificate to the Holder thereof
      or taking any other action with respect to such Holder under the provisions
      of
      this Agreement so long as the transfer was registered by the Trustee in
      accordance with the foregoing requirements. The Trustee shall be entitled,
      but
      not obligated, to recover from any Holder of any ERISA-Restricted Certificate
      that was in fact a Plan or a Person acting on behalf of any such Plan any
      payments made on such ERISA-Restricted Certificate at and after either such
      time. Any such payments so recovered by the Trustee shall be paid and delivered
      by the Trustee to the last preceding Holder of such Certificate that is not
      such
      a Plan or Person acting on behalf of a Plan.

     


    
      
         

      

      
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    Notwithstanding
      the foregoing, no opinion or certificate shall be required for the initial
      issuance of any ERISA-Restricted Certificate that is registered in the name
      of
      the Depository or its nominee.

     

    (c) Each
      Person who has or who acquires any Ownership Interest in a Residual Certificate
      shall be deemed by the acceptance or acquisition of such Ownership Interest
      to
      have agreed to be bound by the following provisions, and the rights of each
      Person acquiring any Ownership Interest in a Residual Certificate are expressly
      subject to the following provisions:

     

    (i) Each
      Person holding or acquiring any Ownership Interest in a Residual Certificate
      shall be a Permitted Transferee and shall promptly notify the Trustee of any
      change or impending change in its status as a Permitted Transferee.

     

    (ii) No
      Ownership Interest in a Residual Certificate may be registered on the Closing
      Date or thereafter transferred, and the Trustee shall not register the Transfer
      of any Residual Certificate unless, in addition to the certificates required
      to
      be delivered to the Trustee under subparagraph (b) above, the Trustee shall
      have
      been furnished with an affidavit (a “Transfer Affidavit”) of the initial owner
      or the proposed transferee in the form attached hereto as Exhibit H and with
      a
      certificate of the proposed transferor in the form attached hereto as Exhibit
      I.

     

    (iii) Each
      Person holding or acquiring any Ownership Interest in a Residual Certificate
      shall agree (A) to obtain a Transfer Affidavit from any other Person to whom
      such Person attempts to Transfer its Ownership Interest in a Residual
      Certificate, (B) to obtain a Transfer Affidavit from any Person for whom such
      Person is acting as nominee, trustee or agent in connection with any Transfer
      of
      a Residual Certificate and (C) not to Transfer its Ownership Interest in a
      Residual Certificate or to cause the Transfer of an Ownership Interest in a
      Residual Certificate to any other Person if it has actual knowledge that such
      Person is not a Permitted Transferee.

     


    
      
         

      

      
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    (iv) Any
      attempted or purported Transfer of any Ownership Interest in a Residual
      Certificate in violation of the provisions of this Section 5.2(c) shall be
      absolutely null and void and shall vest no rights in the purported Transferee.
      If any purported transferee shall become a Holder of a Residual Certificate
      in
      violation of the provisions of this Section 5.2(c), then the last preceding
      Permitted Transferee shall be restored to all rights as Holder thereof
      retroactive to the date of registration of Transfer of such Residual
      Certificate. The Trustee shall be under no liability to any Person for any
      registration of Transfer of a Residual Certificate that is in fact not permitted
      by Section 5.2(b) and this Section 5.2(c) or for making any payments due on
      such
      Certificate to the Holder thereof or taking any other action with respect to
      such Holder under the provisions of this Agreement so long as the Transfer
      was
      registered after receipt of the related Transfer Affidavit, Transferor
      Certificate and, in the case of a Residual Certificate which is also a Private
      Certificate, either the Rule 144A Letter or the Investment Letter. The Trustee
      shall be entitled but not obligated to recover from any Holder of a Residual
      Certificate that was in fact not a Permitted Transferee at the time it became
      a
      Holder or, at such subsequent time as it became other than a Permitted
      Transferee, all payments made on such Residual Certificate at and after either
      such time. Any such payments so recovered by the Trustee shall be paid and
      delivered by the Trustee to the last preceding Permitted Transferee of such
      Certificate.

     

    (v) The
      Depositor shall use its best efforts to make available, upon receipt of written
      request from the Trustee, all information necessary to compute any tax imposed
      under Section 860E(e) of the Code as a result of a Transfer of an Ownership
      Interest in a Residual Certificate to any Holder who is not a Permitted
      Transferee.

     

    The
      restrictions on Transfers of a Residual Certificate set forth in this Section
      5.2(c) shall cease to apply (and the applicable portions of the legend on a
      Residual Certificate may be deleted) with respect to Transfers occurring after
      delivery to the Trustee of an Opinion of Counsel, which Opinion of Counsel
      shall
      not be an expense of the Trust Fund, the Trustee, the Seller or the Master
      Servicer, to the effect that the elimination of such restrictions will not
      cause
      any REMIC created hereunder to fail to qualify as a REMIC at any time that
      the
      Certificates are outstanding or result in the imposition of any tax on the
      Trust
      Fund, a Certificateholder or another Person. Each Person holding or acquiring
      any Ownership Interest in a Residual Certificate hereby consents to any
      amendment of this Agreement which, based on an Opinion of Counsel furnished
      to
      the Trustee, is reasonably necessary (a) to ensure that the record ownership
      of,
      or any beneficial interest in, a Residual Certificate is not transferred,
      directly or indirectly, to a Person that is not a Permitted Transferee and
      (b)
      to provide for a means to compel the Transfer of a Residual Certificate which
      is
      held by a Person that is not a Permitted Transferee to a Holder that is a
      Permitted Transferee.

     


    
      
         

      

      
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    (d) The
      preparation and delivery of all certificates and opinions referred to above
      in
      this Section 5.2 in connection with transfer shall be at the expense of the
      parties to such transfers.

     

    (e) Except
      as
      provided below, the Book-Entry Certificates shall at all times remain registered
      in the name of the Depository or its nominee and at all times: (i) registration
      of the Certificates may not be transferred by the Trustee except to another
      Depository; (ii) the Depository shall maintain book-entry records with respect
      to the Certificate Owners and with respect to ownership and transfers of such
      Book-Entry Certificates; (iii) ownership and transfers of registration of the
      Book-Entry Certificates on the books of the Depository shall be governed by
      applicable rules established by the Depository; (iv) the Depository may collect
      its usual and customary fees, charges and expenses from its Depository
      Participants; (v) the Trustee shall deal with the Depository, Depository
      Participants and indirect participating firms as representatives of the
      Certificate Owners of the Book-Entry Certificates for purposes of exercising
      the
      rights of holders under this Agreement, and requests and directions for and
      votes of such representatives shall not be deemed to be inconsistent if they
      are
      made with respect to different Certificate Owners; and (vi) the Trustee may
      rely
      and shall be fully protected in relying upon information furnished by the
      Depository with respect to its Depository Participants and furnished by the
      Depository Participants with respect to indirect participating firms and persons
      shown on the books of such indirect participating firms as direct or indirect
      Certificate Owners.

     

    All
      transfers by Certificate Owners of Book-Entry Certificates shall be made in
      accordance with the procedures established by the Depository Participant or
      brokerage firm representing such Certificate Owner. Each Depository Participant
      shall only transfer Book-Entry Certificates of Certificate Owners it represents
      or of brokerage firms for which it acts as agent in accordance with the
      Depository’s normal procedures.

     

    If
      (x)
      (i) the Depository or the Depositor advises the Trustee in writing that the
      Depository is no longer willing or able to properly discharge its
      responsibilities as Depository, and (ii) the Trustee or the Depositor is unable
      to locate a qualified successor, (y) the Depositor at its option advises the
      Trustee in writing that it elects to terminate the book-entry system through
      the
      Depository or (z) after the occurrence of an Event of Default, Certificate
      Owners representing at least 51% of the Class Certificate Balance of the
      Book-Entry Certificates together advise the Trustee and the Depository through
      the Depository Participants in writing that the continuation of a book-entry
      system through the Depository is no longer in the best interests of the
      Certificate Owners, the Trustee shall notify all Certificate Owners, through
      the
      Depository, of the occurrence of any such event and of the availability of
      definitive, fully-registered Certificates (the “Definitive Certificates”) to
      Certificate Owners requesting the same. Upon surrender to the Trustee of the
      related Class of Certificates by the Depository, accompanied by the instructions
      from the Depository for registration, the Trustee shall issue the Definitive
      Certificates. Neither the Master Servicer, the Depositor nor the Trustee shall
      be liable for any delay in delivery of such instruction and each may
      conclusively rely on, and shall be protected in relying on, such instructions.
      The Master Servicer shall provide the Trustee with an adequate inventory of
      certificates to facilitate the issuance and transfer of Definitive Certificates.
      Upon the issuance of Definitive Certificates all references herein to
      obligations imposed upon or to be performed by the Depository shall be deemed
      to
      be imposed upon and performed by the Trustee, to the extent applicable with
      respect to such Definitive Certificates and the Trustee shall recognize the
      Holders of the Definitive Certificates as Certificateholders hereunder; provided
      that the Trustee shall not by virtue of its assumption of such obligations
      become liable to any party for any act or failure to act of the
      Depository.

     


    
      
         

      

      
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    SECTION
      5.3  Mutilated,
      Destroyed, Lost or Stolen Certificates.

     

    If
      (a)
      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 (b) there is delivered to the Master Servicer and the Trustee
      such security or indemnity as may be required by them to save each of them
      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,
      countersign and deliver, in exchange for or in lieu of any such mutilated,
      destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
      and Percentage Interest. In connection with the issuance of any new Certificate
      under this Section 5.3, the Trustee may require the payment of a sum sufficient
      to cover any tax or other governmental charge that may be imposed in relation
      thereto and any other expenses (including the fees and expenses of the Trustee)
      connected therewith. Any replacement Certificate issued pursuant to this Section
      5.3 shall constitute complete and indefeasible evidence of ownership, as if
      originally issued, whether or not the lost, stolen or destroyed Certificate
      shall be found at any time.

     

    SECTION
      5.4  Persons
      Deemed Owners.

     

    The
      Master Servicer, the Trustee and any agent of the Master Servicer or the Trustee
      may treat the Person in whose name any Certificate is registered as the owner
      of
      such Certificate for the purpose of receiving distributions as provided in
      this
      Agreement and for all other purposes whatsoever, and neither the Master
      Servicer, the Trustee nor any agent of the Master Servicer or the Trustee shall
      be affected by any notice to the contrary.

     

    SECTION
      5.5  Access
      to
      List of Certificateholders’ Names and Addresses.

     

    If
      three
      or more Certificateholders or Certificate Owners (a) request such information
      in
      writing from the Trustee, (b) state that such Certificateholders or Certificate
      Owners desire to communicate with other Certificateholders with respect to
      their
      rights under this Agreement or under the Certificates, and (c) provide a copy
      of
      the communication which such Certificateholders or Certificate Owners propose
      to
      transmit, or if the Depositor or Master Servicer shall request such information
      in writing from the Trustee, then the Trustee shall, within ten Business Days
      after the receipt of such request, provide the Depositor, the Master Servicer
      or
      such Certificateholders or Certificate Owners at such recipients’ expense the
      most recent list of the Certificateholders of such Trust Fund held by the
      Trustee, if any. The Depositor and every Certificateholder or Certificate Owner,
      by receiving and holding a Certificate, agree that the Trustee shall not be
      held
      accountable by reason of the disclosure of any such information as to the list
      of the Certificateholders hereunder, regardless of the source from which such
      information was derived.

     


    
      
         

      

      
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    SECTION
      5.6  Maintenance
      of Office or Agency.

     

    The
      Trustee will maintain or cause to be maintained at its expense an office or
      offices or agency or agencies in New York City where Certificates may be
      surrendered for registration of transfer or exchange. The Trustee initially
      designates its Corporate Trust Office for such purposes. The Trustee will give
      prompt written notice to the Certificateholders of any change in such location
      of any such office or agency.

     

    ARTICLE
      VI

    THE
      DEPOSITOR AND THE MASTER SERVICER

     

    SECTION
      6.1  Respective
      Liabilities of the Depositor and the Master Servicer.

     

    The
      Depositor and the Master Servicer shall each be liable in accordance herewith
      only to the extent of the obligations specifically and respectively imposed
      upon
      and undertaken by them herein.

     

    SECTION
      6.2  Merger
      or
      Consolidation of the Depositor or the Master Servicer.

     

    The
      Depositor and the Master Servicer will each keep in full effect its existence,
      rights and franchises as a corporation under the laws of the United States
      or
      under the laws of one of the states thereof and will each obtain and preserve
      its qualification to do business as a foreign corporation in each jurisdiction
      in which such qualification is or shall be necessary to protect the validity
      and
      enforceability of this Agreement, or any of the Mortgage Loans and to perform
      its respective duties under this Agreement.

     

    Any
      Person into which the Depositor or the Master Servicer may be merged or
      consolidated, or any Person resulting from any merger or consolidation to which
      the Depositor or the Master Servicer shall be a party, or any person succeeding
      to the business of the Depositor or the Master Servicer, shall be the successor
      of the Depositor or the Master Servicer, as the case may be, hereunder, 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; provided,
      however, that the successor or surviving Person to the Master Servicer shall
      be
      qualified to sell mortgage loans to, and to service mortgage loans on behalf
      of,
      FNMA or FHLMC.

     

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

     

    None
      of
      the Depositor, the Master Servicer or any of the directors, officers, employees
      or agents of the Depositor or the Master Servicer shall be under any liability
      to the Certificateholders for any action taken or for refraining from the taking
      of any action in good faith pursuant to this 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
      representations or warranties made by it herein or protect the Depositor, the
      Master Servicer or any such Person from any liability which would otherwise
      be
      imposed by reasons of willful misfeasance, bad faith or gross negligence in
      the
      performance of duties or by reason of reckless 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 against
      any loss, liability or expense incurred in connection with any audit,
      controversy or judicial proceeding relating to a governmental taxing authority
      or any legal action relating to this Agreement or the Certificates, other than
      any loss, liability or expense related to any specific Mortgage Loan or Mortgage
      Loans (except as any such loss, liability or expense shall be otherwise
      reimbursable pursuant to this Agreement) 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 reckless disregard of
      obligations and duties hereunder. 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 hereunder and which in its
      opinion may involve it in any expense or liability; provided, however, that
      either the Depositor, or the Master Servicer may in its discretion undertake
      any
      such action that it may deem necessary or desirable in respect of this Agreement
      and the rights and duties of the parties hereto and interests of the Trustee
      and
      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 therefor out of the applicable subaccount of the
      Certificate Account.

     


    
      
         

      

      
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    SECTION
      6.4  Limitation
      on Resignation of Master Servicer.

     

    The
      Master Servicer shall not resign from the obligations and duties hereby imposed
      on it except (a) upon appointment of a successor servicer and receipt by the
      Trustee of a letter from each Rating Agency that such a resignation and
      appointment will not result in a downgrading of the rating of any of the
      Certificates, or (b) upon determination that its duties hereunder are no longer
      permissible under applicable law. Any such determination under clause (b)
      permitting the resignation of the Master Servicer shall be evidenced by an
      Opinion of Counsel to such effect delivered to the Trustee. No such resignation
      shall become effective until the Trustee or other successor master servicer
      shall have assumed the Master Servicer’s responsibilities, duties, liabilities
      and obligations hereunder.

     

    ARTICLE
      VII

    DEFAULT

     

    SECTION
      7.1  Events
      of
      Default.

     

    “Event
      of
      Default,” wherever used herein, means any one of the following
      events:

     

    (i) any
      failure by the Master Servicer to deposit in the applicable subaccount of the
      Certificate Account or remit to the Trustee any payment required to be made
      under the terms of this Agreement, which failure shall continue unremedied
      for
      five days after the date upon which written notice of such failure shall have
      been given to the Master Servicer by the Trustee or the Depositor or to the
      Master Servicer and the Trustee by the Holders of Certificates having not less
      than 25% of the Voting Rights evidenced by the Certificates; or

     


    
      
         

      

      
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    (ii) any
      failure by the Master Servicer to observe or perform in any material respect
      any
      other of the covenants or agreements on the part of the Master Servicer
      contained in this Agreement (except with respect to failure related to a Limited
      Exchange Act Reporting Obligation), which failure materially affects the rights
      of Certificateholders, which failure continues unremedied for a period of 60
      days after the date on which written notice of such failure shall have been
      given to the Master Servicer by the Trustee or the Depositor, or to the Master
      Servicer and the Trustee by the Holders of Certificates evidencing not less
      than
      25% of the Voting Rights evidenced by the Certificates; provided, however,
      that
      the 60-day cure period shall not apply to the initial delivery of the Mortgage
      File for Delay Delivery Mortgage Loans nor the failure to substitute or
      repurchase in lieu thereof; or

     

    (iii) a
      decree
      or order of a court or agency or supervisory authority having jurisdiction
      in
      the premises for the appointment of a 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 consecutive days;
      or

     

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

     

    (v) the
      Master Servicer shall admit in writing its inability to pay its debts generally
      as they become due, file a petition to take advantage of, or commence a
      voluntary case under, any applicable insolvency or reorganization statute,
      make
      an assignment for the benefit of its creditors, or voluntarily suspend payment
      of its obligations; or

     

    (vi) the
      failure of the Master Servicer to remit any Advance required to be remitted
      by
      the Master Servicer pursuant to Section 4.1 which failure continues unremedied
      at 11:00 a.m., Central time, on the related Distribution Date.

     


    
      
         

      

      
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    If
      an
      Event of Default described in clauses (i) to (v) of this Section shall occur,
      then, and in each and every such case, so long as such Event of Default shall
      not have been remedied, the Trustee may, or at the direction of the Holders
      of
      Certificates evidencing not less than 66 2/3% of the Voting Rights evidenced
      by
      the Certificates, the Trustee shall by notice in writing to the Master Servicer
      (with a copy to each Rating Agency), terminate all of the rights and obligations
      of the Master Servicer under this Agreement and in and to the Mortgage Loans
      and
      the proceeds thereof, other than its rights as a Certificateholder hereunder.
      If
      an Event of Default described in clause (vi) of this Section shall occur, the
      Trustee shall immediately, by notice in writing to the Master Servicer (with
      a
      copy to each Rating Agency), terminate all of the rights and obligations of
      the
      Master Servicer under this Agreement and in and to the Mortgage Loans and
      proceeds thereof, other than its rights as a Certificateholder hereunder. In
      addition, if during the period that the Depositor is required to file Exchange
      Act Reports with respect to the Trust Fund, the Master Servicer shall fail
      to
      observe or perform any of the obligations set forth in Section 3.16(a) or
      Section 10.1(a)(i) and (ii), and such failure continues for the lesser of ten
      (10) calendar days or such period in which the applicable Exchange Act Report
      can be filed timely (without taking into account any extensions), so long as
      such failure shall not have been remedied, the Trustee shall, but only at the
      direction of the Depositor, terminate all of the rights and obligations of
      the
      Master Servicer under this Agreement and in and to the Mortgage Loans and the
      proceeds thereof, other than its rights as a Certificateholder hereunder. The
      Depositor shall not be entitled to terminate the rights and obligations of
      the
      Master Servicer if a failure of the Master Servicer to identify a Subcontractor
      “participating in the servicing function” within the meaning of Item 1122 of
      Regulation AB was attributable solely to the role or functions of such
      Subcontractor with respect to mortgage loans other than the Mortgage Loans.
      On
      and after the receipt by the Master Servicer of such written notice, all
      authority and power of the Master Servicer hereunder, whether with respect
      to
      the Mortgage Loans or otherwise, shall pass to and be vested in the
      Trustee or
      another successor to the Master Servicer appointed by the Trustee pursuant
      to
      Section 7.2. The Trustee, in its capacity as successor to the Master Servicer,
      shall thereupon make any Advance which the Master Servicer failed to make
      subject to Section 4.1 hereof. The Trustee is hereby authorized and empowered
      to
      execute and deliver, on behalf of the Master Servicer, as attorney-in-fact
      or
      otherwise, any and all documents and other instruments, and to do or accomplish
      all other acts or things necessary or appropriate to effect the purposes of
      such
      notice of termination, whether to complete the transfer and endorsement or
      assignment of the Mortgage Loans and related documents, or otherwise. Unless
      expressly provided in such written notice, no such termination shall affect
      any
      obligation of the Master Servicer to pay amounts owed pursuant to Article VIII.
      The Master Servicer agrees to cooperate with the Trustee in effecting the
      termination of the Master Servicer’s responsibilities and rights hereunder,
      including, without limitation, the transfer to the Trustee of all cash amounts
      which shall at the time be credited to the Certificate Account, or thereafter
      be
      received with respect to the Mortgage Loans. All expenses incurred in the
      transferring of the servicing duties from the Master Servicer to a Successor
      Servicer shall be paid by the Master Servicer, and if not paid by the Master
      Servicer, shall be paid from amounts on deposit in the Certificate Account.
      

     

    Notwithstanding
      any termination of the activities of the Master Servicer hereunder, the Master
      Servicer shall be entitled to receive, out of any late collection of a Scheduled
      Payment on a Mortgage Loan which was due prior to the notice terminating such
      Master Servicer’s rights and obligations as Master Servicer hereunder and
      received after such notice, that portion thereof to which such Master Servicer
      would have been entitled pursuant to Sections 3.8(a)(i) through (viii),and
      any
      other amounts payable to such Master Servicer hereunder the entitlement to
      which
      arose prior to the termination of its activities hereunder. Any termination
      of
      the activities of the Master Servicer hereunder will simultaneously result
      in
      the termination of the Master Servicer’s duties as a subservicer pursuant to the
      Servicing Rights Transfer and Subservicing Agreement.

     

    If
      the
      Master Servicer is terminated, the Trustee shall provide the Depositor in
      writing and in form and substance reasonably satisfactory to the Depositor,
      all
      information reasonably requested by the Depositor in order to comply with its
      reporting obligation under Item 6.02 of Form 8-K with respect to a successor
      master servicer in the event the Trustee should succeed to the duties of the
      Master Servicer as set forth herein. 

     


    
      
         

      

      
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    SECTION
      7.2  Trustee
      to Act; Appointment of Successor.

     

    On
      and
      after the time the Master Servicer receives a notice of termination pursuant
      to
      Section 7.1 hereof, the Trustee shall, subject to and to the extent provided
      in
      Section 3.4, be the successor to the Master Servicer under this Agreement and
      the transactions set forth or provided for herein and shall be subject to all
      the responsibilities, duties and liabilities relating thereto placed on the
      Master Servicer by the terms and provisions hereof and applicable law including
      the obligation to make Advances pursuant to Section 4.1. As compensation
      therefor, the Trustee shall be entitled to all funds relating to the Mortgage
      Loans that the Master Servicer would have been entitled to charge to the
      Certificate Account or Distribution Account if the Master Servicer had continued
      to act hereunder. Notwithstanding the foregoing, if the Trustee has become
      the
      successor to the Master Servicer in accordance with Section 7.1 hereof, the
      Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
      by applicable law from making Advances pursuant to Section 4.1 hereof or if
      it
      is otherwise unable to so act appoint, or petition a court of competent
      jurisdiction to appoint, any established mortgage loan servicing institution
      the
      appointment of which does not adversely affect the then current rating of the
      Certificates by each Rating Agency as the successor to the Master Servicer
      hereunder in the assumption of all or any part of the responsibilities, duties
      or liabilities of the Master Servicer hereunder. Any successor to the Master
      Servicer shall be an institution which is a FNMA and FHLMC approved
      seller/servicer in good standing, which has a net worth of at least $10,000,000,
      and which is willing to service the Mortgage Loans and executes and delivers
      to
      the Depositor and the Trustee an agreement accepting such delegation and
      assignment, which contains an assumption by such Person of the rights, powers,
      duties, responsibilities, obligations and liabilities of the Master Servicer
      (other than liabilities of the Master Servicer under Section 6.3 hereof incurred
      prior to termination of the Master Servicer under Section 7.1), with like effect
      as if originally named as a party to this Agreement; and provided further that
      each Rating Agency acknowledges that its rating of the Certificates in effect
      immediately prior to such assignment and delegation will not be qualified or
      reduced, as a result of such assignment and delegation. The Trustee shall
      provide written notice to the Depositor of such successor pursuant to this
      Section. The successor to the Master Servicer shall provide to the Depositor
      in
      writing, fifteen (15) days prior to the effective date of such appointment,
      and
      in form and substance reasonably satisfactory to the Depositor, all information
      reasonably requested by the Depositor in order to comply with its reporting
      obligation under Item 6.02 of Form 8-K with respect to a replacement master
      servicer. The Trustee shall not resign as servicer until a successor servicer
      has been appointed and has accepted such appointment. Pending appointment of
      a
      successor to the Master Servicer hereunder, the Trustee, unless the Trustee
      is
      prohibited by law from so acting, shall, subject to Section 3.4 hereof, act
      in
      such capacity as provided above. In connection with such appointment and
      assumption, the Trustee may make such arrangements for the compensation of
      such
      successor out of payments on Mortgage Loans as it and such successor shall
      agree; provided, however, that no such compensation shall be in excess of the
      Master Servicing Fee permitted the Master Servicer hereunder. The Trustee and
      such successor shall take such action, consistent with this Agreement, as shall
      be necessary to effectuate any such succession. Neither the Trustee nor any
      other successor master servicer shall be deemed to be in default hereunder
      by
      reason of any failure to make, or any delay in making, any distribution
      hereunder or any portion thereof or any failure to perform, or any delay in
      performing, any duties or responsibilities hereunder, in either case caused
      by
      the failure of the Master Servicer to deliver or provide, or any delay in
      delivering or providing, any cash, information, documents or records to
      it.

     


    
      
         

      

      
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    Any
      successor to the Master Servicer as master servicer shall give notice to the
      Mortgagors of such change of servicer and shall, during the term of its service
      as master servicer maintain in force the policy or policies that the Master
      Servicer is required to maintain pursuant to Section 3.17.

     

    In
      connection with the termination or resignation of the Master Servicer hereunder,
      either (i) the successor Master Servicer, including the Trustee if the Trustee
      is acting as successor Master Servicer, shall represent and warrant that it
      is a
      member of MERS in good standing and shall agree to comply in all material
      respects with the rules and procedures of MERS in connection with the servicing
      of the Mortgage Loans that are registered with MERS, or (ii) the predecessor
      Master Servicer shall cooperate with the successor Master Servicer either (x)
      in
      causing MERS to execute and deliver an assignment of Mortgage in recordable
      form
      to transfer the Mortgage from MERS to the Trustee and to execute and deliver
      such other notices, documents and other instruments as may be necessary or
      desirable to effect a transfer of such Mortgage Loan or servicing of such
      mortgage Loan on the MERS® System to the successor Master Servicer or (y) in
      causing MERS to designate on the MERS® System the successor Master Servicer as
      the servicer of such Mortgage Loan. The predecessor Master Servicer shall file
      or cause to be filed any such assignment in the appropriate recording office.
      The successor Master Servicer shall cause such assignment to be delivered to
      the
      Trustee promptly upon receipt of the original with evidence of recording thereon
      or a copy certified by the public recording office in which such assignment
      was
      recorded.

     

    SECTION
      7.3  Notification
      to Certificateholders.

     

    (a) Upon
      any
      termination of or appointment of a successor to the Master Servicer, the Trustee
      shall give prompt written notice thereof to Certificateholders and to each
      Rating Agency.

     

    (b) Within
      60
      days after the occurrence of any Event of Default, the Trustee shall transmit
      by
      mail to all Certificateholders notice of each such Event of Default hereunder
      known to the Trustee, unless such Event of Default shall have been cured or
      waived.

     

    ARTICLE
      VIII

    CONCERNING
      THE TRUSTEE

     

    SECTION
      8.1  Duties
      of
      Trustee.

     

    The
      Trustee, prior to the occurrence of an Event of Default of which a Responsible
      Officer of the Trustee has actual knowledge and after the curing of all Events
      of Default that may have occurred, shall undertake to perform such duties and
      only such duties as are specifically set forth in this Agreement. In case an
      Event of Default of which a Responsible Officer of the Trustee has actual
      knowledge has occurred and remains uncured, the Trustee shall exercise such
      of
      the rights and powers vested in it by this Agreement, and use the same degree
      of
      care and skill in their exercise as a prudent person would exercise or use
      under
      the circumstances in the conduct of such person’s own affairs.

     


    
      
         

      

      
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    The
      Trustee, upon receipt of all resolutions, certificates, statements, opinions,
      reports, documents, orders or other instruments furnished to the Trustee that
      are specifically required to be furnished pursuant to any provision of this
      Agreement shall examine them to determine whether they are in the form required
      by this Agreement; provided, however, that the Trustee shall not be responsible
      for the accuracy or content of any such resolution, certificate, statement,
      opinion, report, document, order or other instrument. If any such instrument
      is
      found not to conform in any material respect to the requirements of this
      Agreement, the Trustee shall notify the Certificateholders of such instrument
      in
      the event that the Trustee, after so requesting, does not receive a
      satisfactorily corrected instrument.

     

    The
      Trustee is hereby directed to execute and deliver to The Depository Trust
      Company the Issuer Letter of Representations dated as of the Closing Date on
      behalf of the trust created hereunder. The Depositor and the Master Servicer
      acknowledge and agree that the Trustee is executing and delivering the Issuer
      Letter of Representations on behalf of the trust created hereunder and shall
      do
      so solely in its capacity as Trustee and not in its individual
      capacity.

     

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

     

    DAL:530004.1
      

    (i) unless
      an
      Event of Default of which a Responsible Officer of the Trustee has actual
      knowledge shall have occurred and be continuing, the duties and obligations
      of
      the Trustee shall be determined solely by the express provisions of this
      Agreement, the Trustee shall not be liable except for the performance of such
      duties and obligations as are specifically set forth in this Agreement, no
      implied covenants or obligations shall be read into this Agreement against
      the
      Trustee and 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
      Agreement which it believed in good faith to be genuine and to have been duly
      executed by the proper authorities respecting any matters arising
      hereunder;

     

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

     

    (iii) the
      Trustee shall not be liable with respect to any action taken, suffered or
      omitted to be taken by it in good faith in accordance with the direction of
      Holders of Certificates evidencing not less than 25% of the Voting Rights of
      Certificates relating 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 Agreement;

     

    (iv) the
      Trustee shall not be required to expend or risk its own funds or otherwise
      incur
      financial liability in the performance of any of its duties hereunder or the
      exercise of any of its rights or powers if there is reasonable ground for
      believing that the repayment of such funds or adequate indemnity against such
      risk or liability is not assured to it, and none of the provisions contained
      in
      this Agreement shall in any event require the Trustee to perform, or be
      responsible for the manner of performance of, any of the obligations of the
      Master Servicer under this Agreement except during such time, if any, as the
      Trustee shall be the successor to, and be vested with the rights, duties, powers
      and privileges of, the Master Servicer; and

     


    
      
         

      

      
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    (v) without
      limiting the generality of this Section 8.1, the Trustee shall have no duty
      (A)
      to see to any recording, filing, or depositing of this Agreement or any
      agreement referred to herein or any financing statement or continuation
      statement evidencing a security interest, or to see to the maintenance of any
      such recording or filing or deposit or to any rerecording, refiling or
      redepositing of any thereof, (B) to see to any insurance, (C) to see to the
      payment or discharge of any tax, assessment, or other governmental charge or
      any
      lien or encumbrance of any kind owing with respect to, assessed or levied
      against, any part of the Trust Fund other than from funds available in the
      Distribution Account (D) to confirm or verify the contents of any reports or
      certificates of the Servicer delivered to the Trustee pursuant to this Agreement
      believed by the Trustee to be genuine and to have been signed or presented
      by
      the proper party or parties.

     

    SECTION
      8.2  Certain
      Matters Affecting the Trustee.

     

    Except
      as
      otherwise provided in Section 8.1:

     

    (i) the
      Trustee may request and rely upon and shall be protected in acting or refraining
      from acting upon any resolution, Officers’ Certificate, certificate of auditors
      or any other certificate, statement, instrument, opinion, report, notice,
      request, consent, order, appraisal, bond or other paper or document believed
      by
      it to be genuine and to have been signed or presented by the proper party or
      parties and the Trustee shall have no responsibility to ascertain or confirm
      the
      genuineness of any signature of any such party or parties;

     

    (ii) the
      Trustee may consult with counsel, financial advisers or accountants and the
      advice of any such counsel, financial advisers or accountants 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;

     

    (iii) the
      Trustee shall not be 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 Agreement;

     

    (iv) 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 Holders of Certificates evidencing
      not
      less than 25% of the Voting Rights allocated to each Class of Certificates;
      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 assured to the
      Trustee by the security afforded to it by the terms of this Agreement, the
      Trustee may require indemnity satisfactory to the Trustee against such cost,
      expense or liability as a condition to taking any such action. The reasonable
      expense of every such examination shall be paid by the Master Servicer or,
      if
      paid by the Trustee, shall be repaid by the Master Servicer upon demand from
      the
      Servicer’s own funds.

     


    
      
         

      

      
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    (v) the
      Trustee may execute any of the trusts or powers hereunder or perform any duties
      hereunder either directly or by or through agents, accountants or attorneys
      and
      the Trustee shall not be responsible for any misconduct or negligence on the
      part of such agent, accountant or attorney appointed by the Trustee with due
      care;

     

    (vi) the
      Trustee shall not be required to risk or expend its own funds or otherwise
      incur
      any financial liability in the performance of any of its duties or in the
      exercise of any of its rights or powers hereunder if it shall have reasonable
      grounds for believing that repayment of such funds or adequate indemnity against
      such risk or liability is not assured to it;

     

    (vii) the
      Trustee shall not be liable for any loss on any investment of funds pursuant
      to
      this Agreement (other than as issuer of the investment security);

     

    (viii) the
      Trustee shall not be deemed to have knowledge of an Event of Default until
      a
      Responsible Officer of the Trustee shall have received written notice thereof
      and in the absence of such notice, the Trustee may conclusively assume that
      there is no Event of Default;

     

    (ix) the
      Trustee shall be under no obligation to exercise any of the trusts, rights
      or
      powers vested in it by this Agreement or to institute, conduct or defend any
      litigation hereunder or in relation hereto at the request, order or direction
      of
      any of the Certificateholders, pursuant to the provisions of this Agreement,
      unless such Certificateholders shall have offered to the Trustee reasonable
      security or indemnity satisfactory to the Trustee against the costs, expenses
      and liabilities which may be incurred therein or thereby;

     

    (x) the
      right
      of the Trustee to perform any discretionary act enumerated in this Agreement
      shall not be construed as a duty, and the Trustee shall not be answerable for
      other than its negligence or willful misconduct in the performance of such
      act;
      and 

     


    
      
         

      

      
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    (xi) the
      Trustee shall not be required to give any bond or surety in respect of the
      execution of the Trust Fund created hereby or the powers granted
      hereunder.

     

    SECTION
      8.3  Trustee
      Not Liable for Certificates or Mortgage Loans.

     

    The
      recitals contained herein and in the Certificates shall be taken as the
      statements of the Depositor and the Trustee assumes no responsibility for their
      correctness. The Trustee makes no representations as to the validity or
      sufficiency of this Agreement or of the Certificates or of any Mortgage Loan
      or
      related document or of MERS or the MERS® System other than with respect to the
      Trustee’s execution and counter-signature of the Certificates. The Trustee shall
      not be accountable for the use or application by the Depositor or the Master
      Servicer of any funds paid to the Depositor or the Master Servicer in respect
      of
      the Mortgage Loans or deposited in or withdrawn from the Certificate Account
      by
      the Depositor or the Master Servicer.

     

    SECTION
      8.4  Trustee
      May Own Certificates.

     

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

     

    SECTION
      8.5  Trustee’s
      Fees and Expenses.

     

    The
      Trustee, as compensation for its activities prior to making the distributions
      pursuant to Section 4.2 hereunder, shall be entitled to withdraw from the
      Distribution Account on each Distribution Date an amount equal to the Trustee
      Fee for such Distribution Date. The Trustee and any director, officer, employee
      or agent of the Trustee shall be indemnified by the Master Servicer and held
      harmless against any loss, liability or expense (including reasonable attorney’s
      fees) (i) incurred in connection with any claim or legal action relating to
      (a)
      this Agreement, (b) the Certificates or (c) in connection with the performance
      of any of the Trustee’s duties hereunder, other than any loss, liability or
      expense incurred by reason of willful misfeasance, bad faith or negligence
      in
      the performance of any of the Trustee’s duties hereunder or incurred by reason
      of any action of the Trustee taken at the direction of the Certificateholders
      and (ii) resulting from any error in any tax or information return prepared
      by
      the Master Servicer. Such indemnity shall survive the termination of this
      Agreement or the resignation or removal of the Trustee hereunder. Without
      limiting the foregoing, the Master Servicer covenants and agrees, except as
      otherwise agreed upon in writing by the Depositor and the Trustee, and except
      for any such expense, disbursement or advance as may arise from the Trustee’s
      negligence, bad faith or willful misconduct, to pay or reimburse the Trustee,
      for all reasonable expenses, disbursements and advances incurred or made by
      the
      Trustee in accordance with any of the provisions of this Agreement with respect
      to: (A) the reasonable compensation and the expenses and disbursements of its
      counsel not associated with the closing of the issuance of the Certificates,
      (B)
      the reasonable compensation, expenses and disbursements of any accountant,
      engineer or appraiser that is not regularly employed by the Trustee, to the
      extent that the Trustee must engage such persons to perform acts or services
      hereunder and (C) printing and engraving expenses in connection with preparing
      any Definitive Certificates. Except as otherwise provided herein, the Trustee
      shall not be entitled to payment or reimbursement for any routine ongoing
      expenses incurred by the Trustee in the ordinary course of its duties as
      Trustee, Registrar, Tax Matters Person or Paying Agent hereunder or for any
      other expenses.

     


    
      
         

      

      
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    SECTION
      8.6  Eligibility
      Requirements for Trustee.

     

    The
      Trustee hereunder shall at all times be a corporation or association organized
      and doing business under the laws of a 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, subject to supervision or
      examination by federal or state authority and with a credit rating which would
      not cause either of the Rating Agencies to reduce their respective then current
      ratings of the Certificates (or having provided such security from time to
      time
      as is sufficient to avoid such reduction). If such corporation or association
      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 8.6 the combined capital and surplus of such
      corporation or association 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 8.6, the Trustee shall resign immediately in the
      manner and with the effect specified in Section 8.7 hereof. The entity serving
      as Trustee may have normal banking and trust relationships with the Depositor
      and its affiliates or the Master Servicer and its affiliates; provided, however,
      that such entity cannot be an affiliate of the Master Servicer other than the
      Trustee in its role as successor to the Master Servicer.

     

    SECTION
      8.7  Resignation
      and Removal of Trustee.

     

    The
      Trustee may at any time resign and be discharged from the trusts hereby created
      by giving written notice of resignation to the Depositor and the Master Servicer
      and each Rating Agency not less than 60 days before the date specified in such
      notice when, subject to Section 8.8, such resignation is to take effect, and
      acceptance by a successor trustee in accordance with Section 8.8 meeting the
      qualifications set forth in Section 8.6. If no successor trustee meeting such
      qualifications shall have been so appointed and have accepted appointment within
      30 days after the giving of such notice or resignation, the resigning Trustee
      may petition any court of competent jurisdiction for the appointment of a
      successor trustee.

     

    As
      a
      condition to the effectiveness of any such resignation, at least 15 calendar
      days prior to the effective date of such resignation, the Trustee shall provide
      (x) written notice to the Depositor of any successor pursuant to this Section
      and (y) in writing and in form and substance reasonably satisfactory to the
      Depositor, all information reasonably requested by the Depositor in order to
      comply with its reporting obligation under Item 6.02 of Form 8-K with respect
      to
      the resignation of the Trustee.

     

    If
      at any
      time (i) the Trustee shall cease to be eligible in accordance with the
      provisions of Section 8.6 hereof and shall fail to resign after written request
      thereto by the Depositor, (ii) the Trustee shall become incapable of acting,
      or
      shall be adjudged as 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, (iii)(A) a tax is imposed with
      respect to the Trust Fund by any state in which the Trustee or the Trust Fund
      is
      located, (B) the imposition of such tax would be avoided by the appointment
      of a
      different trustee and (C) the Trustee fails to indemnify the Trust Fund against
      such tax, or (iv) during the period that the Depositor is required to file
      Exchange Act Reports with respect to the Trust Fund, the Trustee fails to comply
      with its obligations under the last sentence of Section 7.1, Section 8.9 or
      Article X and such failure is not remedied within the lesser of ten (10)
      calendar days or such period in which the applicable Exchange Act Report can
      be
      filed timely (without taking into account any extensions), then, in the case
      of
      clauses (i) through (iii), the Depositor or the Master Servicer may remove
      the
      Trustee and appoint a successor trustee by written instrument, in triplicate,
      one copy of which instrument shall be delivered to the Trustee, one copy of
      which shall be delivered to the Master Servicer and one copy to the successor
      trustee.

     


    
      
         

      

      
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    The
      Holders of Certificates entitled to at least 51% of the Voting Rights may at
      any
      time remove the Trustee and appoint a successor trustee by written instrument
      or
      instruments, in triplicate, signed by such Holders or their attorneys-in-fact
      duly authorized, one complete set of which instruments shall be delivered by
      the
      successor Trustee to the Master Servicer, one complete set to the Trustee so
      removed and one complete set to the successor so appointed. Notice of any
      removal of the Trustee shall be given to each Rating Agency by the Successor
      Trustee.

     

    Any
      resignation or removal of the Trustee and appointment of a successor trustee
      pursuant to any of the provisions of this Section 8.7 shall become effective
      upon acceptance of appointment by the successor trustee as provided in Section
      8.8 hereof.

     

    SECTION
      8.8  Successor
      Trustee.

     

    Any
      successor trustee appointed as provided in Section 8.7 hereof shall execute,
      acknowledge and deliver to the Depositor and to its predecessor trustee and
      the
      Master Servicer an instrument accepting such appointment hereunder and thereupon
      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 Depositor, the Master Servicer and 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.

     

    No
      successor trustee shall accept appointment as provided in this Section 8.8
      unless at the time of such acceptance such successor trustee shall be eligible
      under the provisions of Section 8.6 hereof and its appointment shall not
      adversely affect the then current rating of the Certificates.

     

    Upon
      acceptance of appointment by a successor trustee as provided in this Section
      8.8, the Depositor shall mail notice of the succession of such trustee hereunder
      to all Holders of Certificates. If the Depositor fails to mail such notice
      within 10 days after acceptance of appointment by the successor trustee, the
      successor trustee shall cause such notice to be mailed at the expense of the
      Depositor.

     


    
      
         

      

      
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    SECTION
      8.9  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 that such corporation shall be eligible under the provisions
      of Section 8.6 hereof without the execution or filing of any paper or further
      act on the part of any of the parties hereto, anything herein to the contrary
      notwithstanding.

     

    The
      Trustee shall provide (x) written notice to the Depositor of any successor
      due
      to merger or consolidation of the trustee pursuant to this Section within five
      (5) days after the effectiveness of such merger or consolidation and (y) in
      writing and in form and substance reasonably satisfactory to the Depositor,
      all
      information reasonably requested by the Depositor in order to comply with its
      reporting obligation under Item 6.02 of Form 8-K with respect to a replacement
      Trustee.

     

    SECTION
      8.10  Appointment
      of Co-Trustee or Separate Trustee.

     

    Notwithstanding
      any other provisions of this Agreement, at any time, for the purpose of meeting
      any legal requirements of any jurisdiction in which any part of the Trust Fund
      or property securing any Mortgage Note may at the time be located, the Master
      Servicer and the Trustee acting jointly shall have the power and shall 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 Trust Fund,
      and
      to vest in such Person or Persons, in such capacity and for the benefit of
      the
      Certificateholders, such title to the Trust Fund or any part thereof, whichever
      is applicable, and, subject to the other provisions of this Section 8.10, such
      powers, duties, obligations, rights and trusts as the Master Servicer and the
      Trustee may consider necessary or desirable. If the Master Servicer shall not
      have joined in such appointment within 15 days after the receipt by it of a
      request to do so, or in the case an Event of Default shall have occurred and
      be
      continuing, the Trustee alone shall have the power to make such appointment.
      No
      co-trustee or separate trustee hereunder shall be required to meet the terms
      of
      eligibility as a successor trustee under Section 8.6 and no notice to
      Certificateholders of the appointment of any co-trustee or separate trustee
      shall be required under Section 8.8.

     

    Every
      separate trustee and co-trustee shall, to the extent permitted by law, be
      appointed and act subject to the following provisions and
      conditions:

     

    (i) To
      the
      extent necessary to effectuate the purposes of 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 (it being understood that such separate
      trustee or co-trustee is not authorized to act separately without the Trustee
      joining in such act), except to the extent that under any law of any
      jurisdiction in which any particular act or acts are to be performed (whether
      as
      Trustee hereunder or as successor to the Master Servicer hereunder), 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
      the applicable Trust Fund or any portion thereof in any such jurisdiction)
      shall
      be exercised and performed singly by such separate trustee or co-trustee, but
      solely at the direction of the Trustee;

     


    
      
         

      

      
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    (ii) No
      trustee hereunder shall be held personally liable by reason of any act or
      omission of any other trustee hereunder and such appointment shall not, and
      shall not be deemed to, constitute any such separate trustee or co-trustee
      as
      agent of the Trustee;

     

    (iii) The
      Trustee may at any time accept the resignation of or remove any separate trustee
      or co-trustee; and

     

    (iv) The
      Master Servicer, and not the Trustee, shall be liable for the payment of
      reasonable compensation, reimbursement and indemnification to any such separate
      trustee or co-trustee.

     

    Any
      notice, request or other writing given to the Trustee shall be deemed to have
      been given to each of the separate trustees and co-trustees, when and as
      effectively as if given to each of them. Every instrument appointing any
      separate trustee or co-trustee shall refer to this 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 Agreement,
      specifically including every provision of this 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 and a copy thereof given to
      the
      Master Servicer and the Depositor.

     

    Any
      separate trustee or 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 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  Tax
      Matters.

     

    It
      is
      intended that the assets with respect to which each REMIC election is to be
      made, as set forth in the preliminary statement shall constitute, and that
      the
      conduct of matters relating to such assets shall be such as to qualify such
      assets as, a “real estate mortgage investment conduit” as defined in and in
      accordance with the REMIC Provisions. In furtherance of such intention, the
      Trustee covenants and agrees that it shall act as agent (and the Trustee is
      hereby appointed to act as agent) on behalf of any such REMIC and that in such
      capacity it shall: (a) prepare and file, or cause to be prepared and filed,
      in a
      timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Return
      (Form 1066 or any successor form adopted by the Internal Revenue Service) and
      prepare and file or cause to be prepared and filed with the Internal Revenue
      Service and applicable state or local tax authorities income tax or information
      returns for each taxable year with respect to any such REMIC, containing such
      information and at the times and in the manner as may be required by the Code
      or
      state or local tax laws, regulations, or rules, and furnish or cause to be
      furnished to Certificateholders the schedules, statements or information at
      such
      times and in such manner as may be required thereby; (b) within thirty days
      of
      the Closing Date, furnish or cause to be furnished to the Internal Revenue
      Service, on Forms 8811 or as otherwise may be required by the Code, the name,
      title, address, and telephone number of the person that the Holders of the
      Certificates may contact for tax information relating thereto, together with
      such additional information as may be required by such Form, and update such
      information at the time or times in the manner required by the Code; (c) make
      or
      cause to be made elections that such assets be treated as a REMIC on the federal
      tax return for its first taxable year (and, if necessary, under applicable
      state
      law); (d) prepare and forward, or cause to be prepared and forwarded, to the
      Certificateholders and to the Internal Revenue Service and, if necessary, state
      tax authorities, all information returns and reports as and when required to
      be
      provided to them in accordance with the REMIC Provisions, including without
      limitation, the calculation of any original issue discount using the prepayment
      assumption; (e) provide information necessary for the computation of tax imposed
      on the transfer of a Residual Certificate to a Person that is not a Permitted
      Transferee, or an agent (including a broker, nominee or other middleman) of
      a
      Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
      Transferee is the record holder of an interest (the reasonable cost of computing
      and furnishing such information may be charged to the Person liable for such
      tax); (f) to the extent that they are under its control conduct matters relating
      to such assets at all times that any Certificates are outstanding so as to
      maintain the status as a REMIC under the REMIC Provisions; (g) not knowingly
      or
      intentionally take any action or omit to take any action that would cause the
      termination of any REMIC status; (h) pay, from the sources specified in the
      last
      paragraph of this Section 8.11, the amount of any federal or state tax,
      including prohibited transaction taxes as described below, imposed on any such
      REMIC prior to its termination when and as the same shall be due and payable
      (but such obligation shall not prevent the Trustee or any other appropriate
      Person from contesting any such tax in appropriate proceedings and shall not
      prevent the Trustee from withholding payment of such tax, if permitted by law,
      pending the outcome of such proceedings); (i) ensure that federal, state or
      local income tax or information returns shall be signed by the Trustee or such
      other person as may be required to sign such returns by the Code or state or
      local laws, regulations or rules; (j) maintain records relating to any such
      REMIC, including but not limited to the income, expenses, assets and liabilities
      thereof and the fair market value and adjusted basis of the assets determined
      at
      such intervals as may be required by the Code, as may be necessary to prepare
      the foregoing returns, schedules, statements or information; and (k) as and
      when
      necessary and appropriate, represent any such REMIC in any administrative or
      judicial proceedings relating to an examination or audit by any governmental
      taxing authority, request an administrative adjustment as to any taxable year
      of
      any such REMIC, enter into settlement agreements with any governmental taxing
      agency, extend any statute of limitations relating to any tax item of any such
      REMIC, and otherwise act on behalf of any such REMIC in relation to any tax
      matter or controversy involving it.

     

    In
      order
      to enable the Trustee to perform its duties as set forth herein, the Depositor
      shall provide, or cause to be provided, to the Trustee within ten (10) days
      after the Closing Date all information or data that the Trustee requests in
      writing and determines to be relevant for tax purposes to the valuations and
      offering prices of the Certificates, including, without limitation, the price,
      yield, prepayment assumption and projected cash flows of the Certificates and
      the Mortgage Loans. Thereafter, the Depositor shall provide to the Trustee
      promptly upon written request therefor, any such additional information or
      data
      that the Trustee may, from time to time, reasonably request in order to enable
      the Trustee to perform its duties as set forth herein. The Depositor hereby
      indemnifies the Trustee for any losses, liabilities, damages, claims or expenses
      of the Trustee arising from any errors or miscalculations of the Trustee that
      result from any failure of the Depositor to provide, or to cause to be provided,
      accurate information or data to the Trustee on a timely basis.

     


    
      
         

      

      
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    In
      the
      event that any tax is imposed on “prohibited transactions” of any REMIC as
      defined in Section 860F(a)(2) of the Code, on the “net income from foreclosure
      property” of any REMIC as defined in Section 860G(c) of the Code, on any
      contribution to any REMIC after the Startup Day pursuant to Section 860G(d)
      of
      the Code, or any other tax is imposed, if not paid as otherwise provided for
      herein, such tax shall be paid by (i) the Trustee, if any such other tax arises
      out of or results from a breach by the Trustee of any of its obligations under
      this Agreement which breach was caused by its negligence or willful misconduct,
      (ii) the Master Servicer, in the case of any such minimum tax, or if such tax
      arises out of or results from a breach by the Master Servicer of any of their
      obligations under this Agreement, (iii) the Seller, if any such tax arises
      out
      of or results from the Seller’s obligation to repurchase a Mortgage Loan
      pursuant to Section 2.2 or 2.3 or (iv) in all other cases, or in the event
      that
      the Trustee, the Master Servicer or the Seller fails to honor its obligations
      under the preceding clauses (i), (ii) or (iii), any such tax will be paid with
      amounts otherwise to be distributed to the Certificateholders, as provided
      in
      Section 3.8(b). 

     

    ARTICLE
      IX

    TERMINATION

     

    SECTION
      9.1  Termination
      upon Liquidation or Purchase of all Mortgage Loans.

     

    Subject
      to Section 9.3, the obligations and responsibilities of the Depositor, the
      Master Servicer and the Trustee created hereby with respect to the Trust Fund
      shall terminate upon the earlier of (a) the purchase by the Master Servicer
      of
      all Mortgage Loans (and REO Properties) remaining in the Trust Fund at the
      price
      equal to the sum of (i) 100% of the Stated Principal Balance of each Mortgage
      Loan (other than a Mortgage Loan that has been foreclosed and subject to clause
      (ii)) plus one month’s accrued interest thereon at the applicable Adjusted
      Mortgage Rate, (ii) the lesser of (x) the appraised value of any REO Property
      as
      determined by the higher of two appraisals completed by two independent
      appraisers selected by the Master Servicer at the expense of the Master Servicer
      and (y) the Stated Principal Balance of each Mortgage Loan related to any REO
      Property, plus accrued and unpaid interest thereon at the applicable Adjusted
      Mortgage Rate, and (iii) any costs and damages incurred by the Trust in
      connection with the noncompliance of such Mortgage Loan with any specifically
      applicable predatory or abusive lending law, and (b) the later of (i) the
      maturity or other liquidation (or any Advance with respect thereto) of the
      last
      Mortgage Loan remaining in the Trust Fund and the disposition of all REO
      Property and (ii) the distribution to Certificateholders of all amounts required
      to be distributed to them pursuant to this Agreement. In no event shall the
      trusts created hereby continue beyond the earlier of (i) the expiration of
      21
      years from the death of the 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, and (ii) the Latest Possible Maturity Date. The right to
      purchase all Mortgage Loans and REO Properties pursuant to clause (a) above
      shall be conditioned upon the aggregate of the Pool Principal Balances for
      all
      of the Mortgage Pools, at the time of any such repurchase, totaling less than
      ten percent of the aggregate Cut-off Date Pool Principal Balance of all the
      Mortgage Pools.

     


    
      
         

      

      
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    SECTION
      9.2  Final
      Distribution on the Certificates.

     

    If
      on any
      Determination Date, the Master Servicer determines that there are no Outstanding
      Mortgage Loans and no other funds or assets in the Trust Fund other than the
      funds in the Certificate Account, the Master Servicer shall direct the Trustee
      promptly to send a final distribution notice to each Certificateholder. If
      the
      Master Servicer elects to terminate the Trust Fund pursuant to clause (a) of
      Section 9.1, at least 20 days prior to the date notice is to be mailed to the
      affected Certificateholders, the Master Servicer shall notify the Depositor
      and
      the Trustee of the date the Master Servicer intends to terminate the Trust
      Fund
      and of the applicable repurchase price of the Mortgage Loans and REO
      Properties.

     

    Notice
      of
      any termination of the Trust Fund, specifying the Distribution Date on which
      Certificateholders may surrender their Certificates for payment of the final
      distribution and cancellation, shall be given promptly by the Trustee by letter
      to Certificateholders mailed not earlier than the 10th day and no later than
      the
      15th day of the month next preceding the month of such final distribution.
      Any
      such notice shall specify (a) the Distribution Date upon which final
      distribution on the Certificates will be made upon presentation and surrender
      of
      Certificates at the office therein designated, (b) the amount of such final
      distribution, (c) the location of the office or agency at which such
      presentation and surrender must be made, and (d) that the Record Date otherwise
      applicable to such Distribution Date is not applicable, distributions being
      made
      only upon presentation and surrender of the Certificates at the office therein
      specified. The Master Servicer will give such notice to each Rating Agency
      at
      the time such notice is given to Certificateholders.

     

    In
      the
      event such notice is given, the Master Servicer shall cause all funds in the
      Certificate Account to be remitted to the Trustee for deposit in the applicable
      subaccounts of the Distribution Account on the Business Day prior to the
      applicable Distribution Date in an amount equal to the final distribution in
      respect of the Certificates. Upon such final deposit with respect to the Trust
      Fund and the receipt by the Trustee of a Request for Release therefor, the
      Trustee shall promptly release to the Master Servicer the Mortgage Files for
      the
      Mortgage Loans.

     

    Upon
      presentation and surrender of the Certificates, the Trustee shall cause to
      be
      distributed to the Certificateholders of each Class, in the order set forth
      in
      Section 4.2 hereof, on the final Distribution Date, in the case of the
      Certificateholders, in proportion to their respective Percentage Interests,
      with
      respect to Certificateholders of the same Class, an amount equal to (i) as
      to
      each Class of Regular Certificates, the Class Certificate Balance thereof plus
      accrued interest thereon in the case of an interest bearing Certificate, and
      (ii) as to the Residual Certificates, the amount, if any, which remains on
      deposit in the Distribution Account (other than the amounts retained to meet
      claims) after application pursuant to clause (i) above. 

     


    
      
         

      

      
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    In
      the
      event that any affected Certificateholders shall not surrender Certificates
      for
      cancellation within six months after the date specified in the above mentioned
      written notice, the Trustee shall give a second written notice to the remaining
      Certificateholders to surrender their Certificates for cancellation and receive
      the final distribution with respect thereto. If within six months after the
      second notice all the applicable Certificates shall not have been surrendered
      for cancellation, the Trustee may take appropriate steps, or may appoint an
      agent to take appropriate steps, to contact the remaining Certificateholders
      concerning surrender of their Certificates, and the cost thereof shall be paid
      out of the funds and other assets which remain a part of the Trust Fund. If
      within one year after the second notice all Certificates shall not have been
      surrendered for cancellation, the Holders of each of the Class I-A-R
      Certificates shall be entitled to all unclaimed funds and other assets of the
      Trust Fund, held for distribution to such Certificateholders, which remain
      subject hereto.

     

    SECTION
      9.3  Additional
      Termination Requirements.

     

    (a) In
      the
      event the Master Servicer exercises its purchase option as provided in Section
      9.1, the Trust Fund and each REMIC created hereunder shall be terminated in
      accordance with the following additional requirements, unless the Trustee has
      been supplied with an Opinion of Counsel, at the expense of the Master Servicer,
      to the effect that the failure to comply with the requirements of this Section
      9.3 will not (i) result in the imposition of taxes on “prohibited transactions”
on any REMIC as defined in Section 860F of the Code, or (ii) cause any REMIC
      to
      fail to qualify as a REMIC at any time that any Certificates are
      outstanding:

     

    (1) Within
      90
      days prior to the final Distribution Date set forth in the notice given by
      the
      Master Servicer under Section 9.2, the Master Servicer shall prepare and the
      Trustee, at the expense of the “tax matters person,” shall adopt a plan of
      complete liquidation within the meaning of Section 860F(a)(4) of the Code for
      each REMIC created hereunder which, as evidenced by an Opinion of Counsel
      addressed to the Trustee (which opinion shall not be an expense of the Trustee
      or the Tax Matters Person), meets the requirements of a qualified liquidation;
      and

     

    (2) Within
      90
      days after the time of adoption of such plans of complete liquidation, the
      Trustee shall sell all of the assets of the Trust Fund to the Master Servicer
      for cash in accordance with Section 9.1.

     

    (b) The
      Trustee as agent for any REMIC established hereunder hereby agrees to adopt
      and
      sign such a plan of complete liquidation upon the written request of the Master
      Servicer, and the receipt of the Opinion of Counsel referred to in Section
      9.3(a)(1) and to take such other action in connection therewith as may be
      reasonably requested by the Master Servicer.

     

    (c) By
      their
      acceptance of the Certificates, the Holders thereof hereby authorize the Master
      Servicer to prepare and the Trustee to adopt and sign plans of complete
      liquidation.

     


    
      
         

      

      
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    ARTICLE
      X

    EXCHANGE
      ACT REPORTING

     

    SECTION
      10.1  Filing
      Obligations.

     

    The
      Master Servicer, the Trustee and the Seller shall reasonably cooperate with
      the
      Depositor in connection with the satisfaction of the Depositor’s reporting
      requirements under the Exchange Act with respect to the Trust Fund. In addition
      to the information specified below, if so requested by the Depositor for the
      purpose of satisfying its reporting obligation under the Exchange Act, the
      Master Servicer, the Trustee and the Seller shall (and the Master Servicer
      shall
      cause each Subservicer to) provide the Depositor with (a) such information
      which
      is available to such Person without unreasonable effort or expense and within
      such timeframe as may be reasonably requested by the Depositor to comply with
      the Depositor’s reporting obligations under the Exchange Act and (b) to the
      extent such Person is a party (and the Depositor is not a party) to any
      agreement or amendment requested of it by the Depositor and required to be
      filed, copies of such agreement or amendment in EDGAR-compatible
      form.

     

    SECTION
      10.2  Form
      10-D
      Filings.

     

    (a) Although
      the Depositor is responsible under Regulation AB for filing the Form 10-D,
      the
      Trustee hereby agrees it shall prepare for filing and file within fifteen days
      after each Distribution Date (subject to permitted extensions under the Exchange
      Act) with the SEC with respect to the Trust Fund, a Form 10-D with copies of
      the
      Monthly Report and, to the extent delivered to the Trustee, no later than ten
      days following the Distribution Date, such other information identified by
      the
      Depositor or the Master Servicer, in writing, to be filed with the SEC (such
      other information, the “Additional Designated Information”). If the Depositor or
      Master Servicer directs that any Additional Designated Information is to be
      filed with any Form 10-D, the Depositor or Master Servicer, as the case may
      be,
      shall specify the Item on Form 10-D to which such information is responsive
      and,
      with respect to any Exhibit to be filed on Form 10-D, the Exhibit number. Any
      information to be filed on Form 10-D shall be delivered to the Trustee in
      EDGAR-compatible form or as otherwise agreed upon by the Trustee and the
      Depositor or the Master Servicer, as the case may be, at the Depositor’s
      expense, and any necessary conversion to EDGAR-compatible format will be at
      the
      Depositor’s expense. At the reasonable request of, and in accordance with the
      reasonable directions of, the Depositor or the Master Servicer, subject to
      the
      two preceding sentences, the Trustee shall prepare for filing and file an
      amendment to any Form 10-D previously filed with the SEC with respect to the
      Trust Fund. The Master Servicer shall sign the Form 10-D filed on behalf of
      the
      Trust Fund.

     

    (b) No
      later
      than each Distribution Date, each of the Master Servicer and the Trustee shall
      notify (and the Master Servicer shall cause any Subservicer to notify) the
      Depositor and the Master Servicer of any Form 10-D Disclosure Item relating
      to
      it, together with a description of any such Form 10-D Disclosure Item in form
      and substance reasonably acceptable to the Depositor. In addition to such
      information as the Master Servicer and the Trustee are obligated to provide
      pursuant to other provisions of this Agreement, if so requested by the
      Depositor, each of the Master Servicer and the Trustee shall provide such
      information which is available to the Master Servicer and the Trustee, as
      applicable, without unreasonable effort or expense regarding the performance
      or
      servicing of the Mortgage Loans (in the case of the Trustee, based on the
      information provided by the Master Servicer) as is reasonably required of the
      Depositor to facilitate preparation of distribution reports in accordance with
      Item 1121 of Regulation AB. Such information shall be provided concurrently
      with
      the delivering of the reports specified in Section 4.6 in the case of the Master
      Servicer and the Monthly Statement in the case of the Trustee, commencing with
      the first such report due not less than five (5) Business Days following such
      request.

     


    
      
         

      

      
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    (c) The
      Trustee shall not have any responsibility to file any items (other than those
      generated by it) that have not been received in a format suitable (or readily
      convertible into a format suitable) for electronic filing via the EDGAR system
      and shall not have any responsibility to convert any such items to such format
      (other than those items generated by it or that are readily convertible to
      such
      format). The Trustee shall have no liability to the Certificateholders, the
      Trust Fund, the Master Servicer or the Depositor with respect to any failure
      to
      properly prepare or file any of Form 10-D to the extent that such failure is
      not
      the result of any negligence, bad faith or willful misconduct on its part.
      For
      avoidance of doubt, the Trustee shall have no liability whatsoever under the
      Securities Act or the Exchange Act.

     

    SECTION
      10.3  Form
      8-K
      Filings.

     

    The
      Master Servicer shall prepare and file on behalf of the Trust Fund any Form
      8-K
      required by the Exchange Act. Each Form 8-K must be signed by the Master
      Servicer. Each of the Trustee and the Master Servicer shall (and the Master
      Servicer shall cause any Subservicer to), promptly notify the Depositor and
      the
      Master Servicer (if the notifying party is not the Master Servicer), but in
      no
      event later than one (1) Business Day after its occurrence, of any Reportable
      Event related to it, of which it has actual knowledge. The Master Servicer
      shall
      notify the Depositor if any material pool characteristic of the actual asset
      pool at the time of issuance of the Certificates differs by five percent or
      more
      (other than as a result of the pool assets converting into cash in accordance
      with their terms) from the description of the asset pool in the Prospectus
      Supplement.

     

    SECTION
      10.4  Form
      10-K
      Filings.

     

    Prior
      to
      March 30th of each year, commencing in 2008 (or such earlier date as may be
      required by the Exchange Act), the Depositor shall prepare and file on behalf
      of
      the Trust Fund a Form 10-K, in form and substance as required by the Exchange
      Act. A senior officer in charge of the servicing function of the Master Servicer
      shall sign each Form 10-K filed on behalf of the Trust Fund. Such Form 10-K
      shall include as exhibits each (i) annual compliance statement described under
      Section 3.16(a), (ii) annual report on assessments of compliance with servicing
      criteria described under Section 10.7 and (iii) accountant’s report described
      under Section 10.7. Each Form 10-K shall also include any Sarbanes-Oxley
      Certification required to be included therewith, as described in Section
      10.5.

     


    
      
         

      

      
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    If
      the
      Item 1119 Parties listed on Exhibit P have changed since the Closing Date,
      no
      later than March 1st of each year, the Depositor shall provide each of the
      Master Servicer (and the Master Servicer shall provide any Subservicer) and
      the
      Trustee with an updated Exhibit P setting forth the Item 1119 Parties. No later
      than March 15th of each year, commencing in 2008, the Master Servicer and the
      Trustee shall notify (and the Master Servicer shall cause any Subservicer to
      notify) the Depositor of any Form 10-K Disclosure Item related to it, together
      with a description of any such Form 10-K Disclosure Item in form and substance
      reasonably acceptable to the Depositor. Additionally, each of the Master
      Servicer and the Trustee shall provide to the Depositor, and shall cause each
      Reporting Subcontractor retained by the Master Servicer or the Trustee, as
      applicable, and in the case of the Master Servicer shall cause each Subservicer
      that is a Reporting Subcontractor, to provide to the Depositor, the following
      information no later than March 15th of each year in which a Form 10-K is
      required to be filed on behalf of the Trust Fund: (i) if such Person’s report on
      assessment of compliance with servicing criteria described under Section 10.7
      or
      related registered public accounting firm attestation report described under
      Section 10.7 identifies any material instance of noncompliance, notification
      of
      such instance of noncompliance and (ii) if any such Person’s report on
      assessment of compliance with servicing criteria or related registered public
      accounting firm attestation report is not provided to be filed as an exhibit
      to
      such Form 10-K, information detailing the explanation why such report is not
      included.

     

    SECTION
      10.5  Sarbanes-Oxley
      Certification.

     

    Each
      Form
      10-K shall include a certification (the “Sarbanes-Oxley Certification”) required
      by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section
      302
      of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC
      promulgated thereunder (including any interpretations thereof by the SEC’s
      staff)). No later than March 15th of each year in which a Form 10-K is required
      to be filed on behalf of the Trust Fund, beginning in 2007, the Master Servicer
      (unless such Person is the Certifying Person) and the Trustee shall, and the
      Master Servicer shall cause each Subservicer to, provide to the Person who
      signs
      the Sarbanes-Oxley Certification (the “Certifying Person”) a certification
      (each, a “Performance Certification”), substantially in the form attached hereto
      as Exhibit N-1 (in the case of a Subservicer) and Exhibit N-2 (in the case
      of
      the Trustee), unless such other form is mutually agreed upon, on which the
      Certifying Person, the entity for which the Certifying Person acts as an
      officer, and such entity’s officers, directors and Affiliates (collectively with
      the Certifying Person, “Certification Parties”) can reasonably rely. The senior
      officer in charge of the servicing function of the Master Servicer shall serve
      as the Certifying Person on behalf of the Trust Fund. Neither the Master
      Servicer nor the Depositor will request delivery of a certification under this
      clause unless the Depositor is required under the Exchange Act to file an annual
      report on Form 10-K with respect to the Trust Fund. In the event that prior
      to
      the filing date of the Form 10-K in March of each year, a Responsible Officer
      of
      the Trustee or the Depositor has actual knowledge of information material to
      the
      Sarbanes-Oxley Certification, the Trustee or the Depositor, as the case may
      be,
      shall promptly notify the Master Servicer and the Depositor. The respective
      parties hereto agree to cooperate with all reasonable requests made by any
      Certifying Person or Certification Party in connection with such Person’s
      attempt to conduct any due diligence that such Person reasonably believes to
      be
      appropriate in order to allow it to deliver any Sarbanes-Oxley Certification
      or
      portion thereof with respect to the Trust Fund.

     


    
      
         

      

      
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    SECTION
      10.6  Form
      15
      Filing.

     

    Prior
      to
      January 31 of the first year in which the Depositor is able to do so under
      applicable law, the Depositor shall file a Form 15 relating to the automatic
      suspension of reporting in respect of the Trust Fund under the Exchange
      Act.

     

    SECTION
      10.7  Report
      on
      Assessment of Compliance and Attestation.

     

    (a) On
      or
      before March 15th of each calendar year in which a Form 10-K is required to
      be
      filed on behalf of the Trust Fund, commencing in 2008:

     

    (i) Each
      of
      the Master Servicer and the Trustee shall deliver to the Depositor and the
      Master Servicer a report (in form and substance reasonably satisfactory to
      the
      Depositor) regarding the Master Servicer’s or the Trustee’s, as applicable,
      assessment of compliance with the Servicing Criteria during the immediately
      preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
      Exchange Act and Item 1122 of Regulation AB. Such report shall be signed by
      an
      authorized officer of such Person and shall address each of the Servicing
      Criteria specified on a certification substantially in the form of Exhibit
      O
      hereto, unless such other form is mutually agreed upon and delivered to the
      Depositor concurrently with the execution of this Agreement. To the extent
      any
      of the Servicing Criteria are not applicable to such Person, with respect to
      asset-backed securities transactions taken as a whole involving such Person
      and
      that are backed by the same asset type backing the Certificates, such report
      shall include such a statement to that effect. The Depositor and the Master
      Servicer, and each of their respective officers and directors shall be entitled
      to rely upon each such servicing criteria assessment.

     

    (ii) Each
      of
      the Master Servicer and the Trustee shall deliver to the Depositor and the
      Master Servicer a report of a registered public accounting firm reasonably
      acceptable to the Depositor that attests to, and reports on, the assessment
      of
      compliance made by Master Servicer or the Trustee, as applicable, and delivered
      pursuant to the preceding paragraphs. Such attestation shall be in accordance
      with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act
      and
      the Exchange Act, including, without limitation that in the event that an
      overall opinion cannot be expressed, such registered public accounting firm
      shall state in such report why it was unable to express such an opinion. Such
      report must be available for general use and not contain restricted use
      language. To the extent any of the Servicing Criteria are not applicable to
      such
      Person, with respect to asset-backed securities transactions taken as a whole
      involving such Person and that are backed by the same asset type backing the
      Certificates, such report shall include such a statement that that
      effect.

     

    (iii) The
      Master Servicer shall cause each Subservicer that is a Reporting Subcontractor
      engaged by it to deliver to the Depositor an assessment of compliance and
      accountants’ attestation as and when provided in paragraphs (a) and (b) of this
      Section 10.7.

     


    
      
         

      

      
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    (iv) The
      Trustee shall cause each Reporting Subcontractor engaged by it to deliver to
      the
      Depositor and the Master Servicer an assessment of compliance and accountants’
attestation as and when provided in paragraphs (a) and (b) of this
      Section.

     

    (b) Each
      assessment of compliance provided by a Subservicer pursuant to Section
      10.7(a)(iii) shall address each of the Servicing Criteria specified on a
      certification substantially in the form of Exhibit O hereto delivered to the
      Depositor concurrently with the execution of this Agreement or, in the case
      of a
      Subservicer subsequently appointed as such, on or prior to the date of such
      appointment. An assessment of compliance provided by a Subcontractor pursuant
      to
      Section 10.7(a)(iii) or (iv) need not address any elements of the Servicing
      Criteria other than those specified by the Master Servicer or the Trustee,
      as
      applicable, pursuant to Section 10.7(a)(i).

     

    SECTION
      10.8  Use
      of
      Subservicers and Subcontractors.

     

    (a) The
      Master Servicer shall cause any Subservicer that is a Reporting Subcontractor
      used by the Master Servicer (or by any Subservicer) for the benefit of the
      Depositor to comply with the provisions of Section 3.16 and this Article X
      to
      the same extent as if such Subservicer were the Master Servicer (except with
      respect to the Master Servicer’s duties with respect to preparing and filing any
      Exchange Act Reports or as the Certifying Person). The Master Servicer shall
      be
      responsible for obtaining from each Subservicer that is a Reporting
      Subcontractor and delivering to the Depositor any servicer compliance statement
      required to be delivered by such Subservicer under Section 3.16, any assessment
      of compliance and attestation required to be delivered by such Subservicer
      under
      Section 10.7 and any certification required to be delivered to the Certifying
      Person under Section 10.5 as and when required to be delivered. As a condition
      to the succession to any Subservicer as subservicer under this Agreement by
      any
      Person (i) into which such Subservicer may be merged or consolidated, or (ii)
      which may be appointed as a successor to any Subservicer, the Master Servicer
      shall provide to the Depositor, at least fifteen (15) calendar days prior to
      the
      effective date of such succession or appointment, (x) written notice to the
      Depositor of such succession or appointment and (y) in writing and in form
      and
      substance reasonably satisfactory to the Depositor, all information reasonably
      requested by the Depositor in order to comply with its reporting obligation
      under Item 6.2 of Form 8-K.

     

    (b) It
      shall
      not be necessary for the Master Servicer or any Subservicer to seek the consent
      of the Depositor or any other party hereto to the utilization of any
      Subcontractor. The Master Servicer shall promptly upon request provide to the
      Depositor (or any designee of the Depositor, such as the Master Servicer or
      administrator) a written description (in form and substance satisfactory to
      the
      Depositor) of the role and function of each Subcontractor utilized by such
      Person (or in the case of the Master Servicer or any Subservicer), specifying
      (i) the identity of each such Subcontractor, (ii) which (if any) of such
      Subcontractors are “participating in the servicing function” within the meaning
      of Item 1122 of Regulation AB, and (iii) which elements of the Servicing
      Criteria will be addressed in assessments of compliance provided by each
      Subcontractor, who is a Reporting Subcontrator, identified pursuant to clause
      (ii) of this paragraph.

     


    
      
         

      

      
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    As
      a
      condition to the utilization of any Subcontractor determined to be a Reporting
      Subcontractor, the Master Servicer shall cause any such Subcontractor used
      by
      such Person (or in the case of the Master Servicer or any Subservicer) for
      the
      benefit of the Depositor to comply with the provisions of Sections 10.7 and
      10.9
      of this Agreement to the same extent as if such Subcontractor were the Master
      Servicer (except with respect to the Master Servicer’s duties with respect to
      preparing and filing any Exchange Act Reports or as the Certifying Person).
      The
      Master Servicer shall be responsible for obtaining from each Subcontractor
      and
      delivering to the Depositor and the Master Servicer, any assessment of
      compliance and attestation required to be delivered by such Subcontractor under
      Section 10.7, in each case as and when required to be delivered.

     

    SECTION
      10.9  Amendments.

     

    In
      the
      event the parties to this Agreement desire to further clarify or amend any
      provision of this Article X, this Agreement shall be amended to reflect the
      new
      agreement between the parties covering matters in this Article X pursuant to
      Section 11.1, which amendment shall not require any Opinion of Counsel or Rating
      Agency confirmations or the consent of any Certificateholder. If, during the
      period that the Depositor is required to file Exchange Act Reports with respect
      to the Trust Fund, the Master Servicer is no longer an Affiliate of the
      Depositor, the Depositor shall assume the obligations and responsibilities
      of
      the Master Servicer in this Article X with respect to the preparation and filing
      of the Exchange Act Reports and/or acting as the Certifying Person, if the
      Depositor has received indemnity from such successor Master Servicer
      satisfactory to the Depositor, and such Master Servicer has agreed to provide
      a
      Sarbanes-Oxley Certification to the Depositor substantially in the form of
      Exhibit Q.

     

    ARTICLE
      XI

    MISCELLANEOUS
      PROVISIONS

     

    SECTION
      11.1  Amendment.

     

    This
      Agreement may be amended from time to time by the Depositor, the Master Servicer
      and the Trustee without the consent of any of the Certificateholders (i) to
      cure
      any ambiguity or mistake, (ii) to correct any defective provision herein or
      to
      supplement any provision herein which may be inconsistent with any other
      provision herein, (iii) to add to the duties of the Depositor, the Seller or
      the
      Master Servicer, (iv) to add any other provisions with respect to matters or
      questions arising hereunder or (v) to modify, alter, amend, add to or rescind
      any of the terms or provisions contained in this Agreement; provided that any
      action pursuant to clauses (iv) or (v) above shall not, as evidenced by an
      Opinion of Counsel delivered to the Trustee (which Opinion of Counsel shall
      not
      be an expense of the Trustee or the Trust Fund), adversely affect in any
      material respect the interests of any Certificateholder; provided, however,
      that
      the amendment shall not be deemed to adversely affect in any material respect
      the interests of the Certificateholders if the Person requesting the amendment
      obtains a letter from each Rating Agency stating that the amendment would not
      result in the downgrading or withdrawal of the respective ratings then assigned
      to the Certificates; it being understood and agreed that any such letter in
      and
      of itself will not represent a determination as to the materiality of any such
      amendment and will represent a determination only as to the credit issues
      affecting any such rating. The Trustee, the Depositor and the Master Servicer
      also may at any time and from time to time amend this Agreement without the
      consent of the Certificateholders to modify, eliminate or add to any of its
      provisions to such extent as shall be necessary or helpful to (i) maintain
      the
      qualification of any REMIC established hereunder as a REMIC under the Code,
      (ii)
      avoid or minimize the risk of the imposition of any tax on any REMIC established
      hereunder pursuant to the Code that would be a claim at any time prior to the
      final redemption of the Certificates or (iii) comply with any other requirements
      of the Code, provided that the Trustee has been provided an Opinion of Counsel,
      which opinion shall be an expense of the party requesting such opinion but
      in
      any case shall not be an expense of the Trustee or the Trust Fund, to the effect
      that such action is necessary or helpful to, as applicable, (i) maintain such
      qualification, (ii) avoid or minimize the risk of the imposition of such a
      tax
      or (iii) comply with any such requirements of the Code.

     


    
      
         

      

      
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    This
      Agreement may also be amended from time to time by the Depositor, the Master
      Servicer and the Trustee with the consent of the Holders of a Majority in
      Interest of each Class of Certificates affected thereby for the purpose of
      adding any provisions to or changing in any manner or eliminating any of the
      provisions of this Agreement or of modifying in any manner the rights of the
      Holders of Certificates; provided, however, that no such amendment shall (i)
      reduce in any manner the amount of, or delay the timing of, payments required
      to
      be distributed on any Certificate without the consent of the Holder of such
      Certificate, (ii) adversely affect in any material respect the interests of
      the
      Holders of any Class of Certificates in a manner other than as described in
      (i),
      without the consent of the Holders of Certificates of such Class evidencing,
      as
      to such Class, Percentage Interests aggregating 66%, or (iii) reduce the
      aforesaid percentages of Certificates the Holders of which are required to
      consent to any such amendment, without the consent of the Holders of all such
      Certificates then outstanding. In addition, the permitted activities of the
      Trust under this Agreement cannot be significantly modified without the approval
      of Holders of Certificates evidencing a Majority in Interest.

     

    Notwithstanding
      any contrary provision of this Agreement, the Trustee shall not consent to
      any
      amendment to this Agreement unless it shall have first received an Opinion
      of
      Counsel, which opinion shall not be an expense of the Trustee or the Trust
      Fund,
      to the effect that such amendment will not cause the imposition of any tax
      on
      any REMIC established hereunder or the Certificateholders or cause any REMIC
      established hereunder to fail to qualify as a REMIC at any time that any
      Certificates are outstanding.

     

    Promptly
      after the execution of any amendment to this Agreement requiring the consent
      of
      Certificateholders, the Trustee shall furnish written notification of the
      substance or a copy of such amendment to each Certificateholder and each Rating
      Agency.

     

    It
      shall
      not be necessary for the consent of Certificateholders under this Section to
      approve the particular form of any proposed amendment, but it shall be
      sufficient if such consent shall approve the substance thereof. The manner
      of
      obtaining such consents and of evidencing the authorization of the execution
      thereof by Certificateholders shall be subject to such reasonable regulations
      as
      the Trustee may prescribe.

     

    Nothing
      in this Agreement shall require the Trustee to enter into an amendment without
      receiving an Opinion of Counsel (which Opinion shall not be an expense of the
      Trustee or the Trust Fund), satisfactory to the Trustee that (i) such amendment
      is permitted and is not prohibited by this Agreement and that all requirements
      for amending this Agreement have been complied with; and (ii) either (A) the
      amendment does not adversely affect in any material respect the interests of
      any
      Certificateholder or (B) the conclusion set forth in the immediately preceding
      clause (A) is not required to be reached pursuant to this Section
      11.1.

     


    
      
         

      

      
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    SECTION
      11.2  Recordation
      of Agreement; Counterparts.

     

    This
      Agreement is subject to recordation in all appropriate public offices for real
      property records in all the counties or other comparable jurisdictions in which
      any or all of the properties subject to the Mortgages are situated, and in
      any
      other appropriate public recording office or elsewhere, such recordation to
      be
      effected by the Master Servicer at its expense, but only upon direction a
      majority of the Certificateholders to the effect that such recordation
      materially and beneficially affects the interests of the
      Certificateholders.

     

    For
      the
      purpose of facilitating the recordation of this Agreement as herein provided
      and
      for other purposes, this Agreement may be executed (by facsimile or otherwise)
      simultaneously in any number of counterparts, each of which counterparts shall
      be deemed to be an original, and such counterparts shall constitute but one
      and
      the same instrument.

     

    SECTION
      11.3  Governing
      Law.

     

    THIS
      AGREEMENT (OTHER THAN SECTION 2.1 HEREOF) SHALL BE CONSTRUED IN ACCORDANCE
      WITH
      AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
      AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
      OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
      CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. SECTION
      2.1
      OF THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
      SUBSTANTIVE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND
      TO
      BE PERFORMED IN THE STATE OF DELAWARE AND THE OBLIGATIONS, RIGHTS AND REMEDIES
      OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS UNDER SUCH SECTION SHALL BE
      DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     

    SECTION
      11.4  Intention
      of Parties. 

     

    It
      is the
      express intent of the parties hereto that the conveyance of the Trust Fund
      by
      the Depositor to the Trustee be, and be construed as, absolute sales thereof
      to
      the Trustee. It is, further, not the intention of the parties that such
      conveyances be deemed a pledge thereof by the Depositor to the Trustee. However,
      in the event that, notwithstanding the intent of the parties, such assets are
      held to be the property of the Depositor, or if for any other reason this
      Agreement is held or deemed to create a security interest in such assets, then
      (i) this Agreement shall be deemed to be a security agreement within the meaning
      of the Uniform Commercial Code of the State of New York and (ii) the conveyance
      provided for in this Agreement shall be deemed to be an assignment and a grant
      by the Depositor to the Trustee, for the benefit of the Certificateholders,
      of a
      security interest in all of the assets that constitute the Trust Fund, whether
      now owned or hereafter acquired. 

     


    
      
         

      

      
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    The
      Depositor, for the benefit of the Certificateholders, shall, to the extent
      consistent with this Agreement, take such actions as may be necessary to ensure
      that, if this Agreement were deemed to create a security interest in the Trust
      Fund, such security interest would be deemed to be a perfected security interest
      of first priority under applicable law and will be maintained as such throughout
      the term of the Agreement. The Depositor shall arrange for filing any Uniform
      Commercial Code financing and continuation statements in connection with any
      security interest granted or assigned to the Trustee for the benefit of the
      Certificateholders.

     

    SECTION
      11.5  Notices.

     

    (a) The
      Trustee shall use its best efforts to promptly provide notice to each Rating
      Agency with respect to each of the following of which it has actual
      knowledge:

     

    
      	 	
              (1)

            	
              Any
                material change or amendment to this
                Agreement;

            


    

     

    
      	 	
              (2)

            	
              The
                occurrence of any Event of Default that has not been
                cured;

            


    

     

    
      	 	
              (3)

            	
              The
                resignation or termination of the Master Servicer or the Trustee
                and the
                appointment of any successor;

            


    

     

    
      	 	
              (4)

            	
              The
                repurchase or substitution of Mortgage Loans pursuant to Section
                2.3;
                

            


    

     

    
      	 	
              (5)

            	
              The
                final payment to Certificateholders;
                and

            


    

     

    
      	 	
              (6)

            	
              Any
                rating action involving the long-term credit rating of the Master
                Servicer, which notice shall be made by first-class mail within two
                Business Days after the Trustee gains actual knowledge
                thereof.

            


    

     

    In
      addition, the Trustee shall promptly furnish to each Rating Agency copies of
      the
      following:

     

    
      	 	
              (1)

            	
              Each
                report to Certificateholders described in Section
                4.6;

            


    

     

    
      	 	
              (2)

            	
              Each
                annual statement as to compliance described in Section 3.16;
                and

            


    

     

    
      	 	
              (3)

            	
              Any
                notice of a purchase of a Mortgage Loan pursuant to Section 2.2,
                2.3 or
                3.11.

            


    

     

    (b) All
      directions, demands, authorizations, consents, waivers, communications and
      notices hereunder shall be in writing and shall be deemed to have been duly
      given when delivered to by first class mail, facsimile or courier (a) in the
      case of the Depositor, First Horizon Asset Securities Inc., 4000 Horizon Way,
      Irving, Texas 75063, Attention: Alfred Chang; (b) in the case of the Master
      Servicer, First Horizon Home Loan Corporation, 4000 Horizon Way, Irving, Texas
      75063, Attention: Larry P. Cole or such other address as may be hereafter
      furnished to the Depositor and the Trustee by the Master Servicer in writing;
      (c) in the case of the Trustee, The Bank of New York, 101 Barclay Street, 4W,
      New York, New York 10286, Attention: Corporate Trust Administration—First
      Horizon 2007-AR1, or such other address as the Trustee may hereafter furnish
      to
      the Depositor or Master Servicer; and (d) in the case of the Rating Agencies,
      the address specified therefor in the definition corresponding to the name
      of
      such Rating Agency. Notices to Certificateholders shall be deemed given when
      mailed, first class postage prepaid, to their respective addresses appearing
      in
      the Certificate Register.

     


    
      
         

      

      
        110

        
          

        

      

      
         

      

    


    


     

    SECTION
      11.6  Severability
      of Provisions.

     

    If
      any
      one or more of the covenants, agreements, provisions or terms of this 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 Agreement and shall in no
      way
      affect the validity or enforceability of the other provisions of this Agreement
      or of the Certificates or the rights of the Holders thereof.

     

    SECTION
      11.7  Assignment.

     

    Notwithstanding
      anything to the contrary contained herein, except as provided in Section 6.2,
      this Agreement may not be assigned by the Master Servicer without the prior
      written consent of the Trustee and Depositor.

     

    SECTION
      11.8  Limitation
      on Rights of Certificateholders.

     

    The
      death
      or incapacity of any Certificateholder shall not operate to terminate this
      Agreement or the trust created hereby, nor entitle such Certificateholder’s
      legal representative or heirs to claim an accounting or to take any action
      or
      commence any proceeding in any court for a petition or winding up of the trust
      created hereby, or otherwise affect the rights, obligations and liabilities
      of
      the parties hereto or any of them.

     

    No
      Certificateholder shall have any right to vote (except as provided herein)
      or in
      any manner otherwise control the operation and management of the Trust Fund,
      or
      the obligations of the parties hereto, nor shall anything herein set forth
      or
      contained in the terms of the Certificates be construed so as to constitute
      the
      Certificateholders from time to time as partners or members of an association;
      nor shall any Certificateholder be under any liability to any third party by
      reason of any action taken by the parties to this Agreement pursuant to any
      provision hereof.

     

    No
      Certificateholder shall have any right by virtue or by availing itself of any
      provisions of this Agreement to institute any suit, action or proceeding in
      equity or at law upon or under or with respect to this Agreement, unless such
      Holder previously shall have given to the Trustee a written notice of an Event
      of Default and of the continuance thereof, as herein provided, and unless the
      Holders of Certificates evidencing not less than 25% of the Voting Rights
      evidenced by the Certificates shall also have made written request to the
      Trustee to institute such action, suit or proceeding in its own name as Trustee
      hereunder and shall have offered to the Trustee such reasonable indemnity as
      it
      may require against the costs, expenses, and liabilities to be incurred therein
      or thereby, and the Trustee, for 60 days after its receipt of such notice,
      request and offer of indemnity shall have neglected or refused to institute
      any
      such action, suit or proceeding; it being understood and intended, and being
      expressly covenanted by each Certificateholder with every other
      Certificateholder and the Trustee, that no one or more Holders of Certificates
      shall have any right in any manner whatever by virtue or by availing itself
      or
      themselves of any provisions of this Agreement to affect, disturb or prejudice
      the rights of the Holders of any other of the Certificates, or to obtain or
      seek
      to obtain priority over or preference to any other such Holder or to enforce
      any
      right under this Agreement, except in the manner herein provided and for the
      common benefit of all Certificateholders. For the protection and enforcement
      of
      the provisions of this Section 11.8, each and every Certificateholder and the
      Trustee shall be entitled to such relief as can be given either at law or in
      equity.

     


    
      
         

      

      
        111

        
          

        

      

      
         

      

    


    


     

    SECTION
      11.9  Inspection
      and Audit Rights.

     

    The
      Master Servicer agrees that, on reasonable prior notice, it will permit and
      will
      cause each Subservicer to permit any representative of the Depositor or the
      Trustee during the Master Servicer’s normal business hours, to examine all the
      books of account, records, reports and other papers of the Master Servicer
      relating to the Mortgage Loans, to make copies and extracts therefrom, to cause
      such books to be audited by independent certified public accountants selected
      by
      the Depositor or the Trustee and to discuss its affairs, finances and accounts
      relating to the Mortgage Loans with its officers, employees and independent
      public accountants (and by this provision the Master Servicer hereby authorizes
      said accountants to discuss with such representative such affairs, finances
      and
      accounts), all at such reasonable times and as often as may be reasonably
      requested. Any out-of-pocket expense incident to the exercise by the Depositor
      or the Trustee of any right under this Section 11.9 shall be borne by the party
      requesting such inspection; all other such expenses shall be borne by the Master
      Servicer or the related Subservicer.

     

    SECTION
      11.10  Certificates
      Nonassessable and Fully Paid.

     

    It
      is the
      intention of the Depositor that Certificateholders shall not be personally
      liable for obligations of the Trust Fund, that the interests in the Trust Fund
      represented by the Certificates shall be nonassessable for any reason
      whatsoever, and that the Certificates, upon due authentication thereof by the
      Trustee pursuant to this Agreement, are and shall be deemed fully
      paid.

     

    SECTION
      11.11  Limitations
      on Actions; No Proceedings.

     

    (a) Other
      than pursuant to this Agreement, or in connection with or incidental to the
      provisions or purposes of this Agreement, the trust created hereunder shall
      not
      (i) issue debt or otherwise borrow money, (ii) merge or consolidate with any
      other entity reorganize, liquidate or transfer all or substantially all of
      its
      assets to any other entity, or (iii) otherwise engage in any activity or
      exercise any power not provided for in this Agreement.

     

    (b) Notwithstanding
      any prior termination of this Agreement, the Trustee, the Master Servicer and
      the Depositor shall not, prior to the date which is one year and one day after
      the termination of this Agreement, acquiesce, petition or otherwise invoke
      or
      cause any Person to invoke the process of any court or government authority
      for
      the purpose of commencing or sustaining a case against the Depositor or the
      Trust Fund under any federal or state bankruptcy, insolvency or other similar
      law or appointing a receiver, liquidator, assignee, trustee, custodian,
      sequestrator or other similar official of the Depositor or the Trust Fund or
      any
      substantial part of their respective property, or ordering the winding up or
      liquidation of the affairs of the Depositor or the Trust Fund.

     


    
      
         

      

      
        112

        
          

        

      

      
         

      

    


    


     

    SECTION
      11.12  Acknowledgment
      of Seller.

     

    Seller
      hereby acknowledges the provisions of this Agreement, including the obligations
      under Sections 2.1(a), 2.2, 2.3(b) and 8.11 of this Agreement and further
      acknowledges the Depositor’s assignment of its rights and remedies for the
      breach of the representations and warranties made by the Seller under the
      MLPA.

     

    


    *
      * * * *
      *

     


    
      
         

      

      
        113

        
          

        

      

      
         

      

    




    IN
      WITNESS WHEREOF, the Depositor, the Trustee and the Master Servicer have caused
      their names to be signed hereto by their respective officers thereunto duly
      authorized as of the day and year first above written.

     

    
      	 	
              FIRST
                HORIZON ASSET SECURITIES INC.,

            
	 	
              as
                Depositor

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Alfred
                Chang

            
	 	 	
              Vice
                President

            
	 	 	 
	 	 	 
	 	
              THE
                BANK OF NEW YORK,

            
	 	
              not
                in its individual capacity, but solely as Trustee

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Kelly
                Crosson

            
	 	 	
              Assistant
                Treasurer

            
	 	 	 
	 	 	 
	 	
              FIRST
                HORIZON HOME LOAN CORPORATION, in its capacity as Master
                Servicer

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Terry
                L. McCoy

            
	 	 	
              Executive
                Vice President

            


    

    


    The
      foregoing agreement is hereby 

    acknowledged
      and accepted as of the  

    date
      first above written: 

     

    FIRST
      HORIZON HOME LOAN CORPORATION, 

    in
      its
      capacity as Seller 

     

    
      	
              By:
                

            	
               

            	 
	 	
              Terry
                McCoy

            	 
	 	
              Executive
                Vice President

            	 


    

    
 


    
      
         

      

      
        
          FHASI
            2007-AR1

          Pooling
            and Servicing Agreement - Signature Page

        

        
          

        

      

      
         

        
        

      

    



    SCHEDULE
      I

     

    First
      Horizon Asset Securities Inc.

    Mortgage
      Pass-Through Certificates Series 2007-AR1

     

    Mortgage
      Loan Schedule

     

    [Available
      Upon Request from Trustee]

     


    
      
         

      

      
        I-1

        
          

        

      

      
         

        
        

      

    



    SCHEDULE
      II

     

    First
      Horizon Asset Securities Inc.

    Mortgage
      Pass-Through Certificates Series 2007-AR1

     

    Representations
      and Warranties of the Master Servicer

     

    First
      Horizon Home Loan Corporation (“First Horizon”) hereby makes the representations
      and warranties set forth in this Schedule II to the Depositor and the Trustee,
      as of the Closing Date, or if so specified herein, as of the Cut-off Date.
      Capitalized terms used but not otherwise defined in this Schedule II shall
      have
      the meanings ascribed thereto in the Pooling and Servicing Agreement (the
“Pooling and Servicing Agreement”) relating to the above-referenced Series,
      among First Horizon, as master servicer, First Horizon Asset Securities Inc.,
      as
      depositor, and The Bank of New York, as trustee. 

     

    (1) First
      Horizon is duly organized as a Kansas corporation and is validly existing and
      in
      good standing under the laws of the State of Kansas and is duly authorized
      and
      qualified to transact any and all business contemplated by the Pooling and
      Servicing Agreement to be conducted by First Horizon in any state in which
      a
      Mortgaged Property is located or is otherwise not required under applicable
      law
      to effect such qualification and, in any event, is in compliance with the doing
      business laws of any such state, to the extent necessary to ensure its ability
      to enforce each Mortgage Loan, to service the Mortgage Loans in accordance
      with
      the terms of the Pooling and Servicing Agreement and to perform any of its
      other
      obligations under the Pooling and Servicing Agreement in accordance with the
      terms thereof. 

     

    (2) 
      First
      Horizon has the full corporate power and authority to service each Mortgage
      Loan, and to execute, deliver and perform, and to enter into and consummate
      the
      transactions contemplated by the Pooling and Servicing Agreement and has duly
      authorized by all necessary corporate action on the part of First Horizon the
      execution, delivery and performance of the Pooling and Servicing Agreement;
      and
      the Pooling and Servicing Agreement, assuming the due authorization, execution
      and delivery thereof by the other parties thereto, constitutes a legal, valid
      and binding obligation of First Horizon, enforceable against First Horizon
      in
      accordance with its terms, except that (a) the enforceability thereof may be
      limited by bankruptcy, insolvency, moratorium, receivership and other similar
      laws relating to creditors’ rights generally and (b) the remedy of specific
      performance and injunctive and other forms of equitable relief may be subject
      to
      equitable defenses and to the discretion of the court before which any
      proceeding therefor may be brought. 

     

    (3) The
      execution and delivery of the Pooling and Servicing Agreement by First Horizon,
      the servicing of the Mortgage Loans by First Horizon under the Pooling and
      Servicing Agreement, the consummation of any other of the transactions
      contemplated by the Pooling and Servicing Agreement, and the fulfillment of
      or
      compliance with the terms thereof are in the ordinary course of business of
      First Horizon and will not (A) result in a material breach of any term or
      provision of the charter or by-laws of First Horizon or (B) materially conflict
      with, result in a material breach, violation or acceleration of, or result
      in a
      material default under, the terms of any other material agreement or instrument
      to which First Horizon is a party or by which it may be bound, or (C) constitute
      a material violation of any statute, order or regulation applicable to First
      Horizon of any court, regulatory body, administrative agency or governmental
      body having jurisdiction over First Horizon; and First Horizon is not in breach
      or violation of any material indenture or other material agreement or
      instrument, or in violation of any statute, order or regulation of any court,
      regulatory body, administrative agency or governmental body having jurisdiction
      over it which breach or violation may materially impair First Horizon’s ability
      to perform or meet any of its obligations under the Pooling and Servicing
      Agreement. 

     


    
      
         

      

      
        II-1

        
          

        

      

      
         

      

    


    


     

    (4) No
      litigation is pending or, to the best of First Horizon’s knowledge, threatened
      against First Horizon that would prohibit the execution or delivery of, or
      performance under, the Pooling and Servicing Agreement by First Horizon.


     

    (5) First
      Horizon is a member of MERS in good standing, and will comply in all material
      respects with the rules and procedures of MERS in connection with the servicing
      of the MERS Mortgage Loans for as along as such Mortgage Loans are registered
      with MERS.

     

    


     


    
      
         

      

      
        II-2

        
          

        

      

      
         

        
        

      

    



    SCHEDULE
      III

     

    First
      Horizon Asset Securities Inc.

    Mortgage
      Pass-Through Certificates Series 2007-AR1

     

    Form
      of Monthly Master Servicer Report

     

    [Begins
      on Next Page]

     


    
      
         

      

      
        III-1

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      A


     

    [FORM
      OF
      SENIOR CERTIFICATE]

     

    UNLESS
      THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
      TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR
      REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
      IS
      REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
      BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
      OF
      DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
      TO
      ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
      HAS AN INTEREST HEREIN.

     

    SOLELY
      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED,
      RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
      AS
      AMENDED (THE “CODE”).

     

    


     

    


     


    
      
         

      

      
        A-1

        
          

        

      

      
         

        
        

      

    



    
      	
              Certificate
                No.

            	:
	
              Cut-off
                Date

            	:
	
              First
                Distribution Date

            	:
	
              Initial
                Certificate Balance 

              of
                this Certificate 

              (“Denominations”)

            	
               

              : 
                $

            
	
              Initial
                Certificate 

              Balances
                of all 

              Certificate
                of this 

              Class

            	
              : 
                $

            
	
              CUSIP

            	:


    

    


     

    First
      Horizon Mortgage Pass-Through Trust 2007-AR1

    Mortgage
      Pass-Through Certificates, Series 2007-AR1

    Class
      [________]

     

    evidencing
      a percentage interest in the distributions allocable to the Certificates of
      the
      above-referenced Class with respect to a Trust Fund consisting primarily of
      one
      or more pools of conventional mortgage loans (the “Mortgage Loans”) secured by
      first liens on one- to four-family residential properties.

     

    First
      Horizon Asset Securities Inc., as Depositor

     

    [Principal
      in respect of this Certificate is distributable monthly as set forth herein.
      Accordingly, the Certificate Balance at any time may be less than the
      Certificate Balance as set forth herein.] This Certificate does not evidence
      an
      obligation of, or an interest in, and is not guaranteed by the Depositor, the
      Master Servicer or the Trustee referred to below or any of their respective
      affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed
      or
      insured by any governmental agency or instrumentality.

     

    This
      certifies that __________________ is the registered owner of the Percentage
      Interest evidenced by this Certificate (obtained by dividing the denomination
      of
      this Certificate by the aggregate Initial Certificate Balances of all
      Certificates of the Class to which this Certificate belongs) in certain monthly
      distributions with respect to a Trust Fund consisting primarily of the Mortgage
      Loans deposited by First Horizon Asset Securities Inc. (the “Depositor”). The
      Trust Fund was created pursuant to a Pooling and Servicing Agreement dated
      as of
      the Cut-off Date specified above (the “Agreement”) among the Depositor, First
      Horizon Home Loan Corporation, as master servicer (the “Master Servicer”), and
      The Bank of New York, as trustee (the “Trustee”). To the extent not defined
      herein, the capitalized terms used herein have the meanings assigned in the
      Agreement. This Certificate is issued under and is subject to the terms,
      provisions and conditions of the Agreement, to which Agreement the Holder of
      this Certificate by virtue of the acceptance hereof assents and by which such
      Holder is bound.

     

    Reference
      is hereby made to the further provisions of this Certificate set forth on the
      reverse hereof, which further provisions shall for all purposes have the same
      effect as if set forth at this place.

     


    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    


    


     

    This
      Certificate shall not be entitled to any benefit under the Agreement or be
      valid
      for any purpose unless manually countersigned by an authorized signatory of
      the
      Trustee.

     


    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    


     

     

    IN
      WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
      executed.

     

    Dated:
      March __, 2007

     

    
      	 	
              THE
                BANK OF NEW YORK,

            
	 	
              not
                in its individual capacity, but solely as Trustee

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Authorized
                Signatory of 

            
	 	 	
              THE
                BANK OF NEW YORK

            
	 	 	
              not
                in its individual capacity,

            
	 	 	
              but
                solely as Trustee

            


    

     

     

    
      	
              Countersigned:

            	 
	 	 	 
	
              By

            	
               

            	 
	 	
              Authorized
                Signatory of

            	 
	 	
              THE
                BANK OF NEW YORK,

            	 
	 	
              not
                in its individual capacity,

            	 
	 	
              but
                solely as Trustee

            	 


    

    


     


    
      
         

      

      
        A-4

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      B

     

    [FORM
      OF
      SUBORDINATED / [REGULATION S CERTIFICATE]]

     

    UNLESS
      THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
      TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR
      REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
      IS
      REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
      BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
      OF
      DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
      TO
      ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
      HAS AN INTEREST HEREIN.

     

    SOLELY
      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED,
      RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
      AS
      AMENDED (THE “CODE”).

     

    THIS
      CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
      DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

     

    THIS
      CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
      OF
      1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF
      THE UNITED STATES (“BLUE SKY LAWS”), AND SUCH CERTIFICATE MAY NOT BE OFFERED,
      RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON WHOM THE SELLER
      REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
      RULE 144A UNDER THE SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS
      OF
      RULE 144A, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
      144
      UNDER THE SECURITIES ACT (IF AVAILABLE) OR (C) TO AN INSTITUTIONAL ACCREDITED
      INVESTOR AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER
      THE
      SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
      THE
      SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE BLUE SKY LAWS.
      NO
      REPRESENTATION IS MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY
      RULE
      144 FOR RESALES OF THIS CERTIFICATE.

     

    [THIS
      CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS CERTIFICATE
      NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
      TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF WITHIN THE UNITED
      STATES (AS DEFINED IN RULES 901 THROUGH 905 OF THE SECURITIES ACT (“REGULATION
      S”)) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON (AS DEFINED IN
      REGULATION S), IN THE ABSENCE OF SUCH REGISTRATION, UNLESS SUCH TRANSACTION
      IS
      EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.]

     


    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    


    


     

    [THE
      HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF IS DEEMED TO HAVE
      REPRESENTED AND WARRANTED THAT (A) UNTIL THE EXPIRATION OF THE APPLICABLE
“DISTRIBUTION COMPLIANCE PERIOD” WITHIN THE MEANING OF REGULATION S, ANY OFFER,
      SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE SHALL NOT BE MADE IN THE
      UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON (EACH
      AS
      DEFINED IN REGULATION S) AND (B) IF THIS CERTIFICATE IS HELD WITHIN THE UNITED
      STATES OR SUCH HOLDER IS A U.S. PERSON OR THIS CERTIFICATES IS HELD FOR THE
      ACCOUNT OR BENEFIT OF, A U.S. PERSON (EACH AS DEFINED IN REGULATION S) SUCH
      CERTIFICATE WAS ACQUIRED ONLY (1) PURSUANT TO A REGISTRATION STATEMENT WHICH
      HAS
      BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (2) BY SUCH HOLDER AS A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
      THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
      INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
      IN
      RELIANCE ON RULE 144A OR TO AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED
      IN
      RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN
      A
      TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
      ACT.]

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
      TRANSFEREE REPRESENTS TO THE TRUSTEE THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
      BENEFIT PLAN OR ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
      ACT OF 1974, AS AMENDED (“ERISA”), OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION
      4975 OF THE CODE, OR, IF SUCH PURCHASER IS AN INSURANCE COMPANY AND THE
      CERTIFICATE HAS BEEN SUBJECT TO AN ERISA-QUALIFYING UNDERWRITING, A
      REPRESENTATION IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED
      TO
      HEREIN, OR DELIVERS TO THE TRUSTEE AN OPINION OF COUNSEL IN ACCORDANCE WITH
      THE
      PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. SUCH REPRESENTATION SHALL BE
      DEEMED TO HAVE BEEN MADE TO THE TRUSTEE BY THE TRANSFEREE’S ACCEPTANCE OF A
      CERTIFICATE OF THIS CLASS AND BY A BENEFICIAL OWNER’S ACCEPTANCE OF ITS INTEREST
      IN A CERTIFICATE OF THIS CLASS. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
      HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
      EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
      COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
      NO
      EFFECT.

     

     

     


    
      
         

      

      
        B-2

        
          

        

      

      
         

      

    


    


     

    
      	
              Certificate
                No.

            	: 
	
              Cut-off
                Date

            	: 
	
              First
                Distribution Date

            	: 
	
              Initial
                Certificate Balance of this Certificate (“Denominations”)

            	
               

              : 
                $

            
	
              Initial
                Certificate 

              Balances
                of all 

              Certificate
                of this 

              Class

            	
              : 
                $

            
	
              CUSIP

            	: 


    

    


     

    First
      Horizon Mortgage Pass-Through Trust 2007-AR1

    Mortgage
      Pass-Through Certificates, Series 2007-AR1 

     

    Class
      [___]

     

    [Regulation
      S]

     

    evidencing
      a percentage interest in the distributions allocable to the Certificates of
      the
      above-referenced Class with respect to a Trust Fund consisting primarily of
      one
      or more pools of conventional mortgage loans (the “Mortgage Loans”) secured by
      first liens on one- to four-family residential properties.

     

    First
      Horizon Asset Securities Inc., as Depositor

     

    Principal
      in respect of this Certificate is distributable monthly as set forth herein.
      Accordingly, the Certificate Balance at any time may be less than the
      Certificate Balance as set forth herein. This Certificate does not evidence
      an
      obligation of, or an interest in, and is not guaranteed by the Depositor, the
      Master Servicer, or the Trustee referred to below or any of their respective
      affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed
      or
      insured by any governmental agency or instrumentality.

     

    This
      certifies that ___________ is the registered owner of the Percentage Interest
      evidenced by this Certificate (obtained by dividing the denomination of this
      Certificate by the aggregate Initial Certificate Balances of the denominations
      of all Certificates of the Class to which this Certificate belongs) in certain
      monthly distributions with respect to a Trust Fund consisting primarily of
      the
      Mortgage Loans deposited by First Horizon Asset Securities Inc. (the
“Depositor”). The Trust Fund was created pursuant to a Pooling and Servicing
      Agreement dated as of the Cut-off Date specified above (the “Agreement”) among
      the Depositor, First Horizon Home Loan Corporation, as master servicer (the
      “Master Servicer”), and The Bank of New York, as trustee (the “Trustee”). To the
      extent not defined herein, the capitalized terms used herein have the meanings
      assigned in the Agreement. This Certificate is issued under and is subject
      to
      the terms, provisions and conditions of the Agreement, to which Agreement the
      Holder of this Certificate by virtue of the acceptance hereof assents and by
      which such Holder is bound.

     


    
      
         

      

      
        B-3

        
          

        

      

      
         

      

    


    


     

    No
      transfer of a Certificate of this Class shall be made unless such transfer
      is
      made pursuant to an effective registration statement under the Securities Act
      and any applicable state securities laws or is exempt from the registration
      requirements under said Act and such laws. In the event that a transfer is
      to be
      made in reliance upon an exemption from the Securities Act and such laws, in
      order to assure compliance with the Securities Act and such laws, the
      Certificateholder desiring to effect such transfer and such Certificateholder’s
      prospective transferee shall each certify to the Trustee in writing the facts
      surrounding the transfer. In the event that such a transfer is to be made within
      two years from the date of the initial issuance of Certificates pursuant hereto,
      there shall also be delivered (except in the case of a transfer pursuant to
      Rule
      144A of the Securities Act) to the Trustee an Opinion of Counsel that such
      transfer may be made pursuant to an exemption from the Securities Act and such
      state securities laws, which Opinion of Counsel shall not be obtained at the
      expense of the Trustee, the Seller, the Master Servicer or the Depositor. The
      Holder hereof desiring to effect such transfer shall, and does hereby agree
      to,
      indemnify the Trustee and the Depositor against any liability that may result
      if
      the transfer is not so exempt or is not made in accordance with such federal
      and
      state laws.

     

    No
      transfer of a Certificate of this Class shall be made unless the Trustee shall
      have received either (i) a representation [letter] from the transferee of such
      Certificate, acceptable to and in form and substance satisfactory to the
      Trustee, to the effect that such transferee is not an employee benefit plan
      or
      arrangement subject to Section 406 of ERISA or Section 4975 of the Code, nor
      a
      person acting on behalf of any such plan, which representation letter shall
      not
      be an expense of the Trustee, the Depositor or the Master Servicer, (ii) if
      the
      purchaser is an insurance company and the certificate has been subject to an
      ERISA-Qualifying Underwriting, a representation that the purchaser is an
      insurance company which is purchasing such Certificates with funds contained
      in
      an “insurance company general account” (as such term is defined in Section V(e)
      of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”)) and that the
      purchase and holding of such Certificates are covered under Sections I and
      III
      of PTCE 95-60 or (iii) in the case of any such Certificate presented for
      registration in the name of an employee benefit plan subject to ERISA or Section
      4975 of the Code (or comparable provisions of any subsequent enactments), or
      a
      trustee of any such plan or any other person acting on behalf of any such plan,
      an Opinion of Counsel satisfactory to the Trustee to the effect that the
      purchase or holding of such Certificate will not result in prohibited
      transactions under Section 406 of ERISA and Section 4975 of the Code and will
      not subject the Trustee, the Depositor or the Master Servicer to any obligation
      in addition to those undertaken in the Agreement, which Opinion of Counsel
      shall
      not be an expense of the Trustee, the Depositor or the Master Servicer. [Such
      representation shall be deemed to have been made to the Trustee by the
      Transferee’s acceptance of a Certificate of this Class and by a beneficial
      owner’s acceptance of its interest in a Certificate of this Class.
      Notwithstanding anything else to the contrary herein, any purported transfer
      of
      a Certificate of this Class to or on behalf of an employee benefit plan subject
      to ERISA or to the Code without the opinion of counsel satisfactory to the
      Trustee as described above shall be void and of no effect.]Reference is hereby
      made to the further provisions of this Certificate set forth on the reverse
      hereof, which further provisions shall for all purposes have the same effect
      as
      if set forth at this place.

     

    Reference
      is hereby made to the further provisions of this Certificate set forth on the
      reverse hereof, which further provisions shall for all purposes have the same
      effect as if set forth at this place.

     


    
      
         

      

      
        B-4

        
          

        

      

      
         

      

    


    


     

    This
      Certificate shall not be entitled to any benefit under the Agreement or be
      valid
      for any purpose unless manually countersigned by an authorized signatory of
      the
      Trustee.

     


    
      
         

      

      
        B-5

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
      executed.

     

    Dated:
      March __, 2007

     

    
      	 	
              THE
                BANK OF NEW YORK,

            
	 	
              not
                in its individual capacity, but solely as Trustee

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Authorized
                Signatory of 

            
	 	 	
              THE
                BANK OF NEW YORK

            
	 	 	
              not
                in its individual capacity,

            
	 	 	
              but
                solely as Trustee

            


    

     

     

    
      	
              Countersigned:

            	 
	
              By
                

            	
               

            	 
	 	
              Authorized
                Signatory of

            	 
	 	
              THE
                BANK OF NEW YORK,

            	 
	 	
              not
                in its individual capacity, 

            	 
	 	
              but
                solely as Trustee

            	 


    

    


     


    
      
         

      

      
        B-6

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      C

     

    [FORM
      OF
      RESIDUAL CERTIFICATE]

     

     

    SOLELY
      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “RESIDUAL INTEREST”
IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED,
      RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
      AS
      AMENDED (THE “CODE”).

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
      TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE WITH
      THE
      PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

     

    [THIS
      CERTIFICATE REPRESENTS THE “TAX MATTERS PERSON RESIDUAL INTEREST” ISSUED UNDER
      THE POOLING AND SERVICING AGREEMENT REFERRED TO BELOW AND MAY NOT BE TRANSFERRED
      TO ANY PERSON EXCEPT IN CONNECTION WITH THE ASSUMPTION BY THE TRANSFEREE OF
      THE
      DUTIES OF THE SERVICER UNDER SUCH AGREEMENT.]

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
      TRANSFEREE REPRESENTS TO THE TRUSTEE THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
      BENEFIT PLAN OR ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
      ACT OF 1974, AS AMENDED (“ERISA”), OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION
      4975 OF THE CODE, OR, IF SUCH PURCHASER IS AN INSURANCE COMPANY, A
      REPRESENTATION IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED
      TO
      HEREIN, OR DELIVERS TO THE TRUSTEE AN OPINION OF COUNSEL IN ACCORDANCE WITH
      THE
      PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. [SUCH REPRESENTATION SHALL
      BE
      DEEMED TO HAVE BEEN MADE TO THE TRUSTEE BY THE TRANSFEREE’S ACCEPTANCE OF A
      CERTIFICATE OF THIS CLASS AND BY A BENEFICIAL OWNER’S ACCEPTANCE OF ITS INTEREST
      IN A CERTIFICATE OF THIS CLASS.] NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
      HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
      EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
      COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
      NO
      EFFECT.

     


    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    


    


     

    
      	
              Certificate
                No.

            	: 
	
              Cut-off
                Date

            	:
	
              First
                Distribution Date

            	: 
	
              Initial
                Certificate Balance of this Certificate (“Denominations”)

            	
               

              : 
                $

            
	
              Initial
                Certificate 

              Balances
                of all 

              Certificate
                of this 

              Class

            	
              : 
                $

            
	
              CUSIP

            	: 


    

    


     

    First
      Horizon Mortgage Pass-Through Trust 2007-AR1

     

    Mortgage
      Pass-Through Certificates, Series 2007-AR1

     

    evidencing
      a percentage interest in the distributions allocable to the Certificates of
      the
      above-referenced Class with respect to a Trust Fund consisting primarily of
      one
      or more pools of conventional mortgage loans (the “Mortgage Loans”) secured by
      first liens on one- to four-family residential properties.

     

    First
      Horizon Asset Securities Inc., as Depositor

     

    Principal
      in respect of this Certificate is distributable monthly as set forth herein.
      Accordingly, the Certificate Balance at any time may be less than the
      Certificate Balance as set forth herein. This Certificate does not evidence
      an
      obligation of, or an interest in, and is not guaranteed by the Depositor, the
      Master Servicer or the Trustee referred to below or any of their respective
      affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed
      or
      insured by any governmental agency or instrumentality.

     

    This
      certifies that _________________ is the registered owner of the Percentage
      Interest (obtained by dividing the denomination of this Certificate by the
      aggregate Initial Certificate Balances of the denominations of all Certificates
      of the Class to which this Certificate belongs) in certain monthly distributions
      with respect to a Trust Fund consisting of the Mortgage Loans deposited by
      First
      Horizon Asset Securities Inc. (the “Depositor”). The Trust Fund was created
      pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date
      specified above (the “Agreement”) among the Depositor, First Horizon Home Loan
      Corporation, as master servicer (the “Master Servicer”), and The Bank of New
      York, as trustee (the “Trustee”). To the extent not defined herein, the
      capitalized terms used herein have the meanings assigned in the Agreement.
      This
      Certificate is issued under and is subject to the terms, provisions and
      conditions of the Agreement, to which Agreement the Holder of this Certificate
      by virtue of the acceptance hereof assents and by which such Holder is
      bound.

     

    Any
      distribution of the proceeds of any remaining assets of the Trust Fund will
      be
      made only upon presentment and surrender of this Class I-A-R Certificate at
      the
      Corporate Trust Office or the office or agency maintained by the Trustee in
      New
      York, New York. This Class I-A-R Certificate represents an ownership in the
      RL
      Interest and RU Interest, as defined in the Agreement.

     


    
      
         

      

      
        C-2

        
          

        

      

      
         

      

    


    


     

    No
      transfer of a Class I-A-R Certificate shall be made unless the Trustee shall
      have received either (i) a representation [letter] from the transferee of such
      Certificate, acceptable to and in form and substance satisfactory to the
      Trustee, to the effect that such transferee is not an employee benefit plan
      or
      arrangement subject to Section 406 of ERISA or Section 4975 of the Code, nor
      a
      person acting on behalf of any such plan, which representation letter shall
      not
      be an expense of the Trustee, the Depositor or the Master Servicer, (ii) if
      the
      purchaser is an insurance company, a representation that the purchaser is an
      insurance company which is purchasing such Certificate with funds contained
      in
      an “insurance company general account” (as such term is defined in Section V(e)
      of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”)) and that the
      purchase and holding of such Certificate are covered under Sections I and III
      of
      PTCE 95-60 or (iii) in the case of any such Certificate presented for
      registration in the name of an employee benefit plan subject to ERISA or Section
      4975 of the Code (or comparable provisions of any subsequent enactments), or
      a
      trustee of any such plan or any other person acting on behalf of any such plan,
      an Opinion of Counsel satisfactory to the Trustee to the effect that the
      purchase or holding of such Class I-A-R Certificate will not result in
      prohibited transactions under Section 406 of ERISA and Section 4975 of the
      Code
      and will not subject the Trustee, the Depositor and the Master Servicer to
      any
      obligation in addition to those undertaken in the Agreement, which Opinion
      of
      Counsel shall not be an expense of the Trustee, the Depositor or the Master
      Servicer. [Such representation shall be deemed to have been made to the Trustee
      by the Transferee’s acceptance of this Class I-A-R Certificate and by a
      beneficial owner’s acceptance of its interest in such Certificate.]
      Notwithstanding anything else to the contrary herein, any purported transfer
      of
      a Class I-A-R Certificate to or on behalf of an employee benefit plan subject
      to
      ERISA or to the Code without the opinion of counsel satisfactory to the Trustee
      as described above shall be void and of no effect.

     

    Each
      Holder of this Class I-A-R Certificate will be deemed to have agreed to be
      bound
      by the restrictions of the Agreement, including but not limited to the
      restrictions that (i) each person holding or acquiring any Ownership Interest
      in
      this Class I-A-R Certificate must be a Permitted Transferee, (ii) no Ownership
      Interest in this Class I-A-R Certificate may be transferred without delivery
      to
      the Trustee of (a) a transfer affidavit of the proposed transferee and (b)
      a
      transfer certificate of the transferor, each of such documents to be in the
      form
      described in the Agreement, (iii) each person holding or acquiring any Ownership
      Interest in this Class I-A-R Certificate must agree to require a transfer
      affidavit and to deliver a transfer certificate to the Trustee as required
      pursuant to the Agreement, (iv) each person holding or acquiring an Ownership
      Interest in this Class I-A-R Certificate must agree not to transfer an Ownership
      Interest in this Class I-A-R Certificate if it has actual knowledge that the
      proposed transferee is not a Permitted Transferee and (v) any attempted or
      purported transfer of any Ownership Interest in this Class I-A-R Certificate
      in
      violation of such restrictions will be absolutely null and void and will vest
      no
      rights in the purported transferee.

     

    Reference
      is hereby made to the further provisions of this Certificate set forth on the
      reverse hereof, which further provisions shall for all purposes have the same
      effect as if set forth at this place.

     


    
      
         

      

      
        C-3

        
          

        

      

      
         

      

    


    


     

    This
      Certificate shall not be entitled to any benefit under the Agreement or be
      valid
      for any purpose unless manually countersigned by an authorized signatory of
      the
      Trustee.

     


    
      
         

      

      
        C-4

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
      executed.

     

    Dated:
      March __, 2007

     

    
      	 	
              THE
                BANK OF NEW YORK,

            
	 	
              not
                in its individual capacity, but solely as Trustee

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Authorized
                Signatory of 

            
	 	 	
              THE
                BANK OF NEW YORK

            
	 	 	
              not
                in its individual capacity,

            
	 	 	
              but
                solely as Trustee

            


    

     

     

    
      	
              Countersigned:

            	 
	
              By

            	
               

            	 
	 	
              Authorized
                Signatory of

            	 
	 	
              THE
                BANK OF NEW YORK,

            	 
	 	
              not
                in its individual capacity, 

            	 
	 	
              but
                solely as Trustee

            	 


    

    


     


    
      
         

      

      
        C-5

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      D

     

    [Form
      of
      Reverse of Certificates]

     

    First
      Horizon Mortgage Pass-Through Trust 2007-AR1

    Mortgage
      Pass-Through Certificates

     

    This
      Certificate is one of a duly authorized issue of Certificates designated as
      First Horizon Mortgage Pass-Through Trust 2007-AR1 Mortgage Pass-Through
      Certificates, of the Series specified on the face hereof (herein collectively
      called the “Certificates”), and representing a beneficial ownership interest in
      the Trust Fund created by the Agreement.

     

    The
      Certificateholder, by its acceptance of this Certificate, agrees that it will
      look solely to the funds on deposit in the Distribution Account for payment
      hereunder and that the Trustee is not liable to the Certificateholders for
      any
      amount payable under this Certificate or the Agreement or, except as expressly
      provided in the Agreement, subject to any liability under the
      Agreement.

     

    This
      Certificate does not purport to summarize the Agreement and reference is made
      to
      the Agreement for the interests, rights and limitations of rights, benefits,
      obligations and duties evidenced thereby, and the rights, duties and immunities
      of the Trustee.

     

    Pursuant
      to the terms of the Agreement, a distribution will be made on the 25th day
      of
      each month or, if such 25th day is not a Business Day, the Business Day
      immediately following (the “Distribution Date”), commencing on the first
      Distribution Date specified on the face hereof, to the Person in whose name this
      Certificate is registered at the close of business on the applicable Record
      Date
      in an amount equal to the product of the Percentage Interest evidenced by this
      Certificate and the amount required to be distributed to Holders of Certificates
      of the Class to which this Certificate belongs on such Distribution Date
      pursuant to the Agreement. The Record Date applicable to each Distribution
      Date
      is the last Business Day of the month next preceding the month of such
      Distribution Date.

     

    Distributions
      on this Certificate shall be made by wire transfer of immediately available
      funds to the account of the Holder hereof at a bank or other entity having
      appropriate facilities therefor, if such Certificateholder shall have so
      notified the Trustee in writing at least five Business Days prior to the related
      Record Date and such Certificateholder shall satisfy the conditions to receive
      such form of payment set forth in the Agreement, or, if not, by check mailed
      by
      first class mail to the address of such Certificateholder appearing in the
      Certificate Register. The final distribution on each Certificate will be made
      in
      like manner, but only upon presentment and surrender of such Certificate at
      the
      Corporate Trust Office or such other location specified in the notice to
      Certificateholders of such final distribution.

     

    The
      Agreement permits, with certain exceptions therein provided, the amendment
      thereof and the modification of the rights and obligations of the Trustee and
      the rights of the Certificateholders under the Agreement at any time by the
      Depositor, the Master Servicer and the Trustee with the consent of the Holders
      of Certificates affected by such amendment evidencing the requisite Percentage
      Interest, as provided in the Agreement. Any such consent by the Holder of this
      Certificate shall be conclusive and binding on such Holder and upon all future
      Holders of this Certificate and of any Certificate issued upon the transfer
      hereof or in exchange therefor or in lieu hereof whether or not notation of
      such
      consent is made upon this Certificate. The Agreement also permits the amendment
      thereof, in certain limited circumstances, without the consent of the Holders
      of
      any of the Certificates.

     


    
      
         

      

      
        D-1

        
          

        

      

      
         

      

    


    


     

    As
      provided in the Agreement and subject to certain limitations therein set forth,
      the transfer of this Certificate is registrable in the Certificate Register
      of
      the Trustee upon surrender of this Certificate for registration of transfer
      at
      the Corporate Trust Office or the office or agency maintained by the Trustee
      in
      New York, New York, accompanied by a written instrument of transfer in form
      satisfactory to the Trustee and the Certificate Registrar duly executed by
      the
      holder hereof or such holder’s attorney duly authorized in writing, and
      thereupon one or more new Certificates of the same Class in authorized
      denominations and evidencing the same aggregate Percentage Interest in the
      Trust
      Fund will be issued to the designated transferee or transferees.

     

    The
      Certificates are issuable only as registered Certificates without coupons in
      denominations specified in the Agreement. As provided in the Agreement and
      subject to certain limitations therein set forth, Certificates are exchangeable
      for new Certificates of the same Class in authorized denominations and
      evidencing the same aggregate Percentage Interest, as requested by the Holder
      surrendering the same.

     

    No
      service charge will be made for any such registration of transfer or exchange,
      but the Trustee may require payment of a sum sufficient to cover any tax or
      other governmental charge payable in connection therewith.

     

    The
      Depositor, the Master Servicer and the Trustee and any agent of the Depositor
      or
      the Trustee may treat the Person in whose name this Certificate is registered
      as
      the owner hereof for all purposes, and neither the Depositor, the Trustee,
      nor
      any such agent shall be affected by any notice to the contrary.

     

    On
      any
      Distribution Date on which the aggregate of the Pool Principal Balances of
      all
      of the Mortgage Pools is less than 10% of the aggregate of the Cut-off Date
      Pool
      Principal Balances of all of the Mortgage Pools, the Master Servicer will have
      the option to repurchase, in whole, from the Trust Fund all remaining Mortgage
      Loans and all property acquired in respect of the Mortgage Loans in the Mortgage
      Pools at a purchase price determined as provided in the Agreement. In the event
      that no such optional termination occurs, the obligations and responsibilities
      created by the Agreement will terminate upon the later of the maturity or other
      liquidation (or any advance with respect thereto) of the last Mortgage Loan
      remaining in the Trust Fund or the disposition of all property in respect
      thereof and the distribution to Certificateholders of all amounts required
      to be
      distributed pursuant to the Agreement. In no event, however, will the trust
      created by the Agreement continue beyond the expiration of 21 years from the
      death of the last survivor of the descendants living at the date of the
      Agreement of a certain person named in the Agreement.

     

    Any
      term
      used herein that is defined in the Agreement shall have the meaning assigned
      in
      the Agreement, and nothing herein shall be deemed inconsistent with that
      meaning.

     


    
      
         

      

      
        D-2

        
          

        

      

      
         

      

    


    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto


     

    ______________________________

     

    (Please
      insert social security or

     

    other
      identifying number of assignee)

     

    
      
        

      

    

     

    
      
        

      

    

     

    (Please
      print or typewrite name and address

     

    including
      postal zip code of assignee)

     

    
      
 

    the
      Percentage Interest evidenced by the within Certificate and hereby authorizes
      the transfer of registration of such Percentage Interest to assignee on the
      Certificate Register of the Trust Fund.

     

    I
      (We)
      further direct the Trustee to issue a new Certificate of a like denomination
      and
      Class, to the above named assignee and deliver such Certificate to the following
      address:

     

    
      
 

    
      
 

    
      
 

    Dated: __________________

     

    
      	 	  

	 	Signature by or on behalf of
              assignor


    

     

     

    


    


     

    DISTRIBUTION
      INSTRUCTIONS

     

    The
      assignee should include the following for purposes of distribution:

     

    Distributions
      shall be made, by wire transfer or otherwise, in immediately available funds
      to
      ______________________________________, for the account of
      _____________________, account number ___________, or, if mailed by check,
      to
      ___________________________. Applicable statements should be mailed to
      __________________________. 

     

    This
      information is provided by ________________________________________, the
      assignee named above, or _________________, as its agent.

     

    


     


    
      
         

      

      
        D-3

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      E

     

    FORM
      OF
      INITIAL CERTIFICATION OF CUSTODIAN

     

    [date]

     

    First
      Horizon Asset Securities Inc. 

    First
      Horizon Home Loan Corporation 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286

     

    
      	 	
              Re:

            	
              Custodial
                Agreement dated as of March 30, 2007 by and among The Bank of New
                York, as
                Trustee, First Horizon Home Loan Corporation, as Servicer and First
                Tennessee Bank National Association, as
                Custodian

            


    

     

    Gentlemen:

     

    In
      accordance with Section 2 of the above-captioned Custodial Agreement (the
“Custodial Agreement”), the undersigned, as Custodian, hereby certifies that, as
      to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
      Mortgage Loan listed in the attached schedule), it has received:

     

    (i)
       the
      original Mortgage Note, endorsed as provided in the following form: “Pay to the
      order of ________________,
      without
      recourse”; and

     

    (ii)
       a
      duly
      executed assignment, or a copy of such assignment certified by the Seller as
      being a true and complete copy of the assignment, of the Mortgage (which may
      be
      included in a blanket assignment or assignments); provided, however, that it
      has
      received no assignment with respect to any Mortgage for which the related
      Mortgaged Property is located in the Commonwealth of Puerto Rico.

     

    Based
      on
      its review and examination and only as to the foregoing documents, such
      documents appear regular on their face and related to such Mortgage
      Loan.

     

    The
      Custodian has made no independent examination of any documents contained in
      each
      Mortgage File beyond the review specifically required in the Custodial
      Agreement. The Custodian makes no representations as to: (i) the validity,
      legality, sufficiency, enforceability or genuineness of any of the documents
      contained in each Mortgage File of any of the Mortgage Loans identified on
      the
      Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
      or suitability of any such Mortgage Loan.

     


    
      
         

      

      
        E-1

        
          

        

      

      
         

      

    


    Capitalized
      words and phrases used herein shall have the respective meanings assigned to
      them in the Custodial Agreement.

     

    
      	 	
              FIRST
                TENNESSEE BANK NATIONAL ASSOCIATION,

            
	 	
              as
                Custodian

            
	 	 	 
	 	 	 
	 	
              By:

            	  

	 	
              Name:

            	  

	 	
              Title:

            	  



    

    



    
      
         

      

      
        E-2

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      F

     

    FORM
      OF
      DELAY DELIVERY CERTIFICATION

     

    [date]

     

    


     

    First
      Horizon Asset Securities Inc. 

    First
      Horizon Home Loan Corporation 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286

     

    
      	 	
              Re:

            	
              Custodial
                Agreement dated as of March 30, 2007 by and among The Bank of New
                York, as
                Trustee, First Horizon Home Loan Corporation, as Servicer, and First
                Tennessee Bank National Association, as
                Custodian

            


    

     

    Ladies
      and Gentlemen:

     

    In
      accordance with Section 3 of the above-captioned Custodial Agreement (the
“Custodial Agreement”), the undersigned, as Custodian, hereby certifies that, as
      to each Delay Delivery Mortgage Loan listed in the Mortgage Loan Schedule (other
      than any Delay Delivery Mortgage Loan listed in the attached schedule), it
      has
      received:

     

    (i) the
      original Mortgage Note, endorsed as provided in the following form: “Pay to the
      order of ____________,
      without
      recourse”; 

     

    (ii) in
      the
      case of each Mortgage Loan, the original recorded Mortgage, or a copy of such
      Mortgage certified by the Seller as being a true and complete copy of the
      Mortgage, [and in the case of each Mortgage Loan that is a MERS Mortgage Loan,
      the original Mortgage, or a copy of such Mortgage certified by the Seller as
      being a true and complete copy of the Mortgage, noting thereon the presence
      of
      the MIN of the Mortgage Loan and language indicating that the Mortgage Loan
      is a
      MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
      indicated thereon]; and

     

    (iii) in
      the
      case of each Mortgage Loan, a duly executed assignment, or a copy of such
      assignment certified by the Seller as a true and complete copy of the
      assignment, of the Mortgage (which may be included in a blanket assignment
      or
      assignments); provided, however, that it has received no assignment with respect
      to any Mortgage for which the related Mortgage Property is located in the
      Commonwealth of Puerto Rico.

     

    Based
      on
      its review and examination and only as to the foregoing documents, such
      documents appear regular on their face and related to such Delay Delivery
      Mortgage Loan.

     

    The
      Custodian has made no independent examination of any documents contained in
      each
      Mortgage File beyond the review specifically required in the Custodial
      Agreement. The Custodian makes no representations as to: (i) the validity,
      legality, sufficiency, enforceability or genuineness of any of the documents
      contained in each Mortgage File of any of the Delay Delivery Mortgage Loans
      identified on the Mortgage Loan Schedule, or (ii) the collectability,
      insurability, effectiveness or suitability of any such Delay Delivery Mortgage
      Loan.

     


    
      
         

      

      
        F-1

        
          

        

      

      
         

      

    


    


     

    Capitalized
      words and phrases used herein shall have the respective meanings assigned to
      them in the above-captioned Custodial Agreement.

     

    


     

    
      	 	
              FIRST
                TENNESSEE BANK NATIONAL ASSOCIATION,

            
	 	
              as
                Custodian

            
	 	 	 
	 	 	 
	 	
              By:

            	  

	 	
              Name:

            	  

	 	
              Title:

            	  



    

    



    
      
         

      

      
        F-2

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      G

     

    FORM
      OF
      SUBSEQUENT CERTIFICATION OF CUSTODIAN

     

    [date]

     

    


     

    First
      Horizon Asset Securities Inc. 

    First
      Horizon Home Loan Corporation 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286

     

    
      	 	
              Re:

            	
              Custodial
                Agreement dated as of March 30, 2007 by and among The Bank of New
                York, as
                Trustee, First Horizon Home Loan Corporation, as Servicer, and First
                Tennessee Bank National Association, as
                Custodian

            


    

     

    Ladies
      and Gentlemen:

     

    In
      accordance with Section 3 of the above-captioned Custodial Agreement (the
“Custodial Agreement”), the undersigned, as Custodian hereby certifies that as
      to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
      Mortgage Loan paid in full or listed on the attached exception report) it has
      received, unless otherwise provided in Section 2 of the Custodial
      Agreement:

     

    (i)    (A)
      The
      original Mortgage Note endorsed by manual or facsimile signature in blank in
      the
      following form: “Pay to the order of ______________ without
      recourse,” with all intervening endorsements showing a complete chain of
      endorsements from the originator to the Person endorsing the Mortgage Note
      (each
      such endorsement being sufficient to transfer all right, title and interest
      of
      the party so endorsing, as noteholder or assignee thereof, in and to that
      Mortgage Note); or

     

    
      	 	 	
              (B)
                with respect to any Lost Mortgage Note, a lost note affidavit from
                the
                Seller stating that the original Mortgage Note was lost or destroyed,
                together with a copy of such Mortgage
                Note;

            


    

     

    
      	 	
              (ii)

            	
              except
                as provided in Section 2(c) of the Custodial Agreement and for each
                Mortgage Loan that is not a MERS Mortgage Loan, the
                original recorded Mortgage or a copy of such Mortgage certified by
                the
                Seller as being a true and complete copy of the Mortgage, and in
                the case
                of each MERS Mortgage Loan, the original recorded Mortgage, noting
                the
                presence of the MIN of the Mortgage Loans and either language indicating
                that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM
                Loan or
                if the Mortgage Loan was not a MOM Loan at origination, the original
                Mortgage and the assignment thereof to MERS, with evidence of recording
                indicated thereon, or a copy of the Mortgage certified by the Seller
                as
                being a true and complete copy of the Mortgage;

            


    

     


    
      
         

      

      
        G-1

        
          

        

      

      
         

      

    


    


     

    
      	 	
              (iii)

            	
              in
                the case of each Mortgage Loan that is not a MERS Mortgage Loan,
                a duly
                executed assignment of the Mortgage, or a copy of such assignment
                certified by the Seller as being a true and complete copy of the
                assignment, in blank (which may be included in a blanket assignment
                or
                assignments), together with, except as provided below, all interim
                recorded assignments, or copies of such interim assignments certified
                by
                the Seller as being true and complete copies of the interim assignments,
                of such Mortgage (each such assignment, when duly and validly completed,
                to be in recordable form and sufficient to effect the assignment
                of and
                transfer to the assignee thereof, under the Mortgage to which the
                assignment relates); provided that, if the related Mortgage has not
                been
                returned from the applicable public recording office, such assignment
                of
                the Mortgage may exclude the information to be provided by the recording
                office;

            


    

     

    
      	 	
              (iv)

            	
              the
                original or copies of each assumption, modification, written assurance
                or
                substitution agreement, if any;

            


    

     

    
      	 	
              (v)

            	
              either
                the original or duplicate original title policy, or a copy of such
                title
                policy certified by the Seller as being a true and complete copy
                of the
                title policy (including all riders thereto), with respect to the
                related
                Mortgaged Property, if available, provided that the title policy
                (including all riders thereto) will be delivered as soon as it becomes
                available, and if the title policy is not available, and to the extent
                required pursuant to the second paragraph below or otherwise in connection
                with the rating of the Certificates, a written commitment or interim
                binder or preliminary report of the title issued by the title insurance
                or
                escrow company with respect to the Mortgaged Property, or in lieu
                thereof,
                an Alternative Title Product or a copy of such Alternative Title
                Product
                certified by the Seller as being a true and complete copy of the
                Alternative Title Product; and

            


    

     

    
      	 	
              (vi)

            	
              in
                the case of a Cooperative Loan, the originals of the following documents
                or instruments:

            


    

     

    
      	 	
              (a)

            	
              The
                Coop Shares, together with a stock power in
                blank;

            


    

     

    
      	 	
              (b)

            	
              The
                executed Security Agreement;

            


    

     

    
      	 	
              (c)

            	
              The
                executed Proprietary Lease;

            


    

     

    
      	 	
              (d)

            	
              The
                executed UCC-1 financing statement with evidence of recording thereon
                which have been filed in all places required to perfect the Seller’s
                interest in the Coop Shares and the Proprietary Lease;
                and

            


    

     

    
      	 	
              (e)

            	
              Executed
                UCC-3 financing statements or their appropriate UCC financing statements
                required by state law, evidencing a complete and unbroken line from
                the
                mortgagee to the Trustee with evidence of recording thereon (or in
                a form
                suitable for recordation).

            


    

     


    
      
         

      

      
        G-2

        
          

        

      

      
         

      

    


    


     

    Based
      on
      its review and examination and only as to the foregoing documents, (a) such
      documents appear regular on their face and related to such Mortgage Loan, and
      (b) the information set forth in items (i), (ii), (iii), (iv), (vi) and (xi)
      of
      the definition of the “Mortgage Loan Schedule” in Article I of the Pooling and
      Servicing Agreement accurately reflects information set forth in the Mortgage
      File.

     

    The
      Custodian has made no independent examination of any documents contained in
      each
      Mortgage File beyond the review specifically required in the Custodial
      Agreement. The Custodian makes no representations as to: (i) the validity,
      legality, sufficiency, enforceability or genuineness of any of the documents
      contained in each Mortgage File of any of the Mortgage Loans identified on
      the
      Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
      or suitability of any such Mortgage Loan. Notwithstanding anything herein to
      the
      contrary, the Custodian has made no determination and makes no representations
      as to whether (i) any endorsement is sufficient to transfer all right, title,
      and interest of the party so endorsing, as noteholder or assignee thereof,
      in
      and to that Mortgage Note or (ii) any assignment is in recordable form or
      sufficient to effect the assignment of and transfer to the assignee thereof,
      under the Mortgage to which the assignment relates.

     

    Capitalized
      words and phrases used herein shall have the respective meanings assigned to
      them in the Custodial Agreement.

     

    


     

    
      	 	
              FIRST
                TENNESSEE BANK NATIONAL ASSOCIATION,

            
	 	
              as
                Custodian

            
	 	 	 
	 	
              By:

            	  

	 	
              Name:

            	  

	 	
              Title:

            	  



    

    


    



    
      
         

      

      
        G-3

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      H

     

    TRANSFER
      AFFIDAVIT

     

    First
      Horizon Mortgage Pass-Through Trust 2007-AR1

    Mortgage
      Pass-Through Certificates

    Series
      2007-AR1

     

    
      	
              STATE
                OF

            	
              )

            
	 	
              )
                ss.:

            
	
              COUNTY
                OF

            	
              )

            


    

     

    The
      undersigned, being first duly sworn, deposes and says as follows:

     

    1. The
      undersigned is an officer of __________, the proposed Transferee of an Ownership
      Interest in a [Class I-A-R] Certificate (the “Certificate”) issued pursuant to
      the Pooling and Servicing Agreement, (the “Agreement”), relating to the
      above-referenced Series, by and among First Horizon Asset Securities Inc.,
      as
      depositor (the “Depositor”), First Horizon Home Loan Corporation, as master
      servicer, and The Bank of New York, as trustee. Capitalized terms used, but
      not
      defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to
      such
      terms in the Agreement. The Transferee has authorized the undersigned to make
      this affidavit on behalf of the Transferee.

     

    2. The
      Transferee is, as of the date hereof, and will be, as of the date of the
      Transfer, a Permitted Transferee. The Transferee is acquiring its Ownership
      Interest in the Certificate either (i) for its own account or (ii) as nominee,
      trustee or agent for another Person and has attached hereto an affidavit from
      such Person in substantially the same form as this affidavit. The Transferee
      has
      no knowledge that any such affidavit is false. The Transferee does not hold
      REMIC residual interests as nominee to facilitate the clearance and settlement
      of such interests through electronic book-entry changes in accounts of
      participating organizations.

     

    3. The
      Transferee has been advised of, and understands that (i) a tax may be imposed
      on
      Transfers of the Certificate to Persons that are not Permitted Transferees;
      (ii)
      such tax will be imposed on the transferor, or, if such Transfer is through
      an
      agent (which includes a broker, nominee or middleman) for a Person that is
      not a
      Permitted Transferee, on the agent; and (iii) the Person otherwise liable for
      the tax shall be relieved of liability for the tax if the subsequent transferee
      furnished to such Person an affidavit that such subsequent transferee is a
      Permitted Transferee and, at the time of Transfer, such Person does not have
      actual knowledge that the affidavit is false.

     

    4. The
      Transferee has been advised of, and understands that a tax may be imposed on
      a
“pass-through entity” holding the Certificate if at any time during the taxable
      year of the pass-through entity a Person that is not a Permitted Transferee
      is
      the record holder of an interest in such entity. The Transferee understands
      that
      such tax will not be imposed for any period with respect to which the record
      holder furnishes to the pass-through entity an affidavit that such record holder
      is a Permitted Transferee and the pass-through entity does not have actual
      knowledge that such affidavit is false. (For this purpose, a “pass-through
      entity” includes a regulated investment company, a real estate investment trust
      or common trust fund, a partnership, trust or estate, and certain cooperatives
      and, except as may be provided in Treasury Regulations, persons holding
      interests in pass-through entities as a nominee for another
      Person.)

     


    
      
         

      

      
        H-1

        
          

        

      

      
         

      

    


    


     

    5. The
      Transferee has reviewed the provisions of Section 5.2(c) of the Agreement
      (attached hereto as Exhibit 2 and incorporated herein by reference) and
      understands the legal consequences of the acquisition of an Ownership Interest
      in the Certificate including, without limitation, the restrictions on subsequent
      Transfers and the provisions regarding voiding the Transfer and mandatory sales.
      The Transferee expressly agrees to be bound by and to abide by the provisions
      of
      Section 5.2(c) of the Agreement and the restrictions noted on the face of the
      Certificate. The Transferee understands and agrees that any breach of any of
      the
      representations included herein shall render the Transfer to the Transferee
      contemplated hereby null and void.

     

    6. The
      Transferee agrees to require a Transfer Affidavit from any Person to whom the
      Transferee attempts to Transfer its Ownership Interest in the Certificate,
      and
      in connection with any Transfer by a Person for whom the Transferee is acting
      as
      nominee, trustee or agent, and the Transferee will not Transfer its Ownership
      Interest or cause any Ownership Interest to be Transferred to any Person that
      the Transferee knows is not a Permitted Transferee. In connection with any
      such
      Transfer by the Transferee, the Transferee agrees to deliver to the Trustee
      a
      certificate substantially in the form set forth as Exhibit I to the Agreement
      (a
“Transferor Certificate”) to the effect that such Transferee has no actual
      knowledge that the Person to which the Transfer is to be made is not a Permitted
      Transferee.

     

    7. The
      Transferee does not have the intention to impede the assessment or collection
      of
      any tax legally required to be paid with respect to the
      Certificate.

     

    8. The
      Transferee’s taxpayer identification number is ______.

     

    9. The
      Transferee is either a U.S. Person as defined in Code Section 7701(a)(30) or
      the
      Transferee has furnished the Transferor a properly completed Internal Revenue
      Service Form W-8ECI.

     

    10. The
      Transferee is aware that the Certificate may represent one or more interest
      in a
“noneconomic residual interest” within the meaning of Treasury regulations
      promulgated pursuant to the Code and that the transferor of a noneconomic
      residual interest will remain liable for any taxes due with respect to the
      income on such residual interest, unless no significant purpose of the transfer
      was to impede the assessment or collection of tax.

     

    11. The
      Transferee is not an employee benefit plan or arrangement subject to Section
      406
      of ERISA or a plan or arrangement subject to Section 4975 of the Code, nor
      a
      person acting on behalf of any such plan or arrangement, nor using the assets
      of
      any such plan or arrangement to effect such transfer.

     

    12. The
      Transferee has historically paid its debts as they came due and the Transferee
      will continue to pay its debts as they come due in the future; the Transferee
      understands that, as the holder of the Certificate, the Transferee may incur
      tax
      liabilities in excess of any cash flows generated by the Certificate and the
      Transferee intends to pay taxes associated with holding the Certificate as
      they
      become due.

     


    
      
         

      

      
        H-2

        
          

        

      

      
         

      

    


    


     

    13. The
      Transferee is a domestic corporation taxable as a regular corporation for U.S.
      federal income tax purposes (a “taxable domestic C corporation”) and is not a
      real estate investment trust, regulated investment company or REMIC. The
      Transferee will not cause income from the Certificate to be attributable, for
      U.S. federal income tax purposes, to a non-U.S. permanent establishment or
      fixed
      base (within the meaning of an applicable income tax treaty) of the Transferee
      or another U.S. taxpayer. At the time of the Transfer, and at the close of
      each
      of the Transferee’s two fiscal years preceding the year of the Transfer, the
      Transferee’s gross assets for financial reporting purposes exceeded $10 million
      (together, the “Asset Requirements”), and the Transferee hereby covenants that
      any subsequent Transfer of its Ownership Interest in the Certificate will be
      to
      another taxable, domestic C corporation satisfying the Asset
      Requirements

     

    IN
      WITNESS WHEREOF, the Transferee has caused this instrument to be executed on
      its
      behalf, pursuant to authority of its Board of Directors, by its duly authorized
      officer and its corporate seal to be hereunto affixed, duly attested, this
      ___
      day of _________, 20__.

     

     

     

    
      	 	  

	 	
              Print
                Name of Transferee

            
	 	 	 
	 	
              By:

            	  

	 	
              Name:

            	  

	 	
              Title:

            	  



    

    


    Personally
      appeared before me the above-named ________________, known or proved to me
      to be
      the same person who executed the foregoing instrument and to be the
      _________________ of the Transferee, and acknowledged that he executed the
      same
      as his free act and deed and the free act and deed of the
      Transferee.

     

    Subscribed
      and sworn before me this _____ day of ___________, 20____.

     

    


     

    
      	 	 

	 	
              NOTARY
                PUBLIC

            
	 	 	 
	 	
              My
                Commission expires the ___ day of 

            
	 	
              ________________,
                20___.

            


    

    


     


    
      
         

      

      
        H-3

        
          

        

      

      
         

      

    


    EXHIBIT
      1
      to EXHIBIT H

     

    Certain
      Definitions

     

    “Ownership
      Interest”: As to any Certificate, any ownership interest in such Certificate,
      including any interest in such Certificate as the Holder thereof and any other
      interest therein, whether direct or indirect, legal or beneficial.

     

    “Permitted
      Transferee”: Any Person other than (i) the United States, any State or political
      subdivision thereof, or any agency or instrumentality of any of the foregoing,
      (ii) a foreign government, International Organization or any agency or
      instrumentality of either of the foregoing, (iii) an organization (except
      certain farmers’ cooperatives described in section 521 of the Code) which is
      exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
      by
      section 511 of the Code on unrelated business taxable income) on any excess
      inclusions (as defined in section 860E(c)(l) of the Code) with respect to any
      Certificate, (iv) rural electric and telephone cooperatives described in section
      1381(a)(2)(C) of the Code, (v) an “electing large partnership” as defined in
      section 775 of the Code, (vi) a Person that is not (a) a citizen or resident
      of
      the United States, (b) a corporation, partnership, or other entity created
      or
      organized in or under the laws of the United States, any state thereof or the
      District of Columbia, (c) an estate whose income from sources without the United
      States is includible in gross income for United States federal income tax
      purposes regardless of its connection with the conduct of a trade or business
      within the United States or (d) a trust if a court within the United States
      is
      able to exercise primary supervision over the administration of the trust and
      one or more United States persons have the authority to control all substantial
      decisions of the trust, unless such Person has furnished the transferor and
      the
      Trustee with a duly completed Internal Revenue Service Form W-8ECI or any
      applicable successor form, and (vii) any other Person so designated by the
      Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
      Interest in a Certificate to such Person may cause any REMIC created pursuant
      to
      the Agreement to fail to qualify as a REMIC at any time that the Certificates
      (as defined in the Agreement) are outstanding; provided, however, that if a
      person is classified as a partnership or a disregarded entity under the Code,
      such person shall only be a Permitted Transferee if all of its beneficial owners
      are described in subclauses (a), (b), (c) or (d) of clause (vi) and the
      governing documents of such person prohibits a transfer of any interest in
      such
      person to any person described in clause (vi). The terms “United States,”
“State” and “International Organization” shall have the meanings set forth in
      section 7701 of the Code or successor provisions. A corporation will not be
      treated as an instrumentality of the United States or of any State or political
      subdivision thereof for these purposes if all of its activities are subject
      to
      tax and, with the exception of the Federal Home Loan Mortgage Corporation,
      a
      majority of its board of directors is not selected by such government unit.
      

     

    “Person”:
      Any individual, corporation, partnership, joint venture, association, bank,
      joint-stock company, trust (including any beneficiary thereof), unincorporated
      organization or government or any agency or political subdivision
      thereof.

     

    “Transfer”:
      Any direct or indirect transfer or sale of any Ownership Interest in a
      Certificate, including the acquisition of a Certificate by the
      Depositor.

     


    
      
         

      

      
        H-4

        
          

        

      

      
         

      

    

     

    “Transferee”:
      Any Person who is acquiring by Transfer any Ownership Interest in a
      Certificate.

     


    
      
         

      

      
        H-5

        
          

        

      

      
         

      

    


    EXHIBIT
      2
      to EXHIBIT H

     

    Section
      5.2(c) of the Agreement

     

    (c)
       Each
      Person who has or who acquires any Ownership Interest in a Residual Certificate
      shall be deemed by the acceptance or acquisition of such Ownership Interest
      to
      have agreed to be bound by the following provisions, and the rights of each
      Person acquiring any Ownership Interest in a Residual Certificate are expressly
      subject to the following provisions: 

     

    (i) Each
      Person holding or acquiring any Ownership Interest in a Residual Certificate
      shall be a Permitted Transferee and shall promptly notify the Trustee of any
      change or impending change in its status as a Permitted Transferee.

     

    (ii) No
      Ownership Interest in a Residual Certificate may be registered on the Closing
      Date or thereafter transferred, and the Trustee shall not register the Transfer
      of any Residual Certificate unless, in addition to the certificates required
      to
      be delivered to the Trustee under subparagraph (b) above, the Trustee shall
      have
      been furnished with an affidavit (a “Transfer Affidavit”) of the initial owner
      or the proposed transferee in the form attached hereto as Exhibit H and with
      a
      certificate of the proposed transferor in the form attached hereto as Exhibit
      I.

     

    (iii) Each
      Person holding or acquiring any Ownership Interest in a Residual Certificate
      shall agree (A) to obtain a Transfer Affidavit from any other Person to whom
      such Person attempts to Transfer its Ownership Interest in a Residual
      Certificate, (B) to obtain a Transfer Affidavit from any Person for whom such
      Person is acting as nominee, trustee or agent in connection with any Transfer
      of
      a Residual Certificate and (C) not to Transfer its Ownership Interest in a
      Residual Certificate or to cause the Transfer of an Ownership Interest in a
      Residual Certificate to any other Person if it has actual knowledge that such
      Person is not a Permitted Transferee. 

     

    (iv) Any
      attempted or purported Transfer of any Ownership Interest in a Residual
      Certificate in violation of the provisions of this Section 5.2(c) shall be
      absolutely null and void and shall vest no rights in the purported Transferee.
      If any purported transferee shall become a Holder of a Residual Certificate
      in
      violation of the provisions of this Section 5.2(c), then the last preceding
      Permitted Transferee shall be restored to all rights as Holder thereof
      retroactive to the date of registration of Transfer of such Residual
      Certificate. The Trustee shall be under no liability to any Person for any
      registration of Transfer of a Residual Certificate that is in fact not permitted
      by Section 5.2(b) and this Section 5.2(c) or for making any payments due on
      such
      Certificate to the Holder thereof or taking any other action with respect to
      such Holder under the provisions of this Agreement so long as the Transfer
      was
      registered after receipt of the related Transfer Affidavit, Transferor
      Certificate, and in the case of a Residual Certificate which is also a Private
      Certificate, either the Rule 144A Letter or the Investment Letter. The Trustee
      shall be entitled but not obligated to recover from any Holder of a Residual
      Certificate that was in fact not a Permitted Transferee at the time it became
      a
      Holder or, at such subsequent time as it became other than a Permitted
      Transferee, all payments made on such Residual Certificate at and after either
      such time. Any such payments so recovered by the Trustee shall be paid and
      delivered by the Trustee to the last preceding Permitted Transferee of such
      Certificate.

     


    
      
         

      

      
        H-6

        
          

        

      

      
         

      

    


    


     

    (v) The
      Depositor shall use its best efforts to make available, upon receipt of written
      request from the Trustee, all information necessary to compute any tax imposed
      under Section 860E(e) of the Code as a result of a Transfer of an Ownership
      Interest in a Residual Certificate to any Holder who is not a Permitted
      Transferee.

     

    The
      restrictions on Transfers of a Residual Certificate set forth in this Section
      5.2(c) shall cease to apply (and the applicable portions of the legend on a
      Residual Certificate may be deleted) with respect to Transfers occurring after
      delivery to the Trustee of an Opinion of Counsel, which Opinion of Counsel
      shall
      not be an expense of the Trust Fund, the Trustee or the Master Servicer, to
      the
      effect that the elimination of such restrictions will not cause any REMIC
      created hereunder to fail to qualify as a REMIC at any time that the
      Certificates are outstanding or result in the imposition of any tax on the
      Trust
      Fund, a Certificateholder or another Person. Each Person holding or acquiring
      any Ownership Interest in a Residual Certificate hereby consents to any
      amendment of this Agreement which, based on an Opinion of Counsel furnished
      to
      the Trustee, is reasonably necessary (a) to ensure that the record ownership
      of,
      or any beneficial interest in, a Residual Certificate is not transferred,
      directly or indirectly, to a Person that is not a Permitted Transferee and
      (b)
      to provide for a means to compel the Transfer of a Residual Certificate which
      is
      held by a Person that is not a Permitted Transferee to a Holder that is a
      Permitted Transferee. 

     

    


     


    
      
         

      

      
        H-7

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      I

     

    FORM
      OF
      TRANSFEROR CERTIFICATE

     

    _______________,
      20___        

     

    


     

    First
      Horizon Asset Securities Inc. 

    First
      Horizon Home Loan Corporation 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286

     

    
      	 	
              Re:

            	
              First
                Horizon Mortgage Pass-Through Trust 2007-AR1 Mortgage Pass-Through
                Certificates, Series 2007-AR1, Class
                ___

            


    

     

    Ladies
      and Gentlemen:

     

    In
      connection with our disposition of the above Certificates we certify that (a)
      to
      the extent we are disposing of a Private Certificate, we understand that such
      Private Certificate has not been registered under the Securities Act of 1933,
      as
      amended (the “Act”), and is being disposed of by us in a transaction that is
      exempt from the registration requirements of the Act, (b) we have not offered
      or
      sold any Certificates to, or solicited offers to buy any Certificates from,
      any
      person, or otherwise approached or negotiated with any person with respect
      thereto, in a manner that would be deemed, or taken any other action which
      would
      result in, a violation of Section 5 of the Act, and (c) to the extent we are
      disposing of a Residual Certificate, we have no knowledge the transferee is
      not
      a Permitted Transferee.

     

    Capitalized
      terms used herein shall have the meaning ascribed to such terms in the Pooling
      and Servicing Agreement, dated as of March 1, 2007, by and among First Horizon
      Asset Securities Inc., as depositor, First Horizon Home Loan Corporation, as
      master servicer, and The Bank of New York, as trustee, pursuant to which the
      Residual Certificates were issued. 

     

    
      	 	
              Very
                truly yours,

            
	 	 	 
	 	 	 
	 	  

	 	Print
              Name of Transferor
	 	 	 
	 	
              By:

            	  

	 	 	
              Authorized
                Officer

            


    

     


    
      
         

      

      
        I-1

        
          

        

      

      
         

      

    


    EXHIBIT
      J

     

    FORM
      OF
      INVESTMENT LETTER (NON-RULE 144A)

     

    _____________,
      20___        

     

    First
      Horizon Asset Securities Inc. 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286 

    Attention:
      Mortgage-Backed Securities Group 

     

    


     

    
      	 	
              Re:

            	
              First
                Horizon Mortgage Pass-Through Trust 2007-AR1 Mortgage Pass-Through
                Certificates, Series 2007-AR1, Class
                ___

            


    

     

    Ladies
      and Gentlemen:

     

    In
      connection with our acquisition of the above Certificates we certify that (a)
      we
      understand that the Certificates are not being registered under the Securities
      Act of 1933, as amended (the “Act”), or any state securities laws and are being
      transferred to us in a transaction that is exempt from the registration
      requirements of the Act and any such laws, (b) we are an “accredited investor,”
as defined in Regulation D under the Act, and have such knowledge and experience
      in financial and business matters that we are capable of evaluating the merits
      and risks of investments in the Certificates, (c) we have had the opportunity
      to
      ask questions of and receive answers from the Depositor concerning the purchase
      of the Certificates and all matters relating thereto or any additional
      information deemed necessary to our decision to purchase the Certificates,
      (d)
      either (i) we are not an employee benefit plan or arrangement that is subject
      to
      the Employee Retirement Income Security Act of 1974, as amended, or a plan
      or
      arrangement that is subject to Section 4975 of the Internal Revenue Code of
      1986, as amended, nor are we acting on behalf of any such plan or arrangement
      nor are we using the assets of any such plan or arrangement to effect such
      acquisition or (ii) if, in the case of ERISA-Restricted Certificates that have
      been the subject of an ERISA-Qualifying Underwriting, we are an insurance
      company, a representation that we are an insurance company which is purchasing
      such Certificates with funds contained in an “insurance company general account”
(as such term is defined in Section V(e) of Prohibited Transaction Class
      Exemption 95-60 (“PTCE 95-60”)) and that the purchase and holding of such
      Certificates are covered under Sections I and III of PTCE 95-60, (e) we are
      acquiring the Certificates for investment for our own account and not with
      a
      view to any distribution of such Certificates (but without prejudice to our
      right at all times to sell or otherwise dispose of the Certificates in
      accordance with clause (g) below), (f) we have not offered or sold any
      Certificates to, or solicited offers to buy any Certificates from, any person,
      or otherwise approached or negotiated with any person with respect thereto,
      or
      taken any other action which would result in a violation of Section 5 of the
      Act, and (g) we will not sell, transfer or otherwise dispose of any Certificates
      unless (1) such sale, transfer or other disposition is made pursuant to an
      effective registration statement under the Act or is exempt from such
      registration requirements, and if requested, we will at our expense provide
      an
      opinion of counsel satisfactory to the addressees of this Certificate that
      such
      sale, transfer or other disposition may be made pursuant to an exemption from
      the Act, (2) the purchaser or transferee of such Certificate has executed and
      delivered to you a certificate to substantially the same effect as this
      certificate, and (3) the purchaser or transferee has otherwise complied with
      any
      conditions for transfer set forth in the Pooling and Servicing
      Agreement.

     


    
      
         

      

      
        J-1

        
          

        

      

      
         

      

    


    


     

    
      	 	
              Very
                truly yours,

            
	 	 	 
	 	 	 
	 	 

	 	Print
              Name of Transferee
	 	 	 
	 	
              By:

            	  

	 	 	
              Authorized
                Officer

            


    

    


     


    
      
         

      

      
        J-2

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      K

     

    FORM
      OF
      RULE 144A LETTER

     

    ___________,
      20__        

     

    


     

    First
      Horizon Asset Securities Inc.  

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286 

    Attention:
      Mortgage-Backed Securities Group 

     

     

    
      	 	
              Re:

            	
              First
                Horizon Mortgage Pass-Through Trust 2007-AR1 Mortgage Pass-Through
                Certificates, Series 2007-AR1, Class
                ___

            


    

     

    Ladies
      and Gentlemen:

     

    In
      connection with our acquisition of the above Certificates we certify that (a)
      we
      understand that the Certificates are not being registered under the Securities
      Act of 1933, as amended (the “Act”), or any state securities laws and are being
      transferred to us in a transaction that is exempt from the registration
      requirements of the Act and any such laws, (b) we have such knowledge and
      experience in financial and business matters that we are capable of evaluating
      the merits and risks of investments in the Certificates, (c) we have had the
      opportunity to ask questions of and receive answers from the Depositor
      concerning the purchase of the Certificates and all matters relating thereto
      or
      any additional information deemed necessary to our decision to purchase the
      Certificates, (d) we are not an employee benefit plan or arrangement that is
      subject to the Employee Retirement Income Security Act of 1974, as amended,
      or a
      plan or arrangement that is subject to Section 4975 of the Internal Revenue
      Code
      of 1986, as amended, nor are we acting on behalf of any such plan or arrangement
      nor using the assets of any such plan or arrangement to effect such acquisition,
      (e) if an insurance company, in the case of ERISA-restricted Certificates that
      have been the subject of an ERISA-Qualifying Underwriting, we are purchasing
      the
      Certificates with funds contained in an “insurance company general account” (as
      defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 (“PTCE
      95-60”)) and our purchase and holding of the Certificates are covered under
      Sections I and III of PTCE 95-60, (f) we have not, nor has anyone acting on
      our
      behalf offered, transferred, pledged, sold or otherwise disposed of the
      Certificates, any interest in the Certificates or any other similar security
      to,
      or solicited any offer to buy or accept a transfer, pledge or other disposition
      of the Certificates, any interest in the Certificates or any other similar
      security from, or otherwise approached or negotiated with respect to the
      Certificates, any interest in the Certificates or any other similar security
      with, any person in any manner, or made any general solicitation by means of
      general advertising or in any other manner, or taken any other action, that
      would constitute a distribution of the Certificates under the Act or that would
      render the disposition of the Certificates a violation of Section 5 of the
      Act
      or require registration pursuant thereto, nor will act, nor has authorized
      or
      will authorize any person to act, in such manner with respect to the
      Certificates, (g) we are a “qualified institutional buyer” as that term is
      defined in Rule 144A under the Act (“Rule 144A”) and have completed either of
      the forms of certification to that effect attached hereto as Annex 1 or Annex
      2,
      (h) we are aware that the sale to us is being made in reliance on Rule 144A,
      and
      (i) we are acquiring the Certificates for our own account or for resale pursuant
      to Rule 144A and further, understand that such Certificates may be resold,
      pledged or transferred only (A) to a person reasonably believed to be a
      qualified institutional buyer that purchases for its own account or for the
      account of a qualified institutional buyer to whom notice is given that the
      resale, pledge or transfer is being made in reliance on Rule 144A, or (B)
      pursuant to another exemption from registration under the Act.

     


    
      
         

      

      
        K-1

        
          

        

      

      
         

      

    


    


     

    
      	 	
              Very
                truly yours,

            
	 	 	 
	 	 	 
	 	  

	 	Print
              Name of Transferee
	 	 	 
	 	
              By:

            	  

	 	 	
              Authorized
                Officer

            


    


    
      
         

      

      
        K-2

        
          

        

      

      
         

      

    


    ANNEX
      1
      TO EXHIBIT K

     

    QUALIFIED
      INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

     

    [For
      Transferees Other Than Registered Investment Companies]

     

    The
      undersigned (the “Buyer”) hereby certifies as follows to the parties listed in
      the Rule 144A Transferee Certificate to which this certification relates with
      respect to the Certificates described therein:

     

    1.
       As
      indicated below, the undersigned is the President, Chief Financial Officer,
      Senior Vice President or other executive officer of the Buyer.

     

    2.
       In
      connection with purchases by the Buyer, the Buyer is a “qualified institutional
      buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as
      amended (“Rule 144A”) because (i) the Buyer owned and/or invested on a
      discretionary basis $ ______1 
      in
      securities (except for the excluded securities referred to below) as of the
      end
      of the Buyer’s most recent fiscal year (such amount being calculated in
      accordance with Rule 144A and (ii) the Buyer satisfies the criteria in the
      category marked below.

     

    ___ Corporation,
      etc.
      The
      Buyer is a corporation (other than a bank, savings and loan association or
      similar institution), Massachusetts or similar business trust, partnership,
      or
      charitable organization described in Section 501(c)(3) of the Internal Revenue
      Code of 1986, as amended.

     

    ___ Bank.
      The
      Buyer (a) is a national bank or banking institution organized under the laws
      of
      any State, territory or the District of Columbia, the business of which is
      substantially confined to banking and is supervised by the State or territorial
      banking commission or similar official or is a foreign bank or equivalent
      institution, and (b) has an audited net worth of at least $25,000,000 as
      demonstrated in its latest annual financial statements, a
      copy
      of which is attached hereto.

     

    ___ Savings
      and Loan.
      The
      Buyer (a) is a savings and loan association, building and loan association,
      cooperative bank, homestead association or similar institution, which is
      supervised and examined by a State or Federal authority having supervision
      over
      any such institutions or is a foreign savings and loan association or equivalent
      institution and (b) has an audited net worth of at least $25,000,000 as
      demonstrated in its latest annual financial statements, a
      copy
      of which is attached hereto.

     

    ___ Broker-dealer.
      The
      Buyer is a dealer registered pursuant to Section 15 of the Securities Exchange
      Act of 1934.

     

    ___ Insurance
      Company.
      The
      Buyer is an insurance company whose primary and predominant business activity
      is
      the writing of insurance or the reinsuring of risks underwritten by insurance
      companies and which is subject to supervision by the insurance commissioner
      or a
      similar official or agency of a State, territory or the District of
      Columbia.

     

    

    
      1Buyer
        must own and/or invest on a discretionary basis at least $100,000,000 in
        securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
        invest on a discretionary basis at least $10,000,000 in securities.

      
 

      
        
          
             

          

          
            K-3

            
              

            

          

          
             

          

        

      

      


    

    


     

    ___ State
      or Local Plan.
      The
      Buyer is a plan established and maintained by a State, its political
      subdivisions, or any agency or instrumentality of the State or its political
      subdivisions, for the benefit of its employees.

     

    ___ ERISA
      Plan.
      The
      Buyer is an employee benefit plan within the meaning of Title I of the Employee
      Retirement Income Security Act of 1974.

     

    ___ Investment
      Advisor.
      The
      Buyer is an investment advisor registered under the Investment Advisors Act
      of
      1940.

     

    ___ Small
      Business Investment Company.
      Buyer
      is a small business investment company licensed by the U.S. Small Business
      Administration under Section 301(c) or (d) of the Small Business Investment
      Act
      of 1958.

     

    ___ Business
      Development Company.
      Buyer
      is a business development company as defined in Section 202(a)(22) of the
      Investment Advisors Act of 1940.

     

    3.
       The
      term
“securities”
as
      used
      herein does
      not include
      (i)
      securities of issuers that are affiliated with the Buyer, (ii) securities that
      are part of an unsold allotment to or subscription by the Buyer, if the Buyer
      is
      a dealer, (iii) securities issued or guaranteed by the U.S. or any
      instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
      (v) loan participations, (vi) repurchase agreements, (vii) securities owned
      but
      subject to a repurchase agreement and (viii) currency, interest rate and
      commodity swaps.

     

    4.
       For
      purposes of determining the aggregate amount of securities owned and/or invested
      on a discretionary basis by the Buyer, the Buyer used the cost of such
      securities to the Buyer and did not include any of the securities referred
      to in
      the preceding paragraph, except (i) where the Buyer reports its securities
      holdings in its financial statements on the basis of their market value, and
      (ii) no current information with respect to the cost of those securities has
      been published. If clause (ii) in the preceding sentence applies, the securities
      may be valued at market. Further, in determining such aggregate amount, the
      Buyer may have included securities owned by subsidiaries of the Buyer, but
      only
      if such subsidiaries are consolidated with the Buyer in its financial statements
      prepared in accordance with generally accepted accounting principles and if
      the
      investments of such subsidiaries are managed under the Buyer’s direction.
      However, such securities were not included if the Buyer is a majority-owned,
      consolidated subsidiary of another enterprise and the Buyer is not itself a
      reporting company under the Securities Exchange Act of 1934, as
      amended.

     

    5.
       The
      Buyer
      acknowledges that it is familiar with Rule 144A and understands that the seller
      to it and other parties related to the Certificates are relying and will
      continue to rely on the statements made herein because one or more sales to
      the
      Buyer may be in reliance on Rule 144A.

     


    
      
         

      

      
        K-4

        
          

        

      

      
         

      

    


    


     

    6.
       Until
      the
      date of purchase of the Rule 144A Securities, the Buyer will notify each of
      the
      parties to which this certification is made of any changes in the information
      and conclusions herein. Until such notice is given, the Buyer’s purchase of the
      Certificates will constitute a reaffirmation of this certification as of the
      date of such purchase. In addition, if the Buyer is a bank or savings and loan
      is provided above, the Buyer agrees that it will furnish to such parties updated
      annual financial statements promptly after they become available.

     

    
      	 	 	 
	 	 	 
	 	 

	 	Print
              Name of Transferee
	 	 	 
	 	
              By:

            	  

	 	
              Name:

            	  

	 	
              Title:

            	  

	 	 	 
	 	
              Date:

            	  



    

    


     


    
      
         

      

      
        K-5

        
          

        

      

      
         

      

    


    ANNEX
      2
      TO EXHIBIT K

     

    QUALIFIED
      INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

     

    [For
      Transferees That are Registered Investment Companies]

     

    The
      undersigned (the “Buyer”) hereby certifies as follows to the parties listed in
      the Rule 144A Transferee Certificate to which this certification relates with
      respect to the Certificates described therein:

     

    1.
       As
      indicated below, the undersigned is the President, Chief Financial Officer
      or
      Senior Vice President of the Buyer or, if the Buyer is a “qualified
      institutional buyer” as that term is defined in Rule 144A under the Securities
      Act of 1933, as amended (“Rule 144A”) because Buyer is part of a Family of
      Investment Companies (as defined below), is such an officer of the
      Adviser.

     

    2.
       In
      connection with purchases by Buyer, the Buyer is a “qualified institutional
      buyer” as defined in SEC Rule 144A because (i) the Buyer is an investment
      company registered under the Investment Company Act of 1940, as amended and
      (ii)
      as marked below, the Buyer alone, or the Buyer’s Family of Investment Companies,
      owned at least $100,000,000 in securities (other than the excluded securities
      referred to below) as of the end of the Buyer’s most recent fiscal year. For
      purposes of determining the amount of securities owned by the Buyer or the
      Buyer’s Family of Investment Companies, the cost of such securities was used,
      except (i) where the Buyer or the Buyer’s Family of Investment Companies reports
      its securities holdings in its financial statements on the basis of their market
      value, and (ii) no current information with respect to the cost of those
      securities has been published. If clause (ii) in the preceding sentence applies,
      the securities may be valued at market.

     

    ___ The
      Buyer
      owned $ in securities (other than the excluded securities referred to below)
      as
      of the end of the Buyer’s most recent fiscal year (such amount being calculated
      in accordance with Rule 144A).

     

    ___ The
      Buyer
      is part of a Family of Investment Companies which owned in the aggregate $
      in
      securities (other than the excluded securities referred to below) as of the
      end
      of the Buyer’s most recent fiscal year (such amount being calculated in
      accordance with Rule 144A).

     

    3.
       The
      term
“Family
      of Investment Companies”
as
      used
      herein means two or more registered investment companies (or series thereof)
      that have the same investment adviser or investment advisers that are affiliated
      (by virtue of being majority owned subsidiaries of the same parent or because
      one investment adviser is a majority owned subsidiary of the
      other).

     

    4.
       The
      term
“securities”
as
      used
      herein does not include (i) securities of issuers that are affiliated with
      the
      Buyer or are part of the Buyer’s Family of Investment Companies, (ii) securities
      issued or guaranteed by the U.S. or any instrumentality thereof, (iii) bank
      deposit notes and certificates of deposit, (iv) loan participations, (v)
      repurchase agreements, (vi) securities owned but subject to a repurchase
      agreement and (vii) currency, interest rate and commodity swaps.

     


    
      
         

      

      
        K-6

        
          

        

      

      
         

      

    


    


     

    5.
       The
      Buyer
      is familiar with Rule 144A and understands that the parties listed in the Rule
      144A Transferee Certificate to which this certification relates are relying
      and
      will continue to rely on the statements made herein because one or more sales
      to
      the Buyer will be in reliance on Rule 144A. In addition, the Buyer will only
      purchase for the Buyer’s own account.

     

    6.
       Until
      the
      date of purchase of the Certificates, the undersigned will notify the parties
      listed in the Rule 144A Transferee Certificate to which this certification
      relates of any changes in the information and conclusions herein. Until such
      notice is given, the Buyer’s purchase of the Certificates will constitute a
      reaffirmation of this certification by the undersigned as of the date of such
      purchase.

     

    
      	 	  

	 	Print
              Name of Transferee
	 	 	 
	 	
              By:

            	  

	 	
              Name:

            	  

	 	
              Title:

            	  

	 	 	 
	 	 	 
	 	
              IF
                AN ADVISER:

            
	 	 	 
	 	  

	 	Print
              Name of Buyer
	 	 	 
	 	
              Date:

            	  



    

    


    


    

      
         

      

    


    
      
         

      

      
        K-7

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      L

     

    REQUEST
      FOR RELEASE

     

    [Substitution
      of Deleted Mortgage Loans

    or

    Mortgage
      Loans Paid in Full]

     

    ____________________________________
      Mortgage Loan Files

     

    _____________________
      hereby certifies that he/she is an officer of _____________________, holding
      the
      office set forth beneath his/her signature, and hereby further certifies as
      follows:

     

    (Check
      One)

     

    
      	
              □

            	
              With
                respect to the mortgage loans described in the attached schedule,
                each
                such mortgage loan constitutes a “Substitute Mortgage Loan” (as the term
                is defined in the Pooling and Servicing
                Agreement).

            


    

     

    
      	
              □

            	
              With
                respect to the “Mortgage Loans” (as the term is defined in the custodial
                agreement) described in the attached
                schedule:

            


    

     

    All
      payments of principal, premium (if any), and interest have been made with
      respect to the following:

     

    Loan
      Number: _________________________________

     

    
 

    Borrower’s
      Name: ______________________________

     

     

     

    County:
      ______________________________________

     

    We
      hereby
      certify that all amounts to be received in connection with such payments have
      been received.

     

    ______________________________

     

    Dated:
      ______________________

     

    /
      / Vice
      President

     

    /
      /
      Assistant Vice President

     

    


     


    
      
         

      

      
        L-1

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      M

     

    REQUEST
      FOR RELEASE AND RECEIPT

     

    [For
      Servicing and Foreclosure]

     

    _____________________________________
      Mortgage Loan Files

     

    LOAN
      INFORMATION

     

    Name
      of
      Mortgagor:  __________________________________       

     

    Loan
      No.:
  __________________________________ 

     

    The
      undersigned hereby acknowledges that it has received from FIRST TENNESSEE BANK
      NATIONAL ASSOCIATION, as Custodian for ____________________ Mortgage Loan Files,
      the documents referred to below (the “Documents”). All capitalized terms not
      otherwise defined in this Request for Release and Receipt shall have the
      meanings ascribed to them in the Custodial Agreement dated as of
      __________________ among ___________________ and FIRST TENNESSEE BANK NATIONAL
      ASSOCIATION, as Custodian (the “Custodial Agreement”).

     

    [complete
      as necessary]

     

    The
      undersigned hereby acknowledges an agrees as follows:

     

    (1) The
      undersigned shall hold and retain possession of the Documents in trust for
      the
      benefit of __________________, solely for the purposes provided in the Custodial
      Agreement.

     

    (2) The
      undersigned shall not cause or permit the Documents to become subject to, or
      encumbered by, any claim, liens, security interest, charges, writs of attachment
      or other impositions nor shall the undersigned assert or seek to assert any
      claims or rights of setoff to or against the Documents or any proceeds
      thereof.

     

    (3) The
      undersigned shall return each and every Document previously requested from
      the
      Mortgage File to the Custodian when the need therefor no longer exists, unless
      the Mortgage Loan relating to the Documents has been liquidated.

     

    Date: _____________________   

     

    


     

    
      	 	
              NAME

            
	 	 	 
	 	
              By:

            	 

	 	
              Name:

            	 

	 	
              Title:

            	 



    


    
      
         

      

      
        M-1

        
          

        

      

      
         

      

    


    EXHIBIT
      N-1

     

    FORM
      OF
      ANNUAL CERTIFICATION

     

    (Subservicer)

     

    Re: First
      Horizon Mortgage Pass-Through Trust 2007-[ ] (the “Trust”),
      Mortgage Pass-Through Certificates, Series 2007-[ ], issued pursuant to the
      Pooling and Servicing Agreement, dated as of _____ 1, 2007 (the “Pooling
      and Servicing Agreement”),
      among
      First Horizon Asset Securities Inc., as depositor (the “Depositor”),
      First
      Horizon Home Loan Corporation, as master servicer (the “Master Servicer”) and
      The Bank of New York, as trustee (the “Trustee”)

     

    I,
      [identify the certifying individual], a [title of certifying individual] of
      [name of company] (the “Company”), hereby certify to the Depositor, the Trustee,
      the Master Servicer, and their officers, directors and affiliates, and with
      the
      knowledge and intent that they will rely upon this certification,
      that:

     

    1. I
      have
      reviewed the servicer compliance statement of the Company provided in accordance
      with Item 1123 of Regulation AB (the “Compliance
      Statement”),
      the
      report on assessment of the Company’s compliance with the servicing criteria set
      forth in Item 1122(d) of Regulation AB (the “Servicing
      Criteria”),
      provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
      Act of 1934, as amended (the “Exchange
      Act”)
      and
      Item 1122 of Regulation AB (the “Servicing
      Assessment”),
      the
      registered public accounting firm’s attestation report provided in accordance
      with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
      Regulation AB (the “Attestation
      Report”),
      and
      all servicing reports, officer’s certificates and other information relating to
      the servicing of the Mortgage Loans by the Company during 200[ ] that were
      delivered by the Company to the [Depositor] [Master Servicer] [Trustee] pursuant
      to the Pooling and Servicing Agreement (collectively, the “Company
      Servicing Information”);

     

    2. Based
      upon my knowledge, the Company Servicing Information, taken as a whole, does
      not
      contain any untrue statement of a material fact or omit to state a material
      fact
      necessary to make the statements made, in light of the circumstances under
      which
      such statements were made, not misleading with respect to the period of time
      covered by the Company Servicing Information;

     

    3. Based
      on
      my knowledge, all of the Company Servicing Information required to be provided
      by the Company under the Pooling and Servicing Agreement has been provided
      to
      the [Depositor] [Master Servicer] [Trustee];

     

    4. I
      am
      responsible for reviewing the activities performed by the Company as a servicer
      under the Pooling and Servicing Agreement, and based on my knowledge and the
      compliance review conducted in preparing the Compliance Statement and except
      as
      disclosed in the Compliance Statement, the Servicing Assessment or the
      Attestation Report, the Company has fulfilled its obligations under the Pooling
      and Servicing Agreement in all material respects; and


    
      
         

      

      
        N-1-1

        
          

        

      

      
         

      

    


     

    


     

    5. The
      Compliance Statement required to be delivered by the Company pursuant to the
      Pooling and Servicing Agreement, and the Servicing Assessment and Attestation
      Report required to be provided by the Company and by any Subservicer or
      Subcontractor pursuant to the Pooling and Servicing Agreement, have been
      provided to the [Depositor] [Master Servicer]. Any material instances of
      noncompliance described in such reports have been disclosed to the [Depositor]
      [Master Servicer]. Any material instance of noncompliance with the Servicing
      Criteria has been disclosed in such reports.

     

    
      	 	
              Date:   
                

            	
              _________________________

            
	 	 	
              _______________________________

            
	 	 	
              [Signature]

            
	 	 	
              [Title]

            


    

    



    
      
         

      

      
        N-1-2

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      N-2

     

    FORM
      OF
      ANNUAL CERTIFICATION

     

    (Trustee)

     

    Re: First
      Horizon Mortgage Pass-Through Trust 2007-[ ] (the “Trust”),
      Mortgage Pass-Through Certificates, Series 2007-[ ], issued pursuant to the
      Pooling and Servicing Agreement, dated as of _____ 1, 2007 (the “Pooling
      and Servicing Agreement”),
      among
      First Horizon Asset Securities Inc., as depositor (the “Depositor”),
      First
      Horizon Home Loan Corporation, as master servicer (the “Master Servicer”) and
      The Bank of New York, as trustee (the “Trustee”)

     

    I,
      [identify the certifying individual], a [title of certifying individual] of
      the
      Trustee, hereby certify to the Depositor, the Master Servicer, and their
      officers, directors and affiliates, and with the knowledge and intent that
      they
      will rely upon this certification, that:

     

    1. I
      have
      reviewed the report on assessment of the Trustee’s compliance with the servicing
      criteria set forth in Item 1122(d) of Regulation AB (the “Servicing
      Criteria”),
      provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
      Act of 1934, as amended (the “Exchange
      Act”)
      and
      Item 1122 of Regulation AB (the “Servicing
      Assessment”),
      and
      the registered public accounting firm’s attestation report provided in
      accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section
      1122(b) of Regulation AB (the “Attestation
      Report”)
      (collectively, the “Trustee
      Information”);

     

    2. Based
      upon my knowledge, the Trustee Information, taken as a whole, does not contain
      any untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances under
      which
      such statements were made, not misleading with respect to the period of time
      covered by the Trustee Information;

     

    3. Based
      on
      my knowledge, all of the Trustee Information required to be provided by the
      Trustee under the Pooling and Servicing Agreement has been provided to the
      [Depositor] [Master Servicer];

     

    4. I
      am
      responsible for reviewing the activities performed by the Trustee as trustee
      under the Pooling and Servicing Agreement, and based on my knowledge and the
      compliance review conducted in preparing the Compliance Statement and except
      as
      disclosed in the Servicing Assessment or the Attestation Report, the Trustee
      has
      fulfilled its obligations under the Pooling and Servicing Agreement in all
      material respects; and

     

    5. The
      Servicing Assessment and Attestation Report required to be provided by the
      Trustee pursuant to the Pooling and Servicing Agreement have been provided
      to
      the [Depositor] [Master Servicer]. Any material instances of noncompliance
      described in such reports have been disclosed to the [Depositor] [Master
      Servicer]. Any material instance of noncompliance with the Servicing Criteria
      has been disclosed in such reports.

     

    
      	 	
              Date:  
                

            	
              _______________________________

            
	 	 	
              _______________________________

            
	 	 	
              [Signature]

            
	 	 	
              [Title]
                

            


    

    


     


    
      
         

      

      
        N-2-1

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      O

     

    [FORM
      OF]
      SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
      STATEMENT

     

    The
      assessment of compliance to be delivered by [the Master Servicer] [Trustee]
      [Name of Subservicer] shall address, at a minimum, the criteria identified
      as
      below as “Applicable Servicing Criteria”:

     

    
      	
              SERVICING
                CRITERIA

               

            
	
              Reference

            	
              Criteria

            	
              Responsible
                Party*

            
	 	 	 
	 	
              General
                Servicing Considerations

            	 
	 	 	 
	
              1122(d)(1)(i)

            	
              Policies
                and procedures are instituted to monitor any performance or other
                triggers
                and events of default in accordance with the transaction
                agreements.

            	
              Master
                Servicer

              Trustee

            
	 	 	 
	
              1122(d)(1)(ii)

            	
              If
                any material servicing activities are outsourced to third parties,
                policies and procedures are instituted to monitor the third party’s
                performance and compliance with such servicing activities.

            	
              Master
                Servicer

              Trustee

            
	 	 	 
	
              1122(d)(1)(iii)

            	
              Any
                requirements in the transaction agreements to maintain a back-up
                servicer
                for the mortgage loans are maintained.

            	
              N/A

            
	 	 	 
	
              1122(d)(1)(iv)

            	
              A
                fidelity bond and errors and omissions policy is in effect on the
                party
                participating in the servicing function throughout the reporting
                period in
                the amount of coverage required by and otherwise in accordance with
                the
                terms of the transaction agreements.

            	
              Master
                Servicer

            
	 	 	 
	 	
              Cash
                Collection and Administration

            	 
	 	 	 
	
              1122(d)(2)(i)

            	
              Payments
                on mortgage loans are deposited into the appropriate custodial bank
                accounts and related bank clearing accounts no more than two business
                days
                following receipt, or such other number of days specified in the
                transaction agreements.

            	
              Master/Sub
                Servicer (Certificate Account)

            
	 	 	 
	
              1122(d)(2)(ii)

            	
              Disbursements
                made via wire transfer on behalf of an obligor or to an investor
                are made
                only by authorized personnel.

            	
              Master
                Servicer

              Trustee

            


    

     

    *
      Unless otherwise agreed upon by the parties.

      
        
           

        

        
          O-1

          
            

          

        

        
           

          
          

        

      




    
      	
              1122(d)(2)(iii)

            	
              Advances
                of funds or guarantees regarding collections, cash flows or distributions,
                and any interest or other fees charged for such advances, are made,
                reviewed and approved as specified in the transaction
                agreements.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(2)(iv)

            	
              The
                related accounts for the transaction, such as cash reserve accounts
                or
                accounts established as a form of overcollateralization, are separately
                maintained (e.g., with respect to commingling of cash) as set forth
                in the
                transaction agreements.

            	
              Master/Sub
                Servicer

              Trustee

            
	 	 	 
	
              1122(d)(2)(v)

            	
              Each
                custodial account is maintained at a federally insured depository
                institution as set forth in the transaction agreements. For purposes
                of
                this criterion, “federally insured depository institution” with respect to
                a foreign financial institution means a foreign financial institution
                that
                meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
                Act.

            	
              Trustee
                (Distribution Account)*; Master/Sub Servicer (Certificate
                Account)

            
	 	 	 
	
              1122(d)(2)(vi)

            	
              Unissued
                checks are safeguarded so as to prevent unauthorized
                access.

            	
              N/A

            
	 	 	 
	
              1122(d)(2)(vii)

            	
              Reconciliations
                are prepared on a monthly basis for all asset-backed securities related
                bank accounts, including custodial accounts and related bank clearing
                accounts. These reconciliations are (A) mathematically accurate;
                (B)
                prepared within 30 calendar days after the bank statement cutoff
                date, or
                such other number of days specified in the transaction agreements;
                (C)
                reviewed and approved by someone other than the person who prepared
                the
                reconciliation; and (D) contain explanations for reconciling items.
                These
                reconciling items are resolved within 90 calendar days of their original
                identification, or such other number of days specified in the transaction
                agreements.

            	
              Master/Sub
                Servicer

              Trustee

            
	 	 	 
	 	
              Investor
                Remittances and Reporting

            	 
	 	 	 
	
              1122(d)(3)(i)

            	
              Reports
                to investors, including those to be filed with the Commission, are
                maintained in accordance with the transaction agreements and applicable
                Commission requirements. Specifically, such reports (A) are prepared
                in
                accordance with timeframes and other terms set forth in the transaction
                agreements; (B) provide information calculated in accordance with
                the
                terms specified in the transaction agreements; (C) are filed with
                the
                Commission as required by its rules and regulations; and (D) agree
                with
                investors’ or the trustee’s records as to the total unpaid principal
                balance and number of mortgage loans serviced by the
                Servicer.

            	
              Trustee

            


    

     

    


     


    
      
         

      

      
        O-2

        
          

        

      

      
         

        
        

      

    



    
      	
              1122(d)(3)(ii)

            	
              Amounts
                due to investors are allocated and remitted in other terms set forth
                in
                the transaction agreements.

            	
              Master
                Servicer

              Trustee

            
	 	 	 
	
              1122(d)(3)(iii)

            	
              Disbursements
                made to an investor are posted within two business days to the Servicer’s
                investor records, or such other number of days specified in the
                transaction agreements.

            	
              Trustee

            
	 	 	 
	
              1122(d)(3)(iv)

            	
              Amounts
                remitted to investors per the investor reports agree with cancelled
                checks, or other form of payment, or custodial bank
                statements.

            	
              Trustee

            
	 	 	 
	 	
              Pool
                Asset Administration

            	 
	 	 	 
	
              1122(d)(4)(i)

            	
              Collateral
                or security on mortgage loans is maintained as required by the transaction
                agreements or related mortgage loan documents.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(ii)

            	
              Mortgage
                loan and related documents are safeguarded as required by the transaction
                agreements.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(iii)

            	
              Any
                additions, removals or substitutions to the asset pool are made,
                reviewed
                and approved in accordance with any conditions or requirements in
                the
                transaction agreements.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(iv)

            	
              Payments
                on mortgage loans, including any payoffs, made in accordance with
                the
                related mortgage loan documents are posted to the Servicer’s obligor
                records maintained no more than two business days after receipt,
                or such
                other number of days specified in the transaction agreements, and
                allocated to principal, interest or other items (e.g., escrow) in
                accordance with the related mortgage loan documents.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(v)

            	
              The
                Servicer’s records regarding the mortgage loans agree with the Servicer’s
                records with respect to an obligor’s unpaid principal
                balance.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(vi)

            	
              Changes
                with respect to the terms or status of an obligor’s mortgage loans (e.g.,
                loan modifications or re-agings) are made, reviewed and approved
                by
                authorized personnel in accordance with the transaction agreements
                and
                related pool asset documents.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(vii)

            	
              Loss
                mitigation or recovery actions (e.g., forbearance plans, modifications
                and
                deeds in lieu of foreclosure, foreclosures and repossessions, as
                applicable) are initiated, conducted and concluded in accordance
                with the
                timeframes or other requirements established by the transaction
                agreements

            	
              Master/Sub
                Servicer

            


    

     

    


     


    
      
         

      

      
        O-3

        
          

        

      

      
         

        
        

      

    



    
      	
              1122(d)(4)(viii)

            	
              Records
                documenting collection efforts are maintained during the period a
                mortgage
                loan is delinquent in accordance with the transaction agreements.
                Such
                records are maintained on at least a monthly basis, or such other
                period
                specified in the transaction agreements, and describe the entity’s
                activities in monitoring delinquent mortgage loans including, for
                example,
                phone calls, letters and payment rescheduling plans in cases where
                delinquency is deemed temporary (e.g., illness or
                unemployment).

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(ix)

            	
              Adjustments
                to interest rates or rates of return for mortgage loans with variable
                rates are computed based on the related mortgage loan
                documents.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(x)

            	
              Regarding
                any funds held in trust for an obligor (such as escrow accounts):
                (A) such
                funds are analyzed, in accordance with the obligor’s mortgage loan
                documents, on at least an annual basis, or such other period specified
                in
                the transaction agreements; (B) interest on such funds is paid, or
                credited, to obligors in accordance with applicable mortgage loan
                documents and state laws; and (C) such funds are returned to the
                obligor
                within 30 calendar days of full repayment of the related mortgage
                loans,
                or such other number of days specified in the transaction
                agreements.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(xi)

            	
              Payments
                made on behalf of an obligor (such as tax or insurance payments)
                are made
                on or before the related penalty or expiration dates, as indicated
                on the
                appropriate bills or notices for such payments, provided that such
                support
                has been received by the servicer at least 30 calendar days prior
                to these
                dates, or such other number of days specified in the transaction
                agreements.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(xii)

            	
              Any
                late payment penalties in connection with any payment to be made
                on behalf
                of an obligor are paid from the servicer’s funds and not charged to the
                obligor, unless the late payment was due to the obligor’s error or
                omission.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(xiii)

            	
              Disbursements
                made on behalf of an obligor are posted within two business days
                to the
                obligor’s records maintained by the servicer, or such other number of days
                specified in the transaction agreements.

            	
              Master/Sub

              Servicer

            
	 	 	 
	
              1122(d)(4)(xiv)

            	
              Delinquencies,
                charge-offs and uncollectible accounts are recognized and recorded
                in
                accordance with the transaction agreements.

            	
              Master/Sub
                Servicer

            
	 	 	 
	
              1122(d)(4)(xv)

            	
              Any
                external enhancement or other support, identified in Item 1114(a)(1)
                through (3) or Item 1115 of Regulation AB, is maintained as set forth
                in
                the transaction agreements.

            	
              Trustee*

              Master/Sub
                Servicer

            


    

    


     
*
    Solely with respect to disburesements to the enhancement provider required
    by the transaction documents.

    
      
         

      

      
        O-4

        
          

        

      

      
         

        
        

      

    



    
      	 	
              [NAME
                OF MASTER SERVICER] [NAME OF 

              TRUSTEE]
                [NAME OF CO-TRUSTEE] 

              [SUBSERVICER]

            
	 	 	 
	 	
              Date:

            	 

	 	 	 
	 	
              By:

            	 

	 	
              Name:

            	 

	 	
              Title:

            	 



    

    


    


     


    
      
         

      

      
        O-5

        
          

        

      

      
         

        
        

      

    



    EXHIBIT
      P

     

    [FORM
      OF]
      LIST OF ITEM 1119 PARTIES

    FIRST
      HORIZON MORTGAGE PASS-THROUGH TRUST 2007-AR1

     

    Mortgage
      Pass-Through Certificates,

    Series
      2007-AR1

     

    
      	
              Party

            	
              Contact
                Information

               

            
	 	 
	 	 
	 	 
	 	 


    

     

    


     


    
      
         

      

      
        P-1

        
          

        

      

      
         

        
        

      

    



     

    EXHIBIT
      Q

     

    FORM
      OF
      SARBANES-OXLEY CERTIFICATION

    (Replacement
      of the Master Servicer) 

     

    I,
      [identify the certifying individual], a [title of certifying individual] of
      First Horizon Home Loan Corporation (the “Company”),
      hereby certify that:

     

    1. I
      have
      reviewed the report on Form 10-K and all reports on Form 10-D required to be
      filed in respect of the period covered by this report on Form 10-K of First
      Horizon Mortgage Pass-Through Trust 2007-AR1 (the “Exchange
      Act Reports”);

     

    2. Based
      upon my knowledge, the Exchange Act Reports, taken as a whole, do not contain
      any untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances under
      which
      such statements were made, not misleading with respect to the period covered
      by
      this report;

     

    3. Based
      on
      my knowledge, all of the distribution, servicing and other information required
      to be provided under Form 10-D for the period covered by this report is included
      in the Exchange Act Reports;

     

    4. I
      am
      responsible for reviewing the activities performed by the Company as master
      servicer under the Pooling and Servicing Agreement and, based on my knowledge
      and the compliance review(s) conducted in preparing the servicer compliance
      statement(s) required in this report under Item 1123 of Regulation AB (the
      “Compliance
      Statements”),
      and
      except as disclosed in the Exchange Act Reports, the Company has fulfilled
      its
      obligations as master servicer under the Pooling and Servicing Agreement; and
      

     

    5. All
      of
      the reports on assessment of compliance with servicing criteria for asset-backed
      securities and their related attestation reports on assessment of compliance
      with servicing criteria for asset-backed securities required to be included
      in
      this report in accordance with Item 1122 of Regulation AB and Exchange Act
      Rules
      13a-18 and 15d-18 have been included as an exhibit to this report, except as
      otherwise disclosed in this report. Any material instances of noncompliance
      described in such reports have been disclosed in this report on Form 10-K.
      [In
      giving the certifications above, I have reasonably relied on information
      provided to me by the following unaffiliated parties [name of servicer,
      sub-servicer, co-servicer, depositor or trustee].

     

    
      	 	
              Date:  
                

            	
              _______________________________

            
	 	 	
              _______________________________

            
	 	 	
              [Signature]

            
	 	 	
              [Title]
                

            


    

     

    


    
      
         

      

      
        Q-1