Document:

UNDERLYING
      CERTIFICATES PURCHASE AGREEMENT

    

     

    Dated
      as of May 31, 2006

    

     

    between

    

     

    FIRST
      HORIZON ASSET SECURITIES INC.,

    Purchaser,

     

    and

     

    CITIGROUP
      GLOBAL MARKETS INC.

    Seller

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    TABLE
      OF CONTENTS

     

    
      	 	 	
              Page

            	 
	
              ARTICLE
                I DEFINITIONS

            	 	 	
              1

            	 
	
              Section
                1.1    
                Definitions

            	 	 	
              1

            	 
	
              ARTICLE
                II CONVEYANCE OF THE CONVEYED ASSETS

            	 	 	
              2

            	 
	
              Section
                2.1     Conveyance of
                the Conveyed Assets

            	 	 	
              2

            	 
	
              Section
                2.2    
                Closing

            	 	 	
              3

            	 
	
              ARTICLE
                III REPRESENTATIONS, WARRANTIES AND COVENANTS

            	 	 	
              3

            	 
	
              Section
                3.1    
                Representations, Warranties and Covenants of Seller

            	 	 	
              3

            	 
	
              Section
                3.2    
                Representations, Warranties and Covenants of Purchaser

            	 	 	
              5

            	 
	
              Section
                3.3     Additional
                Documents and Actions

            	 	 	
              6

            	 
	
              Section
                3.4     Costs and
                Expenses

            	 	 	
              7

            	 
	
              ARTICLE
                IV MISCELLANEOUS

            	 	 	
              7

            	 
	
              Section
                4.1    
                Notices

            	 	 	
              7

            	 
	
              Section
                4.2     Severability
                Clause

            	 	 	
              7

            	 
	
              Section
                4.3    
                Counterparts

            	 	 	
              7

            	 
	
              Section
                4.4     Place of
                Delivery and Governing Law

            	 	 	
              8

            	 
	
              Section
                4.5     Remedies
                Cumulative; No Waiver

            	 	 	
              8

            	 
	
              Section
                4.6    
                Miscellaneous

            	 	 	
              8

            	 
	
              Section
                4.7     Agreement of
                Seller

            	 	 	
              8

            	 
	
              Section
                4.8     Successors and
                Assigns

            	 	 	
              8

            	 
	
              Section
                4.9    
                Survival

            	 	 	
              8

            	 
	
              Section
                4.10    Intention of
                Parties

            	 	 	
              8

            	 

    

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

        
        

      

    

    THIS
      UNDERLYING CERTIFICATES PURCHASE AGREEMENT (this “Agreement”)
      is
      dated as of May 31, 2006 and is by and between CITIGROUP GLOBAL MARKETS INC.,
      a
      Delaware corporation (“Purchaser”),
      and
      FIRST HORIZON ASSET SECURITIES INC., a Delaware corporation (“Seller”).

     

    RECITALS:

     

    A. Subject
      to the terms and conditions of this Agreement, Seller hereby agrees to sell
      to
      Purchaser, and Purchaser hereby agrees to purchase from Seller, the Underlying
      Certificates (as defined below).

     

    B. The
      Underlying Certificates (including all distributions with respect thereto
      payable on and after the Closing Date, other than the Underlying Yield
      Supplement Amounts) will be sold, transferred and assigned by Purchaser to
      a
      trust in exchange for the Class A-1 and Class A-R Certificates issued by First
      Horizon Alternative Mortgage Securities Trust 2006-RE1 (collectively, the
“Certificates”)
      on the
      Closing Date.

     

    C. The
      Certificates will be issued pursuant to a Pooling Agreement dated as of May
      31,
      2006 (the “Pooling
      Agreement”)
      between Purchaser, as depositor, the Seller and The Bank of New York, as trustee
      (the “Trustee”).
      Pursuant to the Pooling Agreement, Purchaser will assign certain of its rights
      under this Agreement to the Trustee.

     

    NOW,
      THEREFORE, in consideration of the premises and mutual covenants and agreements
      set forth herein, the parties hereto agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    Section
      1.1 Definitions. 
      Initially capitalized terms used but not otherwise defined in this Agreement
      have the meanings assigned to them in the Pooling Agreement. Whenever used
      in
      this Agreement, the following words and phrases, unless the context otherwise
      requires, shall have the following meanings:

     

    Assigned
      Distributions:
      All
      distributions payable on the Underlying Certificates, other than any Underlying
      Yield Supplement Amounts payable in respect thereof, from and after the Closing
      Date.

     

    Certificates:
      As
      defined in the Recitals to this Agreement.

     

    Closing
      Date:
      May 31,
      2006.

     

    Conveyed
      Assets:
      The
      Underlying Certificates and the Assigned Distributions.

     

    FHHLC:
      First
      Horizon Home Loan Corporation.

     

    Initial
      Purchaser:
      Citigroup Global Markets Inc., in its capacity as such under the Purchase
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Pooling
      Agreement:
      As
      defined in the Recitals to this Agreement.

     

    Purchase
      Agreement:
      The
      Purchase Agreement dated as of May 26, 2006 by and among the Purchaser, FHHLC
      and the Underwriter, as supplemented by a Terms Agreement with respect thereto
      dated as of May 26, 2006.

     

    Trustee:
      The
      Bank of New York, not in its individual capacity, but solely in its capacity
      as
      trustee for the benefit of the certificate holders under the Pooling Agreement,
      and any successor thereto under the Pooling Agreement.

     

    Underlying
      Certificates:
      An
      82.29% interest in the Class I-A-1 Certificates and a 63.71% interest in the
      Class I-A-3 Certificates, each issued by the Underlying Trust pursuant to the
      Underlying PSA.

     

    Underlying
      PSA:
      The
      Pooling and Servicing Agreement dated as of March 1, 2005 by and among First
      Horizon Asset Securities Inc., as depositor, FHHLC, as master servicer, and
      The
      Bank of New York, as trustee.

     

    Underlying
      Trust:
      First
      Horizon Alternative Mortgage Securities Trust 2005-FA3, a common law trust
      created pursuant to the Underlying PSA.

     

    Underlying
      Yield Supplement Amount:
      63.71%
      of the “Class I-A-1/Class I-A-2 Yield Supplement Amount” as such term is defined
      in the Underlying PSA.

     

    Underwriter:
      Citigroup Global Markets Inc., in its capacity as such under the Underwriting
      Agreement.

     

    Underwriting
      Agreement:
      The
      Underwriting Agreement dated as of May 26, 2006 by and among the Purchaser,
      FHHLC and the Underwriter, as supplemented by a Terms Agreement with respect
      thereto dated as of May 26, 2006.

     

    ARTICLE
      II

     

    CONVEYANCE
      OF THE CONVEYED ASSETS 

     

    Section
      2.1 Conveyance
      of the Conveyed Assets.

     

    
      	 	
              (a)

            	
              Seller
                hereby agrees to sell, transfer, assign, set over and otherwise convey
                to
                Purchaser, without recourse, all of the right, title and interest
                of
                Seller in and to the Conveyed
                Assets.

            

    

     

    
      	 	
              (b)

            	
              On
                or prior to the Closing Date, Seller shall take or cause to be taken
                all
                actions necessary to effect the transfer of the beneficial ownership
                of
                the Underlying Certificates to the Trustee on the book-entry records
                of
                The Depository Trust Company. Seller, effective as of the Closing
                Date,
                hereby acknowledges and agrees that any of the Assigned Distributions
                received by it shall be held in trust for the exclusive benefit of
                the
                Trustee and shall be immediately paid and delivered to the Trustee
                for
                deposit into the Distribution Account established pursuant to the
                Pooling
                Agreement.

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (c)

            	
              As
                consideration for the sale of the Conveyed Assets to the Purchaser
                hereunder, on the Closing Date the Purchaser will deliver or cause
                to be
                delivered the Certificates to the Underwriter and the Initial Purchaser,
                as applicable, or their respective designees in accordance with the
                written instructions of the Seller.

            

    

     

    
      	
            	
              (d)

            	
              The
                obligation of Seller to sell, and of Purchaser to purchase, the Conveyed
                Assets as set forth in this Section
                2.1
                is
                contingent upon the consummation, on the Closing Date, of the transactions
                pursuant to which the Purchaser sells (i) the Class A-1 Certificates
                to
                the Underwriter pursuant to the Underwriting Agreement and (ii) the
                Class
                A-X and Class A-R Certificates to the Initial Purchaser pursuant
                to the
                Purchase Agreement.

            

    

      

    Section
      2.2 Closing.
      The closing for the sale of the Conveyed Assets shall occur on the Closing
      Date
      at such time and place and in such manner as the parties shall
      agree.

     

    ARTICLE
      III

     

    REPRESENTATIONS,
      WARRANTIES AND COVENANTS

     

    Section
      3.1 Representations,
      Warranties and Covenants of Seller.
      Seller
      hereby affirms to Purchaser and the Trustee that each of the following
      representations and warranties will be true and correct as of the Closing
      Date:

     

    
      	 	
              (a)

            	
              Seller
                is a corporation, duly incorporated, validly existing and in good
                standing
                under the laws of the State of Delaware, with corporate power and
                authority to execute and deliver this Agreement and to perform its
                obligations hereunder.

            

    

     

    
      	 	
              (b)

            	
              The
                execution and delivery of this Agreement by Seller, the consummation
                of
                the transactions contemplated hereby, and the fulfillment of and
                compliance with the terms and conditions hereof, will not (i) conflict
                with or result in a breach of or give rise to any default under any
                of the
                terms, conditions or provisions of Seller’s charter or by-laws or any term
                or provision of any material pooling agreement, deed of trust, contract
                or
                other agreement or instrument to which Seller is a party or is bound;
                or
                (ii) result in the violation of or conflict with any law, rule,
                regulation, order, judgment or decree of any court or governmental
                authority having jurisdiction over
                Seller.

            

    

     

    
      	 	
              (c)

            	
              This
                Agreement has been duly and validly authorized, executed and delivered
                by
                Seller and, assuming the due authorization, execution and delivery
                hereof
                by Purchaser, constitutes a legal, valid and binding obligation of
                Seller,
                enforceable against Seller in accordance with its terms, except as
                such
                enforcement may be limited by bankruptcy, insolvency, reorganization,
                receivership or moratorium or other similar laws affecting creditors’
                rights, and by the availability of equitable remedies (including
                specific
                performance and injunctive relief), regardless of whether such enforcement
                is considered in a proceeding in equity or at law, and except as
                enforcement of the indemnification provisions thereof may be limited
                by
                public policy.

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (d)

            	
              Seller
                is not in default with respect to any order or decree of any court
                or any
                order, regulation or demand of any federal, state, municipal or
                governmental agency, which default would materially and adversely
                affect
                its performance of this Agreement.

            

    

     

    
      	 	
              (e)

            	
              There
                is no action, suit or proceeding before or by any court or governmental
                agency or body now pending or, to Seller’s knowledge, threatened, which,
                if determined adversely to Seller, would materially and adversely
                affect
                the ability of Seller to perform and comply with the terms of this
                Agreement.

            

    

     

    
      	 	
              (f)

            	
              Seller
                has the full corporate power and authority to purchase, hold and
                transfer
                the Conveyed Assets and to execute and deliver, engage in the transactions
                contemplated by, and perform and observe the terms and conditions
                of, this
                Agreement.

            

    

     

    
      	 	
              (g)

            	
              No
                consent, approval, authorization or order of, or registration or
                filing
                with, or notice to, any court, governmental agency or body or supervisory
                agent, in each case which has not been obtained, made, or given,
                as
                applicable, is required for the execution, delivery and performance
                by
                Seller of or compliance by Seller with this Agreement or the consummation
                by Seller of the transactions contemplated by this
                Agreement.

            

    

     

    
      	 	
              (h)

            	
              Seller
                does not believe, nor does it have any reason or cause to believe,
                that it
                cannot perform each and every covenant of Seller contained in this
                Agreement.

            

    

     

    
      	 	
              (i)

            	
              The
                consummation of the transactions contemplated by this Agreement is
                being
                undertaken in the ordinary course of business of Seller and the transfer,
                assignment and conveyance of the Conveyed Assets pursuant to this
                Agreement are not subject to the bulk transfer or any similar statutory
                provisions in effect in any relevant
                jurisdiction.

            

    

     

    
      	 	
              (j)

            	
              From
                and after the Closing Date, Seller will record in its books and records
                and report the transfer of the Conveyed Assets to Purchaser as a
                sale for
                federal income tax purposes and pursuant to generally accepted accounting
                principles.

            

    

     

    
      	 	
              (k)

            	
              Seller
                has not dealt with any broker, investment banker or agent or other
                person
                other than the Underwriter that may be entitled to any commission
                or
                compensation in connection with the sale of the Conveyed Assets to
                Purchaser.

            

    

     

    
      	 	
              (l)

            	
              The
                consideration received by Seller upon the sale of the Conveyed Assets
                under this Agreement constitutes fair consideration and reasonably
                equivalent value to Seller for the Conveyed
                Assets.

            

    

     

    
      	 	
              (m)

            	
              Seller
                will be solvent at all relevant times prior to, and will not be rendered
                insolvent by, the sale of the Conveyed Assets. The Seller will not
                be left
                with unreasonably small capital to conduct its business as a result
                of the
                sale hereunder and Seller believes that it will be able to, and it
                intends
                to, pay its debts as they mature. The sale of the Conveyed Assets
                is not
                undertaken with the intent to hinder, delay, or defraud any of Seller’s
                creditors.

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (n)

            	
              Seller
                hereby represents and warrants to Purchaser, as to each of the Conveyed
                Assets as of the Closing Date,
                that:

            

    

     

    
      	 	
              (i)

            	
              All
                steps necessary to transfer all of Seller’s right, title and interest in
                and to the Conveyed Assets have been taken by
                Seller;

            

    

     

    
      	 	
              (ii)

            	
              Immediately
                prior to the transfer contemplated by this Agreement, Seller is the
                sole
                owner and holder of the Conveyed Assets free and clear of any and
                all
                liens, pledges, charges or security interests of any nature and has
                full
                right and authority, subject to no interest or participation of or
                agreement with any other party, to sell and assign the same pursuant
                to
                this Agreement;

            

    

     

    
      	 	
              (iii)

            	
              Seller
                has acquired the Conveyed Assets in the ordinary course of its business,
                in good faith, for value and without notice of any claim against
                or claim
                to the Conveyed Assets on the part of any person;
                and

            

    

     

    
      	 	
              (iv)

            	
              Seller
                has no actual or constructive knowledge or notice of any interest
                in the
                Conveyed Assets contrary to the Trustee’s interest under the Pooling
                Agreement. 

            

    

     

    
      	 	
              (o)

            	
              Seller
                hereby represents and warrants to Purchaser as to the Certificates,
                that:

            

    

     

    
      	 	
              (i)

            	
              If
                the Seller ever sells any of the Certificates, it will sell at least
                25%
                of its beneficial ownership interest in the Certificates to one or
                more
                unaffiliated third parties; and

            

    

     

    
      	 	
              (ii)

            	
              If
                Seller ever owns more than 75% of the beneficial ownership interest
                in the
                Certificates, it will own 100% of the
                Certificates.

            

    

     

    Section
      3.2 Representations,
      Warranties and Covenants of Purchaser.
      Purchaser hereby affirms to Seller and the Trustee that each of the following
      representations and warranties is true and correct as of the Closing
      Date:

     

    
      	 	
              (a)

            	
              Purchaser
                is a corporation, duly incorporated, validly existing and in good
                standing
                under the laws of the State of Delaware, with corporate power and
                authority to execute and deliver this Agreement and to perform its
                obligations hereunder.

            

    

     

    
      	 	
              (b)

            	
              The
                execution and delivery of this Agreement by Purchaser, the consummation
                of
                the transactions contemplated hereby, and the fulfillment of and
                compliance with the terms and conditions hereof, will not (i) conflict
                with or result in a breach of or give rise to any default under any
                of the
                terms, conditions or provisions of Purchaser’s charter or by-laws or any
                term or provision of any material pooling agreement, deed of trust,
                contract or other agreement or instrument to which Purchaser is a
                party or
                is bound; or (ii) result in the violation of or conflict with any
                law,
                rule, regulation, order, judgment or decree of any court or governmental
                authority having jurisdiction over
                Purchaser.

            

    

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (c)

            	
              This
                Agreement has been duly and validly authorized, executed and delivered
                by
                Purchaser and, assuming the due authorization, execution and delivery
                hereof by Seller, constitutes a legal, valid and binding obligation
                of
                Purchaser, enforceable against Purchaser in accordance with its terms,
                except as such enforcement may be limited by bankruptcy, insolvency,
                reorganization, receivership or moratorium or other similar laws
                affecting
                creditors’ rights, and by the availability of equitable remedies
                (including specific performance and injunctive relief), regardless
                of
                whether such enforcement is considered in a proceeding in equity
                or at
                law, and except as enforcement of the indemnification provisions
                thereof
                may be limited by public policy.

            

    

     

    
      	 	
              (d)

            	
              Purchaser
                is not in default with respect to any order or decree of any court
                or any
                order, regulation or demand of any federal, state, municipal or
                governmental agency, which default would materially and adversely
                affect
                its performance of this Agreement.

            

    

     

    
      	 	
              (e)

            	
              There
                is no action, suit or proceeding before or by any court or governmental
                agency or body now pending or, to Purchaser’s knowledge, threatened,
                which, if determined adversely to Purchaser, would materially and
                adversely affect the ability of Purchaser to perform and comply with
                the
                terms of this Agreement.

            

    

     

    
      	 	
              (f)

            	
              Purchaser
                has the full corporate power and authority to execute and deliver,
                engage
                in the transactions contemplated by, and perform and observe the
                terms and
                conditions of, this Agreement.

            

    

     

    
      	 	
              (g)

            	
              No
                consent, approval, authorization or order of, or registration or
                filing
                with, or notice to, any court, governmental agency or body or supervisory
                agent, in each case which has not been obtained, made, or given,
                as
                applicable, is required for the execution, delivery and performance
                by
                Purchaser of or compliance by Purchaser with this Agreement or the
                consummation by the Purchaser of the transactions contemplated by
                this
                Agreement.

            

    

     

    
      	 	
              (h)

            	
              Purchaser
                does not believe, nor does it have any reason or cause to believe,
                that it
                cannot perform each and every covenant of Purchaser contained in
                this
                Agreement.

            

    

     

    Section
      3.3 Additional
      Documents and Actions.
      Seller
      agrees to use its best efforts to furnish (or cause to be furnished) such
      information and to execute, deliver and file, or cause to be executed, delivered
      and filed, such documents or instruments as the Purchaser may reasonably request
      in connection with the transactions herein contemplated and the issuance of
      the
      Certificates, including, but not limited to, officers’ certificates, financing
      statements, transfer instructions, opinions of counsel and letters of
      accountants in order to effectuate the purposes, terms and conditions of this
      Agreement. Seller shall pay, or take all such actions as may be necessary to
      cause to be paid, all Assigned Distributions to the Trustee for deposit into
      the
      Distribution Account established pursuant to the Pooling Agreement.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    Section
      3.4 Costs
      and Expenses.
      Seller
      will pay all costs and expenses in connection with the transfer and delivery
      of
      the Conveyed Assets in the manner contemplated herein.

     

    ARTICLE
      IV

     

    MISCELLANEOUS

     

    Section
      4.1 Notices.

     

    All
      demands, notices and communications hereunder shall be in writing and shall
      be
      deemed to have been duly given if mailed by registered or certified mail, return
      receipt requested, or, if by other means, when received by the other party
      or at
      the following addresses or such other address as may hereinafter be furnished
      to
      the other party by like notice. 

     

    Seller:       
      Citigroup
      Global Markets Inc.

    390
      Greenwich Street

    New
      York,
      NY 10013 

    Attn:
      Jon
      Riber

     

    Purchaser:         First
      Horizon Asset Securities Inc.

    4000
      Horizon Way

    Irving,
      Texas 75063

    Attn:
      Alfred Chang

     

    Any
      such
      demand, notice or communication hereunder shall be deemed to have been given
      on
      the date delivered to the premises of the addressee (as evidenced, in the case
      of registered or certified mail, by the date noted on the return
      receipt).

     

    Section
      4.2 Severability
      Clause.

     

    Any
      part,
      provision, representation or warranty of this Agreement which is prohibited
      or
      which is held to be void or unenforceable shall be ineffective to the extent
      of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof. To the extent permitted by applicable law, the parties hereto
      waive any provision of law which prohibits or renders void or unenforceable
      any
      provision hereof.

     

    Section
      4.3 Counterparts.

     

    For
      the
      purpose of facilitating the execution and proving of this Agreement, as herein
      provided and for other purposes, this Agreement may be executed 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.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    Section
      4.4 Place
      of Delivery and Governing Law.

     

    The
      Agreement shall be construed in accordance with the laws of the State of New
      York (without regard to conflict of laws principles and the application of
      the
      laws of any other jurisdiction) and the obligations, rights and remedies of
      the
      parties hereunder shall be determined in accordance with such laws.

     

    Section
      4.5 Remedies
      Cumulative; No Waiver.

     

    All
      rights and remedies of each party or any successor or assignee of such party
      shall, to the extent permitted by law, be deemed cumulative and not exclusive
      of
      any thereof or of any other rights and remedies available to such party or
      such
      successors or assigns; and no failure to exercise any right or power accruing
      upon any default occurring and continuing as aforesaid shall impair any such
      right or power, or shall be construed to be a waiver of any such default or
      an
      acquiescence therein; and every right and remedy arising under this Agreement
      or
      by law to a party or such successors or assigns may be exercised from time
      to
      time, and as often as shall be deemed expedient, by such party or such
      successors or assigns.

     

    Section
      4.6 Miscellaneous.

     

    This
      Agreement may be amended or supplemented from time to time only with the written
      consent of Seller, Purchaser and any assignee of Purchaser. This Agreement
      contains the entire understanding and agreement of the parties and supersedes
      and incorporates all prior negotiations, understandings and agreements which
      are
      fully merged herein.

     

    Section
      4.7 Agreement
      of Seller.

     

    Seller
      agrees to execute and deliver such instruments and take such actions as
      Purchaser may, from time to time, reasonably request in order to effectuate
      the
      purposes and to carry out the terms of this Agreement.

     

    Section
      4.8 Successors
      and Assigns.

     

    This
      Agreement shall bind and inure to the benefit of and be enforceable by and
      against Seller, Purchaser, and their respective successors and assigns. Each
      party hereto shall have the right to assign its rights, but not its obligations,
      hereunder without the consent of the other parties.

     

    Section
      4.9 Survival.

     

    Article
      IV
      hereto
      shall survive the consummation of the transactions contemplated
      hereby.

     

    Section
      4.10 Intention
      of Parties.

     

    It
      is the
      intention of Seller and Purchaser that the sale, transfer, assignment and
      conveyance herein contemplated constitute a sale of the Conveyed Assets
      conveying good title thereto, free and clear of any liens and encumbrances,
      from
      Seller to Purchaser and that the Conveyed Assets not be part of Seller’s estate
      in the event of an insolvency, and any filing of any financing statement under
      the Uniform Commercial Code, as in effect in any applicable jurisdiction, should
      not be construed as a conclusion that a sale has not occurred. In the event
      that
      such conveyance is deemed by any court of competent jurisdiction to be a loan
      or
      financing notwithstanding the express intent of the parties to the contrary,
      then and only in such event, the parties intend that Seller shall be deemed
      to
      have granted to Purchaser a security interest in all of Seller’s right, title
      and interest in the Conveyed Assets, that such loan or financing shall be
      non-recourse, that the Conveyed Assets and the proceeds of the Conveyed Assets
      constituting the sole source for the repayment of such loan and that this
      Agreement shall constitute a security agreement under applicable
      law.

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

        
        

      

    

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

     

    
      	 	 	 
	 	
              SELLER:

               

              CITIGROUP GLOBAL MARKETS INC.

            
	 
 	 
 	 
 
	 	By:     
              	  
	 	Name:
              	 
	 	Title:
              	 
	 	
            

    

     

    
      	
            	 	 
	 	
              PURCHASER:

               

               

              FIRST HORIZON ASSET SECURITIES INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	Name: 	 Alfred
              Chang
	 	Title: 	 Vice
              PresidentEXHIBIT
      10.30

     

    HAEIFC

    HANFORD
      AREA ECONOMIC INVESTMENT FUND COMMITTEE

    2912
      WEST
      HOOP AVENUE A202

    KENNEWICK,
      WASHINGTON 99336

    HAEIFC@YAHOO.COM

    

    April
      26,
      2006

    

    IsoRay
      Medical, Inc.

    350
      Hills
      St.

    Suite
      106

    Richland,
      WA 99354

    

    Attention:
      Michael K. Dunlop

    

    Mr.
      Dunlop;

    

    The
      Board
      of Directors of the Hanford Area Economic Investment Fund Committee (HAEIFC)
      approved your loan request on April 24, 2006, subject to the attached terms
      and
      conditions. 

    

    Please
      have a corporate officer authorized to sign for the company, sign the
      acknowledgement, acceptance below, and return to HAEIFC, please provide a copy
      of the Board of Directors minutes authorizing the loan, and who is authorized
      to
      sign.

    

    This
      commitment will expire on May 24, 2006, unless the acknowledgement, acceptance
      is received by HAEIFC on or prior to the expiration date. In any event, the
      loan
      must close on or before June 15, 2006. If the loan does not closed by June
      15,
      2006, the commitment is withdrawn and no additional applications will be
      considered.

    

    If
      you
      have any questions please do not hesitate to contact me at
      509-832-0080.

    

    Sincerely,

    

    /s/
      Stephen P. Sensney

      
        

      

    

    Stephen
      P. Sensney

    Loan
      Consultant

    

    Acknowledgement
      and acceptance of terms, condition, and Loan Covenants for the approved loan
      from Hanford Area Economic Investment Funds Committee to IsoRay Inc, DBA IsoRay
      Medical, Inc. approved April 24, 2006.

    

    IsoRay
      Medical, Inc.

    

    By: 
      /s/
      Roger
      E. Girard

      
        

      

    

    Print
      Name:
      Roger E.
      Girard

    Its:
      CEO/Chairman

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Enclosures:
      Schedule A

    Schedule
      A

    

    IsoRay
      Medical, Inc. a wholly owned subsidiary of IsoRay, Inc.

    April
      26,
      2006

    Attachment
      to commitment letter

    

    
      	Loan
              Amount:	
              $1,400,000.00

            

    

    

    
      	Purpose:	
              $1,400,000.00
                Equipment

            

    

    

    
      	Rate:	
              WSJ
                Prime Rate Plus 2.0% Plus .50% service fee fixed at time of closing
                (effective rate as of 3/28/06
                10.25%)

            

    

    

    
      	Term:	
              120
                Monthly Payments estimated at
                $18,695.00

            

    

    

    
      	Loan
              Fee:	
              1.50%
                loan fee all due at closing

            

    

    

    
      	Costs:	
              All
                out of pocket costs paid by IsoRay Medical at time of
                closing

            

    

    

    
      	Collateral	
              2nd
                Security interest in Accounts Receivable, Inventory, and Machinery
                and
                Equipment

            

    

     

    1st
      Purchase
      Money Security Interest in Equipment purchased.

     

    Assignment
      of Life Insurance $250,000.00 each for Girard, Brown, Swanberg,
      Dunlop

    

    
      	Guarantors:	
              Limited
                Unsecured Guarantors from up to 11 Managers, Directors, Board Members,
                and
                other interested individuals. Total Aggregate of
                $300,000.00

            

    

    

    Approved
      Loan Covenants:

    

    
      	 	
              1.

            	
              Loan
                Covenants suggested for IsoRay Medical
                loan.

            

    

    

    
      	 	
              A.

            	
              Current
                Ratio not less than 1.50 to 1

            

    

    

    
      	 	
              B.

            	
              Debt
                to Equity not more than 2.00 to 1

            

    

    

    
      	 	
              C.

            	
              Fixed
                Charge Coverage not less than 

            

    

    
      	 	
              §

            	
              1.10
                to 1 in 2006 and thereafter

            

    

    

    
      	 	
              D.

            	
              All
                production facilities and corporate headquarters to remain within
                the
                boundaries of Benton and Franklin Counties of Washington State. If
                IsoRay
                removes all or any part of its operations from the boundaries of
                Benton or
                Franklin Counties, all principle and accrued interest due by IsoRay
                is
                automatically due and payable in full. HAEFIC will consider requests
                for
                additional facilities outside of the defined
                boundaries.

            

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              E.

            	
              Benton-Franklin
                Economic Development District to subordinate all collateral to
                HAEIFC.

            

    

    

    
      	 	
              F.

            	
              IsoRay
                will not remove any equipment purchased with the proceeds of this
                loan
                from the PECOS facility, any removal will require the reduction in
                loan
                principle equal to the equipments original cost, or full repayment
                of the
                outstanding principle and accrued
                interest.

            

    

    

    
      	 	
              G.

            	
              Assignment
                of lease and leasehold improvements, which will allow HAEIFC to take
                position of the production
                facility.

            

    

    

    
      	 	
              H.

            	
              Letters
                from all creditors recognizing HAEIFC’s
                loan and waiving any default such loan may
                trigger.

            

    

    

    
      	 	
              I.

            	
              Letters
                from all creditors recognizing HAEIFC’s
                collateral and waiving all rights to
                it.

            

    

    

    
      	 	
              J.

            	
              Assignment
                of Life Insurance for $250,000.00 each from guarantors Girard, Segna,
                Swanberg, and Dunlop.

            

    

    

    
      	 	
              K.

            	
              Will
                not pay annual compensation to any Officer, Director, Manager, Salaried
                Employee, or Family member of any for mentioned in excess of $100,000.00
                annually during the term of this loan. Annual compensations over
                $100,000.00 at time of application to be grandfathered. Requests
                for
                grandfathered annual compensation to be supported by individuals
                name,
                annual compensation, and position. Exceptions to annual compensation
                will
                be considered for newly hired, or replacement employees on a case
                by case
                basis.

            

    

    

    
      	 	
              L.

            	
              Will
                pay no dividend to common and/or preferred stockholders and/or bonuses
                to
                Employees as an aggregated total that exceeds 30% of prior
                year’s
                net income as expressed by generally acceptable accounting principles
                and
                reported on the companies prior years audited financial statement
                during
                the term of this loan. This covenant will become effective on June
                30,
                2010.

            

    

    

    
      	 	
              M.

            	
              Buy
                back any stock either common or preferred from any Officer, Director,
                Manager, or Salaried employee or their family members during the
                term of
                this loan.

            

    

    

    
      	 	
              N.

            	
              Annual
                audited financial statements and tax return, due within 90 days of
                corporate year-end.

            

    

    

    
      	 	
              O.

            	
              Quarterly
                GAAP prepared financial statements, due by the end of the month following
                the quarters end.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]