Document:

lfg-ex10_1.htm

    
      

      

    

    Exhibit
      10.1

    

    CHANGE
      OF CONTROL EMPLOYMENT
      AGREEMENT

    

    AGREEMENT
      by and between LandAmerica
      Financial Group, Inc., a Virginia corporation (the “Company”), and ____________
      (the “Executive”), dated as of the 1st
      day of
      January, 2008.

    

    The
      Board of Directors of the Company
      (the “Board”) has determined that it is in the best interests of the Company and
      its shareholders to assure that the Company will have the continued dedication
      of the Executive, notwithstanding the possibility, threat or occurrence of
      a
      Change of Control (as defined below) of the Company.  The Board
      believes it is imperative to diminish the inevitable distraction of the
      Executive by virtue of the personal uncertainties and risks created by a pending
      or threatened Change of Control and to encourage the Executive’s full attention
      and dedication to the Company currently and in the event of any threatened
      or
      pending Change of Control, and to provide the Executive with compensation and
      benefits arrangements upon a Change of Control which ensure that the
      compensation and benefits expectations of the Executive will be satisfied and
      which are competitive with those of other corporations.  Therefore, in
      order to accomplish these objectives, the Board has caused the Company to enter
      into this Agreement.

    

    NOW,
      THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

    

    1.           
      Certain
      Definitions.

    

    (a)           
      “Board” shall mean the Board of Directors of the Company.  In the
      event the Company is no longer traded on an established securities market and
      any parent of the company is publicly traded, Board shall mean the Board of
      Directors of the publicly traded parent corporation.

    

    (b)           
      “Change of Control Period” shall mean the period commencing on the date hereof
      and ending on the date one year after the date hereof; provided, however, that
      on each annual anniversary of the date hereof (each annual anniversary shall
      be
      hereinafter referred to as the “Renewal Date”), unless previously terminated,
      the Change of Control Period shall be automatically extended so as to terminate
      one year from such Renewal Date, unless at least 60 days prior to the Renewal
      Date the Company shall give notice to the Executive that the Change of Control
      Period shall not be so extended.

    

    (c)           
      “Code” shall mean the Internal Revenue Code of 1986, as amended.

    

    (d)           
      “Effective Date” shall mean the first date during the Change of Control Period
      (as defined in Section 1(b)) on which a Change of Control (as defined in Section
      2) occurs.  Anything in this Agreement to the contrary
      notwithstanding, if a Change of Control occurs and if the Executive’s employment
      with the Company is terminated prior to the date on which the Change of Control
      occurs, and if it is reasonably demonstrated by the Executive
      that

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    such
      termination of employment (i) was at the request of a third party who has taken
      steps reasonably calculated to effect a Change of Control or (ii) otherwise
      arose in connection with or anticipation of a Change of Control, then for all
      purposes of this Agreement the “Effective Date” shall mean the date immediately
      prior to the date of such termination of employment.

    

    (e)           
      “Subsidiary” shall mean any corporation that is directly, or indirectly though
      one or more intermediaries, controlled by the Company.

    

    2.           
      Change of
      Control.  For the purpose of this Agreement, a “Change of
      Control” shall mean:

    

    (a)           
      The acquisition by any individual, entity or group (within the meaning of
      Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
      (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
      of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either
      (i)
      the then outstanding shares of common stock of the Company (the “Outstanding
      Company Common Stock”) or (ii) the combined voting power of the then outstanding
      voting securities of the Company entitled to vote generally in the election
      of
      directors (the “Outstanding Company Voting Securities”); provided, however, that
      for purposes of this subsection (a), the following acquisitions shall not
      constitute a Change of Control: (i) any acquisition directly from the Company,
      (ii) any acquisition by the Company, (iii) any acquisition by any employee
      benefit plan (or related trust) sponsored or maintained by the Company or any
      corporation controlled by the Company or (iv) any acquisition by any corporation
      pursuant to a transaction, which complies with clauses (i), (ii) and (iii)
      of
      subsection (c) of this Section 2; or

    

    (b)           
      Individuals who, as of the date hereof, constitute the Board (the “Incumbent
      Board”), cease for any reason to constitute at least a majority of the Board;
      provided, however, that any individual becoming a director subsequent to the
      date hereof whose election, or nomination for election by the Company’s
      shareholders, was approved by a vote of at least a majority of the directors
      then comprising the Incumbent Board shall be considered as though such
      individual were a member of the Incumbent Board, but excluding, for this
      purpose, any such individual whose initial assumption of office occurs as a
      result of an actual or threatened election contest with respect to the election
      or removal of directors or other actual or threatened solicitation of proxies
      or
      con­sents by or on behalf of a Person other than the Board; or

    

    (c)           
      Consummation of a reorganization, merger or consolidation or sale or other
      disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, following such Business
      Combination, (i) all or substantially all of the individuals and entities who
      were the beneficial owners, respectively, of the Outstanding Company Common
      Stock and Outstanding Company Voting Securities immediately prior to such
      Business Combination beneficially own, directly or indirectly, more than 50%
      of,
      respectively, the then outstanding shares of common stock and the combined
      voting power of the then outstanding voting securities entitled to vote
      generally in the election of directors, as the case may be, of the corporation
      resulting from such Business Combination (including, without limitation a
      corporation which as a result of such transaction owns the

    
      
        
           

        

        
        

      

      
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    Company
      or all or substantially all of the Company’s assets either directly or through
      one or more subsidiaries) in substantially the same proportions as their
      ownership, immediately prior to such Business Combination of the Outstanding
      Company Common Stock and Outstanding Company Voting Securities, as the case
      may
      be, (ii) no Person (excluding any corporation resulting from such Business
      Combination or any employee benefit plan (or related trust) of the Company
      or
      such corporation resulting from such Business Combination) beneficially owns,
      directly or indirectly, 20% or more of, respectively, the then outstanding
      shares of common stock of the corporation resulting from such Business
      Combination or the combined voting power of the then outstanding voting
      securities of such corporation except to the extent that such ownership existed
      prior to the Business Combination and (iii) at least a majority of the members
      of the board of directors of the corporation resulting from such Business
      Combination were members of the Incumbent Board at the time of the execution
      of
      the initial agreement, or of the action of the Board, providing for such
      Business Combination; or

    

    (d)           
      Approval by the shareholders of the Company of a complete liquidation or
      dissolution of the Company.

     

    Notwithstanding
      the foregoing, for
      purposes of subsection (a) of this Section 2, a Change of Control shall not
      be
      deemed to have taken place if, as a result of an acquisition by the Company
      which reduces the Outstanding Company Common Stock or the Outstanding Company
      Voting Securities, the beneficial ownership of a Person increases to 20% or
      more
      of the Outstanding Company Common Stock or the Outstanding Company Voting
      Securities; provided, however, that if a Person shall become the beneficial
      owner of 20% or more of the Outstanding Company Common Stock or the Outstanding
      Company Voting Securities by reason of share purchases by the Company and,
      after
      such share purchases by the Company, such Person becomes the beneficial owner
      of
      any additional shares of the Outstanding Company Common Stock or the Outstanding
      Company Voting Stock, for purposes of subsection (a) of this Section 2, a Change
      of Control shall be deemed to have taken place.

    

    3.           
      Employment
      Period.  If the Executive is employed by the Company and/or a
      Subsidiary on the Effective Date, the Company hereby agrees to continue to
      employ and to cause such Subsidiary to continue to employ the Executive, and
      the
      Executive hereby agrees to remain in the employ of the Company and/or such
      Subsidiary, subject to the terms and conditions of this Agreement, for the
      period commencing on the Effective Date and ending on the third anniversary
      of
      such date (the “Employment Period”).  For purposes of this Agreement,
      unless expressly limited to LandAmerica Financial Group, Inc., “Company”
hereinafter shall mean each of LandAmerica Financial Group, Inc. and/or any
      of
      its Subsidiaries or affiliated companies that employ the
      Executive.  As used in this Agreement, the term “affiliated companies”
shall include any company controlled by, controlling or under common control
      with the Company.

    

    4.           
      Terms of
      Employment.

    

    (a)           
      Position and
      Duties.

    

    (i)           
      During the Employment Period, (A) the Executive’s position (including status,
      offices, titles and reporting requirements), authority, duties and
      responsibilities

    
      
        
           

        

        
        

      

      
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    shall
      be
      at least commensurate in all material respects with the most significant of
      those held, exercised and assigned at any time during the 120-day period
      immediately preceding the Effective Date and (B) the Executive’s services shall
      be performed at the location where the Executive was employed immediately
      preceding the Effective Date or any office or location less than 35 miles from
      such location.

    

    (ii)           
      During the Employment Period, and excluding any periods of paid time off to
      which the Executive is entitled, the Executive agrees to devote reasonable
      attention and time during normal business hours to the business and affairs
      of
      the Company and, to the extent necessary to discharge the responsibilities
      assigned to the Executive hereunder, to use the Executive’s reasonable best
      efforts to perform faithfully and efficiently such
      responsibilities.  During the Employment Period it shall not be a
      violation of this Agreement for the Executive to (A) serve on corporate, civic
      or charitable boards or committees, (B) deliver lectures, fulfill speaking
      engagements or teach at educational institutions and (C) manage personal
      investments, so long as such activities do not significantly interfere with
      the
      performance of the Executive’s responsibilities as an employee of the Company in
      accordance with this Agreement. It is expressly understood and agreed that
      to
      the extent that any such activities have been conducted by the Executive prior
      to the Effective Date, the continued conduct of such activities (or the conduct
      of activities similar in nature and scope thereto) subsequent to the Effective
      Date shall not thereafter be deemed to interfere with the performance of the
      Executive’s responsibilities to the Company.

    

    (b)           
      Compensation.

    

    (i)           
      Base
      Salary.  During the Employment Period, the Executive shall
      receive an annual base salary (“Annual Base Salary”), which shall be paid at a
      monthly rate, at least equal to 12 times the highest monthly base salary paid
      or
      payable, including any base salary which has been earned but deferred, to the
      Executive by the Company in respect of the 12-month period immediately preceding
      the month in which the Effective Date occurs.  During the Employment
      Period, the Annual Base Salary shall be reviewed no more than 12 months after
      the last salary increase awarded to the Executive prior to the Effective Date
      and thereafter at least annually.  Any increase in Annual Base Salary
      shall not serve to limit or reduce any other obligation to the Executive under
      this Agreement.  Annual Base Salary shall not be reduced after any
      such increase and the term Annual Base Salary as utilized in this Agreement
      shall refer to Annual Base Salary as so increased.

    

    (ii)           
      Annual
      Bonus.  In addition to Annual Base Salary, the Executive shall
      be awarded, for each fiscal year ending during the Employment Period, an annual
      bonus (the “Annual Bonus”) in cash at least equal to the Executive’s highest
      bonus under annual incentive plans of the Company or any comparable bonus under
      any predecessor or successor plan, for the last three full fiscal years prior
      to
      the Effective Date (annualized in the event that the Executive was not employed
      by the Company for the whole of such fiscal year) (the “Recent Annual
      Bonus”).  Each such Annual Bonus shall be paid no later than the end
      of the third month of the fiscal year next following the fiscal year for which
      the Annual Bonus is awarded, unless the Executive shall elect to defer the
      receipt of such Annual Bonus.

    
      
        
           

        

        
        

      

      
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    (iii)              
      Incentive, Savings
      and
      Retirement Plans.  During the Employment Period, the Executive
      shall be entitled to participate in all incentive, savings and retirement plans,
      practices, policies and programs applicable generally to other peer executives
      of the Company, but in no event shall such plans, practices, policies and
      programs provide the Executive with incentive opportunities (measured with
      respect to both regular and special incentive opportunities, to the extent,
      if
      any, that such distinction is applicable), savings opportunities and retirement
      benefit opportunities, in each case, less favorable, in the aggregate, than
      the
      most favorable of those provided by the Company and its affiliated companies
      for
      the Executive under such plans, practices, policies and programs as in effect
      at
      any time during the 120-day period immediately preceding the Effective Date
      or
      if more favorable to the Executive, those provided generally at any time after
      the Effective Date to other peer executives of the Company.

    

    (iv)           
      Welfare Benefit
      Plans.  During the Employment Period, the Executive and/or the
      Executive’s family, as the case may be, shall be eligible for participation in
      and shall receive all benefits under written welfare benefit plans, practices,
      policies and programs provided by the Company (including, without limitation,
      medical, prescription, dental, disability, employee life, group life, accidental
      death and travel accident insurance plans and programs) to the extent applicable
      generally to other peer executives of the Company, but in no event shall such
      plans, practices, policies and programs provide the Executive with benefits
      which are less favorable, in the aggregate, than the most favorable of such
      written plans, practices, policies and programs in effect for the Executive
      at
      any time during the 120-day period immediately preceding the Effective Date
      or,
      if more favorable to the Executive, those provided generally at any time after
      the Effective Date to other peer executives of the Company. 
      To the extent required by Code Section 409A (i) a reimbursement made under
      this
      section shall be paid by December 31 of the calendar year following the calendar
      year in which the reimbursed expense is incurred and (ii) no reimbursement
      or
      in-kind benefit provided under this section during one calendar year shall
      affect the expenses eligible for reimbursement or in-kind benefits provided
      during another calendar year.

    

    (v)           
      Expenses.  During
      the Employment Period the Executive shall be entitled to receive prompt
      reimbursement for all reasonable expenses incurred by the Executive in
      accordance with the most favorable written policies, practices and procedures
      of
      the Company in effect for the Executive at any time during the 120-day period
      immediately preceding the Effective Date or, if more favorable to the Executive,
      as in effect generally at any time thereafter with respect to other peer
      executives of the Company.  Reimbursement shall occur on or before
      December 31 of the calendar year following the calendar year the applicable
      expense is incurred.  No reimbursement provided under this Section
      4(b)(v) during one calendar year shall affect the expenses eligible for
      reimbursement during another calendar year

    

    (vi)           
      Fringe
      Benefits.  During the Employment Period, the Executive shall be
      entitled to fringe benefits, including, without limitation, tax and financial
      planning services, payment of club dues, and, if applicable, use of an
      automobile and payment of related expenses, in accordance with the most
      favorable written plans, practices, programs and policies

    
      
        
           

        

        
        

      

      
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    of
      the
      Company and its affiliated companies in effect for the Executive at any time
      during the 120-day period immediately preceding the Effective Date or, if more
      favorable to the Executive, as in effect generally at any time thereafter with
      respect to other peer executives of the Company. Any reimbursement made under
      this section shall occur on or before December 31 of the calendar year following
      the calendar year the applicable expense is incurred.  No
      reimbursement or in-kind benefit provided under this Section 4(b)(vi) during
      one
      calendar year shall affect the expenses eligible for reimbursement or in-kind
      benefits provided during another calendar year.

    

    (vii)              
      Office and Support
      Staff.  During the Employment Period, the Executive shall be
      entitled to an office or offices of a size and with furnishings and other
      appointments, and to exclusive personal secretarial and other assistance, at
      least equal to the most favorable of the foregoing provided to the Executive
      by
      the Company and its affiliated companies at any time during the 120-day period
      immediately preceding the Effective Date or, if more favorable to the Executive,
      as provided generally at any time thereafter with respect to other peer
      executives of the Company.

    

    (viii)                 
      Paid Time
      Off.  During the Employment Period, the Executive shall be
      entitled to paid time off in accordance with the most favorable plans, policies,
      programs and practices of the Company and its affiliated companies as in effect
      for the Executive at any time during the 120-day period immediately preceding
      the Effective Date or, if more favorable to the Executive, as in effect
      generally at any time thereafter with respect to other peer executives of the
      Company.

    

    5.           
      Termination of
      Employment.

    

    (a)           
      Death or
      Disability.  The Executive’s employment shall terminate
      automatically upon the Executive’s death during the Employment
      Period.  If the Company determines in good faith that the Disability
      of the Executive has occurred during the Employment Period (pursuant to the
      definition of Disability set forth below), it may give to the Executive written
      notice in accordance with Section 12(b) of this Agreement of its intention
      to
      terminate the Executive’s employment.  In such event, the Executive’s
      employment with the Company shall terminate effective on the 30th day after
      receipt of such notice by the Executive (the “Disability Effective Date”),
      provided that, within the 30 days after such receipt, the Executive shall not
      have returned to full-time performance of the Executive’s duties.  For
      purposes of this Agreement, “Disability” shall mean that the Executive is
      unable, by reason of physical or mental incapacity, to perform Executive’s
      duties to the Company on a full-time basis for a period longer than 3
      consecutive months or more than 6 months in any consecutive 12-month period.
      The
      existence of a Disability shall be determined by the Board of Directors of
      the
      Company, based upon due consideration of the opinion of the Executive’s personal
      physician or physicians and of the opinion of any physician or physicians
      selected by the Board of Directors for these purposes.  If the
      Executive’s personal physician disagrees with the physician retained by the
      Company, the Board of Directors will retain an impartial physician selected
      by
      the Executive’s personal physician and the Company’s physician and the opinion
      of the impartial physician shall be binding upon the Company and the
      Executive.  The Executive shall submit to examination by any physician
      or physicians so selected by the Board of Directors, and shall otherwise
      cooperate

    
      
        
           

        

        
        

      

      
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    with
      the
      Board of Directors in making the determination contemplated hereunder, such
      cooperation to include, without limitation, consenting to the release of
      information by any such physician(s) to the Board of Directors.

    

    (b)           
      Cause.  The
      Company may terminate the Executive’s employment during the Employment Period
      for Cause.  For purposes of this Agreement, “Cause” shall
      mean:

    

    (i)           
      the willful and continued failure of the Executive to perform substantially
      the
      Executive’s duties with the Company (other than any such failure resulting from
      incapacity due to physical or mental illness), after a written demand for
      substantial performance is delivered to the Executive by the Board or the Chief
      Executive Officer of the Company which specifically identifies the manner in
      which the Board or Chief Executive Officer believes that the Executive has
      not
      substantially performed the Executive’s duties, or

    

    (ii)           
      the willful engaging by the Executive in illegal conduct or gross misconduct,
      which is materially and demonstrably injurious to the Company.

    

    For
      purposes of this provision, no act or failure to act, on the part of the
      Executive, shall be considered “willful” unless it is done, or omitted to be
      done, by the Executive in bad faith or without reasonable belief that the
      Executive’s action or omission was in the best interests of the
      Company.  Any act, or failure to act, based upon authority given
      pursuant to a resolution duly adopted by the Board or upon the instructions
      of
      the Chief Executive Officer or a senior officer of the Company or based upon
      the
      advice of counsel for the Company shall be conclusively presumed to be done,
      or
      omitted to be done, by the Executive in good faith and in the best interests
      of
      the Company.  The cessation of employment of the Executive shall not
      be deemed to be for Cause unless and until there shall have been delivered
      to
      the Executive a copy of a resolution duly adopted by the affirmative vote of
      not
      less than three-quarters of the entire membership of the Board at a meeting
      of
      the Board called and held for such purpose (after reasonable notice is provided
      to the Executive and the Executive is given an opportunity, together with
      counsel, to be heard before the Board), finding that, in the good faith opinion
      of the Board, the Executive is guilty of the conduct described in subparagraph
      (i) or (ii) above, and specifying the particulars thereof in
      detail.

    

    (c)           
      Good Reason; Window
      Period.  The Executive’s employment may be terminated (i)
      during the Employment Period by the Executive for Good Reason or (ii) during
      the
      Window Period by Executive without any reason.  For purposes of this
      Agreement, “Window Period” shall mean the 30-day period immediately following
      the first anniversary of the Effective Date.  For purposes of this
      Agreement, “Good Reason” shall mean:

    

    (i)           
      the assignment to the Executive of any duties inconsistent in any respect with
      the Executive’s position (including status, offices, titles and reporting
      requirements), authority, duties or responsibilities as contemplated by Section
      4(a) of this Agreement, or any other action by the Company, which results in
      a
      diminution in such position, authority, duties or responsibilities, excluding
      for this purpose an isolated, insubstantial and inadvertent action
      not

    
      
        
           

        

        
        

      

      
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    taken
      in
      bad faith and which is remedied by the Company promptly after receipt of notice
      thereof given by the Executive;

    

    (ii)           
      any failure by the Company to comply with any of the provisions of Section
      4(b)
      of this Agreement, other than an isolated, insubstantial and inadvertent failure
      not occurring in bad faith and which is remedied by the Company promptly after
      receipt of notice thereof given by the Executive;

    

    (iii)           
      the Company’s requiring the Executive to be based at any office or location
      other than as provided in Section 4(a)(i)(B) hereof or the Company’s requiring
      the Executive to travel on Company business to a substantially greater extent
      than required immediately prior to the Effective Date;

    

    (iv)           
      any purported termination by the Company of the Executive’s employment otherwise
      than as expressly permitted by this Agreement; or

    

    (v)           
      any failure by the Company to comply with and satisfy Section 11(c) of this
      Agreement.

    

    For
      purposes of this Section 5(c), any good faith determina­tion of “Good
      Reason” made by the Executive shall be conclusive.

    

    Executive’s
      mental or physical
      incapacity following the occurrence of an event described in clauses (i) through
      (v) shall not affect Executive’s ability to terminate for Good Reason and
      Executive’s eligibility for retirement shall not be a basis to deny benefits
      payable to Executive under this Agreement following his resignation for Good
      Reason if Executive otherwise has Good Reason to resign.

    

    (d)           
      Notice of
      Termination.  Any termination by the Company for Cause, or by
      the Executive during the Window Period or for Good Reason, shall be communicated
      by Notice of Termination to the other party hereto given in accordance with
      Section 12(b) of this Agreement.  For purposes of this Agreement, a
“Notice of Termination” means a written notice which (i) indicates the specific
      termination provision in this Agreement relied upon, (ii) to the extent
      applicable, sets forth in reasonable detail the facts and circumstances claimed
      to provide a basis for termination of the Executive’s employment under the
      provision so indicated and (iii) if the Date of Termination (as defined below)
      is other than the date of receipt of such notice, specifies the termination
      date
      (which date shall be not more than thirty days after the giving of such
      notice).  The failure by the Executive or the Company to set forth in
      the Notice of Termination any fact or circumstance which contributes to a
      showing of Good Reason or Cause shall not waive any right of the Executive
      or
      the Company, respectively, hereunder or preclude the Executive or the Company,
      respectively, from asserting such fact or circumstance in enforcing the
      Executive’s or the Company’s rights hereunder.

    

    (e)           
      Date of
      Termination.  “Date of Termination” means (i) if the
      Executive’s employment is terminated by the Company for Cause, or by the
      Executive during the Window

    
      
        
           

        

        
        

      

      
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    Period
      or
      for Good Reason, the date of receipt of the Notice of Termination or any later
      date specified therein, as the case may be, (ii) if the Executive’s employment
      is terminated by the Company other than for Cause or Disability, the Date of
      Termination shall be the date on which the Company notifies the Executive of
      such termination and (iii) if the Executive’s employment is terminated by reason
      of death or Disability, the Date of Termination shall be the date of death
      of
      the Executive or the Disability Effective Date, as the case may be.

    

    6.           
      Obligations of the
      Company upon Termination.

    

    (a)           
      During the Window
      Period. If, during the Employment Period, the Executive shall terminate
      employment without any reason during the Window Period:

    

    (i)           
      the Company shall pay to the Executive in a lump sum in cash within 30 days
      after the Date of Termination, except as provided in Section 6(f) of this
      Agreement the aggregate of the following amounts:

    

    (A)           
      the sum of (1) the Executive’s Annual Base Salary through the Date of
      Termination to the extent not theretofore paid and (2) the product of (x) the
      higher of (I) the Recent Annual Bonus and (II) the Annual Bonus paid or payable,
      including any bonus or portion thereof which has been earned but deferred (and
      annualized for any fiscal year consisting of less than twelve full months or
      during which the Executive was employed for less than 12 full months), for
      the
      most recently completed fiscal year during the Employment Period, if any (such
      higher amount being referred to as the “Highest Annual Bonus”) and (y) a
      fraction, the numerator of which is the number of days in the current fiscal
      year through the Date of Termination, and the denominator of which is 365,
      in
      each case to the extent not theretofore paid (the sum of the amounts described
      in clauses (1) and (2) shall be hereinafter referred to as the “Accrued
      Obligations”);  and

    

    (B)           
      the amount equal to the sum of (x) the Executive’s Annual Base Salary and (y)
      the Highest Annual Bonus;

    

    (ii)           
      for the period from Executive’s
      Date of Termination through December 31 of the second calendar year following
      the calendar year of Executive’s Date of Termination, the Company shall continue
      benefits to the Executive
      and/or the Executive’s family at least equal to those which would have been
      provided to them in accordance with the plans, programs, practices and policies
      described in Section 4(b)(iv) of this Agreement if the Executive’s employment
      had not been terminated or, if more favorable to the Executive, as in effect
      generally at any time thereafter with respect to other peer executives of the
      Company and its affiliated companies and their families at a cost to the
      Executive no greater than the cost the Executive would have paid for such
      benefits if he had remained employed, provided, however, that (i) if
      continuation is not possible under the terms of the applicable plan, program,
      practice or policy, then the Company shall pay in cash in a lump sum within
      thirty (30) days following
Executive’s
      Date of
      Termination an amount equal to the present value of the contributions the
      Company would have made thereunder on behalf of Executive and/or Executive’s
      family for the period from Executive’s Date of Termination through December 31
      of the second calendar year

    
      
        
           

        

        
        

      

      
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    following
      the calendar year of
      Executive’s Date of Termination, calculated using (a) Company contribution
      levels in effect on the Date of Termination and (b) a present value discount
      rate, equal to 120% of the
      Federal short-term rate (using monthly compounding) as defined in Section
      1274(d) of the Code and as published for the month immediately preceding the
      month of payment; and (ii)
      if the Executive becomes reemployed with another employer and is eligible to
      receive medical or other welfare benefits under another employer provided plan,
      the medical and other welfare benefits described herein shall be secondary
      to
      those provided under such other plan during such applicable period of
      eligibility.  For purposes of determining eligibility (but not the
      time of commencement of benefits) of the Executive for retiree benefits pursuant
      to such plans, practices, programs and policies, the Executive shall be
      considered to have remained employed until 3 years after the Date of Termination
      and to have retired on the last day of such period.  To the extent required
      by
      Code Section 409A, (i) a reimbursement made under this section shall
      be paid by December 31 of the
      calendar year after the calendar year in which the reimbursed expense is
      incurred and (ii) no reimbursement or in-kind benefit provided
      under this section during
      one calendar year shall affect
      the expenses eligible for reimbursement or in-kind benefits provided
      during another calendar
      year;
      and

    

    (iii)           
      to the extent not theretofore paid or provided, the Company shall timely pay
      or
      provide to the Executive any other amounts or benefits required to be paid
      or
      provided or which the Executive is eligible to receive under any written plan,
      program, policy or practice or contract or agreement of the Company and its
      affiliated companies (such other amounts and benefits shall be hereinafter
      referred to as the “Other Benefits”).

    

    (b)           
      Good Reason; Other
      Than for Cause, Death or Disability.  If, during the Employment
      Period, the Company shall terminate the Executive’s employment other than for
      Cause, Death or Disability or the Executive shall terminate employment for
      Good
      Reason:

    

    (i)           
      the Company shall pay to the Executive in a lump sum in cash within 30 days
      after the Date of Termination, except as provided in Section 6(f) of this
      Agreement, the aggregate of the following amounts:

    

    (A)           
      the Accrued Obligations; and

    

    (B)           
      the amount equal to the product of (1) three times, and
      (2) the
      sum of (x) the Executive’s Annual Base Salary and (y) the Highest Annual
      Bonus;

    

    (ii)           
      for the period from Executive’s
      Date of Termination through December 31 of the second calendar year following
      the calendar year of Executive’s Date of Termination, the Company shall continue
      benefits to the Executive and/or the Executive’s family at least equal to those
      which would have been provided to them in accordance with the plans, programs,
      practices and policies described in Section 4(b)(iv) of this Agreement if the
      Executive’s employment had not been terminated or, if more favorable to the
      Executive, as in effect generally at any time thereafter with respect to other
      peer executives of the Company and its affiliated companies and their families
      at a cost to the Executive no greater than the cost the Executive would have
      paid for such benefits if he had remained employed, provided,
      however,

    
      
        
           

        

        
        

      

      
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          10

        
          

        

      

      
        
        

      

    

    that
      (i) if continuation is not possible
      under the terms of the applicable plan, program, practice or policy, then the
      Company shall pay in cash in a lump sum within thirty (30) days following Executive’s
      Date of Termination an
      amount equal to the present value of the contributions the Company would have
      made thereunder on behalf of Executive and/or Executive’s family for the period
      from Executive’s Date of Termination through December 31 of the second calendar
      year following the calendar year of Executive’s Date of Termination, calculated
      using (a) Company contribution levels in effect on the Date of Termination
      and
      (b) a present value discount rate, equal to 120% of the
      Federal
      short-term rate (using monthly compounding) as defined in Section 1274(d) of
      the
      Code and as published for the month immediately preceding the month of
      payment; and (ii) if the
      Executive becomes reemployed with another employer and is eligible to receive
      medical or other welfare benefits under another employer provided plan, the
      medical and other welfare benefits described herein shall be secondary to those
      provided under such other plan during such applicable period of
      eligibility.  For purposes of determining eligibility (but not the
      time of commencement of benefits) of the Executive for retiree benefits pursuant
      to such plans, practices, programs and policies, the Executive shall be
      considered to have remained employed until 3 years after the Date of Termination
      and to have retired on the last day of such period.  To the extent required
      by
      Code Section 409A, (i) a reimbursement made under this section shall be paid
      by
      December 31 of the calendar year after the calendar year in which the reimbursed
      expense is incurred and (ii) no reimbursement or in-kind benefit provided under
      this section during one calendar year shall affect the expenses eligible for
      reimbursement or in-kind benefits provided during another calendar
      year;
      and

    

    (iii)           
      for the period from Executive’s Date of Termination through December 31 of the
      second calendar year following the calendar year of Executive’s Date of
      Termination, the Company shall, at its sole expense as incurred, provide the
      Executive with reasonable outplacement services the scope and provider of which
      shall be selected by the Executive in his sole discretion (to the extent such
      selection is reasonable and directly related to Executive’s termination of
      employment with the Company), provided that any reimbursement made to Executive
      under this Section 6(b)(iii) shall be paid by December 31 of the third calendar
      year following the calendar year of Executive’s Date of Termination;
      and

    

    (iv)           
      to the extent not theretofore paid or provided, the Company shall timely pay
      or
      provide to the Executive any other amounts or benefits required to be paid
      or
      provided or which the Executive is eligible to receive under any written plan,
      program, policy or practice or contract or agreement of the Company and its
      affiliated companies (such other amounts and benefits shall be hereinafter
      referred to as the “Other Benefits”).

    

    Executive’s
      resignation for Good Reason shall not provide a basis for denying Executive
      any
      retirement or other benefits if he otherwise qualifies for such
      benefits.

    

    (c)           
      Death.  If
      the Executive’s employment is terminated by reason of the Executive’s death
      during the Employment Period, this Agreement shall terminate without further
      obligations to the Executive’s legal representatives under this Agreement, other
      than for payment of Accrued Obligations and the timely payment or provision
      of
      Other Benefits.  Accrued Obligations shall be paid to the Executive’s
      estate or beneficiary, as applicable, in a lump sum in

    
      
        
           

        

        
        

      

      
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          11

        
          

        

      

      
        
        

      

    

    cash
      within 30 days of the Date of Termination.  With respect to the
      provision of Other Benefits, the term Other Benefits as utilized in this Section
      6(c) shall include, without limitation, and the Executive’s estate and/or
      beneficiaries shall be entitled to receive, benefits at least equal to the
      most
      favorable benefits provided by the Company to the estates and beneficiaries
      of
      peer executives of the Company under such written plans, programs, practices
      and
      policies relating to death benefits, if any, as in effect with respect to other
      peer executives and their beneficiaries at any time during the 120-day period
      immediately preceding the Effective Date or, if more favorable to the
      Executive’s estate and/or the Executive’s beneficiaries, as in effect on the
      date of the Executive’s death with respect to other peer executives of the
      Company and their beneficiaries.  To the extent required by 409A, (i)
      a reimbursement made under this Section 6(c) shall be paid by December 31 of
      the
      calendar year after the calendar year in which the reimbursed expense is
      incurred and (ii) no reimbursement or in-kind benefit provided under this
      Section 6(c) during one calendar year shall affect the expenses eligible for
      reimbursement or in-kind benefits provided during another calendar
      year.

    

    (d)           
      Disability.  If
      the Executive’s employment is terminated by reason of the Executive’s Disability
      during the Employment Period, this Agreement shall terminate without further
      obligations to the Executive, other than for payment of Accrued Obligations
      and
      the timely payment or provision of Other Benefits.  Accrued
      Obligations shall be paid to the Executive in a lump sum in cash within 30
      days
      of the Date of Termination. With respect to the provision of Other Benefits,
      the
      term Other Benefits as utilized in this Section 6(d) shall include, and the
      Executive shall be entitled after the Disability Effective Date to receive,
      disability and other benefits at least equal to the most favorable of those
      generally provided by the Company to disabled executives and/or their families
      in accordance with such written plans, programs, practices and policies relating
      to disability, if any, as in effect generally with respect to other peer
      executives and their families at any time during the 120-day period immediately
      preceding the Effective Date or, if more favorable to the Executive and/or
      the
      Executive’s family, as in effect at any time thereafter generally with respect to other peer executives
      of
      the Company and their families.  To the extent required by
      409A, (i) a reimbursement made under this Section 6(d) shall be paid by December
      31 of the calendar year after the calendar year in which the reimbursed expense
      is incurred and (ii) no reimbursement or in-kind benefit provided under this
      Section 6(d) during one calendar year shall affect the expenses eligible for
      reimbursement or in-kind benefits provided during another calendar
      year.

    

    (e)           
      Cause; Other than
      for
      Good Reason.  If the Executive’s employment shall be terminated
      for Cause during the Employment Period, this Agreement shall terminate without
      further obligations to the Executive other than the obligation to pay to the
      Executive (x) Executive’s Annual Base Salary through the Date of Termination,
      (y) the amount of any compensation previously deferred by the Executive, and
      (z)
      Other Benefits, in each case to the extent theretofore unpaid.  If the
      Executive voluntarily terminates employment during the Employment Period,
      excluding a termination for Good Reason, this Agreement shall terminate without
      further obligations to the Executive, other than for Accrued Obligations and
      the
      timely payment or provision of Other Benefits.  In such case, all
      Accrued Obligations shall be paid to the Executive in a lump sum in cash within
      30 days of the Date of Termination.

    
      
        
           

        

        
        

      

      
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          12

        
          

        

      

      
        
        

      

    

    (f)           
      Application of Code
      Section 409A.

    

    (i)           
      Notwithstanding any other provision in this Agreement, the Executive and the
      Company intend for this Agreement to comply with the provisions of Code Section
      409A and any Treasury Regulations issued thereunder. Each provision and term
      of
      this Agreement should be interpreted accordingly. If any provision or term
      of
      this Agreement would be prohibited by or be inconsistent with Code Section
      409A,
      then such provision shall be deemed to be conformed to comply with Code Section
      409A or, if such conformation is not possible, such provision shall be null
      and
      void to the extent, and only to the extent, required for this Agreement to
      be in
      compliance with Code Section 409A without effecting the remainder of this
      Agreement.

    

    (ii)           
      To the extent required by Code Section 409A, in the event the Executive is
      a
“key employee” as provided in Code Section 409A(a)(2)(i) on the Date of
      Termination, any amounts payable hereunder shall be paid no earlier than the
      first business day after the six month anniversary of the Date of
      Termination.  Whether the Executive is a key employee and whether an
      amount payable to the Executive hereunder is subject to Code Section 409A shall
      be determined by the Company.

    

    7.           
      Non-exclusivity
      of
      Rights.  Nothing in this Agreement shall prevent or limit the
      Executive’s continuing or future participation in any plan, program, policy or
      practice provided by the Company and for which the Executive may qualify, nor,
      subject to Section 12(f), shall anything herein limit or otherwise affect such
      rights as the Executive may have under any contract or agreement with the
      Company.  Amounts which are vested benefits or which the Executive is
      otherwise entitled to receive under any plan, policy, practice or program of
      or
      any contract or agreement with the Company at or subsequent to the Date of
      Termination shall be payable in accordance with such plan, policy, practice
      or
      program or contract or agreement except as explicitly modified by this
      Agreement.

    

    8.           
      Full
      Settlement.  The Company’s obligation to make the payments
      provided for in this Agreement and otherwise to perform its obligations
      hereunder shall not be affected by any set-off, counterclaim, recoupment,
      defense or other claim, right or action which the Company may have against
      the
      Executive or others.  In no event shall the Executive be obligated to
      seek other employment or take any other action by way of mitigation of the
      amounts payable to the Executive under any of the provisions of this Agreement
      and such amounts shall not be reduced whether or not the Executive obtains
      other
      employment.  The Company agrees to pay as incurred, during the
      Executive’s lifetime, to the full extent permitted by law, all legal fees and
      expenses which the Executive may reasonably incur as a result of any contest
      (regardless of the outcome thereof) by the Company, the Executive or others
      of
      the validity or enforceability of, or liability under, any provision of this
      Agreement or any guarantee of performance thereof (including as a result of
      any
      contest by the Executive about the amount of any payment pursuant to this
      Agreement), plus in each case interest on any delayed payment at the applicable
      Federal rate provided for in Code Section 7872(f)(2)(A).   Any
      reimbursement under this Section 8 shall be made no later than December 31
      of
      the calendar year after the calendar year in which the applicable expense is
      incurred.

    
      
        
           

        

        
        

      

      
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          13

        
          

        

      

      
        
        

      

    

    

    9.           
      Certain Additional
      Payments by the Company.

    

    (a)           
      Anything in this Agreement to the contrary notwithstanding and except as set
      forth below, in the event it shall be determined that any payment or
      distribution by the Company to or for the benefit of the Executive (whether
      paid
      or payable or distributed or distributable pursuant to the terms of this
      Agreement or otherwise, but determined without regard to any additional payments
      required under this Section 9) (a “Payment”) would be subject to the excise tax
      imposed by Code Section 4999 or any interest or penalties are incurred by the
      Executive with respect to such excise tax (such excise tax, together with any
      such interest and penalties, are hereinafter collectively referred to as the
      “Excise Tax”), then the Executive shall be entitled to receive an additional
      payment (a “Gross-Up Payment”) in an amount such that after payment by the
      Executive of all taxes (including any interest or penalties imposed with respect
      to such taxes), including, without limitation, any income taxes (and any
      interest and penalties imposed with respect thereto) and Excise Tax imposed
      upon
      the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
      equal to the Excise Tax imposed upon the Payments.  Notwithstanding
      the foregoing provisions of this Section 9(a), if it shall be determined that
      the Executive is entitled to a Gross-Up Payment, but that
      the  Payments do not exceed 110% of the greatest amount that could be
      paid to the Executive such that the receipt of Payments would not give rise
      to
      any Excise Tax (the “Reduced Amount”), then no Gross-Up Payment shall be made to
      the Executive and the Payments, in the aggregate, shall be reduced to the
      Reduced Amount.

    

    (b)           
      Subject to the provisions of Section 9(c), all determinations required to be
      made under this Section 9, including whether and when a Gross-Up Payment is
      required and the amount of such Gross-Up Payment and the assumptions to be
      utilized in arriving at such determination, shall be made by a nationally
      recognized certified public accounting firm as may be designated by the
      Executive (the “Accounting Firm”) which shall provide detailed supporting
      calculations both to the Company and the Executive within 15 business days
      of
      the receipt of notice from the Executive that there has been a Payment, or
      such
      earlier time as is requested by the Company.  In the event that the
      Accounting Firm is serving as accountant or auditor for the individual, entity
      or group effecting the Change of Control, the Executive shall appoint another
      nationally recognized accounting firm to make the determinations required
      hereunder (which accounting firm shall then be referred to as the Accounting
      Firm hereunder).  All fees and expenses of the Accounting Firm shall
      be borne solely by the Company.  Any Gross-Up Payment, as determined
      pursuant to this Section 9, shall be paid by the Company to the Executive within
      5 days of the receipt of the Accounting Firm’s determination, but no later than
      the last day of the calendar year following the calendar year in which the
      Executive remits the related taxes. Any determination by the Accounting Firm
      shall be binding upon the Company and the Executive.  As a result of
      the uncertainty in the application of Code Section 4999 at the time of the
      initial determination by the Accounting Firm hereunder, it is possible that
      Gross-Up Payments which will not have been made by the Company should have
      been
      made (“Underpayment”), consistent with the calculations required to be made
      hereunder.  In the event that the Company exhausts its remedies
      pursuant to Section 9(c) and the Executive thereafter is required to make a
      payment of any Excise Tax, the Accounting Firm shall determine the
      amount

    
      
        
           

        

        
        

      

      
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          14

        
          

        

      

      
        
        

      

    

    of
      the
      Underpayment that has occurred and any such Underpayment shall be promptly
      paid
      by the Company to or for the benefit of the Executive.

    

    (c)           
      The Executive shall notify the Company in writing of any claim by the Internal
      Revenue Service that, if successful, would require the payment by the Company
      of
      the Gross-Up Payment. Such notification shall be given as soon as practicable
      but no later than 10 business days after the Executive is informed in writing
      of
      such claim and shall apprise the Company of the nature of such claim and the
      date on which such claim is requested to be paid. The Executive shall not pay
      such claim prior to the expiration of the 30-day period following the date
      on
      which it gives such notice to the Company (or such shorter period ending on
      the
      date that any payment of taxes with respect to such claim is due). If the
      Company notifies the Executive in writing prior to the expiration of such period
      that it desires to contest such claim, the Executive shall:

    

    (i)           
      give the Company any information reasonably requested by the Company relating
      to
      such claim,

    

    (ii)           
      take such action in connection with contesting such claim as the Company shall
      reasonably request in writing from time to time, including, without limitation,
      accepting legal representation with respect to such claim by an attorney
      reasonably selected by the Company,

    

    (iii)           
      cooperate with the Company in good faith in order effectively to contest such
      claim, and

    

    (iv)           
      permit the Company to participate in any pro­ceedings relating to such
      claim; provided, however, that the Company shall bear and pay directly all
      costs
      and expenses (including additional interest and penalties) incurred in
      connection with such contest and shall indemnify and hold the Executive
      harmless, on an after-tax basis, for any Excise Tax or income tax (including
      interest and penalties with respect thereto) imposed as a result of such
      representation and payment of costs and expenses. Such tax indemnification
      shall
      be paid to Executive no later than December 31 of the calendar year following
      the calendar year in which the Executive remits the related taxes.  In
      addition, payment of such costs and expenses shall occur no later than December
      31 of the calendar year in which the taxes that are the subject of the
      proceedings are remitted to the taxing authority or, if no taxes are remitted,
      the last day of the calendar year following the taxable year in which the audit
      is completed or there is a final and nonappealable settlement of the litigation.
      Without limitation on the foregoing provisions of this Section 9(c), the Company
      shall control all proceedings taken in connection with such contest and, at
      its
      sole option, may pursue or forgo any and all administrative appeals,
      proceedings, hearings and conferences with the taxing authority in respect
      of
      such claim and may, at its sole option, either direct the Executive to pay
      the
      tax claimed and sue for a refund or contest the claim in any permissible manner,
      and the Executive agrees to prosecute such contest to a determination before
      any
      administrative tribunal, in a court of initial jurisdiction and in one or more
      appellate courts, as the Company shall determine; provided, however, that any
      extension of the statute of limitations relating to payment of taxes for the
      taxable year of the Executive with respect to

    
      
        
           

        

        
        

      

      
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    which
      such contested amount is claimed to be due is limited solely to such contested
      amount.  Furthermore, the Company’s control of the contest shall be
      limited to issues with respect to which a Gross-Up Payment would be payable
      hereunder and the Executive shall be entitled to settle or contest, as the
      case
      may be, any other issue raised by the Internal Revenue Service or any other
      taxing authority.

    

    (d)           
      If, after the receipt by Executive of a Gross-up Payment, Executive becomes
      entitled to receive any refund with respect to the Excess Tax to which such
      Gross-up Payment relates, Executive shall promptly pay to the Company the amount
      of such refund (together with any interest paid or credited thereon after taxes
      applicable thereto).

    

    10.           
      Restrictive
      Covenants.

    

    (a)           
      Confidential
      Information.  The Executive shall hold in a fiduciary capacity
      for the benefit of the Company all secret or confidential information, knowledge
      or data relating to the Company, and their respective businesses, which shall
      have been obtained by the Executive during the Executive’s employment by the
      Company and which shall not be or become public knowledge (other than by acts
      by
      the Executive or representatives of the Executive in violation of this
      Agreement).  After termination of the Executive’s employment with the
      Company, the Executive shall not, without the prior written consent of the
      Company or as may otherwise be required by law or legal process, communicate
      or
      divulge any such information, knowledge or data to anyone other than the Company
      and those designated by it.

    

    (b)           
      Nonraiding of
      Employees. The Executive covenants that during Executive’s employment
      hereunder and for a period of 2 years immediately following the date of
      termination of Executive’s employment, but only if said termination is voluntary
      or for Cause, Executive will not solicit, induce or encourage for the purposes
      of employing or offering employment to any individuals who, as of the date
      of
      termination of the Executive’s employment, are employees of the Company, nor
      will Executive directly or indirectly solicit, induce or encourage any of the
      Company’s employees to seek employment with any other business, whether or not
      the Executive is then affiliated with such business.

    

    In
      no
      event shall an asserted violation of the provisions of this Section 10
      constitute a basis for deferring or withholding any amounts otherwise payable
      to
      the Executive under this Agreement.

    

    11.           
      Successors.

    

    (a)           
      This Agreement is personal to the Executive and without the prior written
      consent of the Company shall not be assignable by the Executive otherwise than
      by will or the laws of descent and distribution. This Agreement shall inure
      to
      the benefit of and be enforceable by the Executive’s legal
      representatives.

    

    (b)           
      This Agreement shall inure to the benefit of and be binding upon the Company
      and
      its successors and assigns.

    
      
        
           

        

        
        

      

      
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          16

        
          

        

      

      
        
        

      

    

    (c)           
      The Company will require any successor (whether direct or indirect, by purchase,
      merger, consolidation or otherwise) to all or substantially all of the business
      and/or assets of the Company to assume expressly and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be
      required to perform it if no such succession had taken place.

    

    12.           
      Miscellaneous.

    

    (a)           
      This Agreement shall be governed by and construed in accordance with the laws
      of
      the Commonwealth of Virginia without reference to principles of conflict of
      laws. The captions of this Agreement are not part of the provisions hereof
      and
      shall have no force or effect. This Agreement may not be amended or modified
      otherwise than by a written agreement executed by the parties hereto or their
      respective successors and legal representatives.

    

    (b)           
      All notices and other communications hereunder shall be in writing and shall
      be
      given by hand delivery to the other party or by registered or certified mail,
      return receipt requested, postage prepaid, addressed, if to the Executive,
      to
      the Executive’s address, or record with the Company and, if to the Company, to
      LandAmerica Financial Group, Inc., 5600 Cox Road, Glen Allen, Virginia 23060
      Attention:  Chairman & Chief Executive Officer, or to such other
      address as either party shall have furnished to the other in writing in
      accordance herewith.  Notice and communications shall be effective
      when actually received by the addressee.

    

    (c)           
      The invalidity or unenforceability of any pro­vision of this Agreement shall
      not affect the validity or enforceability of any other provision of this
      Agreement.

    

    (d)           
      The Company may withhold from any amounts payable under this Agreement such
      federal, state, local or foreign taxes as shall be required to be withheld
      pursuant to any applicable law or regulation.

    

    (e)           
      The Executive’s or the Company’s failure to insist upon strict compliance with
      any provision of this Agreement or the failure to assert any right the Executive
      or the Company may have hereunder, including, without limitation, the right
      of
      the Executive to terminate employment for Good Reason pursuant to Sections
      6(b)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such
      provision or right or any other provision or right of this
      Agreement.

    

    (f)           
      The Executive and the Company acknowledge that, except as may otherwise be
      provided under any other written agreement between the Executive and the
      Company, the employment of the Executive by the Company is “at will” and,
      subject to Section 1(b) hereof, prior to the Effective Date, the Executive’s
      employment and/or this Agreement may be terminated by either the Executive
      or
      the Company at any time prior to the Effective Date, in which case the Executive
      shall have no further rights under this Agreement.  From and after the
      Effective Date, this Agreement shall become effective, and shall replace and
      supersede any existing Employment Agreement between the Company and the
      Executive, to the extent its terms are more advantageous to the Executive,
      except that any covenants contained in any prior

    
      
        
           

        

        
        

      

      
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          17

        
          

        

      

      
        
        

      

    

    agreement
      between Executive and the Company restricting Executive’s ability to compete
      with or to solicit the employees, clients or customers of the Company, or to
      use
      or disclose any Confidential Information (as that term is defined in any such
      agreement), shall remain in full force and effect.

    

    (g)           
      The Executive hereby acknowledges and agrees that this Agreement is intended
      to
      replace and supersede the Change of Control Employment Agreement between
      Executive and the Company dated December 28, 2006 and that such former agreement
      has been terminated.

    

    IN
      WITNESS WHEREOF, the Executive has
      hereunto set the Executive’s hand and, pursuant to the authorization from its
      Board of Directors, the Company has caused these presents to be executed in
      its
      name on its behalf, all as of the day and year first above written.

    

    

    LANDAMERICA
      FINANCIAL GROUP,
      INC.

    

    

    By:           
      _____________________________________

    Theodore
      L. Chandler, Jr., Chairman
      and

    Chief
      Executive Officer

    

    

    __________________________________________

    [Name
      of Executive]

    

    

    
      
        
           

        

        
        

      

      
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    Schedule
      to Change of Control Employment Agreements

    

    Applicable
      Multiples

    

    
      	
              Executive
                Officer

            	
              Applicable
                Multiple

            
	
              Theodore
                L. Chandler, Jr.

              Principal
                Executive Officer

            	
              3

            
	
              G.
                William Evans

              Principal
                Financial Officer

            	
              3

            
	
              Kenneth
                Astheimer

              Named
                Executive Officer

            	
              3

            
	
              Melissa
                Hill

              Named
                Executive Officer

            	
              3

            
	
              Jeffrey
                C. Selby

              Named
                Executive Officer

            	
              3

            

    

    

    

    

    
      
        
           

        

        
        

      

      
        Page
          19Unassociated Document

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 
	 
	
              STRUCTURED
                ASSET MORTGAGE INVESTMENTS II INC.,

            
	 
	
              Depositor,

            
	 
	
              and

            
	 
	
              WELLS
                FARGO BANK, N.A.,

            
	 
	
              Grantor
                Trust Trustee

            
	 
	 
	 
	 
	 	 	 
	 	
              
GRANTOR
                TRUST AGREEMENT

              Dated
                as of October 24, 2007

            	 
	 	 	 
	 
	 
	 
	
              $24,759,000

            
	 
	
              Bear
                Stearns Structured Products Inc. Trust 2007-R3

              Grantor
                Trust Certificates

              Series
                2007-R3

            
	 
	 
	 
	 

    

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      TABLE
        OF
        CONTENTS

    
      	
              
              

              ARTICLE
                I DEFINITIONS

            
	 	 	
              Section
                1.01. Defined Terms.

            
	 
	
              
              

              ARTICLE
                II CONVEYANCE OF THE UNDERLYING SECURITIES; ORIGINAL ISSUANCE OF
                GRANTOR
                TRUST CERTIFICATES

            
	 	 Section
              2.01.	
              Conveyance
                of the Underlying Securities.

            
	 	 Section
              2.02.	
              Acceptance
                of Trust Fund by Grantor Trust Trustee; Initial Issuance of Grantor
                Trust
                Certificates.

            
	 	 Section
              2.03.	
              Representations
                and Warranties of the Depositor and the Grantor Trust Trustee.

            
	 	 Section
              2.04.	
              Grantor
                Trust.  l:

            
	 
	
              
              

              ARTICLE
                III ADMINISTRATION OF THE UNDERLYING SECURITIES; PAYMENTS AND REPORTS
                TO
                GRANTOR TRUST CERTIFICATEHOLDERS

            
	 	
              Section
                3.01.

            	
              Administration
                of the Trust Fund and the Underlying Security.

            
	 	
              Section
                3.02.

            	
              Collection
                of Monies.

            
	 	
              Section
                3.03.

            	
              Establishment
                of the Certificate Account; Deposits Therein.

            
	 	
              Section
                3.04.

            	
              Permitted
                Withdrawals From the Certificate Account.

            
	 	
              Section
                3.05.

            	
              Distributions.

            
	 	
              Section
                3.06.

            	
              Statements
                to Grantor Trust Certificateholders.

            
	 	
              Section
                3.07.

            	
              Access
                to Certain Documentation and Information.

            
	 	
              Section
                3.08.

            	
              Calculation
                of Distribution Amounts.

            
	 	
              Section
                3.09.

            	
              Annual
                Statement as to Compliance.

            
	 	
              Section
                3.10.

            	
              Assessments
                of Compliance and Attestation Reports.

            
	 	
              Section
                3.11.

            	
              Reports
                Filed with Securities and Exchange Commission.

            
	 	
              Section
                3.12.

            	
              Reserve
                Account

            
	 	
              Section
                3.13.

            	
              The
                Yield Maintenance Agreement

            
	 
	
              
              

              ARTICLE
                IV THE GRANTOR TRUST CERTIFICATES

            
	 	
              Section
                4.01.

            	
              The
                Grantor Trust Certificates.

            
	 	
              Section
                4.02.

            	
              Registration
                of Transfer and Exchange of Grantor Trust Certificates.

            
	 	
              Section
                4.03.

            	
              Mutilated,
                Destroyed, Lost or Stolen Grantor Trust Certificates.

            
	 	
              Section
                4.04.

            	
              Persons
                Deemed Owners.

            
	 
	
              
              

              ARTICLE
                V THE GRANTOR TRUST TRUSTEE

            
	 	
              Section
                5.01.

            	
              Duties
                of Grantor Trust Trustee.

            
	 	
              Section
                5.02.

            	
              Certain
                Matters Affecting the Grantor Trust Trustee.

            
	 	
              Section
                5.03.

            	
              Grantor
                Trust Trustee Not Liable for Grantor Trust Certificates or Underlying
                Securities.

            
	 	
              Section
                5.04.

            	
              Grantor
                Trust Trustee May Own Grantor Trust Certificates.

            
	 	
              Section
                5.05.

            	
              Grantor
                Trust Trustee’s Fees and Expenses.

            
	 	
              Section
                5.06.

            	
              Eligibility
                Requirements for Grantor Trust Trustee.

            
	 	
              Section
                5.07.

            	
              Resignation
                and Removal of the Grantor Trust Trustee.

            
	 	
              Section
                5.08.

            	
              Successor
                Grantor Trust Trustee.

            
	 	
              Section
                5.09.

            	
              Merger
                or Consolidation of Grantor Trust Trustee.

            
	 	
              Section
                5.10.

            	
              Appointment
                of Co-Grantor Trust Trustee or Separate Grantor Trust Trustee.

            
	 
	
              
              

              ARTICLE
                VI THE DEPOSITOR

            
	 	
              Section
                6.01.

            	
              Liability
                of the Depositor.

            
	 	
              Section
                6.02.

            	
              Merger,
                Consolidation or Conversion of the Depositor.

            
	 	
              Section
                6.03.

            	
              Limitation
                on Liability of the Depositor and Others.

            
	 
	
              
              

              ARTICLE
                VII TERMINATION

            
	 	
              Section
                7.01.

            	
              Termination.

            
	 
	
              
              

              ARTICLE
                VIII MISCELLANEOUS PROVISIONS

            
	 	
              Section
                8.01.

            	
              Amendment.

            
	 	
              Section
                8.02.

            	
              Counterparts.

            
	 	
              Section
                8.03.

            	
              Limitation
                on Rights of Grantor Trust Certificateholders.

            
	 	
              Section
                8.04.

            	
              Governing Law.

            
	 	
              Section
                8.05.

            	
              Notices.

            
	 	
              Section
                8.06.

            	
              Severability of Provisions.

            
	 	
              Section
                8.07.

            	
              Successors
                and Assigns.

            
	 	
              Section
                8.08.

            	
              Article
                and Section Headings.

            
	 	
              Section
                8.09.

            	
              Notices
                to Rating Agency.

            
	 	
              Section
                8.10.

            	
              Acts
                of Grantor Trust Certificateholders.

            

    

    

    

    
      	
              Exhibit
                A

            	
              -

            	
              Form
                of Grantor Trust Certificates

            
	
              Exhibit
                B

            	
              -

            	
              Form
                of Annual Certification

            
	
              Exhibit
                C

            	
              -

            	
              Servicing
                Criteria to Be Addressed in Assessment of Compliance

            
	
              Exhibit
                D

            	
              -

            	
              Form
                10-D, Form 8-K and Form 10-K Reporting Responsibility

            
	
              Exhibit
                E

            	
              -

            	
              Additional
                Disclosure Notification

            
	
              Exhibit
                F

            	
              -

            	
              Yield
                Maintenance Agreement

            
	
              Schedule
                A

            	
              -

            	
              Underlying
                Securities

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    GRANTOR
      TRUST AGREEMENT, dated as of October 24, 2007, by and between STRUCTURED ASSET
      MORTGAGE INVESTMENTS II INC., as depositor (the “Depositor”), and
      Wells Fargo Bank, N.A., as grantor trust trustee (the “Grantor Trust
      Trustee”).

     

    PRELIMINARY
      STATEMENT

     

    The
      Depositor intends to cause the issuance of and to sell its Grantor Trust
      Certificates, Series 2007-R3, Class A-1 Grantor Trust Certificates representing
      in the aggregate the entire beneficial ownership of a trust fund, the primary
      asset of which is the Underlying Securities (as defined herein).

     

    All
      things necessary to make this Agreement a valid declaration of trust by the
      Depositor in accordance with its terms have been done.

     

    In
      consideration of the premises and the mutual agreements herein contained, the
      Depositor and the Grantor Trust Trustee agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    Section
      1.01. 
      Defined
      Terms.

     

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

     

    Additional
      Amount: An
      amount that the Sponsor has agreed on the Closing Date to cause to be paid
      to
      the Grantor Trust Trustee equal to the excess, if any, of (i) the interest
      accrued during the Interest Accrual Period related to the second Distribution
      Date at a rate equal to 15.50% per annum on the Current Principal Amount of
      the
      Grantor Trust Certificates immediately prior to such Distribution Date, over
      (ii) the sum of (a) the amount of Available Funds with respect to the second
      Distribution Date and (b) the Reserve Account Deposit Portion B.

     

    Affiliate:  With
      respect to any specified Person, any other Person that directly, or indirectly
      through one or more intermediaries, controls or is controlled by, or is under
      common control with, such specified Person.  For the purposes of this
      definition, “control” when used with respect to any specified Person means
      possession, direct or indirect, of the power to direct or cause the direction
      of
      the management and policies of such Person, whether through the ownership of
      voting securities, by contract or otherwise, and the terms “controlling,”
“controlled by” and “under common control with” have meanings correlative to the
      foregoing.

     

    Agreement:  This
      Grantor Trust Agreement and all amendments hereof and supplements hereto.

     

    Available
      Funds:  As of any date of determination, the aggregate amount
      on deposit in the Certificate Account as of such date received with respect
      to
      the Underlying Securities net of any portion thereof which represents amounts
      to
      be paid to any Person pursuant to clauses (ii) and (iv) of Section 3.04.

     

    Bear
      Stearns:  Bear, Stearns & Co. Inc.

     

    Business
      Day:  Any day other than (i) a Saturday or a Sunday, or (ii) a
      day on which banking institutions in the cities of New York, New York, Columbia,
      Maryland, Minneapolis, Minnesota or any city in which the Corporate Trust Office
      of the Grantor Trust Trustee is located are authorized or obligated by law
      or
      executive order to be closed.

     

    Certificate
      Account:  The trust account or accounts, which shall at all
      times be Eligible Accounts, created and maintained by the Grantor Trust Trustee
      for the benefit of the Grantor Trust Certificateholders pursuant to Section
      3.03.  Funds deposited in the Certificate Account shall be held in
      trust for the Grantor Trust Certificateholders for the uses and purposes set
      forth in Article III hereof.

     

    Certificate
      Register:  Shall have the meaning provided in Section
      4.02.

     

    Class:  Collectively,
      all of the Grantor Trust Certificates bearing the same designation.

     

    Class
      A-1 Grantor Trust
      Certificate:  Any Class A-1 Grantor Trust Certificate as
      executed hereunder by the Grantor Trust Trustee and authenticated and delivered
      hereunder by the Grantor Trust Trustee, substantially in the form of Exhibit
      A
      hereto.

     

    Closing
      Date: October
      24, 2007.

     

    Code:  The
      Internal Revenue Code of 1986, as amended.

     

    Commission:  U.S.
      Securities and Exchange Commission.

     

    Corporate
      Trust
      Office:  The corporate trust office of the Grantor Trust
      Trustee 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, for purposes other than presentment and surrender
      of the Grantor Trust Certificates, is located at Wells Fargo Bank, N.A., P.O.
      Box 98, Columbia, Maryland 21046 (or, for overnight deliveries, 9062 Old
      Annapolis Road, Columbia, Maryland 21045), Attention: Client Manager – BSSP
      2007-R3, and for purposes of presentment and surrender of the Grantor Trust
      Certificates for registration of transfer, exchange or final payment, is located
      at Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue, Minneapolis,
      Minnesota 55479, Attention: Corporate Trust Services – BSSP 2007-R3, or any
      other address that the Grantor Trust Trustee may designate from time to time
      by
      notice to the Grantor Trust Certificateholders.

     

    Current
      Principal
      Amount:  With respect to any Grantor Trust Certificate, as of
      any date of determination, (i) the sum of (a) the original principal amount
      of
      such Grantor Trust Certificate and (b) any Net Deferred Interest added to the
      certificate principal balance of the Underlying Securities on the related
      Underlying Distribution Date pursuant to the Underlying Agreement, minus (ii)
      the sum of (a) the aggregate of all distributions of principal previously made
      on that Grantor Trust Certificate pursuant to Section 3.05, (b) the principal
      portion of all Realized Losses previously allocated to such Grantor Trust
      Certificate pursuant to Section 3.05 and (c) the principal portion of Available
      Funds with respect to the first and second Distribution Dates that is not
      distributed as principal to the Grantor Trust Certificates only to the extent
      needed to cause the Current Principal Amount to equal the balance of the
      Underlying Securities for such Distribution Date.

     

    Cut-off
      Date:  October 1, 2007.

     

    Definitive
      Certificates:  The meaning specified in Section 4.01(b)
      hereof.

     

    Depositor:  Structured
      Asset Mortgage Investments II Inc., a Delaware corporation, or its successor
      in
      interest.

     

    Depository:  DTC,
      the nominee of which is Cede & Co., or any successor thereto.

     

    Depository
      Agreement:  The meaning specified in Subsection 4.01(a)
      hereof.

     

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

     

    Distribution
      Date:  The Underlying Securities Distribution Date, commencing
      in October 2007.

     

    DTC:  The
      Depository Trust Company.

     

    Eligible
      Account:  Any of (i) an account or accounts maintained with a
      federal or state chartered depository institution or trust company, the
      long-term unsecured debt obligations and 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, so long as Moody’s is not a Rating Agency) are rated by the
      Rating Agency in one of its two highest long-term and its highest short-term
      rating categories, respectively, at the time any amounts are held on deposit
      therein; provided, that following a downgrade, withdrawal, or suspension of
      such
      institution’s rating as set forth above, each account shall promptly (and in any
      case within not more than 30 calendar days) be moved to one or more segregated
      trust accounts in the trust department of such institution, or to an account
      at
      another institution that complies with the above requirements, or (ii) a trust
      account or accounts maintained with the corporate trust department of a federal
      or state chartered depository institution or trust company having capital and
      surplus of not less than $50,000,000, acting in its fiduciary capacity or (iii)
      any other account acceptable to the Rating Agency, as evidenced in writing.
      Eligible Accounts may bear interest, and may include, if otherwise qualified
      under this definition, accounts maintained with the Grantor Trust Trustee.
      Notwithstanding Section 8.01, this Agreement may be amended to reduce the rating
      requirements in clause (i) above, without the consent of any of the Grantor
      Trust Certificateholders, provided that the Person requesting such amendment
      obtains a letter from the Rating Agency stating that such amendment would not
      result in the downgrading or withdrawal of the respective ratings then assigned
      to the Grantor Trust Certificates.

     

    ERISA:  The
      Employee Retirement Income Security Act of 1974, as amended, and the rules
      and
      regulations promulgated thereunder.

     

    Exchange
      Act:  The Securities Exchange Act of 1934, as amended.

     

    Final
      Distribution
      Date:  With respect to each Underlying Security, the Underlying
      Security Distribution Date on which the final distribution thereon is to be
      made
      in accordance with the Underlying Agreement; and with respect to the Grantor
      Trust Certificates, the  Distribution Date on which the final
      distribution thereon is to be made in accordance with this Agreement.

     

    First
      Available Funds
      Cap:  An amount equal to (a) the sum of (i) the amount of
      Available Funds paid to the Underlying Securities on the first Underlying
      Distribution Date and (ii) the Reserve Account Deposit Portion A, divided by
      (b)
      the Current Principal Amount of the Grantor Trust Certificates immediately
      prior
      to the first Underlying Distribution Date.

     

    Grantor
      Trust
      Certificates:  The Class A-1 Grantor Trust Certificates.

     

    Grantor
      Trust Certificate
      Owner:  Any Person who is the beneficial owner of a Grantor
      Trust Certificate registered in the name of the Depository or its
      nominee.

     

    Grantor
      Trust
      Certificateholder or Holder:  The person in whose name a
      Grantor Trust Certificate is registered in the Certificate Register, except
      that, subject to Sections 8.01(b) and 8.10(e), solely for the purpose of giving
      any consent, approval or waiver pursuant to this Agreement, any Grantor Trust
      Certificate registered in the name of the Depositor or any Affiliate thereof
      shall be deemed not to be outstanding and shall not be taken into account for
      purposes of determining whether the Holders of Grantor Trust Certificates
      evidencing the requisite aggregate Percentage Interest necessary to effect
      any
      such consent, approval or waiver has been obtained, unless such Persons
      collectively own all the Grantor Trust Certificates.

     

    Grantor
      Trust
      Trustee: Wells Fargo Bank, N.A., in its capacity as grantor trust
      trustee, or its successor in interest.

     

    Guarantor:
      As defined
      in Section 3.13.

     

    Guaranty:
      As defined
      in Section 3.13.

     

    Interest
      Accrual
      Period:  For each Distribution Date other than the first
      Distribution Date, the period beginning with and including 25th
      day of
      the month immediately preceding such Distribution Date and ending on and
      including the 24th
      day of
      the calendar month in which such Distribution Date occurs. The Interest Accrual
      Period for the first Distribution Date will be the period beginning with and
      including October 24, 2007 and ending on but not including October 25,
      2007.

     

    Interest
      Distribution
      Amount:  With respect to the Grantor Trust Certificates and any
      Distribution Date, the amount of interest accrued during the related Interest
      Accrual Period at the related Pass-Through Rate on the Current Principal Amount
      of the Grantor Trust Certificates immediately prior to such Distribution Date,
      adjusted for any Distribution Date following the second Distribution Date for
      any Net Deferred Interest
      allocated to the Underlying Securities on the related Underlying Distribution
      Date pursuant to the Underlying Agreement for such Distribution
      Date.

     

    Investment
      Company
      Act:  The Investment Company Act of 1940, as amended from time
      to time, and the rules and regulations promulgated thereunder.

     

    Latest
      Possible Final
      Distribution Date: With respect to the Grantor Trust Certificates, the
      Distribution Date occurring in October 2037.

     

    Majority
      Grantor Trust
      Certificateholders:  With respect to the Grantor Trust
      Certificates, the Holders of the Grantor Trust Certificates evidencing in the
      aggregate greater than 50% of the aggregate Current Principal Amount of the
      Grantor Trust Certificates.

     

    Moody’s:
      Moody’s
      Investors Service, Inc.

     

    Net
      Deferred
      Interest: As defined in the Underlying Agreement.

     

    NMWHFIT:
      shall mean a “Non-Mortgage
      Widely Held Fixed Investment Trust” as that term is defined in Treasury
      Regulations Section 1.671-5(b)(12) or successor provisions.

     

    Notice
      of Final
      Distribution:  With respect to each Underlying Security, any
      notice provided pursuant to the Underlying Agreement to the effect that final
      distribution on such Underlying Security shall be made only upon presentment
      and
      surrender thereof.  With respect to the Grantor Trust Certificates,
      the notice to be provided pursuant to Sections 7.01(b) to the effect that final
      distribution on the Grantor Trust Certificates shall be made only upon
      presentment and surrender thereof.

     

    Officer’s
      Certificate:  A certificate signed by the Chairman of the
      Board, the Vice Chairman of the Board, the President or a Vice President or
      Assistant Vice President or other authorized officer of the Depositor and
      delivered to the Grantor Trust Trustee, as required by this Agreement.

     

    Opinion
      of
      Counsel:  A written opinion of counsel, who may be counsel for
      the Depositor, which opinion is addressed to the Grantor Trust Trustee and
      is
      reasonably acceptable to the Grantor Trust Trustee.

     

    Pass-Through
      Rate:  With respect to the Grantor Trust Certificates, (i) on
      the first Distribution Date, a rate that would be required to accrue an amount
      of interest on the initial principal balance during a 30-day accrual period
      at a
      pass-through rate of 21.81025% per annum, subject to the First Available Funds
      Cap, (ii) on the second Distribution Date, a rate of 15.50% per annum, subject
      to the Second Available Funds Cap and (iii) on all subsequent Distribution
      Dates, a variable per annum pass-through rate equal to the weighted average
      of
      the pass-through rates of the Underlying Securities, as reported in the
      Underlying Distribution Date Statement for the Underlying Security Distribution
      Date.

     

    Percentage
      Interest:  With respect to the Grantor Trust Certificates, the
      portion of the Grantor Trust Certificates represented by such Grantor Trust
      Certificate, expressed as a percentage, the numerator of which is the initial
      outstanding Current Principal Amount of the Grantor Trust Certificates as of
      the
      Closing Date, as specified on the face thereof, and the denominator of which
      is
      the Original Current Principal Amount of all Grantor Trust Certificates.

     

    Permitted
      Investments: Any one or more of the following obligations
      or  securities held in the name of the Grantor Trust Trustee for the
      benefit of the Grantor Trust Certificateholders:

     

    
      	
              (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;

            

    

     

    
      	
              (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
                the Rating Agency, or such lower rating as will not result in the
                downgrading or withdrawal of the ratings then assigned to the Grantor
                Trust Certificates by the Rating Agency, as evidenced in
                writing;

            

    

     

    
      	
              (iii)          

            	
              commercial
                or finance company paper which is then receiving the highest commercial
                or
                finance company paper rating of the Rating Agency, or such lower
                rating as
                will not result in the downgrading or withdrawal of the ratings then
                assigned to the Grantor Trust Certificates by the Rating Agency,
                as
                evidenced in writing;

            

    

     

    
      	
              (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 (including
                the
                Grantor Trust Trustee in its commercial banking capacity), provided
                that
                the commercial paper and/or long term unsecured debt obligations
                of such
                depository institution or trust company are then rated one of the
                two
                highest long-term and the highest short-term ratings of each such
                Rating
                Agency for such securities, or such lower ratings as will not result
                in
                the downgrading or withdrawal of the rating then assigned to the
                Grantor
                Trust Certificates by any Rating Agency, as evidenced in
                writing;

            

    

     

    
      	
              (v)          

            	
              guaranteed
                reinvestment agreements issued by any bank, insurance company or
                other
                corporation 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 Grantor Trust Certificates
                by the Rating Agency, as evidenced in
                writing;

            

    

     

    
      	
              (vi)          

            	
              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 (v)
                above;

            

    

     

    
      	
              (vii)          

            	
              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 short term ratings
                of
                the Rating Agency (except if the Rating Agency is Moody’s, such rating
                shall be the highest commercial paper rating of Moody’s for any such
                securities), or such lower rating as will not result in the downgrading
                or
                withdrawal of the rating then assigned to the Grantor Trust Certificates
                by the Rating Agency, as evidenced by a signed writing delivered
                by the
                Rating Agency;

            

    

     

    
      	
              (viii)        

            	
              interests
                in any money market fund (including any such fund managed or advised
                by
                the Grantor Trust Trustee or any affiliate thereof) which at the
                date of
                acquisition of the interests in such fund and throughout the time
                such
                interests are held in such fund has the highest applicable short
                term
                rating by the Rating Agency rating such fund or such lower rating
                as will
                not result in the downgrading or withdrawal of the ratings then assigned
                to the Grantor Trust Certificates by the Rating Agency, as evidenced
                in
                writing;

            

    

     

    
      	
              (ix)          

            	
              short
                term investment funds sponsored by any trust company or banking
                association incorporated under the laws of the United States or any
                state
                thereof (including any such fund managed or advised by the Grantor
                Trust
                Trustee or any affiliate thereof) which on the date of acquisition
                has
                been rated by the Rating Agency in their respective highest applicable
                rating category or such lower rating as will not result in the downgrading
                or withdrawal of the ratings then assigned to the Grantor Trust
                Certificates by the Rating Agency, as evidenced in writing;
                and

            

    

     

    
      	
              (x)          

            	
              such
                other investments having a specified stated maturity and bearing
                interest
                or sold at a discount acceptable to the Rating Agency and as will
                not
                result in the downgrading or withdrawal of the rating then assigned
                to the
                Grantor Trust Certificates by any Rating Agency, as evidenced by
                a signed
                writing delivered by the Rating
                Agency;

            

    

     

    provided,
      that no such instrument shall be a Permitted Investment if such instrument
      (i)
      evidences the right to receive interest only payments with respect to the
      obligations underlying such instrument, (ii) is purchased at a premium or (iii)
      is purchased at a deep discount; provided further that no such instrument shall
      be a Permitted Investment (A) if such instrument evidences principal and
      interest payments derived from obligations underlying such instrument and the
      interest payments with respect to such instrument provide a yield to maturity
      of
      greater than 120% of the yield to maturity at par of such underlying
      obligations, or (B) if it may be redeemed at a price below the purchase price
      (the foregoing clause (B) not to apply to investments in units of money market
      funds pursuant to clause (viii) above). Permitted Investments that are subject
      to prepayment or call may not be purchased at a price in excess of par.

     

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

     

    Prospectus
      Supplement: The Prospectus
      Supplement dated October 24, 2007 relating to the public offering of the Grantor
      Trust Certificates.

     

    Purchase
      Agreement:  The Purchase Agreement, dated as of October 24,
      2007, between EMC Mortgage Corporation and the Depositor relating to the
      Underlying Securities.

     

    Rating
      Agency:  S&P or its successors.  If such agency
      or its successors are no longer in existence, “Rating Agency” shall
      be deemed to refer to such nationally recognized statistical rating agency,
      or
      other comparable Person, designated by the Depositor, notice of which
      designation shall be given to the Grantor Trust Trustee, and specific ratings
      of
      the Rating Agency shall be deemed to refer to the equivalent ratings of the
      party so designated.

     

    Record
      Date:  For the Grantor Trust Certificates and the first
      Distribution Date, the Closing Date, and for any Distribution Date thereafter,
      the last Business Day of the month preceding the month in which such
      Distribution Date occurs.

     

    Regulation
      AB:  Subpart 229.1100 – Asset Backed Securities (Regulation
      AB), 17 C.F.R. §§229.1100-229.1123, as amended from time to time, and subject to
      such clarification and interpretation as have been provided by the Commission
      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
      Commission, or as may be provided by the Commission or its staff from time
      to
      time.

     

    Repurchase
      Price:  In connection with the repurchase of any of the
      Underlying Securities pursuant to Section 2.03(c), a price equal to the
      outstanding principal balance thereof as of the date of repurchase plus accrued
      interest thereon.

     

    Reserve
      Account:  The account established and maintained pursuant to
      Section 3.12 of this Agreement, which shall be an Eligible Account.

     

    Reserve
      Account
      Deposit:  The amount to be paid by the Depositor to the Grantor
      Trust Trustee for deposit in the Reserve Account on the Closing Date, which
      amount is equal to $500,000.00.

     

    Reserve
      Account Deposit
      Portion A: The sum of (i) that portion of the Reserve Account Deposit
      equal to $368,299.21, which may be invested on the Closing Date in a Permitted
      Investment designated by the Depositor, maturing on or before the first
      Distribution Date following the Closing Date and (ii) the proceeds of any
      Permitted Investment specified in clause (i).

     

    Reserve
      Account Deposit
      Portion B: The sum of (i) that portion of the Reserve Account Deposit
      equal to $131,700.79, which may be invested on the Closing Date in a Permitted
      Investment designated by the Depositor (separate from any Permitted Investment
      relating to the Reserve Account Deposit Portion A), maturing on or before the
      second Distribution Date following the Closing Date, (ii) the proceeds of any
      Permitted Investment described in clause (i) and (iii) the Reserve Account
      Deposit Portion A remaining after the first Distribution Date.

     

    Reserve
      Account Distribution
      Amount:  With respect to the first Distribution Date following
      the Closing Date, the Reserve Account Deposit Portion A to the extent necessary
      to cover the Interest Distribution Amount for the Grantor Trust Certificates
      for
      such Distribution Date, and with respect to the second Distribution Date
      following the Closing Date, the Reserve Account Deposit Portion B and any
      Additional Amount received by the Grantor Trust Trustee pursuant to the Yield
      Maintenance Agreement.

     

    Responsible
      Officer:  When used with respect to the Grantor Trust Trustee,
      any officer of the Grantor Trust Trustee assigned to and working in its
      Corporate Trust Office or similar group administering the Trusts hereunder
      and
      also, with respect to a particular matter, any other officer of the Grantor
      Trust Trustee to whom a particular matter is referred by the Grantor Trust
      Trustee because of such officer’s knowledge of and familiarity with the
      particular subject.

     

    S&P:
      Standard
& Poor’s, a division of The McGraw-Hill Companies, Inc., and its successors
      in interest.

     

    Second
      Available Funds
      Cap:  An amount equal to (a) the sum of (i) the amount of
      Available Funds paid to the Underlying Securities on the second Underlying
      Distribution Date, (ii) the Reserve Account Deposit Portion B and (iii) any
      Additional Amount received by the Grantor Trust Trustee pursuant to the Yield
      Maintenance Agreement, divided by (b) the Current Principal Amount of the
      Grantor Trust Certificates immediately prior to the second Underlying
      Distribution Date.

     

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

     

    Servicing
      Criteria:  The “servicing criteria” set forth in Item 1122(d)
      of Regulation AB, as such may be amended from time to time, or those Servicing
      Criteria otherwise mutually agreed to by the Sponsor, the Grantor Trust Trustee
      and the Depositor in response to evolving interpretations of Regulation AB
      and
      incorporated into a revised Exhibit C.

     

    Significance
      Estimate:  With respect to any Distribution Date, and in
      accordance with Item 1115 of Regulation AB, shall be an amount determined based
      on the reasonable good-faith estimate by the Sponsor or its affiliate of the
      aggregate maximum probable exposure of the outstanding Grantor Trust
      Certificates to the Yield Maintenance Agreement.

     

    Significance
      Percentage: With respect to any Distribution Date, and in accordance with
      Item 1115 of Regulation AB, shall be an percentage equal to the Significance
      Estimate divided by the outstanding Current Principal Amount of the Grantor
      Trust Certificates, prior to the distribution of Available Funds on such
      Distribution Date.

     

    Sponsor:  EMC
      Mortgage Corporation, or its successor in interest.

     

    Structured
      Asset Mortgage
      Investments II Trust 2007-AR7 Class A-4
      Certificates:  Structured Asset Mortgage Investments II Trust
      2007-AR7, Mortgage Pass-Through Certificates, Series 2007-AR7, Class A-4
      Certificates.

     

    Structured
      Asset Mortgage
      Investments II Trust 2007-AR7 Class III-A-2
      Certificates:  Structured Asset Mortgage Investments II Trust
      2007-AR7, Mortgage Pass-Through Certificates, Series 2007-AR7, Class III-A-2
      Certificates.

     

    Trust:
      Bear Stearns
      Structured Products Inc. Trust 2007-R3, created pursuant to this Agreement
      and
      comprised of the Trust Fund.

     

    Trust
      Fund:  The segregated pool of assets subject hereto,
      constituting the corpus of the Trust created hereby and to be administered
      hereunder, consisting of (i) the Underlying Securities, (ii) all amounts payable
      on the Underlying Securities pursuant to the Underlying Agreement following
      the
      Closing Date, (iii) the Reserve Account (including the right to receive the
      Additional Amount), (iv) the Certificate Account and such funds or assets as
      are
      from time to time deposited in the Certificate Account, (v) the Depositor’s
      rights under the Purchase Agreement, (vi) the Yield Maintenance Agreement and
      (vii) the income, payments and proceeds of each of the foregoing.

     

    Underlying
      Agreement:  The agreement pursuant to which the Underlying
      Securities were issued, as in effect on the Closing Date.

    

    Underlying
      Distribution Date
      Statement:  The monthly investor reports provided or made
      available pursuant to the Underlying Agreement in respect of the Underlying
      Securities in connection with the Underlying Security Distribution Date.

     

    Underlying
      Securities: The respective Underlying Security Class Percentage of the
      (i) Structured Asset Mortgage Investments II Trust 2007-AR7 Class A-4
      Certificates and (ii) Structured Asset Mortgage Investments II Trust 2007-AR7
      Class III-A-2 Certificates, sold by the Depositor to, and registered in the
      name
      of, the Grantor Trust Trustee, for the benefit of the Holders of the Grantor
      Trust Certificates, pursuant to Section 2.01 and as more particularly described
      in Schedule A hereto.

     

    Underlying
      Security Class
      Percentage:  The percentage which each Underlying Security
      constitutes of its entire class as set forth in Schedule A attached hereto
      under
      the caption “Class % in Trust.”

     

    Underlying
      Security
      Distribution Date:  The 25th day of each month, or if such day
      is not a Business Day, then the next Business Day commencing in October
      2007.

     

    Underlying
      Securityholder:  The Grantor Trust Trustee or its Depository
      Participant for the benefit of the Grantor Trust Certificateholders.

     

    Underlying
      Series:  The series of securities which includes the Underlying
      Securities.

     

    WHFIT:
      shall mean a
“Widely Held Fixed Investment Trust” as that term is defined in Treasury
      Regulations section 1.671-5(b)(22) or successor provisions.

     

    WHFIT
      Regulations:
      shall mean Treasury Regulations section 1.671-5, as amended.

     

    Yield
      Maintenance
      Agreement: A yield maintenance agreement, between the Grantor Trust
      Trustee and the Yield Maintenance Agreement Counterparty, including any
      schedule, confirmations, credit support annex or other credit support document
      relating thereto, and attached hereto as Exhibit F, all of which shall evidence
      the right to receive the Additional Amount that is agreed by the Sponsor to
      cause to be paid to the Trust and included in the Reserve Account on the Closing
      Date as further described herein.

     

    Yield
      Maintenance Agreement
      Counterparty: The yield maintenance agreement counterparty under the
      Yield Maintenance Agreement.  Initially, the Yield Maintenance
      Agreement Counterparty shall be and Bear Stearns Capital Markets Inc.

     

    ARTICLE
      II

     

    CONVEYANCE
      OF THE UNDERLYING SECURITIES; ORIGINAL ISSUANCE OF GRANTOR TRUST
      CERTIFICATES

     

    Section
      2.01. Conveyance
      of the Underlying
      Securities.

     

    (a) The
      Depositor, concurrently with the execution and delivery hereof, does hereby
      sell, transfer, assign, set-over and otherwise convey to the Grantor Trust
      Trustee, in trust, for the use and benefit of the Grantor Trust
      Certificateholders, without recourse, all the right, title and interest of
      the
      Depositor in and to (i) the Underlying Securities, (ii) the Purchase Agreement
      and (iii) all other assets constituting the Trust Fund.  Such
      assignment includes, without limitation, all amounts payable on the Underlying
      Securities pursuant to the Underlying Agreement following the Closing
      Date.

     

    (b) In
      connection with such transfer and assignment, and concurrently with its
      execution and delivery of this Agreement, the Depositor shall have caused the
      Underlying Securities to be registered in the book-entry records of the
      Depository in the name of the Grantor Trust Trustee or its nominee.

     

    (c) The
      transfer of the Underlying Securities and all other assets constituting the
      Trust Fund is absolute and is intended by the parties hereto as a
      sale.

     

    (d) It
      is
      intended that the conveyances by the Depositor to the Grantor Trust Trustee
      of
      the Underlying Securities as provided for in this Section 2.01 be construed
      as a
      sale by the Depositor to the Grantor Trust Trustee of the Underlying Securities
      for the benefit of the Grantor Trust Certificateholders.  Further, it
      is not intended that any such conveyance be deemed to be a pledge of the
      Underlying Securities by the Depositor to the Grantor Trust Trustee to secure
      a
      debt or other obligation of the Depositor.  However, in the event that
      the Underlying Securities are held to be property of the Depositor, or if for
      any reason this Agreement is held or deemed to create a security interest in
      the
      Underlying Securities, then it is intended that (a) this Agreement shall also
      be
      deemed to be a security agreement within the meaning of Articles 8 and 9 of
      the
      New York Uniform Commercial Code and the Uniform Commercial Code of any other
      applicable jurisdiction; (b) the conveyance provided for in Section 2.01 shall
      be deemed to be a grant by the Depositor to the Grantor Trust Trustee of a
      security interest in all of the Depositor’s right (including the power to convey
      title thereto), title and interest, whether now owned or hereafter acquired,
      in
      and to (1) the Underlying Securities, (2) all amounts payable on the Underlying
      Securities in accordance with the terms thereof and (3) any and all general
      intangibles consisting of, arising from or relating to any of the foregoing,
      and
      all proceeds of the conversion, voluntary or involuntary, of the foregoing
      into
      cash, instruments, securities or other property, including without limitation
      all amounts from time to time held in the Certificate Account, whether in the
      form of cash, instruments, securities or other property; (c) the possession
      by
      the Grantor Trust Trustee or any agent of the Grantor Trust Trustee of such
      items of property as constitute instruments, money, negotiable documents or
      chattel paper shall be deemed to be “possession by the secured party,” or
      possession by a purchaser or a person designated by such secured party, for
      purposes of perfecting the security interest pursuant to the New York Uniform
      Commercial Code and the Uniform Commercial Code of any other applicable
      jurisdiction; and (d) notifications to persons holding such property, and
      acknowledgments, receipts or confirmations from persons holding such property,
      shall be deemed notifications to, or acknowledgments, receipts or confirmations
      from, financial intermediaries, bailees or agents (as applicable) of the Grantor
      Trust Trustee for the purpose of perfecting such security interest under
      applicable law.  It is also intended that the Trust be classified for
      federal income tax purposes as a grantor trust under Subpart E, part I of
      subchapter J of chapter 1 of the Code, of which the Grantor Trust
      Certificateholders are owners, rather than a partnership, an association taxable
      as a corporation or a taxable mortgage pool.  The powers granted and
      obligations undertaken in this Agreement shall be construed so as to further
      such intent.

     

    The
      Depositor and the Grantor Trust Trustee, at the Depositor’s or the Majority
      Grantor Trust Certificateholders’ direction, shall, to the extent consistent
      with this Agreement, take such reasonable actions as may be determined to be
      necessary to ensure that, if this Agreement were deemed to create a security
      interest in the Underlying Securities, and the other property described above,
      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 this Agreement.

     

    Section
      2.02. Acceptance
      of Trust Fund by
      Grantor Trust Trustee; Initial Issuance of Grantor Trust
      Certificates.

     

    The
      Grantor Trust Trustee acknowledges receipt of the Underlying Agreement and
      the
      receipt by it and the transfer, delivery and assignment to it of the Underlying
      Securities, in good faith and without notice of any adverse claim, and the
      assignment to it of all other assets included in the Trust Fund and declares
      that it holds and will hold the Underlying Securities and all other assets
      included in the Trust Fund in trust for the exclusive use and benefit of all
      present and future Grantor Trust Certificateholders in accordance with the
      terms
      of this Agreement.  Concurrently with such transfer, delivery and
      assignment and in exchange therefor, pursuant to the written request of the
      Depositor executed by an officer of the Depositor, the Grantor Trust Trustee
      has
      executed and caused to be authenticated and delivered to or upon the order
      of
      the Depositor, the Grantor Trust Certificates in authorized denominations
      evidencing the entire beneficial ownership of the Trust Fund.

     

    Until
      the
      Trust Fund is terminated in accordance with Section 7.01, except as provided
      herein, the Grantor Trust Trustee shall not assign, sell, dispose of or transfer
      any interest in the Underlying Securities or any other asset constituting the
      Trust Fund or permit the Underlying Securities or any other asset constituting
      the Trust Fund to be subjected to any lien, claim or encumbrance arising by,
      through or under the Grantor Trust Trustee or any person claiming by, through
      or
      under the Grantor Trust Trustee.

     

    Section
      2.03. Representations
      and
      Warranties of the Depositor and the Grantor Trust Trustee.

     

    (a) The
      Depositor hereby represents and warrants to the Grantor Trust Trustee, and
      for
      the benefit of the Grantor Trust Certificateholders, as of the Closing Date,
      that:

     

    (i) The
      Depositor is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware, and the Depositor is possessed of
      all
      licenses necessary to carry on its business.

     

    (ii) The
      execution and delivery of this Agreement by the Depositor, and the performance
      and compliance with the terms of this Agreement by the Depositor, will not
      violate the Depositor’s certificate of incorporation or bylaws or constitute a
      default (or an event which, with notice or lapse of time, or both, would
      constitute a default) under, or result in the breach of, any material agreement
      or other instrument to which it is a party or which is applicable to it or
      any
      of its assets.

     

    (iii) The
      Depositor has the full right, power and authority to enter into and consummate
      all transactions contemplated by this Agreement, including but not limited
      to
      selling the Underlying Securities to the Grantor Trust Trustee, has duly
      authorized the execution, delivery and performance of this Agreement, and has
      duly executed and delivered this Agreement.

     

    (iv) This
      Agreement, assuming due authorization, execution and delivery by the Grantor
      Trust Trustee, constitutes a valid, legal and binding obligation of the
      Depositor, enforceable against the Depositor in accordance with the terms
      hereof, subject to (A) applicable bankruptcy, insolvency, reorganization,
      moratorium and other laws affecting the enforcement of creditors’ rights
      generally, and (B) general principles of equity, regardless of whether such
      enforcement is considered in a proceeding in equity or at law.

     

    (v) The
      Depositor is not in violation of, and its execution and delivery of this
      Agreement and its performance and compliance with the terms of this Agreement
      will not constitute a violation of, any law, any order or decree of any court
      or
      arbiter, or any order, regulation or demand of any federal, state or local
      governmental or regulatory authority, which violation is likely to affect
      materially and adversely either the ability of the Depositor to perform its
      obligations under this Agreement or the financial condition of the
      Depositor.

     

    (vi) No
      litigation is pending or, to the best of the Depositor’s knowledge, threatened
      against the Depositor which, if determined adversely to the Depositor, would
      prohibit the Depositor from entering into this Agreement or is likely to
      materially and adversely affect either the ability of the Depositor to perform
      its obligations under this Agreement or the financial condition of the
      Depositor.

     

    (vii) The
      Depositor was, immediately prior to the transfer of the Underlying Securities
      to
      the Grantor Trust Trustee, the sole owner thereof free and clear of any lien,
      pledge, charge or encumbrance of any kind (except any lien created by this
      Agreement).

     

    (viii) The
      Depositor acquired the Underlying Securities in good faith without notice of
      any
      adverse claim, lien, charge, encumbrance or security interest (including without
      limitation, federal tax liens or liens arising under ERISA).

     

    (ix) The
      Depositor has not assigned any interest in the Underlying Securities or any
      distributions thereon, except as contemplated herein.

     

    (x) The
      Grantor Trust Trustee, will be entitled to distributions under the Underlying
      Agreement equal to all distributions of interest and principal made on the
      Underlying Securities.

     

    (xi) The
      information relating to the Underlying Securities set forth in Schedule A is
      true and correct in all material respects.

     

    (xii) The
      Underlying Securities are registered on the books of the Depository in the
      name
      of the Grantor Trust Trustee or its financial intermediary on behalf of the
      Grantor Trust Trustee.

     

    (xiii) The
      Underlying Securities are “regular interests” in a real estate mortgage
      investment conduit within the meaning of Section 860G(a)(1) of the
      Code.

     

    (xiv) The
      Depositor has no actual knowledge after reasonable inquiry that any of the
      Underlying Securities (1) were not validly issued by the underlying trust,
      (2)
      are not outstanding, (3) are not the legal, valid, binding and enforceable
      obligation of the underlying trust, and (4) are not entitled to the benefits
      of
      the Underlying Agreement pursuant to which such Underlying Security was issued
      (except as limited by bankruptcy, insolvency or other similar laws affecting
      the
      enforcement of creditors’ rights generally or to the extent that such
      enforceability may be subject to the exercise of judicial discretion in
      accordance with general equitable principles).

     

    (xv) The
      information relating to the Underlying Securities set forth on Schedule A hereto
      conforms to information set forth in the Prospectus dated June 28, 2007 and
      the
      Prospectus Supplement dated September 17, 2007 for the Structured Asset Mortgage
      Investments II Trust 2007-AR7 Class A-4 Certificates and the Structured Asset
      Mortgage Investments II Trust 2007-AR7 Class III-A-2 Certificates.

     

    (b) The
      Grantor Trust Trustee hereby represents and warrants to the Depositor and for
      the benefit of the Grantor Trust Certificateholders, as of the Closing Date,
      that:

     

    (i) The
      Grantor Trust Trustee is a national banking association, duly organized and
      validly existing under the laws of the United States of America.

     

    (ii) The
      execution and delivery of this Agreement by the Grantor Trust Trustee, and
      the
      performance and compliance with the terms of this Agreement by the Grantor
      Trust
      Trustee, will not violate the Grantor Trust Trustee’s charter or bylaws or
      constitute a default (or an event which, with notice or lapse of time, or both,
      would constitute a default) under, or result in the breach of, any material
      agreement or other instrument to which it is a party or which is applicable
      to
      it or any of its assets.

     

    (iii) The
      Grantor Trust Trustee has the full power and authority to enter into and
      consummate all transactions contemplated by this Agreement, has duly authorized
      the execution, delivery and performance of this Agreement, and has duly executed
      and delivered this Agreement.

     

    (iv) This
      Agreement, assuming due authorization, execution and delivery by the Depositor,
      constitutes a valid, legal and binding obligation of the Grantor Trust Trustee,
      enforceable against the Grantor Trust Trustee in accordance with the terms
      hereof, subject to (A) applicable bankruptcy, insolvency, reorganization,
      moratorium and other laws affecting the enforcement of creditors’ rights
      generally, and (B) general principles of equity, regardless of whether such
      enforcement is considered in a proceeding in equity or at law.

     

    (v) The
      Grantor Trust Trustee is not in violation of, and its execution and delivery
      of
      this Agreement and its performance and compliance with the terms of this
      Agreement will not constitute a violation of, any law, any order or decree
      of
      any court or arbiter, or any order, regulation or demand of any federal, state
      or local governmental or regulatory authority, which violation is likely to
      affect materially and adversely the ability of the Grantor Trust Trustee to
      perform its obligations under this Agreement.

     

    (vi) No
      litigation is pending or, to the best of the Grantor Trust Trustee’s knowledge,
      threatened against the Grantor Trust Trustee which would prohibit the Grantor
      Trust Trustee from entering into this Agreement or is likely to materially
      and
      adversely affect the ability of the Grantor Trust Trustee to perform its
      obligations under this Agreement.

     

    (vii) The
      Underlying Securities will be held by the Grantor Trust Trustee through the
      Depository or its nominee; it has acquired the Underlying Securities on behalf
      of the Grantor Trust Certificateholders from the Depositor in good faith, for
      value, and the Grantor Trust Trustee has not received notice of, and has no
      actual knowledge of, any adverse claim, lien, charge, encumbrance or security
      interest (including, without limitation, federal tax liens or liens arising
      under ERISA); it has not and will not, in any capacity except as Grantor Trust
      Trustee, on behalf of the Grantor Trust Certificateholders, assert any claim
      or
      interest in the Underlying Securities and will hold the Underlying Securities
      and the proceeds thereof in trust pursuant to the terms of this Agreement;
      and
      it has not encumbered or transferred its right, title or interest in the
      Underlying Securities.

     

    (c) It
      is
      understood and agreed that the foregoing representations and warranties shall
      survive the execution and delivery of this Agreement.  Upon discovery
      by either party hereto of a breach of any of the foregoing representations
      and
      warranties which materially and adversely affects the interests of the Grantor
      Trust Certificateholders or either party hereto, the party discovering such
      breach will give prompt written notice thereof to the other party hereto and
      to
      the Grantor Trust Certificateholders.  Within thirty (30) days of the
      earlier of either discovery by or notice to the Depositor of any breach of
      a
      representation or warranty of the Depositor that materially and adversely
      affects the interests of the Grantor Trust Certificateholders, the Depositor
      shall use its best efforts promptly to cure such breach in all material respects
      and, if such breach cannot be cured, the Depositor shall, at the election of
      the
      Majority Grantor Trust Certificateholders, repurchase the Underlying Security
      affected by the breach at the Repurchase Price.  If the Depositor is
      to repurchase any Underlying Security, the Grantor Trust Trustee shall promptly
      determine the Repurchase Price in accordance with the definition
      thereof.  Repurchase of any Underlying Security pursuant to the
      foregoing provisions of this Section 2.03(c) shall be accomplished by deposit
      by
      the Depositor in the Certificate Account on the Business Day prior to the next
      succeeding Distribution Date of the amount of the Repurchase Price.

     

    Section
      2.04. Grantor
      Trust.  The Trust created hereby is intended to qualify as an
“investment trust” within the meaning of Treasury Regulation §301.7701-4(c), and
      it is neither the purpose nor the intent of the parties hereto to create a
      partnership, joint venture, taxable mortgage pool or association taxable as
      a
      corporation between or among the Grantor Trust Certificateholders, the Grantor
      Trust Trustee or the Depositor.  In furtherance of the foregoing, the
      purpose of the Trust shall be to protect and conserve the assets of the Trust,
      and the Trust shall not at any time engage in or carry on any kind of business
      or any kind of commercial or investment activity.  Subject to the
      foregoing, the Trust shall:

     

    (i) issue
      the
      Grantor Trust Certificates to, or at the written direction of, the Depositor
      in
      exchange for the Underlying Securities;

     

    (ii) perform
      the activities of the Trust that are expressly set forth in this
      Agreement;

     

    (iii) engage
      in
      those activities that are reasonably necessary, suitable or convenient to
      accomplish the foregoing or are incidental thereto or connected therewith;
      and

     

    (iv) subject
      to compliance with this Agreement, engage in such other activities as may be
      required in connection with conservation of the Trust and the making of
      distributions to the Grantor Trust Certificateholders.

     

    The
      Trust
      is hereby authorized to engage in the foregoing activities. The Trust shall
      not
      engage in any activity other than the foregoing or other than as required or
      authorized by the terms of this Agreement while any Grantor Trust Certificate
      is
      outstanding without the consent of all of the Grantor Trust Certificateholders;
      provided, however, that in no event shall the Grantor Trust Trustee or any
      other
      Person have any duty, responsibility or power to vary the investment of the
      Grantor Trust Certificateholders in the Grantor Trust Certificates or to
      substitute new investments or reinvest so as to enable the Trust to take
      advantage of variations in the market to improve the investment of the Grantor
      Trust Certificateholders in the Grantor Trust Certificates.

     

    ARTICLE
      III

    ADMINISTRATION
      OF THE UNDERLYING SECURITIES;

    PAYMENTS
      AND REPORTS TO GRANTOR TRUST CERTIFICATEHOLDERS

     

    Section
      3.01. Administration
      of the Trust
      Fund and the Underlying Security.

     

    If
      at any
      time the Grantor Trust Trustee, as a holder of the Underlying Securities, is
      requested in such capacity, whether by a Grantor Trust Certificateholder, a
      holder of a certificate of the Underlying Series or a party to the Underlying
      Agreement or any other Person, to take any action or to give any consent,
      approval or waiver, including, without limitation, in connection with an
      amendment of the Underlying Agreement, the Grantor Trust Trustee shall promptly
      notify all of the Holders of Grantor Trust Certificates and the Depositor of
      such request and of its planned course of action with respect thereto and shall,
      in its capacity as a holder of the Underlying Securities, take such action
      in
      connection with the exercise and/or enforcement of any rights and/or remedies
      available to it in such capacity with respect to such request, as the Majority
      Grantor Trust Certificateholder of the Grantor Trust Certificates shall direct
      in writing.

     

    Section
      3.02. Collection
      of
      Monies.

     

    (a) In
      connection with its receipt of any distribution on the Underlying Securities
      on
      any Underlying Security Distribution Date, the Grantor Trust Trustee shall
      review the related Underlying Distribution Date Statement and shall confirm
      that
      the aggregate amount of such distribution received by it with respect to the
      Underlying Securities is consistent with the Underlying Distribution Date
      Statements (it being understood that the Grantor Trust Trustee shall be entitled
      to rely on the accuracy and correctness of the Underlying Distribution Date
      Statements).

     

    (b) If
      the
      Grantor Trust Trustee receives a Notice of Final Distribution in respect of
      any
      Underlying Security, the Grantor Trust Trustee shall present and surrender
      the
      related Underlying Security which is in certificated form for final payment
      thereon, if required, in accordance with the terms and conditions of the
      Underlying Agreement and such notice.  The Grantor Trust Trustee shall
      promptly deposit in the Certificate Account the final distribution received
      upon
      presentation and surrender of such Underlying Security for distribution in
      accordance with Section 3.05 hereof on the next succeeding Distribution Date
      for
      the Grantor Trust Certificates.

     

    Section
      3.03. Establishment
      of the
      Certificate Account; Deposits Therein.

     

    (a) The
      Grantor Trust Trustee, for the benefit of the Grantor Trust Certificateholders,
      shall establish and maintain one or more interest bearing trust accounts
      (collectively, the “Certificate
      Account”), each of which shall be an Eligible Account, entitled “Wells
      Fargo Bank, N.A., as grantor trust trustee for the registered Holders of Bear
      Stearns Structured Products Inc. Trust 2007-R3, Grantor Trust Certificates,
      Series 2007-R3,” held in trust by the Grantor Trust Trustee for the benefit of
      the Grantor Trust Certificateholders with respect to the portion of such
      accounts in the Trust Fund.  The Grantor Trust Trustee shall cause to
      be deposited directly into the Certificate Account all distributions received
      on
      the Underlying Securities by the Grantor Trust Trustee, from whatever source,
      and all amounts received by it representing payment of a Repurchase Price
      pursuant to Section 2.03(c), subsequent to the Closing Date.  The
      Certificate Account is initially located at the Grantor Trust
      Trustee.  The Grantor Trust Trustee shall give notice to the Depositor
      and to the Grantor Trust Certificateholders of any new location of the
      Certificate Account prior to any change thereof.

     

    (b) In
      the
      event that payments in respect of the Underlying Securities are received by
      the
      Grantor Trust Trustee prior to the related Distribution Date, the Grantor Trust
      Trustee may invest such funds deposited in the Certificate Account in one or
      more Permitted Investments held in the name of the Grantor Trust Trustee and
      shall receive as compensation, any interest or investment income earned on
      such
      Permitted Investments, which may be withdrawn by the Grantor Trust Trustee
      on
      each Distribution Date and shall not constitute Available Funds. Notwithstanding
      the foregoing, no such Permitted Investment may mature later than such related
      Distribution Date and no such investment shall be sold prior to its maturity
      date. The amount of any losses incurred in respect of any such investments
      shall
      be deposited in the Certificate Account by the Grantor Trust Trustee immediately
      as realized out of its own funds.

     

    (c) The
      Depositor shall cause all distributions received on the Underlying Securities
      by
      the Depositor or any of its Affiliates after the Closing Date to be remitted
      promptly to the Grantor Trust Trustee for deposit into the Certificate
      Account.

     

    Section
      3.04. Permitted
      Withdrawals From
      the Certificate Account.

     

    The
      Grantor Trust Trustee may from time to time withdraw funds from the Certificate
      Account for the following purposes:

     

    (i) to
      make
      distributions in the amounts and in the manner provided for in Section
      3.05;

     

    (ii) to
      pay to
      the Person entitled thereto any amount deposited in the Certificate Account
      in
      error;

     

    (iii) to
      clear
      and terminate the Certificate Account upon the termination of this Agreement;
      and

     

    (iv) to
      pay
      itself, as additional compensation, the net reinvestment income permitted to
      be
      paid to it as provided in Section 3.03(b).

     

    On
      each
      Distribution Date, the Grantor Trust Trustee shall withdraw all funds from
      the
      Certificate Account and shall use such funds withdrawn from the Certificate
      Account only for the purposes described in this Section 3.04 and in Section
      3.05.

     

    Section
      3.05. Distributions.

     

    (a) On
      each
      Distribution Date, the Grantor Trust Trustee shall withdraw amounts from the
      Certificate Account and the Reserve Account representing the Available Funds
      and, if applicable, the Reserve Account Distribution Amount, for such
      Distribution Date and apply them to pay the Grantor Trust Certificates in the
      following manner and order of priority:

     

    (i) from
      Available Funds received on the Underlying Securities, if any, and the Reserve
      Account Distribution Amounts with respect to the first and second Distribution
      Dates, to the Holders of the Class A-1 Grantor Trust Certificates, as a
      distribution of interest, the Interest Distribution Amount for the Class A-1
      Grantor Trust Certificates for such Distribution Date; and

     

    (ii) from
      remaining Available Funds received on the Underlying Securities, if any, to
      the
      Holders of the Class A-1 Grantor Trust Certificates, as distributions of
      principal, until the Current Principal Amount of the Class A-1 Grantor Trust
      Certificates has been reduced to zero.

     

    (b) With
      respect to the second Distribution Date, the Reserve Account Deposit Portion
      B
      remaining following distributions on such Distribution Date will be distributed
      to the Class A-1 Grantor Trust Certificates on such Distribution Date as
      interest.

     

    (c) All
      distributions made to Holders of the
      Grantor Trust Certificates pursuant to Sections 3.05(a) and (b) on each
      Distribution Date shall be allocated prorata
      among the
      outstanding Grantor Trust Certificates based upon their respective Percentage
      Interests and, except in the case of the final distribution to the Holders
      of
      the Grantor Trust Certificates, shall be made to the Holders of record on the
      related Record Date.  Distributions to any Grantor Trust
      Certificateholder on any Distribution Date shall be made by wire transfer of
      immediately available funds to the account of such Grantor Trust
      Certificateholder at a bank or other entity having appropriate facilities
      therefor, if such Grantor Trust Certificateholder shall have so notified the
      Grantor Trust Trustee in writing (which wiring instructions may be in the form
      of a standing order applicable to all future Distribution Dates) no less than
      five (5) Business Days prior to the related Record Date (or, in the case of
      the
      initial Distribution Date, no later than the related Record Date) and is the
      registered owner of Grantor Trust Certificates with an aggregate initial Current
      Principal Amount of not less than $1,000,000, or otherwise by check mailed
      by
      first class mail to the address of such Grantor Trust Certificateholder
      appearing in the Certificate Register.  Final distribution to each
      Grantor Trust Certificateholder will be made in like manner, but only upon
      presentment and surrender of such Grantor Trust Certificate at the Corporate
      Trust Office or such other location specified in the notice to Grantor Trust
      Certificateholders of such final distribution.

     

    (d) Notwithstanding
      any other provision of this Agreement, the Grantor Trust Trustee shall comply
      with all federal withholding requirements respecting payments to Grantor Trust
      Certificateholders of interest or the accrual of discount that the Grantor
      Trust
      Trustee reasonably believes are applicable under the Code.  The
      consent of Grantor Trust Certificateholders shall not be required for such
      withholding.  In the event the Grantor Trust Trustee does withhold any
      amount from payments to any Grantor Trust Certificateholder pursuant to federal
      withholding requirements, the Grantor Trust Trustee shall indicate the amount
      withheld to such Grantor Trust Certificateholders.

     

    (e) Realized
      Losses.  On any Distribution Date, following distributions to
      be made on that Distribution Date, any Realized Losses (as defined in the
      Underlying Agreement) allocated to the Underlying Securities shall be allocated
      to the Class A-1 Grantor Trust Certificates, until the Current Principal Amount
      thereof has been reduced to zero.  Realized Losses shall be allocated
prorata
      among the
      outstanding Grantor Trust Certificates based upon their respective Percentage
      Interests.

     

    Section
      3.06. Statements
      to Grantor Trust
      Certificateholders.

     

    On
      each
      Distribution Date, the Grantor Trust Trustee shall prepare and make available
      to
      each Grantor Trust Certificateholder, the Depositor and the Rating Agency,
      on
      its website, a statement with respect to such Distribution Date, stating:

     

    (i) the
      Available Funds for such Distribution Date, including the cash flows received
      and the sources thereof for distributions;

     

    (ii) the
      Interest Distribution Amount and the Reserve Account Distribution Amount and
      the
      portion thereof, if any, provided by the Yield Maintenance Agreement with
      respect to the second Distribution Date only, and the amount with respect to
      principal paid on the Grantor Trust Certificates with respect to such
      Distribution Date;

     

    (iii) the
      Current Principal Amount of the Grantor Trust Certificates before and after
      applying payments on such Distribution Date;

     

    (iv) the
      applicable record dates, accrual dates and actual Distribution Dates for the
      period;

     

    (v) the
      Pass-Through Rate on the Grantor Trust Certificates for such Distribution Date;
      and

     

    (vi) the
      interest rate on the Underlying Securities for such Distribution
      Date.

     

    In
      the
      case of the information furnished pursuant to clause (ii) above, the amounts
      shall also be expressed as a dollar amount per $100,000 of principal face
      amount.

     

    The
      Grantor Trust Trustee may make available each month, to any interested party,
      the monthly statement to Grantor Trust Certificateholders via the Grantor Trust
      Trustee’s website initially located at www.ctslink.com.
      Assistance in using the website can be obtained by calling the Grantor Trust
      Trustee’s customer service desk at (866) 846-4526. Parties that are unable to
      use the above distribution option are entitled to have a paper copy mailed
      to
      them via first class mail by calling the Grantor Trust Trustee’s customer
      service desk and indicating such. The Grantor Trust Trustee shall have the
      right
      to change the way such reports are distributed in order to make such
      distribution more convenient and/or more accessible to the parties, and the
      Grantor Trust Trustee shall provide timely and adequate notification to all
      parties regarding any such change.

     

    In
      addition, the Grantor Trust Trustee promptly will furnish to the Depositor,
      and
      upon the written request of a Grantor Trust Certificateholder, to such Grantor
      Trust Certificateholder, copies of any written notices, statements, reports
      or
      other written communications, received by the Grantor Trust Trustee in respect
      of the Underlying Securities.

     

    The
      Grantor Trust Trustee shall be responsible for preparing, at its own expense,
      executing and filing in a timely manner, on behalf of the Trust Fund and for
      the
      Trust Fund as a grantor trust under the Code, federal income tax and information
      returns and reports with the Internal Revenue Service (“IRS”) and income tax and
      information returns and reports of any other state or local taxing authority
      as
      are required to be so filed, using a calendar year as the taxable year of the
      Trust on an accrual basis including the information reportable under the WHFIT
      Regulations as provided below. The Depositor and each Holder of the Grantor
      Trust Certificates shall provide the Grantor Trust Trustee, no later than
      December 31, 2007 (to the extent then ascertainable) and from time to time
      thereafter, all information deemed necessary and requested by the Grantor Trust
      Trustee to fulfill its obligations under this paragraph and the paragraphs
      below. The Grantor Trust Trustee shall furnish to each Grantor Trust
      Certificateholder at the time required by law such information reports or
      returns as are required by applicable federal, state or local law with respect
      to the Trust Fund to enable Grantor Trust Certificateholders to prepare their
      tax returns and will furnish comparable information to the IRS and other taxing
      authorities as and when required by law to do so.

     

    The
      parties hereto and each Holder of a Grantor Trust Certificate, by acceptance
      of
      its interest in such Grantor Trust Certificate, agree to treat the Trust Fund
      as
      a WHFIT that is a NMWHFIT. The Grantor Trust Trustee shall report as required
      under the WHFIT Regulations to the extent such information as is reasonably
      necessary and requested by the Grantor Trust Trustee to enable the Grantor
      Trust
      Trustee to do so is provided to the Grantor Trust Trustee on a timely
      basis.  Each Holder of Grantor Trust Certificates and the Depositor
      shall provide (to the extent known by the Depositor) the Grantor Trust Trustee
      with information identifying any Holders of Grantor Trust Certificates that
      are
“middlemen” as defined by the WHFIT Regulations.  The Grantor Trust
      Trustee shall not be liable for any tax reporting penalties that may arise
      under
      the WHFIT Regulations as a result of the incorrect determination of the status
      of the Trust Fund as a WHFIT.

     

    The
      Grantor Trust Trustee, in its discretion, shall report required WHFIT
      information using either the cash or accrual method, except to the extent the
      WHFIT Regulations specifically require a different method.  The
      Grantor Trust Trustee shall be under no obligation to determine whether a Holder
      of a Grantor Trust Certificate uses the cash or accrual method.  The
      Grantor Trust Trustee shall make available WHFIT information to the Holders
      of
      Grantor Trust Certificates annually in accordance with the WHFIT
      Regulations.  In addition, the Grantor Trust Trustee shall not be
      responsible or liable for providing subsequently amended, revised or updated
      information to any Holder of Grantor Trust Certificates, unless requested by
      any
      such Holder.

     

    The
      Grantor Trust Trustee shall not be liable for failure to meet the reporting
      requirements of the WHFIT Regulations nor for any penalties thereunder if such
      failure is due to: (i) the lack of reasonably necessary information being
      provided to the Grantor Trust Trustee as required in the second preceding
      paragraph, (ii) incomplete, inaccurate or untimely information being provided
      to
      the Grantor Trust Trustee or (iii) the inability of the Grantor Trust Trustee,
      after good faith efforts, to alter its existing information reporting systems
      to
      capture information necessary to fully account for any updates and revisions
      to
      the WHFIT Regulations for the 2007 calendar year.  Each Holder of a
      Grantor Trust Certificate, by acceptance of its interest in such Grantor Trust
      Certificate, shall be deemed to have agreed to provide, and shall so provide,
      the Grantor Trust Trustee with information regarding any sale of such Grantor
      Trust Certificate, including the price, amount of proceeds and date of
      sale.  Absent receipt of such information, and unless informed
      otherwise by the Depositor, the Grantor Trust Trustee will assume there is
      no
      secondary market trading of interests in the Trust Fund for purposes of the
      WHFIT Regulations.

     

    To
      the
      extent required by the WHFIT Regulations, the Grantor Trust Trustee shall
      publish on an appropriate website the CUSIPs for the Grantor Trust
      Certificates.  The Grantor Trust Trustee shall make reasonable good
      faith efforts to keep the website accurate and updated to the extent CUSIPs
      have
      been received.  Absent the receipt of a CUSIP, the Grantor Trust
      Trustee shall use a reasonable identifier number in lieu of such missing
      CUSIP.  The Grantor Trust Trustee shall not be liable for investor
      reporting delays that result from the receipt of inaccurate or untimely CUSIP
      information.

     

    The
      Grantor Trust Trustee shall be entitled to additional reasonable compensation
      for changes in reporting required in respect of the WHFIT Regulations that
      arise
      as a result of a change in the WHFIT Regulations or a change in interpretation
      of the WHFIT Regulations by the IRS or the Depositor or its counsel, in each
      case, following the Closing Date, if such change requires, in the Grantor Trust
      Trustee’s sole discretion, a material increase in the Grantor Trust Trustee’s
      reporting obligations under the WHFIT Regulations in respect of the Trust
      Fund.

     

    Section
      3.07. Access
      to Certain
      Documentation and Information.

     

    The
      Grantor Trust Trustee shall provide to the Depositor access to all reports,
      documents and records maintained by the Grantor Trust Trustee in respect of its
      duties hereunder, such access being afforded without charge but only upon three
      (3) Business Days’ written request and during normal business hours at offices
      designated by the Grantor Trust Trustee.

     

    Section
      3.08. Calculation
      of Distribution
      Amounts.

     

    All
      calculations of Available Funds, the Interest Distribution Amount, the Reserve
      Account Distribution Amount and amounts payable with respect to principal for
      any Distribution Date shall be performed by the Grantor Trust Trustee in
      reliance on the information provided to it in the Underlying Distribution Date
      Statements.

     

    Section
      3.09. Annual
      Statement as to
      Compliance.

     

    (a) The
      Grantor Trust Trustee shall deliver (or otherwise make available) to the
      Depositor not later than March 15th of each calendar year in which a Form 10-K
      is required to be filed for the Trust beginning in 2008, an Officer’s
      Certificate (an “Annual Statement of Compliance”) stating, as to the signatory
      thereof, that (i) a review of the activities of the Grantor Trust Trustee during
      the preceding calendar year and of its performance 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 Grantor Trust Trustee has fulfilled all
      of
      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 nature and status of the cure provisions
      thereof.  Such Annual Statement of Compliance shall contain no
      restrictions or limitations on its use.

     

    (b) Failure
      of the Grantor Trust Trustee to comply with this Section 3.09 (including with
      respect to the timeframes required in this Section) which failure results in
      a
      failure to timely file the related Form 10-K, shall, upon written notice from
      the Depositor, constitute a default, and, in addition to whatever rights the
      Depositor may have under this Agreement and at law or equity or to damages,
      including injunctive relief and specific performance, the Depositor may upon
      notice immediately terminate all of the rights and obligations of the Grantor
      Trust Trustee under this Agreement and in and to the Underlying Securities
      and
      the proceeds thereof without compensating the Grantor Trust Trustee for the
      same
      (but subject to the Grantor Trust Trustee’s right to reimbursement of all
      amounts for which it is entitled to be reimbursed prior to the date of
      termination).  This paragraph shall supersede any other provision in
      this Agreement or any other agreement to the contrary.

     

    Section
      3.10. Assessments
      of Compliance
      and Attestation Reports.

     

    Pursuant
      to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation
      AB,
      the Grantor Trust Trustee (the “Attesting Party”) shall deliver (or otherwise
      make available) to the Depositor on or before March 15th of each calendar year
      in which a report on Form 10-K is required to be filed with the Commission
      with
      respect to the Grantor Trust Certificates, beginning in 2008, a report regarding
      the Attesting Party’s assessment of compliance (an “Assessment of Compliance”)
      with the Servicing Criteria applicable to it during the preceding calendar
      year.  The Assessment of Compliance, as set forth in Regulation AB,
      must contain the following:

     

    (a)           
      A statement by an authorized officer of the Attesting Party of its authority
      and
      responsibility for assessing compliance with the Servicing Criteria applicable
      to the Attesting Party;

     

    (b)           
      A statement by an authorized officer that the Attesting Party used the Servicing
      Criteria identified in Exhibit C hereto to assess compliance with the Servicing
      Criteria applicable to the Attesting Party;

     

    (c)           
      An assessment by such officer of the Attesting Party’s compliance with the
      applicable Servicing Criteria for the period consisting of the preceding
      calendar year, including disclosure of any material instance of noncompliance
      with respect thereto during such period, which assessment shall be based on
      the
      activities the Attesting Party performs with respect to asset-backed securities
      transactions taken as a whole involving the Attesting Party, that are backed
      by
      the same asset type as those backing the Underlying Securities;

     

    (d)           
      A statement that a registered public accounting firm has issued an attestation
      report on the Attesting Party’s Assessment of Compliance for the period
      consisting of the preceding calendar year; and

     

    (e)           
      A statement as to which of the Servicing Criteria, if any, are not applicable
      to
      the Attesting Party, which statement shall be based on the activities the
      Attesting Party performs with respect to asset-backed securities transactions
      taken as a whole involving the Attesting Party, that are backed by the same
      asset type as those backing the Grantor Trust Certificates.

     

    Such
      report at a minimum shall address each of the Servicing Criteria specified
      on
      Exhibit C hereto which are indicated as applicable to the Attesting
      Party.

     

    On
      or
      before March 15th of each calendar year in which a report on Form 10-K is
      required to be filed with the Commission with respect to the Grantor Trust
      Certificates, beginning in 2008, the Attesting Party shall furnish to the
      Depositor a report (an “Attestation Report”) by a registered public accounting
      firm that attests to, and reports on, the Assessment of Compliance made by
      the
      Attesting Party, as required by Rules 13a-18 and 15d-18 of the Exchange Act
      and
      Item 1122(b) of Regulation AB, which Attestation Report must be made in
      accordance with standards for attestation reports issued or adopted by the
      Public Company Accounting Oversight Board.

     

    Each
      party to the Underlying Series that is determined by the Depositor to be
“participating in the servicing function” within the meaning of Item 1122 of
      Regulation AB will be required to provide to the Grantor Trust Trustee and
      the
      Depositor an assessment of compliance and attestation report pursuant to the
      Underlying Agreement. The Depositor, in its capacity as depositor for the
      Underlying Series, shall forward any assessment of compliance and attestation
      report to the Grantor Trust Trustee to the extent not otherwise received by
      the
      Grantor Trust Trustee (pursuant to the Underlying Agreement in its capacity
      as
      master servicer and securities administrator of the Underlying Series) and
      any
      other assessment of compliance and attestation report required to be filed
      under
      the related Form 10-K no later than two Business Days following March 15th
      in any
      calendar year in which a Form 10-K is required to be filed by the Trust. The
      Depositor will identify in writing by no later than January 30th
      of each
      year for which a Form 10-K is required to be filed for the Trust and provide
      any
      assessment of compliance and attestation report to the Grantor Trust Trustee
      required to be included in any Form 10-K to the extent not otherwise received
      by
      the Grantor Trust Trustee as set forth in the previous sentence and cause such
      assessment of compliance and attestation reports that are required to be
      included in such Form 10-K to be incorporated by reference.

     

    The
      Depositor shall confirm that each Assessment of Compliance delivered to it
      addresses all of the relevant Servicing Criteria and notify the Grantor Trust
      Trustee of any exceptions. Notwithstanding the foregoing, as to any
      subcontractor, an Assessment of Compliance is not required to be delivered
      unless it is required as part of a Form 10-K with respect to the Trust
      Fund.

     

    Failure
      of the Grantor Trust Trustee to comply with this Section 3.10 (including with
      respect to the timeframes required in this Section) which failure results in
      a
      failure to timely file the related Form 10-K, shall, upon written notice from
      the Depositor, constitute a default and the Depositor shall, in addition to
      whatever rights the Depositor may have under this Agreement and at law or equity
      or to damages, including injunctive relief and specific performance, upon notice
      immediately terminate all of the rights and obligations of the Grantor Trust
      Trustee under this Agreement and in and to the Underlying Securities and the
      proceeds thereof without compensating the Grantor Trust Trustee for the same
      (but subject to the Grantor Trust Trustee’s right to reimbursement of all
      amounts for which it is entitled to be reimbursed prior to the date of
      termination).  This paragraph shall supersede any other provision in
      this Agreement or any other agreement to the contrary.

     

    Section
      3.11. Reports
      Filed with
      Securities and Exchange Commission.

     

    (a)           
      (i) (A) Within 15 days after each Distribution Date, for so long as the Trust
      is
      subject to Exchange Act reporting requirements, the Grantor Trust Trustee shall,
      in accordance with industry standards, prepare and file with the Commission
      via
      the Electronic Data Gathering and Retrieval System (“EDGAR”), a Distribution
      Report on Form 10-D, signed by the Depositor, with a copy of the monthly
      statement to be furnished by the Grantor Trust Trustee to the Grantor Trust
      Certificateholders for such Distribution Date pursuant to Section 3.06 hereof,
      including any monthly statement with respect to the Underlying Series, and
      the
      Depositor shall incorporate by reference the related monthly statement included
      in the Form 10-D filed for the Underlying Series; provided that, the Grantor
      Trust Trustee shall have received no later than five (5) calendar days after
      the
      related Distribution Date, all information required to be provided to the
      Grantor Trust Trustee as described in clause (a)(iv) below.  Any
      disclosure that is in addition to the monthly statement and that is required
      to
      be included on Form 10-D, including any information that is otherwise required
      to be provided or incorporated by reference as instructed by the Depositor
      (“Additional Form 10-D Disclosure”), shall be, pursuant to the paragraph (B)
      below, reported by the parties set forth on Exhibit D to the Grantor Trust
      Trustee, or otherwise provided by the Depositor with respect to any information
      required to be provided pursuant to Item 1117 or Item 1119 of Regulation AB,
      and
      the Depositor and approved for inclusion by the Depositor. The Grantor Trust
      Trustee will have no duty or liability for any failure hereunder to determine
      or
      prepare any Additional Form 10-D Disclosure absent such reporting (other than
      in
      the case where the Grantor Trust Trustee is the reporting party as set forth
      in
      Exhibit D) and approval.

     

    Notwithstanding
      anything in this Agreement or the Underlying Agreement to the contrary, the
      Grantor Trust Trustee, as master servicer and securities administrator for
      the
      Underlying Series, shall aggregate and make available to the Depositor all
      information provided pursuant to Item 1121 of Regulation AB with respect to
      the
      Underlying Series for purposes of including such information in each Form 10-D
      that is required to be filed under this Agreement.

     

    (B)
      Within five (5) calendar days after the related Distribution Date, (i) the
      parties set forth in Exhibit D and the parties related to the Underlying Series
      and required to provide information pursuant to the Underlying Agreement shall
      be required to provide, pursuant to Section 3.11(a)(iv) below, to the Grantor
      Trust Trustee and the Depositor, to the extent known by a responsible officer
      thereof, in EDGAR-compatible format, or in such other form as otherwise agreed
      upon by the Grantor Trust Trustee and the Depositor and such party, the form
      and
      substance of any Additional Form 10-D Disclosure, if applicable and (ii) the
      Depositor shall approve, as to form and substance, or disapprove, as the case
      may be, the inclusion of the Additional Form 10-D Disclosure on Form 10-D.
      To
      the extent not otherwise required under the Underlying Agreement, the Depositor
      shall provide to the Grantor Trust Trustee any Additional Form 10-D Disclosure
      (other than any information required under Item 1121 of Regulation AB) for
      any
      servicer or trustee of the Underlying Series. The Depositor shall be responsible
      for any reasonable fees and expenses assessed or incurred by the Grantor Trust
      Trustee in connection with including any Form 10-D Disclosure Information on
      Form 10-D pursuant to this Section.

     

    (C)
      After
      preparing the Form 10-D, the Grantor Trust Trustee shall forward electronically
      a copy of the Form 10-D to the Depositor for review.  Within two (2)
      Business Days after receipt of such copy, but no later than the 12th calendar
      day after the Distribution Date (provided that, the Grantor Trust Trustee
      forwards a copy of the Form 10-D no later than the 10th calendar after the
      Distribution Date), the Depositor shall notify the Grantor Trust Trustee in
      writing (which may be furnished electronically) of any changes to or approval
      of
      such Form 10-D.  In the absence of receipt of any written changes or
      approval, the Grantor Trust Trustee shall be entitled to assume that such Form
      10-D is in final form and the Grantor Trust Trustee may proceed with the filing
      of the Form 10-D.  No later than the 13th calendar day after the
      related Distribution Date, a duly authorized officer of the Depositor shall
      sign
      the Form 10-D and return an electronic or fax copy of such signed Form 10-D
      (with an original executed hard copy to follow by overnight mail) to the Grantor
      Trust Trustee.  If a Form 10-D cannot be filed on time or if a
      previously filed Form 10-D needs to be amended, the Grantor Trust Trustee shall
      follow the procedures set forth in Section 3.11(a)(v). Promptly (but no later
      than one (1) Business Day) after filing with the Commission, the Grantor Trust
      Trustee shall make available on its internet website a final executed copy
      of
      each Form 10-D filed by the Grantor Trust Trustee.  The parties to
      this Agreement acknowledge that the performance by the Grantor Trust Trustee
      of
      its duties under Sections 3.11(a)(i) and (v) related to the timely preparation,
      execution and filing of Form 10-D is contingent upon such parties strictly
      observing all applicable deadlines in the performance of their duties under
      such
      Sections. The Grantor Trust Trustee shall not have any liability for any loss,
      expense, damage, claim arising out of or with respect to any failure to properly
      prepare and timely file such Form 10-D, where such failure results from the
      Grantor Trust Trustee’s inability or failure to receive, on a timely basis, any
      information from any other party hereto needed to prepare, arrange for execution
      or file such Form 10-D, not resulting from its own negligence, bad faith or
      willful misconduct.

     

    Each
      of
      Form 10-D and Form 10-K requires the registrant to indicate (by checking “yes”
or “no”) that it “(1) has filed all reports required to be filed by Section 13
      or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
      period that the registrant was required to file such reports), and (2) has
      been
      subject to such filing requirements for the past 90 days.”  The
      Depositor hereby represents to the Grantor Trust Trustee that the Depositor
      has
      filed all such required reports during the preceding twelve (12) months and
      it
      has been subject to such filing requirements for the past 90
      days.  The Depositor shall notify the Grantor Trust Trustee in
      writing, no later than the fifth calendar day after the related Distribution
      Date with respect to the filing of a report on Form 10-D and no later than
      March
      15th
      with respect to the filing of a report on Form 10-K, if the answer to the
      questions should be “no.”  The Grantor Trust Trustee shall be entitled
      to rely on such representations in preparing, executing and/or filing any such
      report.

     

    (ii)
      (A)
      Within four (4) Business Days after the occurrence of an event requiring
      disclosure on Form 8-K (each such event, a “Reportable Event”), for so long as
      the Trust is subject to Exchange Act reporting requirements, the Grantor Trust
      Trustee shall prepare and file, at the direction of the Depositor, on behalf
      of
      the Trust, any Form 8-K, as required by the Exchange Act; provided that, the
      Depositor shall prepare and file the initial Form 8-K in connection with the
      issuance of the Grantor Trust Certificates.  Any disclosure or
      information related to a Reportable Event or that is otherwise required to
      be
      included on Form 8-K, including information as otherwise required to be provided
      or incorporated by reference as instructed by the Depositor (“Form 8-K
      Disclosure Information”), shall be, pursuant to the paragraph immediately below,
      reported by the parties set forth on Exhibit D and the parties related to the
      Underlying Series pursuant to the Underlying Agreement to the Grantor Trust
      Trustee and the Depositor and approved by the Depositor, and the Grantor Trust
      Trustee will have no duty or liability for any failure hereunder to determine
      or
      prepare any Additional Form 8-K Disclosure absent such reporting (other than
      in
      the case where the Grantor Trust Trustee is the reporting party as set forth
      in
      Exhibit D) and approval. To the extent not otherwise required under the
      Underlying Agreement, the Depositor shall provide to the Grantor Trust Trustee,
      by no later than the second (2nd)
      Business Day after the Reportable Event, any Additional Form 8-K Disclosure
      for
      any servicer or trustee of the Underlying Series required to be filed on Form
      8-K.

     

    (B)
      For
      so long as the Trust is subject to the Exchange Act reporting requirements,
      no
      later than the close of business New York City time on the second (2nd)
      Business Day after the occurrence of a Reportable Event  (i) the
      parties set forth in Exhibit D and parties related to the Underlying Series
      and
      required to provide information pursuant to the Underlying Agreement shall
      be
      required pursuant to Section 3.11(a)(iv) below to provide to the Grantor Trust
      Trustee and the Depositor, to the extent known by a responsible officer thereof,
      in EDGAR-compatible format, or in such other form as otherwise agreed upon
      by
      the Grantor Trust Trustee and the Depositor and such party, the form and
      substance of any Form 8-K Disclosure Information, if applicable, and (ii) the
      Depositor shall approve, as to form and substance, or disapprove, as the case
      may be, the inclusion of the Form 8-K Disclosure Information on Form 8-K. The
      Depositor shall be responsible for any reasonable fees and expenses assessed
      or
      incurred by the Grantor Trust Trustee in connection with including any Form
      8-K
      Disclosure Information on Form 8-K pursuant to this Section.

     

    (C)
      After
      preparing the Form 8-K, the Grantor Trust Trustee shall forward electronically
      a
      copy of the Form 8-K to the Depositor for review no later than noon New York
      time on the third (3rd)
      Business Day after the Reportable Event.  No later than the close of
      business New York City time on the third (3rd)
      Business Day after the Reportable Event, a duly authorized officer of the
      Depositor shall sign the Form 8-K and return an electronic or fax copy of such
      signed Form 8-K (with an original executed hard copy to follow by overnight
      mail) to the Grantor Trust Trustee.  Promptly, but no later than the
      close of business on the 3rd Business Day after the Reportable Event, the
      Depositor shall notify the Grantor Trust Trustee in writing (which may be
      furnished electronically) of any changes to or approval of such Form 8-K filed
      by the Grantor Trust Trustee.  In the absence of receipt of any
      written changes or approval, the Grantor Trust Trustee shall be entitled to
      assume that such Form 8-K is in final form and the Grantor Trust Trustee may
      proceed with the filing of the Form 8-K.  If a Form 8-K cannot be
      filed on time or if a previously filed Form 8-K needs to be amended, the Grantor
      Trust Trustee shall follow the procedures set forth in Section 3.11(a)(v).
      Promptly (but no later than one (1) Business Day) after filing with the
      Commission, the Grantor Trust Trustee shall make available on its internet
      website a final executed copy of each Form 8-K filed by the Grantor Trust
      Trustee.  The parties to this Agreement acknowledge that the
      performance by the Grantor Trust Trustee of its duties under this Section
      3.11(a)(ii) related to the timely preparation, execution and filing of Form
      8-K
      is contingent upon such parties strictly observing all applicable deadlines
      in
      the performance of their duties under this Section 3.11(a)(ii).  The
      Grantor Trust Trustee shall have no liability for any loss, expense, damage,
      claim arising out of or with respect to any failure to properly prepare, execute
      and/or timely file such Form 8-K, where such failure results from the Grantor
      Trust Trustee’s inability or failure to receive, on a timely basis, any
      information from any other party hereto needed to prepare, arrange for execution
      or file such Form 8-K, not resulting from its own negligence, bad faith or
      willful misconduct.

     

    (iii)
      (A)
      Within 90 days after the end of each fiscal year of the Trust or such earlier
      date as may be required by the Exchange Act (the “10-K Filing Deadline”) (it
      being understood that the fiscal year for the Trust ends on December 31st of
      each year), commencing in March 2008 and thereafter so long as the Trust is
      subject to Exchange Act reporting requirements, the Grantor Trust Trustee shall
      prepare and file on behalf of the Trust a Form 10-K, in form and substance
      as
      required by the Exchange Act.  Each such Form 10-K shall include a
      Sarbanes-Oxley Certification as described in Section 3.11 (a)(iii)(D) below
      to
      the extent it has been delivered to the Grantor Trust Trustee within the
      applicable time frame set forth in this Agreement. Any disclosure or information
      in addition to information described in the preceding sentence that is required
      to be included on Form 10-K, including the Form 10-K filed in connection with
      the Underlying Series (“Additional Form 10-K Disclosure”) shall be, pursuant to
      paragraph (B) below, reported by the parties set forth on Exhibit D and parties
      related to the Underlying Series and required to provide information pursuant
      to
      the Underlying Agreement to the Grantor Trust Trustee and the Depositor and
      approved by the Depositor, and the Grantor Trust Trustee will have no duty
      or
      liability for any failure hereunder to determine or prepare any Additional
      Form
      10-K Disclosure absent such reporting (other than in the case where the Grantor
      Trust Trustee is the reporting party as set forth in Exhibit D) and approval.
      Such Form 10-K also shall incorporate by reference the Form 10-Ks filed with
      respect to the Underlying Series.

     

    Notwithstanding
      anything in this Agreement or the Underlying Agreement to the contrary, the
      Grantor Trustee shall aggregate all information provided by the parties related
      to the Underlying Series pursuant to the Underlying Agreement or as otherwise
      required to be provided by the Depositor or incorporated by reference as
      instructed by the Depositor, to the Depositor or the Grantor Trust Trustee,
      and
      shall include such information in any Form 10-K filed pursuant to this Agreement
      to the extent such information is required to be included in such Form 10-K
      and
      is received by the Grantor Trust Trustee.

     

    (B)
      No
      later than March 15th of each year that the Trust is subject to the Exchange
      Act
      reporting requirements, commencing in 2008, (i) the parties set forth in Exhibit
      D and parties related to the Underlying Series and required to provide
      information pursuant to the Underlying Agreement shall be required to provide
      pursuant to Section 3.11(a)(iv) below or the Underlying Agreement to the Grantor
      Trust Trustee and the Depositor, to the extent known by a responsible officer
      thereof, in EDGAR-compatible format, or in such other form as otherwise agreed
      upon by the Grantor Trust Trustee and the Depositor and such party, the form
      and
      substance of any Additional Form 10-K Disclosure, if applicable, and (ii) the
      Depositor will approve, as to form and substance, or disapprove, as the case
      may
      be, the inclusion of the Additional Form 10-K Disclosure on Form
      10-K.  To the extent not otherwise required under the Underlying
      Agreement, the Depositor shall provide to the Grantor Trust Trustee, by no
      later
      than two Business Days after the date specified above, any Additional Form
      10-K
      Disclosure for any Servicer of the Underlying Series. The Depositor shall be
      responsible for any reasonable fees and expenses assessed or incurred by the
      Grantor Trust Trustee in connection with including any Form 10-K Disclosure
      information on Form 10-K pursuant to this Section.

     

    (C)
      After
      preparing the Form 10-K, the Grantor Trust Trustee shall forward electronically
      a copy of the Form 10-K to the Depositor for review.  Within three (3)
      Business Days after receipt of such copy, but no later than March 25th
      of such
      year, the Depositor shall notify the Grantor Trust Trustee in writing (which
      may
      be furnished electronically) of any changes to or approval of such Form
      10-K.  In the absence of receipt of any written changes or approval,
      the Grantor Trust Trustee shall be entitled to assume that such Form 10-K is
      in
      final form and the Grantor Trust Trustee may proceed with the filing of the
      Form
      10-K.  No later than the close of business New York City time on the
      4th Business Day prior to the 10-K Filing Deadline, a senior officer of the
      Depositor shall sign the Form 10-K and return an electronic or fax copy of
      such
      signed Form 10-K (with an original executed hard copy to follow by overnight
      mail) to the Grantor Trust Trustee.  If a Form 10-K cannot be filed on
      time or if a previously filed Form 10-K needs to be amended, the Grantor Trust
      Trustee will follow the procedures set forth in Section
      3.11(a)(v).  Promptly (but no later than one (1) Business Day) after
      filing with the Commission, the Grantor Trust Trustee shall make available
      on
      its internet website a final executed copy of each Form 10-K filed by the
      Grantor Trust Trustee.  The parties to this Agreement acknowledge that
      the performance by the Grantor Trust Trustee of its duties under Sections
      3.11(a)(iii) and (v) related to the timely preparation, execution and filing
      of
      Form 10-K is contingent upon such parties strictly observing all applicable
      deadlines in the performance of their duties under such Sections and Section
      3.09 and Section 3.10.  The Grantor Trust Trustee shall not have any
      liability for any loss, expense, damage, claim arising out of or with respect
      to
      any failure to properly prepare, execute and/or timely file such Form 10-K,
      where such failure results from the Grantor Trust Trustee’s inability or failure
      to receive, on a timely basis, any information from any other party hereto
      needed to prepare, arrange for execution or file such Form 10-K, not resulting
      from its own negligence, bad faith or willful misconduct.

     

    (D)
      Each
      Form 10-K shall include a certification (the “Sarbanes-Oxley Certification”)
      required to be included therewith in compliance with Item 601(b)(31)(ii) of
      Regulation S-K, which shall be signed by the Certifying Person and delivered
      to
      the Grantor Trust Trustee no later than March 15th of each year in which the
      Trust is subject to the reporting requirements of the Exchange
      Act.  The Grantor Trust Trustee shall provide to the Depositor, as the
      Person who signs the Sarbanes-Oxley Certification (the “Certifying Person”), by
      March 10th of each year in which the Trust is subject to the reporting
      requirements of the Exchange Act and otherwise within a reasonable period of
      time upon request, a certification (a “Back-Up Certification”), in the form
      attached hereto as Exhibit B, upon 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.  A senior officer of the
      Depositor shall serve as the Certifying Person on behalf of the Trust.

     

    (iv)
      With
      respect to any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure
      or any Form 8-K Disclosure Information (collectively, the “Additional
      Disclosure”) relating to the Trust Fund and the Underlying Series, the Grantor
      Trust Trustee’s obligation to include such Additional Information in the
      applicable Exchange Act report is subject to receipt from the entity that is
      indicated in Exhibit D as the responsible party for providing that information,
      if other than the Grantor Trust Trustee, or from the parties to the Underlying
      Series and the Depositor, as and when required as described in Section
      3.11(a)(i) through (iii) above.  Such Additional Disclosure shall be
      accompanied by a notice substantially in the form of Exhibit E.  Each
      of the Sponsor, the Grantor Trust Trustee and the Depositor hereby agrees to
      notify and provide to the extent known to the Sponsor, the Grantor Trust Trustee
      and the Depositor all Additional Disclosure relating to the Trust Fund, with
      respect to which such party is indicated in Exhibit E as the responsible party
      for providing that information. Within five Business Days of each Distribution
      Date of each year that the Trust is subject to the Exchange Act reporting
      requirements, the Depositor shall make available to the Grantor Trust Trustee
      the Significance Estimate and the Grantor Trust Trustee shall use such
      information to calculate the Significance Percentage. The Grantor Trust Trustee
      shall provide the Significance Percentage to the Depositor by the later of
      the
      Distribution Date or three (3) Business Days after the receipt of the
      Significance Estimate from the Depositor. If the Significance Percentage meets
      either of the threshold levels detailed in Item 1115(b)(1) or 1115(b)(2) of
      Regulation AB, the Grantor Trust Trustee shall deliver written notification
      to
      the Depositor and the Yield Maintenance Agreement Counterparty to that effect,
      which notification shall include a request that the Yield Maintenance Agreement
      Counterparty provide Regulation AB information to the Depositor in accordance
      with the Yield Maintenance Agreement.  The Depositor shall be
      obligated to obtain from the Yield Maintenance Agreement Counterparty any
      information required under Regulation AB to the extent required under the Yield
      Maintenance Agreement and to provide to the Grantor Trust Trustee any
      information that may be required to be included in any Form 10-D, Form 8-K
      or
      Form 10-K relating to the Yield Maintenance Agreement Counterparty or written
      notification instructing the Grantor Trust Trustee that such Additional
      Disclosure regarding the Yield Maintenance Agreement Counterparty is not
      necessary for such Distribution Date. The Depositor shall be responsible for
      any
      reasonable fees and expenses assessed or incurred by the Grantor Trust Trustee
      in connection with including any Additional Disclosure information pursuant
      to
      this Section.

     

    So
      long
      as the Depositor is subject to the reporting requirements of the Exchange Act
      with respect to the Trust Fund, the Grantor Trust Trustee shall notify the
      Depositor of any bankruptcy or receivership with respect to the Grantor Trust
      Trustee or of any proceedings of the type described under Item 1117 of
      Regulation AB that have occurred as of the related Due Period, together with
      a
      description thereof, no later than the date on which such information is
      required of other parties hereto as set forth under this Section
      3.11.  In addition, the Grantor Trust Trustee shall notify the
      Depositor of any affiliations or relationships that develop after the Closing
      Date between the Grantor Trust Trustee and the Depositor or the Sponsor of
      the
      type described under Item 1119 of Regulation AB, together with a description
      thereof, no later than the date on which such information is required of other
      parties hereto as set forth under this Section 3.11. Should the identification
      of any of the Depositor or the Sponsor change, the Depositor shall promptly
      notify the Grantor Trust Trustee.

     

    (v)
      (A)
      On or prior to January 30th of the first year in which the Grantor Trust Trustee
      is able to do so under applicable law, the Grantor Trust Trustee shall prepare
      and file a Form 15 relating to the automatic suspension of reporting in respect
      of the Trust under the Exchange Act.

     

    (B)
      In
      the event that the Grantor Trust Trustee is unable to timely file with the
      Commission all or any required portion of any Form 8-K, 10-D or 10-K required
      to
      be filed by this Agreement because required disclosure information was either
      not delivered to it or delivered to it after the delivery deadlines set forth
      in
      this Agreement or for any other reason, the Grantor Trust Trustee shall promptly
      notify the Depositor.  In the case of Form 10-D and 10-K, the
      Depositor and the Grantor Trust Trustee shall cooperate to prepare and file
      a
      Form 12b-25 and a 10-DA and 10-KA as applicable, pursuant to Rule 12b-25 of
      the
      Exchange Act.  In the case of Form 8-K, the Grantor Trust Trustee
      will, upon receipt of all required Form 8-K Disclosure Information and upon
      the
      approval and direction of the Depositor, include such disclosure information
      on
      the next Form 10-D.  In the event that any previously filed Form 8-K,
      10-D or 10-K needs to be amended, and such amendment relates to any Additional
      Disclosure, the Grantor Trust Trustee shall notify the Depositor and the parties
      affected thereby and such parties will cooperate to prepare any necessary Form
      8-K/A, 10-DA or 10-KA.  Any Form 15, Form 12b-25 or any amendment to
      Form 8-K, 10-D or 10-K shall be signed by a duly authorized officer of the
      Depositor.  The parties hereto acknowledge that the performance by the
      Depositor and the Grantor Trust Trustee of their respective duties under this
      Section 3.11(a)(v) related to the timely preparation, execution and filing
      of
      Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent
      upon the Depositor timely performing its duties under this
      Section.  The Grantor Trust Trustee shall not have any liability for
      any loss, expense, damage, claim arising out of or with respect to any failure
      to properly prepare, execute and/or timely file any such Form 15, Form 12b-25
      or
      any amendments to Form 8-K, 10-D or 10-K, where such failure results from the
      Grantor Trust Trustee’s inability or failure to receive, on a timely basis, any
      information from any other party hereto or to the Underlying Series needed
      to
      prepare, arrange for execution or file such Form 15, Form 12b-25 or any
      amendments to Form 8-K, 10-D or 10-K, not resulting from its own negligence,
      bad
      faith or willful misconduct.

     

    The
      Depositor agrees to promptly furnish to the Grantor Trust Trustee, from time
      to
      time upon request, such further information, reports and financial statements
      within its control related to this Agreement and the Underlying Securities
      as
      the Grantor Trust Trustee reasonably deems appropriate to prepare and file
      all
      necessary reports with the Commission. The Grantor Trust Trustee shall have
      no
      responsibility to file any items other than those specified in this Section
      3.11; provided, however, the Grantor Trust Trustee shall cooperate with the
      Depositor in connection with any additional filings with respect to the Trust
      Fund as the Depositor deems necessary under the Exchange Act.  Fees
      and expenses incurred by the Grantor Trust Trustee in connection with this
      Section 3.11 shall not be reimbursable from the Trust Fund.

     

    (b)           
      The Grantor Trust Trustee shall indemnify and hold harmless the Depositor and
      each of its officers, directors and affiliates from and against any losses,
      damages, penalties, fines, forfeitures, reasonable and necessary legal fees
      and
      related costs, judgments and other costs and expenses arising out of or based
      upon a breach of the Grantor Trust Trustee’s obligations under Sections 3.09,
      3.10 and 3.11 or the Grantor Trust Trustee’s negligence, bad faith or willful
      misconduct in connection therewith. In addition, the Grantor Trust Trustee
      shall
      indemnify and hold harmless the Depositor and each of its respective officers,
      directors and affiliates from and against any losses, damages, penalties, fines,
      forfeitures, reasonable and necessary legal fees and related costs, judgments
      and other costs and expenses arising out of or based upon (i) any untrue
      statement or alleged untrue statement of any material fact contained in any
      Back-Up Certification, any Annual Statement of Compliance, any Assessment of
      Compliance or any Additional Disclosure provided by the Grantor Trust Trustee
      on
      its behalf pursuant to Section 3.09, 3.10 or 3.11 (the “Grantor Trust Trustee
      Information”), or (ii) any omission or alleged omission to state therein a
      material fact required to be stated therein or necessary to make the statements
      therein, in light of the circumstances in which they were made, not misleading;
      provided, by way of clarification, that this paragraph shall be construed solely
      by reference to the Grantor Trust Trustee Information and not to any other
      information communicated in connection with the Grantor Trust Certificates,
      without regard to whether the Grantor Trust Trustee Information or any portion
      thereof is presented together with or separately from such other
      information.

     

    The
      Depositor shall indemnify and hold harmless the Grantor Trust Trustee and each
      of its officers, directors and affiliates from and against any losses, damages,
      penalties, fines, forfeitures, reasonable and necessary legal fees and related
      costs, judgments and other costs and expenses arising out of or based upon
      a
      breach of the obligations of the Depositor under Sections 3.09, 3.10 and 3.11
      or
      the Depositor’s negligence, bad faith or willful misconduct in connection
      therewith. In addition, the Depositor shall indemnify and hold harmless the
      Grantor Trust Trustee and each of its respective officers, directors and
      affiliates from and against any losses, damages, penalties, fines, forfeitures,
      reasonable and necessary legal fees and related costs, judgments and other
      costs
      and expenses arising out of or based upon (i) any untrue statement or alleged
      untrue statement of any material fact contained in any Additional Disclosure
      provided by the Depositor that is required to be filed pursuant to this Section
      3.11 (the “Depositor Information”), or (ii) any omission or alleged omission to
      state therein a material fact required to be stated therein or necessary to
      make
      the statements therein, in light of the circumstances in which they were made,
      not misleading; provided, by way of clarification, that this paragraph shall
      be
      construed solely by reference to the Depositor Information that is required
      to
      be filed and not to any other information communicated in connection with the
      Grantor Trust Certificates, without regard to whether the Depositor Information
      or any portion thereof is presented together with or separately from such other
      information.

     

    If
      the
      indemnification provided for herein is unavailable or insufficient to hold
      harmless the Depositor or the Grantor Trust Trustee, as applicable, then the
      defaulting party, in connection with any conduct for which it is providing
      indemnification under this Section 3.11(b), agrees that it shall contribute
      to
      the amount paid or payable by the other parties as a result of the losses,
      claims, damages or liabilities of the other party in such proportion as is
      appropriate to reflect the relative fault and the relative benefit of the
      respective parties.

     

    The
      indemnification provisions set forth in this Section 3.11(b) shall survive
      the
      termination of this Agreement or the termination of any party to this
      Agreement.

     

    (c)           
      Failure of the Grantor Trust Trustee to comply with this Section 3.11 (including
      with respect to the time frames required in this Section) which failure results
      in a failure to timely file the related Form 10-K, shall, upon written notice
      from the Depositor, constitute a default and the Depositor shall, in addition
      to
      whatever rights it may have under this Agreement and at law or equity or to
      damages, including injunctive relief and specific performance, upon notice
      immediately terminate all of the rights and obligations of the Grantor Trust
      Trustee under this Agreement and in and to the Underlying Securities and the
      proceeds thereof without compensating the Grantor Trust Trustee for the same
      (but subject to the Grantor Trust Trustee’s right to reimbursement of all
      amounts for which it is entitled to be reimbursed prior to the date of
      termination).  This paragraph shall supersede any other provision in
      this Agreement or any other agreement to the contrary. In connection with the
      termination of the Grantor Trust Trustee pursuant to this Section 3.11(c),
      the
      Grantor Trust Trustee shall be entitled to reimbursement of all costs and
      expenses associated with such termination.  Notwithstanding anything
      to the contrary in this Agreement, no default by the Grantor Trust Trustee
      shall
      have occurred with respect to any failure to properly prepare and/or timely
      file
      any report on Form 8-K, Form 10-D or Form 10-K, any Form 15 or Form 12b-25
      or
      any amendments to Form 8-K, 10-D or 10-K, where such failure results from the
      Grantor Trust Trustee’s inability or failure to receive, on a timely basis, any
      information from any other party hereto needed to prepare, arrange for execution
      or file any such report, Form or amendment, and does not result from its own
      negligence, bad faith or willful misconduct.

     

    (d)           
      This Section 3.11 may be amended without the consent of the Grantor Trust
      Certificateholders.

     

    (e)           
      Any report, notice or notification to be delivered by the Grantor Trust Trustee
      to the Depositor pursuant to this Section 3.11, may be delivered via email
      to
      RegABNotifications@bear.com or, in the case of a notification, telephonically
      by
      calling Reg AB Compliance Manager at (212) 272-7525.

     

    Section
      3.12. Reserve
      Account.

     

    (a) 
      No later
      than the Closing Date, the Grantor Trust Trustee shall establish and maintain
      a
      segregated trust account or a sub-account of a trust account entitled the
“Reserve Account”. The Reserve Account shall be an Eligible Account. On the
      Closing Date, the Grantor Trust Trustee shall, promptly upon receipt, deposit
      in
      the Reserve Account and retain therein the Reserve Account Deposit remitted
      on
      the Closing Date to the Grantor Trust Trustee by the Sponsor. On the Closing
      Date, the Reserve Account shall also include the right to receive the Additional
      Amount that has been agreed by the Sponsor to be paid to the Trust. Funds
      deposited in the Reserve Account shall be held in trust by the Grantor Trust
      Trustee for the Grantor Trust Certificateholders for the uses and purposes
      set
      forth herein. On the Closing Date, the portion of the Reserve Account Deposit
      initially included in the Reserve Account Deposit Portion A on such date may
      be
      invested in Permitted Investments that mature no later than the first
      Distribution Date, and the portion of the Reserve Account Deposit initially
      included in the Reserve Account Deposit Portion B on such date may be invested
      in Permitted Investments that mature no later than the second Distribution
      Date,
      in each case as directed by the Depositor. Any remaining Reserve Account Deposit
      Portion A following the first Distribution Date shall remain uninvested. All
      income and gain realized from investment of the Reserve Account Deposit or
      portions thereof, which investment shall be made solely upon the written
      direction of the Depositor, shall be for the sole and exclusive benefit of
      the
      Grantor Trust Certificateholders and shall be included in the Reserve Account
      Distribution Amount related to the first and second Distribution Dates. If
      no
      written direction with respect to such investment is received by the Grantor
      Trust Trustee from the Depositor on the Closing Date, then funds in the Reserve
      Account shall remain uninvested.  Pursuant to Section 3.13, the
      Grantor Trust Trustee shall also deposit into the Reserve Account any Additional
      Amount, if any, received pursuant to the Yield Maintenance Agreement for
      inclusion in the Reserve Account Distribution Amount for the second Distribution
      Date.

     

    (b) 
      The
      amounts on deposit in the Reserve Account shall be specifically allocated as
      provided in this Agreement to cover related Interest Distribution Amounts for
      the Grantor Trust Certificates with respect to the first two Distribution Dates
      following the Closing Date. On each of the first two Distribution Dates, the
      Grantor Trust Trustee shall withdraw from the Reserve Account the Reserve
      Account Distribution Amount for such Distribution Date and include such amount
      in the Available Funds for that Distribution Date and distribute such amount
      to
      the Grantor Trust Certificateholders in accordance with Section 3.05. To the
      extent the Reserve Account Deposit Portion B is insufficient to cover the
      Interest Distribution Amount on the second Distribution Date, the Additional
      Amount received pursuant to the Yield Maintenance Agreement shall be used to
      cover such amount. On the second Distribution Date, any remaining Reserve
      Account Deposit Portion B following distributions on the second Distribution
      Date shall be distributed to the Grantor Trust Certificateholders as provided
      in
      Section 3.05(b). Any payments to the Grantor Trust Certificateholders in respect
      of interest pursuant to this subsection shall not be payments with respect
      to a
“regular interest” in a REMIC within the meaning of Section 860G(a)(1) of
      the Code represented by the Underlying Securities.

     

    Section
      3.13. The
Yield
      Maintenance
      Agreement.

     

    On
      the
      Closing Date, the Sponsor has agreed to cause the Additional Amount to be paid
      to the Trust. The Grantor Trust Trustee shall enter into the Yield Maintenance
      Agreement on or before the second Distribution Date to evidence such right
      to
      receive Additional Amounts. Pursuant to the Yield Maintenance Agreement, the
      Yield Maintenance Agreement Counterparty shall remit to the Grantor Trust
      Trustee the Additional Amount. The Grantor Trust Trustee shall demand payment
      of
      all money payable by the Yield Maintenance Agreement Counterparty under the
      Yield Maintenance Agreement. The Grantor Trust Trustee shall deposit in the
      Reserve Account all payments received from the Yield Maintenance Agreement
      Counterparty pursuant to the Yield Maintenance Agreement for inclusion in the
      Reserve Account Distribution Amount to be distributed to the Grantor Trust
      Certificateholders on the second Distribution Date in accordance with Section
      3.05(a).

     

    In
      the
      event that the Yield Maintenance Agreement Counterparty fails to perform any
      of
      its obligations under the Yield Maintenance Agreement (including, without
      limitation, its obligation to make any payment or transfer collateral), or
      breaches any of its representations and warranties thereunder, or in the event
      that any Event of Default, Termination Event, or Additional Termination Event
      (each as defined in the Yield Maintenance Agreement) occurs with respect to
      the
      Yield Maintenance Agreement, the Grantor Trust Trustee shall, promptly following
      actual notice of such failure, breach or event, notify the Depositor and send
      any notices and make any demands, on behalf of the Trust, required to enforce
      the rights of the Trust under the Yield Maintenance Agreement.

     

    In
      the
      event that the Yield Maintenance Agreement Counterparty’s obligations are
      guaranteed by a third party under a guaranty relating to the Yield Maintenance
      Agreement (such guaranty the “Guaranty” and such third party the “Guarantor”),
      then to the extent that the Yield Maintenance Agreement Counterparty fails
      to
      make any payment by the close of business on the day it is required to make
      payment under the terms of the Yield Maintenance Agreement, the Grantor Trust
      Trustee shall, promptly following actual notice of the Yield Maintenance
      Agreement Counterparty’s failure to pay, demand that the Guarantor make any and
      all payments then required to be made by the Guarantor pursuant to such
      Guaranty.  The Yield Maintenance Agreement Counterparty or the
      Depositor shall promptly provide the Grantor Trust Trustee with a copy of such
      Guaranty; provided, that the Grantor Trust Trustee shall in no event be liable
      for any failure or delay in the performance by the Yield Maintenance Agreement
      Counterparty or any Guarantor of its obligations hereunder or pursuant to the
      Yield Maintenance Agreement and the Guaranty, nor for any special, indirect
      or
      consequential loss or damage of any kind whatsoever (including but not limited
      to lost profits) in connection therewith.

     

    ARTICLE
      IV

     

    THE
      GRANTOR TRUST CERTIFICATES

     

    Section
      4.01. The
      Grantor Trust
      Certificates.

     

    (a) The
      Depository, the Depositor and the Grantor Trust Trustee have entered into a
      letter agreement dated as of October 24, 2007 (the “Depository
      Agreement”).  Except as provided in Subsection 4.01(b), the Grantor
      Trust Certificates shall at all times remain registered in the name of the
      Depository or its nominee and at all times:  (i) registration of such
      Grantor Trust Certificates may not be transferred by the Grantor Trust Trustee
      except to a successor to the Depository; (ii) ownership and transfers of
      registration of such Grantor Trust Certificates on the books of the Depository
      shall be governed by applicable rules established by the Depository; (iii)
      the
      Depository may collect its usual and customary fees, charges and expenses from
      its Depository Participants; (iv) the Grantor Trust Trustee shall deal with
      the
      Depository as representative of the Grantor Trust Certificate Owners for
      purposes of exercising the rights of Grantor Trust Certificateholders under
      this
      Agreement, and requests and directions for and votes of such representative
      shall not be deemed to be inconsistent if they are made with respect to
      different Grantor Trust Certificate Owners; and (v) the Grantor Trust Trustee
      may rely and shall be fully protected in relying upon information furnished
      by
      the Depository with respect to its Depository Participants.

     

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

     

    (b) If
      (i)(A)
      the Depositor advises the Grantor Trust Trustee in writing that the Depository
      is no longer willing or able to properly discharge its responsibilities as
      Depository and (B) the Grantor Trust Trustee or the Depositor is unable to
      locate a qualified successor within 30 days or (ii) after the occurrence and
      continuation of a default hereunder, the Grantor Trust Certificate Owners of
      not
      less than 51% of the Percentage Interests of the Grantor Trust Certificates
      advise the Grantor Trust Trustee and the Depository in writing through the
      depository participants that the continuation of a book-entry system with
      respect to the Grantor Trust Certificates through the Depository (or its
      successor) is no longer in the best interests of the Grantor Trust Certificate
      Owners, then the Grantor Trust Trustee shall request that the Depository notify
      all Grantor Trust Certificate Owners of the occurrence of any such event and
      of
      the availability of definitive, fully registered Grantor Trust Certificates
      (the
“Definitive Grantor Trust Certificates”) to Grantor Trust Certificate Owners
      requesting the same.  Upon surrender to the Grantor Trust Trustee of
      the Grantor Trust Certificates by the Depository, accompanied by registration
      instructions from the Depository for registration, the Grantor Trust Trustee
      shall issue the Definitive Grantor Trust Certificates.  Neither the
      Depositor nor the Grantor Trust Trustee shall be liable for any delay in
      delivery of such instructions and may conclusively rely on, and shall be
      protected in relying on, such instructions.

     

    (c) The
      Grantor Trust Certificates shall be substantially in the form set forth in
      Exhibit A hereto.  The Grantor Trust Certificates shall be executed by
      manual signature on behalf of the Grantor Trust Trustee in its capacity as
      Grantor Trust Trustee hereunder by an authorized officer.  Grantor
      Trust Certificates bearing the manual or facsimile signatures of individuals
      who
      were at any time the proper officers of the Grantor Trust Trustee shall be
      entitled to all benefits under this Agreement, subject to the following
      sentence, notwithstanding that such individuals or any of them have ceased
      to
      hold such offices prior to the authentication and delivery of such Grantor
      Trust
      Certificates or did not hold such offices at the date of such Grantor Trust
      Certificates.  No Grantor Trust Certificate shall be entitled to any
      benefit under this Agreement, or be valid for any purpose, unless there appears
      on such Grantor Trust Certificate a certificate of authentication substantially
      in the form provided for herein executed by the Grantor Trust Trustee by manual
      signature, and such certificate upon any Grantor Trust Certificate shall be
      conclusive evidence, and the only evidence, that such Grantor Trust Certificate
      has been duly authenticated and delivered hereunder.  All Grantor
      Trust Certificates shall be dated the date of their authentication.

     

    Pending
      the preparation of Definitive Grantor Trust Certificates, the Grantor Trust
      Trustee may sign and authenticate temporary Grantor Trust Certificates that
      are
      printed, lithographed or typewritten, in authorized denominations for Grantor
      Trust Certificates, substantially of the tenor of the Definitive Grantor Trust
      Certificates in lieu of which they are issued and with such appropriate
      insertions, omissions, substitutions and other variations as the officers or
      authorized signatories executing such Grantor Trust Certificates may determine,
      as evidenced by their execution of such Grantor Trust
      Certificates.  If temporary Grantor Trust Certificates are issued, the
      Depositor will cause Definitive Grantor Trust Certificates to be prepared
      without unreasonable delay.  After the preparation of Definitive
      Grantor Trust Certificates, the temporary Grantor Trust Certificates shall
      be
      exchangeable for Definitive Grantor Trust Certificates upon surrender of the
      temporary Grantor Trust Certificates at the office of the Grantor Trust Trustee,
      without charge to the Holder.  Upon surrender for cancellation of any
      one or more temporary Certificates, the Grantor Trust Trustee shall sign and
      the
      Certificate Registrar shall authenticate and deliver in exchange therefor a
      like
      aggregate principal amount, in authorized denominations, of Definitive Grantor
      Trust Certificates.  Until so exchanged, such temporary Grantor Trust
      Certificates shall in all respects be entitled to the same benefits as
      Definitive Grantor Trust Certificates.

     

    Each
      of
      the Grantor Trust Certificates will be initially registered as a single Grantor
      Trust Certificate held by a nominee of the Depository, and beneficial interests
      will be held by investors through the book-entry facilities of the Depository
      in
      minimum denominations of $100,000 and increments of $1 in excess
      thereof.  The Grantor Trust Certificates shall be issued in the
      aggregate dollar denominations as set forth in the following table:

     

    
      	
              
                Class 

              

            	 	
              
                Current
                  Principal
                  Amount 

              

            
	
              A-1

              
              

            	 	 	
              $                      
                24,759,000.00

            

    

     

    

    Section
      4.02. Registration
      of Transfer and
      Exchange of Grantor Trust Certificates.

     

    (a) At
      all
      times during the term of this Agreement, the Grantor Trust Trustee shall
      maintain at its Corporate Trust Office a register (the “Certificate Register”)
      in which, subject to such reasonable regulations as the Grantor Trust Trustee
      may prescribe, the Certificate Register shall provide for the registration
      of
      Grantor Trust Certificates and of transfers and exchanges of Grantor Trust
      Certificates as herein provided.  The Depositor shall have the right
      to inspect the Certificate Register or to obtain a copy thereof at all
      reasonable times, and to rely conclusively upon a certificate of the Grantor
      Trust Trustee as to the information set forth in the Certificate
      Register.

     

    The
      Depositor and every Grantor Trust Certificateholder and Grantor Trust
      Certificate Owner, by receiving and holding a Grantor Trust Certificate or
      an
      interest therein,  agrees with the Grantor Trust Trustee that the
      Grantor Trust Trustee shall not be held accountable by reason of the disclosure
      of any such information as to the names and addresses of the Grantor Trust
      Certificateholders hereunder, regardless of the source from which such
      information was derived.

     

    (b) Subject
      to the preceding subsection, upon surrender for registration of transfer of
      any
      Grantor Trust Certificate at the Corporate Trust Office of the Grantor Trust
      Trustee, the Grantor Trust Trustee shall execute, authenticate and deliver,
      in
      the name of the designated transferee or transferees, one or more new Grantor
      Trust Certificates of a like aggregate Percentage Interest.

     

    (c) At
      the
      option of any Holder, its Grantor Trust Certificates may be exchanged for other
      Grantor Trust Certificates of authorized denominations of a like aggregate
      Percentage Interest, upon surrender of the Grantor Trust Certificates to be
      exchanged at the Corporate Trust Office of the Grantor Trust
      Trustee.  Whenever any Grantor Trust Certificates are so surrendered
      for exchange, the Grantor Trust Trustee shall execute, authenticate and deliver
      the Grantor Trust Certificates which the Grantor Trust Certificateholder making
      the exchange is entitled to receive.

     

    (d) Every
      Grantor Trust Certificate presented or surrendered for transfer or exchange
      shall (if so required by the Grantor Trust Trustee) be duly endorsed by, or
      be
      accompanied by a written instrument of transfer in the form satisfactory to
      the
      Grantor Trust Trustee duly executed by, the Holder thereof or his attorney
      duly
      authorized in writing, and shall further be accompanied by the information
      required to be provided to the Grantor Trust Trustee for WHFIT reporting
      purposes pursuant to Section 3.06 hereof, including the status of the proposed
      transferee as a “middleman” as defined by the WHFIT Regulations and, in the case
      of a transfer pursuant to a sale, the price, the amount of proceeds and the
      date
      of sale of such Grantor Trust Certificate or interest therein.

     

    (e) No
      service charge shall be made for any transfer or exchange of Grantor Trust
      Certificates, but the Grantor Trust Trustee may require payment of a sum
      sufficient to cover any tax or governmental charge that may be imposed in
      connection with any transfer or exchange of Grantor Trust
      Certificates.

     

    (f) All
      Grantor Trust Certificates surrendered for transfer and exchange shall be
      destroyed by the Grantor Trust Trustee without liability on its
      part.

     

    Section
      4.03. Mutilated,
      Destroyed, Lost
      or Stolen Grantor Trust Certificates.

     

    If
      (i)
      any mutilated Grantor Trust Certificate is surrendered to the Grantor Trust
      Trustee, or the Grantor Trust Trustee receives evidence to its satisfaction
      of
      the destruction, loss or theft of any Grantor Trust Certificate, and (ii)
      (except in the case of a mutilated Grantor Trust Certificate) there is delivered
      to the Grantor Trust Trustee such agreement, security or indemnity as may be
      required by them to save each of them harmless, then, in the absence of notice
      to the Grantor Trust Trustee that such Grantor Trust Certificate has been
      acquired by a bona fide purchaser, the Grantor Trust Trustee shall execute,
      authenticate and deliver, in exchange for or in lieu of any such mutilated,
      destroyed, lost or stolen Grantor Trust Certificate, a new Grantor Trust
      Certificate of like tenor and Percentage Interest but bearing a number not
      contemporaneously outstanding.  Upon the issuance of any new Grantor
      Trust Certificate under this Section, the Grantor Trust Trustee may require
      the
      payment by the Grantor Trust Certificateholder of a sum sufficient to cover
      any
      tax or other governmental charge that may be imposed in relation
      thereto.  Any duplicate Grantor Trust Certificate issued pursuant to
      this Section shall constitute complete and indefeasible evidence of ownership
      in
      the Trust Fund, as if originally issued, whether or not the lost, stolen or
      destroyed Grantor Trust Certificate shall be found at any time.

     

    Section
      4.04. Persons
      Deemed
      Owners.

     

    Prior
      to
      due presentment of a Grantor Trust Certificate for registration of transfer,
      the
      Depositor, the Grantor Trust Trustee and any agent of the Depositor or the
      Grantor Trust Trustee may treat the Person in whose name any Grantor Trust
      Certificate is registered as the owner of such Grantor Trust Certificate for
      the
      purpose of receiving distributions pursuant to Section 3.05 and for all other
      purposes whatsoever, and none of the Depositor, the Grantor Trust Trustee,
      or
      any agent of the Depositor or the Grantor Trust Trustee shall be affected by
      notice to the contrary.

     

    ARTICLE
      V

    THE
      GRANTOR TRUST TRUSTEE

     

    Section
      5.01. Duties
      of Grantor Trust
      Trustee.

     

    (a) 
      Upon
      receipt of all resolutions, certificates, statements, opinions, reports,
      documents, orders or other instruments which are specifically required to be
      furnished to the Grantor Trust Trustee pursuant to any provision of this
      Agreement, the Grantor Trust Trustee shall examine them to determine whether
      they are in the form required by this Agreement and the Underlying Agreement;
      provided, however, that the Grantor Trust Trustee shall not be responsible
      for
      the accuracy or content of any resolution, certificate, statement, opinion,
      report, document, order or other instrument furnished hereunder; provided,
      further, that the Grantor Trust Trustee shall not be responsible for the
      accuracy or verification of any calculation provided to it pursuant to this
      Agreement. The Grantor Trust Trustee shall notify the Grantor Trust
      Certificateholders and the Rating Agency of any such documents which do not
      materially conform to the requirements of this Agreement in the event that
      the
      Grantor Trust Trustee, after so requesting of the party required to deliver
      the
      same, does not receive satisfactorily corrected documents or a satisfactory
      explanation regarding any such nonconformities.

     

    The
      Grantor Trust Trustee shall forward or cause to be forwarded or make available,
      as applicable, in a timely fashion the notices, reports and statements required
      to be forwarded by the Grantor Trust Trustee pursuant to Sections 3.01, 3.02,
      3.06 and 7.01.

     

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

     

    (i) The
      duties and obligations of the Grantor Trust Trustee shall be determined solely
      by the express provisions of this Agreement, the Grantor Trust Trustee shall
      not
      be liable except for the performance of its duties and obligations as are
      specifically set forth in this Agreement, no implied covenants or obligations
      shall be read into this Agreement against the Grantor Trust Trustee and, in
      the
      absence of bad faith on the part of the Grantor Trust Trustee, the Grantor
      Trust
      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 Grantor Trust Trustee and conforming to the requirements of
      this Agreement;

     

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

     

    (iii) The
      Grantor Trust 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 the Majority Grantor Trust Certificateholders in accordance with
      the terms of this Agreement, as to the time, method and place of conducting
      any
      proceeding for any remedy available to the Grantor Trust Trustee, or exercising
      any trust or other power conferred upon the Grantor Trust Trustee under this
      Agreement;

     

    (iv) The
      Grantor Trust Trustee shall not in any way be liable by reason of any
      insufficiency in any Account held by or in the name of Grantor Trust Trustee
      unless it is determined by a court of competent jurisdiction that the Grantor
      Trust Trustee’s gross negligence or willful misconduct was the primary cause of
      such insufficiency (except to the extent that the Grantor Trust Trustee is
      obligor and has defaulted thereon);

     

    (v) Anything
      in this Agreement to the contrary notwithstanding, in no event shall the Grantor
      Trust Trustee be liable for special, indirect or consequential loss or damage
      of
      any kind whatsoever (including but not limited to lost profits), even if the
      Grantor Trust Trustee has been advised of the likelihood of such loss or damage
      and regardless of the form of action;

     

    (vi) Neither
      the Depositor nor the Grantor Trust Trustee shall be responsible for the acts
      or
      omissions of the other, it being understood that this Agreement shall not be
      construed to render them partners, joint venturers or agents of one
      another;

     

    (vii) The
      Grantor Trust 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 in 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 reasonably assured to it;
      provided that this provision shall not be deemed to abrogate the
      responsibilities undertaken by the Grantor Trust Trustee hereunder to perform
      routine administrative duties in accordance with the terms of this
      Agreement;

     

    (viii) The
      Grantor Trust Trustee shall not be deemed to have notice of any fact or
      circumstance upon the occurrence of which it may be required to take action
      hereunder unless a Responsible Officer of the Grantor Trust Trustee has actual
      knowledge of such event, fact or circumstance or unless written notice of any
      such event is received by the Grantor Trust Trustee at its Corporate Trust
      Office;

     

    (ix) No
      provision in this Agreement shall require the Grantor Trust Trustee to expend
      or
      risk its own funds or otherwise incur any personal financial liability in the
      performance of any of its duties as Grantor Trust Trustee hereunder, or in
      the
      exercise of any of its rights or powers, if the Grantor Trust Trustee shall
      have
      reasonable grounds for believing that repayment of funds or adequate indemnity
      against such risk or liability is not reasonably assured to it; provided that
      this provision shall not be deemed to abrogate the responsibilities undertaken
      by the Grantor Trust Trustee hereunder to perform routine administrative duties
      in accordance with the terms hereof; and

     

    (x) Except
      for those actions that the Grantor Trust Trustee is required to take hereunder,
      the Grantor Trust Trustee shall not have any obligation or liability to take
      any
      action or to refrain from taking any action hereunder in the absence of written
      direction as provided hereunder.

     

    The
      Grantor Trust Trustee is hereby directed to execute and deliver the Yield
      Maintenance Agreement on behalf of Party B (as defined therein) and to exercise
      the rights, perform the obligations, and make the representations of Party
      B
      thereunder, solely in its capacity as Grantor Trust Trustee on behalf of Party
      B
      (as defined therein) and not in its individual capacity.

     

    The
      Sponsor, the Depositor and the Grantor Trust Certificateholders (by acceptance
      of their Grantor Trust Certificates) acknowledge and agree that:

     

    (i)
      the
      Grantor Trust Trustee shall execute and deliver the Yield Maintenance Agreement
      on behalf of Party B (as defined therein), and

     

    (ii)
      the
      Grantor Trust Trustee shall exercise the rights, perform the obligations, and
      make the representations of Party B thereunder, solely in its capacity as
      Grantor Trust Trustee on behalf of Party B (as defined therein) and not in
      its
      individual capacity.

     

    Every
      provision of this Agreement relating to the conduct or affecting the liability
      of or affording protection to the Grantor Trust Trustee shall apply to the
      Grantor Trust Trustee’s  execution  of the Yield Maintenance
      Agreement, and the performance of its duties and satisfaction of its obligations
      thereunder.

     

    Section
      5.02. Certain
      Matters Affecting
      the Grantor Trust Trustee.

     

    Except
      as
      otherwise provided in Section 5.01:

     

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

     

    (ii) The
      Grantor Trust Trustee may consult with counsel and any advice of such counsel
      or
      any Opinion of Counsel shall be full and complete authorization and protection
      with respect to any action taken or suffered or omitted by it hereunder in
      good
      faith and in accordance with such advice or Opinion of Counsel;

     

    (iii) The
      Grantor Trust Trustee shall not be under any obligation to exercise any of
      the
      trusts or powers vested in it by this Agreement, other than its obligation
      to
      give notices pursuant to 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 Grantor Trust Certificateholders, pursuant to the provisions of
      this
      Agreement, unless such Grantor Trust Certificateholders shall have offered
      to
      the Grantor Trust Trustee reasonable security or indemnity against the costs,
      expenses and liabilities which may be incurred therein or thereby;

     

    (iv) The
      Grantor Trust Trustee shall not be liable in its individual capacity 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;

     

    (v) The
      Grantor Trust 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, but the Grantor Trust Trustee, in its discretion, may make such
      further inquiry or investigation into such facts or matters as it may see fit,
      and, if the Grantor Trust Trustee shall determine to make such further inquiry
      or investigation, it shall be entitled to the extent reasonable under the
      circumstances to examine the books, records and premises of such Person,
      personally or by agent or attorney;

     

    (vi) The
      Grantor Trust Trustee may execute any of the trusts or powers hereunder or
      perform any duties hereunder either directly or by or through agents or
      attorneys and shall not be liable for the default or misconduct of any such
      agents or attorneys if selected with reasonable care; and

     

    (vii) The
      right
      of the Grantor Trust Trustee to perform any discretionary act enumerated in
      this
      Agreement shall not be construed as a duty, and the Grantor Trust Trustee shall
      not be accountable for other than its negligence or willful misconduct in the
      performance of any such act.

     

    Section
      5.03. Grantor
      Trust Trustee Not
      Liable for Grantor Trust Certificates or Underlying
      Securities.

     

    The
      recitals contained herein and in the Grantor Trust Certificates (other than
      the
      statements attributed to, and the representations and warranties of, the Grantor
      Trust Trustee in Article II and the signature and countersignature of the
      Certificate Registrar on the Grantor Trust Certificates) shall be taken as
      the
      statements of the Depositor, and the Grantor Trust Trustee shall not have any
      responsibility for their correctness. The Grantor Trust Trustee does not makes
      any representation as to the validity or sufficiency of this Agreement (other
      than as specifically set forth in Section 2.03(b)) or of the Grantor Trust
      Certificates (other than that the Grantor Trust Certificates shall be duly
      and
      validly executed and authenticated by it) or of the Underlying Securities or
      any
      related document.  Except as otherwise provided herein, the Grantor
      Trust Trustee shall not be accountable for the use or application by the
      Depositor of any of the Grantor Trust Certificates or of the proceeds of such
      Grantor Trust Certificates, or for the use or application of any funds paid
      to
      the Depositor in respect of the assignment and delivery of the Underlying
      Securities.

     

    Section
      5.04. Grantor
      Trust Trustee May
      Own Grantor Trust Certificates.

     

    The
      Grantor Trust Trustee in its individual capacity or in any capacity other than
      as Grantor Trust Trustee hereunder may become the owner or pledgee of any
      Grantor Trust Certificates with the same rights it would have if it were not
      Grantor Trust Trustee and may otherwise deal with the parties hereto.

     

    Section
      5.05. Grantor
      Trust Trustee’s Fees
      and Expenses.

     

    (a) The
      Grantor Trust Trustee shall be reimbursed for all expenses and fees incurred
      in
      connection with this agreement by Bear Stearns.

     

    (b) The
      Grantor Trust Trustee and any director, officer, employee or agent of the
      Grantor Trust Trustee shall be entitled to be indemnified and held harmless
      by
      Bear Stearns against any loss, liability or expense (including, without
      limitation, costs and expenses of litigation, and of investigation, counsel
      fees
      and expenses, damages, judgments, amounts paid in settlement and out-of-pocket
      expenses) arising out of, or incurred in connection with this Agreement, the
      Underlying Agreement, the Underlying Securities and the Grantor Trust
      Certificates, the exercise and performance of any of the powers and duties
      of
      the Grantor Trust Trustee hereunder or thereunder; provided that neither the
      Grantor Trust Trustee nor any of the other above specified Persons shall be
      entitled to indemnification pursuant to this Section 5.05(b) for any loss,
      liability or expense incurred by reason of willful misfeasance, bad faith or
      negligence in the performance of the Grantor Trust Trustee’s obligations and
      duties hereunder, or by reason of reckless disregard of such obligations or
      duties.

     

    The
      provisions of this Section 5.05 shall survive any resignation or removal of
      the
      Grantor Trust Trustee and appointment of a successor Grantor Trust
      Trustee.

     

    Section
      5.06. Eligibility
      Requirements for
      Grantor Trust Trustee.

     

    The
      Grantor Trust Trustee and any successor Grantor Trust Trustee shall during
      the
      entire duration of this Agreement be a state bank or trust company or a national
      banking association organized and doing business under the laws of such state
      or
      the United States of America, authorized under such laws to exercise corporate
      trust powers, having a combined capital, and surplus and undivided profits
      of at
      least $50,000,000 (or shall be a member of a bank holding system, the combined
      capital and surplus of which is at least $50,000,000) and subject to supervision
      or examination by federal or state authority. If the Grantor Trust Trustee
      publishes reports of condition at least annually, pursuant to law or to the
      requirements of the aforesaid supervising or examining authority, then for
      the
      purposes of this Section the combined capital and surplus of such corporation
      shall be deemed to be its total equity capital (combined capital and surplus)
      as
      set forth in its most recent report of condition so published.  The
      Grantor Trust Trustee shall at all times meet the requirements of Section
      26(a)(1) of the Investment Company Act and shall in no event be an Affiliate
      of
      the Depositor or of any Person involved in the organization or operation of
      the
      Depositor.   In case at any time the Grantor Trust Trustee shall
      cease to be eligible in accordance with the provisions of this Section, the
      Grantor Trust Trustee shall resign immediately in the manner and with the effect
      specified in Section 5.07.

     

    Section
      5.07. Resignation
      and Removal of
      the Grantor Trust Trustee.

     

    (a) The
      Grantor Trust Trustee may at any time resign and be discharged from the Trust
      hereby created by giving written notice thereof to the Depositor and the Grantor
      Trust Certificateholders. Upon receiving such notice of resignation, the
      Depositor shall promptly appoint a successor Grantor Trust Trustee by written
      instrument, in duplicate, one copy of which instrument shall be delivered to
      each of the resigning Grantor Trust Trustee and the successor Grantor Trust
      Trustee. If no successor Grantor Trust Trustee shall have been so appointed
      and
      have accepted appointment within 30 days after the giving of such notice of
      resignation, the resigning Grantor Trust Trustee may petition any court of
      competent jurisdiction for the appointment of a successor Grantor Trust
      Trustee.

     

    (b) If
      at any
      time the Grantor Trust Trustee shall cease to be eligible in accordance with
      the
      provisions of Section 5.06 and shall fail to resign after written request
      therefor by the Depositor or the Majority Grantor Trust Certificateholders,
      or
      if at any time the Grantor Trust Trustee shall become incapable of acting,
      or
      shall be adjudged a bankrupt or insolvent, or a receiver of the Grantor Trust
      Trustee or of its property shall be appointed, or any public officer shall
      take
      charge or control of the Grantor Trust Trustee or of its property or affairs
      for
      the purpose of rehabilitation, conservation or liquidation, then the Depositor
      shall promptly remove the Grantor Trust Trustee and appoint a successor Grantor
      Trust Trustee by written instrument, in duplicate, one copy of which instrument
      shall be delivered to each of the Grantor Trust Trustee so removed and one
      copy
      to the successor Grantor Trust Trustee.

     

    (c) Majority
      Grantor Trust Certificateholders may at any time remove the Grantor Trust
      Trustee and appoint a successor Grantor Trust Trustee by written instrument
      or
      instruments, in quadruplicate, signed by such Holders or their attorneys-in-fact
      duly authorized, one complete set of which instruments shall be delivered to
      the
      Depositor, the Grantor Trust Trustee so removed and the successor so
      appointed.  A copy of such instrument shall be delivered to the
      Grantor Trust Certificateholders by the Depositor.  All reasonable
      out-of-pocket costs and expenses incurred in connection with such removal and
      replacement of the Grantor Trust Trustee, including without limitation,
      reasonable attorneys fees and expenses, shall be borne by the party requesting
      such action.

     

    (d) No
      resignation or removal of the Grantor Trust Trustee and appointment of a
      successor Grantor Trust Trustee pursuant to any of the provisions of this
      Section shall become effective except upon appointment of and acceptance of
      such
      appointment by the successor Grantor Trust Trustee as provided in Section 5.08
      and (ii) no entity may be appointed as a successor Grantor Trust Trustee if
      such
      appointment would result in a withdrawal or downgrading of any then current
      rating assigned to the Grantor Trust Certificates by the Rating
      Agency.

     

    Section
      5.08. Successor
      Grantor Trust
      Trustee.

     

    (a) Any
      successor Grantor Trust Trustee appointed as provided in Section 5.07 shall
      execute, acknowledge and deliver to the Depositor, the Grantor Trust
      Certificateholders and to its predecessor Grantor Trust Trustee an instrument
      accepting such appointment hereunder. The resignation or removal of the
      predecessor Grantor Trust Trustee shall then become effective and such successor
      Grantor Trust 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 like effect as if originally named as Grantor Trust
      Trustee o herein.  The predecessor Grantor Trust Trustee shall after
      payment of its outstanding fees and expenses promptly deliver to the successor
      Grantor Trust Trustee the Underlying Securities and related documents and
      statements held by it hereunder, and the Depositor and the predecessor Grantor
      Trust 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 Grantor Trust Trustee all such rights, powers,
      duties and obligations.

     

    (b) No
      successor Grantor Trust Trustee shall accept appointment as provided in this
      Section unless at the time of such acceptance such successor Grantor Trust
      Trustee shall be eligible under the provisions of Section 5.06.

     

    (c) Upon
      acceptance of appointment by a successor Grantor Trust Trustee as provided
      in
      this Section, the successor Grantor Trust Trustee shall mail notice of the
      succession of such Grantor Trust Trustee hereunder to all Grantor Trust
      Certificateholders at their addresses as shown in the Certificate Register
      and
      to the Rating Agency.  The Depositor shall cause such notice to be
      mailed at the expense of the Depositor.

     

    (d) Notwithstanding
      anything in this Agreement or the Underlying Agreement to the contrary, in
      the
      event that the paying agent for the Underlying Series resigns or is terminated,
      the Grantor Trust Trustee (if it was such paying agent) shall resign as Grantor
      Trust Trustee under this Agreement and the Depositor may appoint the successor
      paying agent as the successor to the Grantor Trust Trustee
      hereunder.

     

    Section
      5.09. Merger
      or Consolidation of
      Grantor Trust Trustee.

     

    Any
      state
      bank or trust company or national banking association into which the Grantor
      Trust Trustee may be merged or converted or with which it may be consolidated
      or
      any state bank or trust company or national banking association resulting from
      any merger, conversion or consolidation to which the Grantor Trust Trustee
      shall
      be a party, or any state bank or trust company or national banking association
      succeeding to all or substantially all of the corporate trust business of the
      Grantor Trust Trustee shall be the successor of the Grantor Trust Trustee
      hereunder, provided such state bank or trust company or national banking
      association shall be eligible under the provisions of Section 5.06. Such
      succession shall be valid 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.  The Grantor Trust Trustee shall mail notice
      of any such merger or consolidation to the Depositor and to the Grantor Trust
      Certificateholders at their address as shown in the Certificate Register.

     

    Section
      5.10. Appointment
      of Co-Grantor
      Trust Trustee or Separate Grantor Trust Trustee.

     

    (a) Notwithstanding
      any other provisions hereof, at any time, for the purpose of meeting any legal
      requirements of any jurisdiction in which any part of the Trust or property
      constituting the same may at the time be located, the Depositor and the Grantor
      Trust Trustee acting jointly shall have the power and shall execute and deliver
      all instruments to appoint one or more Persons approved by the Grantor Trust
      Trustee and the Depositor to act as co-Grantor Trust Trustee or co-Grantor
      Trust
      Trustees, jointly with the Grantor Trust Trustee, or separate Grantor Trust
      Trustee or separate Grantor Trust Trustees, of all or any part of the Trust,
      and
      to vest in such Person or Persons, in such capacity, such title to the Trust,
      or
      any part thereof, and, subject to the other provisions of this Section 5.10,
      such powers, duties, obligations, rights and trusts as the Depositor and the
      Grantor Trust Trustee may consider necessary or desirable.  No
      co-Grantor Trust Trustee or separate Grantor Trust Trustee hereunder shall
      be
      required to meet the terms of eligibility as a successor Grantor Trust Trustee
      under Section 5.06 hereunder; provided, that if the co-Grantor Trust Trustee
      or
      separate Grantor Trust Trustee does not meet such eligibility standards, the
      Grantor Trust Trustee shall remain liable for its actions hereunder, and no
      notice to Grantor Trust Certificateholders of the appointment of co-Grantor
      Trust Trustee(s) or separate Grantor Trust Trustee(s) shall be required under
      Section 5.08 hereof.

     

    (b) If
      the
      Depositor shall not have joined in such appointment within 15 days after the
      receipt by it of a written request so to do, the Grantor Trust Trustee shall
      have the power to make such appointment without the Depositor.

     

    (c) In
      the
      case of any appointment of a co-Grantor Trust Trustee or separate Grantor Trust
      Trustee pursuant to this Section 5.10, all rights, powers, duties and
      obligations conferred or imposed upon the Grantor Trust Trustee and required
      to
      be conferred on such co-Grantor Trust Trustee shall be conferred or imposed
      upon
      and exercised or performed jointly by the Grantor Trust Trustee and such
      separate Grantor Trust Trustee or co-Grantor Trust Trustee jointly, except
      to
      the extent that under any law of any jurisdiction in which any particular act
      or
      acts are to be performed (whether as Grantor Trust Trustee hereunder or as
      successor to the Master Servicer hereunder), the Grantor Trust 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
      Trust Fund or any portion thereof in any such jurisdiction) shall be exercised
      and performed by such separate Grantor Trust Trustee or co-Grantor Trust Trustee
      at the direction of the Grantor Trust Trustee.

     

    (d) Any
      notice, request or other writing
      given to the Grantor Trust Trustee shall be deemed to have been given to each
      of
      the then separate Grantor Trust Trustees and co-Grantor Trust Trustees, as
      effectively as if given to each of them. Every instrument appointing
      any separate
      Grantor Trust Trustee or co-Grantor Trust Trustee shall refer to this Agreement
      and the conditions of this Article V.
Each
      separate Grantor Trust Trustee and
      co-Grantor Trust 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 Grantor Trust 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 Grantor Trust Trustee.
Every such instrument
      shall
      be filed with the Grantor Trust Trustee.

     

    (e) To
      the
      extent not prohibited by law, any separate Grantor Trust Trustee or co-Grantor
      Trust Trustee may, at any time, request the Grantor Trust Trustee, its agent
      or
      attorney-in-fact, with full power and authority, to do any lawful act under
      or
      with respect to this Agreement on its behalf and in its name.  If any
      separate Grantor Trust Trustee or co-Grantor Trust 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 Grantor Trust
      Trustee, to the extent permitted by law, without the appointment of a new or
      successor Grantor Trust Trustee.

     

    (f) No
      Grantor Trust Trustee under this Agreement shall be personally liable by reason
      of any act or omission of another Grantor Trust Trustee under this Agreement.
      The Depositor and the Grantor Trust Trustee acting jointly may at any time
      accept the resignation of or remove any separate Grantor Trust Trustee or
      co-Grantor Trust Trustee.

     

    ARTICLE
      VI

     

    THE
      DEPOSITOR

     

    Section
      6.01. Liability
      of the
      Depositor.

     

    The
      Depositor shall be liable in accordance herewith only to the extent of the
      respective obligations specifically imposed upon and undertaken by the Depositor
      herein.

     

    Section
      6.02. Merger,
      Consolidation or
      Conversion of the Depositor.

     

    Subject
      to the following paragraph, the Depositor will keep in full effect its
      existence, rights and franchises as a corporation under the laws of the
      jurisdiction of its incorporation, and will 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 and the Grantor Trust Certificates and to
      perform its duties under this Agreement.

     

    The
      Depositor may be merged or consolidated with or into any Person, or transfer
      all
      or substantially all of its assets to any Person, in which case any Person
      resulting from any merger or consolidation to which the Depositor shall be
      a
      party, or any Person succeeding to the business of the Depositor, shall be
      the
      successor of the Depositor 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.

     

    Section
      6.03. Limitation
      on Liability of
      the Depositor and Others.

     

    Neither
      the Depositor nor any of the directors, officers, employees or agents of the
      Depositor shall be under any liability to the Trust Fund or the Grantor Trust
      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 or any such other Person against
      any
      breach of a representation or warranty made herein, or against any expense
      or
      liability specifically required to be borne thereby pursuant to the terms
      hereof, or against any liability which would otherwise be imposed by reason
      of
      willful misfeasance, bad faith or negligence in the performance of obligations
      or duties hereunder, or by reason of reckless disregard of such obligations
      and
      duties.  The Depositor and any director, officer, employee or agent of
      the Depositor may rely in good faith on any document of any kind which, primafacie,
      is properly
      executed and submitted by any Person respecting any matters arising
      hereunder.  Provided that such action is not related to its
      representations made in or its duties under this Agreement, the Depositor shall
      not be under any obligation to appear in, prosecute or defend any action or
      proceeding unless such action in its opinion does not involve it in any expense
      or liability.

     

    ARTICLE
      VII

    TERMINATION

     

    Section
      7.01. Termination.

     

    (a) The
      respective obligations and responsibilities of the Depositor and the Grantor
      Trust Trustee created hereby with respect to the Trust Fund (other than the
      obligation to make certain payments and to send certain notices to the Grantor
      Trust Certificateholders as hereinafter set forth) shall terminate upon the
      later of (i) the making of the final payment on or other liquidation of the
      Underlying Securities and (ii) the payment to the Grantor Trust
      Certificateholders of all amounts required to be paid to them pursuant to this
      Agreement; provided, however,
      that in no
      event shall the Trust Fund created hereby continue beyond the expiration of
      twenty-one years from the death of the last survivor of the descendants of
      Joseph P. Kennedy, the late ambassador of the United States to the Court of
      St.
      James’s, living on the date hereof.

     

    (b) The
      Grantor Trust Trustee shall, in accordance with Section 8.05, give a Notice
      of
      Final Distribution to the Holders, the Depositor and the Rating Agency as soon
      as practicable of the Distribution Date on which the Grantor Trust Trustee
      anticipates that the final distribution will be made on the Grantor Trust
      Certificates, which notice shall:

     

    (i) specify
      the Distribution Date on which the final distribution is anticipated to be
      made
      to such Holders;

     

    (ii) specify
      the amount of any such final distribution, if known; and

     

    (iii) state
      that the final distribution to such Holders will be made only upon presentment
      and surrender of their Grantor Trust Certificates at the office of the Grantor
      Trust Trustee therein specified.

     

    If
      the
      payment on the Grantor Trust Certificates is not made on the anticipated
      Distribution Date for any reason, the Grantor Trust Trustee shall promptly
      mail
      notice thereof to each such Holder, the Depositor and to the Rating
      Agency.

     

    (c) Upon
      presentment and surrender of the Grantor Trust Certificates by the Holders
      of
      the Grantor Trust Certificates on the Final Distribution Date, the Grantor
      Trust
      Trustee shall distribute to such Grantor Trust Certificateholders the amounts
      otherwise distributable to them on such Distribution Date pursuant to Section
      3.05(a).  Any funds not distributed on a Final Distribution Date
      because of the failure of any Grantor Trust Certificateholders to tender their
      Grantor Trust Certificates shall be set aside and held in trust for the account
      of the appropriate non-tendering Grantor Trust Certificateholders, and the
      Trust
      Fund shall terminate.  If any Grantor Trust Certificates as to which
      Notice of Final Distribution has been given pursuant to this Section 7.01 shall
      not have been surrendered for cancellation within six months after the time
      specified in such notice, the Grantor Trust Trustee shall mail a second notice
      to the remaining Grantor Trust Certificateholders, at their last addresses
      shown
      in the Certificate Register, to surrender their Grantor Trust Certificates
      for
      cancellation in order to receive, from such funds held, the final distribution
      with respect thereto.  If within one year after the second notice any
      Grantor Trust Certificate shall not have been surrendered for cancellation,
      the
      Grantor Trust Trustee shall directly or through an agent, take reasonable steps
      to contact the remaining Grantor Trust Certificateholders concerning surrender
      of their Grantor Trust Certificates. The costs and expenses of maintaining
      such
      funds and of contacting Grantor Trust Certificateholders shall be paid out
      of
      the assets of the Trust Fund.  If within two years after the second
      notice any Grantor Trust Certificates shall not have been surrendered for
      cancellation, the Grantor Trust Trustee shall segregate all amounts
      distributable to the Holders thereof and shall thereafter hold such amounts
      for
      the benefit of such Holders. No interest shall accrue or be payable to any
      Grantor Trust Certificateholder on any amount held as a result of such Grantor
      Trust Certificateholder’s failure to surrender its Grantor Trust Certificate(s)
      for final payment thereof in accordance with this Section 7.01.

     

    ARTICLE
      VII

     

    MISCELLANEOUS
      PROVISIONS

     

    Section
      8.01. Amendment.

     

    (a) This
      Agreement may be amended from time to time by the Depositor,
      the  Grantor Trust Trustee, without the prior consent of any Grantor
      Trust Certificateholder:

     

    (i) to
      cure
      any ambiguity;

     

    (ii) to
      correct or supplement any provisions herein, which may be inconsistent with
      any
      other provisions herein;

     

    (iii) to
conform
      to the language in the Prospectus
      Supplement;

     

    (iv) to
      revise any provisions to reflect
      the obligations
      of the parties to this Agreement as they relate to Regulation
      AB;

     

    (v) to
      make
      any other provisions with respect to matters or questions arising under this
      Agreement which shall not be materially inconsistent with the existing
      provisions of this Agreement; and

     

    (vi) to
      make
      such modifications as may be permitted or required hereunder in connection
      with
      a repurchase of any Underlying Security pursuant to Section 2.03(c)
      hereof;

     

    provided
      that such amendment shall not, as evidenced by an Opinion of Counsel delivered
      to the Grantor Trust Trustee or a letter from the Rating Agency confirming
      that
      such amendment shall not result in a downgrade or withdrawal of a rating on
      any
      of the Grantor Trust Certificates (in each case, the expense of which shall
      be
      paid for by the Depositor), adversely affect in any material respect the
      interests of any Grantor Trust Certificateholder.

     

    (b) This
      Agreement may also be amended from time to time by the Depositor and the Grantor
      Trust Trustee with the prior written consent of the Majority Grantor Trust
      Certificateholder 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 Grantor Trust Certificateholders; provided, however,
      that no such
      amendment shall:

     

    (i) reduce
      in
      any manner the amount of, or delay the timing of, payments which are required
      to
      be distributed on any Grantor Trust Certificate without the consent of the
      Holder of such Grantor Trust Certificate; or

     

    (ii) modify
      the provisions of this Section 8.01 without the consent of the Holders of all
      Grantor Trust Certificates.

     

    Notwithstanding
      any other provision of this Agreement, for the purposes of the giving or
      withholding of consents pursuant to this Section 8.01(b), Grantor Trust
      Certificates registered in the name of, or held for the benefit of, the
      Depositor or any Affiliate thereof shall be entitled to vote their Percentage
      Interests with respect to matters affecting such Grantor Trust
      Certificates.

     

    (c) Promptly
      after the execution of any such amendment the Grantor Trust Trustee shall
      furnish written notification of the substance of such amendment to each Grantor
      Trust Certificateholder.  It shall not be necessary for the consent of
      the Grantor Trust Certificateholders under this Section 8.01 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
      the Grantor Trust Certificateholders shall be subject to such reasonable
      regulations as the Grantor Trust Trustee may prescribe.

     

    (d) Notwithstanding
      any contrary provision of this Agreement, the Grantor Trust Trustee shall not
      consent to any amendment to this Agreement unless it shall have first received
      an Opinion of Counsel (at the expense of the party seeking such amendment)
      to
      the effect that such amendment or the exercise of any power granted to the
      Depositor or the Grantor Trust Trustee in accordance with such amendment (i)
      is
      authorized or permitted by the Agreement and (ii) will not result in the
      imposition of a tax on the Trust or cause the Trust to fail to be classified
      as
      a grantor trust under subpart E, part I of subchapter J of chapter 1 of the
      Code.

     

    Section
      8.02. Counterparts.

     

    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.

     

    Section
      8.03. Limitation
      on Rights of
      Grantor Trust Certificateholders.

     

    (a) The
      death
      or incapacity of any Grantor Trust Certificateholder shall not operate to
      terminate this Agreement or the Trust Fund, nor entitle such Grantor Trust
      Certificateholder’s legal representatives or heirs to claim an accounting or to
      take any action or proceeding in any court for a partition or winding up of
      the
      Trust Fund, nor otherwise affect the rights, obligations and liabilities of
      the
      parties hereto or any of them.

     

    (b) No
      Grantor Trust Certificateholder shall have any right to vote (except as
      expressly provided for 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 Grantor Trust
      Certificates, be construed so as to constitute the Grantor Trust
      Certificateholders from time to time as partners or members of an association;
      nor shall any Grantor Trust 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.

     

    (c) No
      Grantor Trust Certificateholder shall have any right by virtue of any provision
      of this Agreement to institute any suit, action or proceeding in equity or
      at
      law upon or under or with respect to this Agreement or the Trust Fund, unless
      such Holder previously shall have given to the Grantor Trust Trustee and the
      Depositor a written notice of default hereunder, and of the continuance thereof,
      as hereinbefore provided, and unless also the Majority Grantor Trust
      Certificateholder shall have made written request upon the Grantor Trust Trustee
      to institute such action, suit or proceeding in its own name as Grantor Trust
      Trustee hereunder and shall have offered to the Grantor Trust Trustee such
      reasonable indemnity as it may require against the costs, expenses and
      liabilities to be incurred therein or thereby, and the Grantor Trust Trustee,
      for 30 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.  For the prosecution and enforcement of the rights granted
      under this Section, each and every Grantor Trust Certificateholder and the
      Grantor Trust Trustee shall be entitled to such relief as can be given either
      at
      law or in equity.

     

    Section
      8.04. Governing Law.

     

    This
      Agreement and the Grantor Trust Certificates shall be construed in accordance
      with the laws of the State of New York applicable to agreements made and to
      be
      performed in said state (without reference to the conflicts of law provisions
      of
      such state, other than Sections 5-1401 and 5-1402 of the New York General
      Obligations Laws, which shall apply hereto), and the obligations, rights and
      remedies of the parties hereunder and the Grantor Trust Certificateholders
      shall
      be determined in accordance with such laws.

     

    Section
      8.05. Notices.

     

    All
      communications provided for or permitted hereunder shall be in writing and
      shall
      be deemed to have been duly given when delivered to: (a) in the case of the
      Depositor, Structured Asset Mortgage Investments II Inc., 383 Madison Avenue,
      New York, New York 10179, or such other address as may hereafter be furnished
      to
      the Grantor Trust Trustee in writing by the Depositor; (b) in the case of the
      Grantor Trust Trustee, to its Corporate Trust Office; and (c) in the case of
      S&P, Standard & Poor’s, 55 Water Street, 41st Floor, New York, New York
      10041 or such other address as may hereafter be furnished to the other parties
      hereto in writing.

     

    Section
      8.06. 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 Grantor Trust Certificates or the rights of the Holders
      thereof.

     

    Section
      8.07. Successors
      and
      Assigns.

     

    The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the respective successors and assigns of the parties hereto, and all such
      provisions shall inure to the benefit of the Grantor Trust
      Certificateholders.

     

    Section
      8.08. Article
      and Section
      Headings.

     

    The
      article and section headings herein are for convenience of reference only,
      and
      shall not limit or otherwise affect the meaning hereof.

     

    Section
      8.09. Notices
      to Rating
      Agency.

     

    The
      Grantor Trust Trustee shall notify the Rating Agency at such time as it is
      otherwise required pursuant to this Agreement to give notice of the occurrence
      of any of the events described in clauses (a), (b), or (e) below or provide
      a
      copy to the Rating Agency at such time as otherwise required to be delivered
      pursuant to this Agreement of each of the statements described in clauses (c)
      and (e) below:

     

    (a) a
      material change or amendment to this Agreement,

     

    (b) the
      termination or appointment of a successor Grantor Trust Trustee or a change
      in
      the majority ownership of the Grantor Trust Trustee,

     

    (c) the
      monthly distribution statement required to be made available or delivered to
      the
      Grantor Trust Certificateholders pursuant to Section 3.06,

     

    (d) Notice
      of
      Final Distribution required to be delivered pursuant to Section 7.01(b),
      and

     

    (e) a
      change
      in the location of the Certificate Account.

     

    The
      Depositor shall notify the Rating Agencies of any change in its identity.

     

    Section
      8.10. Acts
      of Grantor Trust
      Certificateholders.

     

    (a)   Any
      request, demand, authorization, direction, notice, consent, waiver or other
      action provided by this Agreement to be given or taken by Grantor Trust
      Certificateholders may be embodied in and evidenced by one or more instruments
      of substantially similar tenor signed by such Grantor Trust Certificateholders
      in person or by an agent duly appointed in writing.  Except as herein
      otherwise expressly provided, such action shall become effective when such
      instrument or instruments are delivered to the Grantor Trust Trustee and, where
      it is expressly required, to the Depositor.  Proof of execution of any
      such instrument or of a writing appointing any such agent shall be sufficient
      for any purpose of this Agreement and conclusive in favor of the Grantor Trust
      Trustee and the Depositor, if made in the manner provided in this Section
      8.10.

     

    (b) The
      fact
      and date of the execution by any Person of any such instrument or writing may
      be
      proved by the affidavit of a witness of such execution or by a certificate
      of a
      notary public or other officer authorized by law to take acknowledgments of
      deeds, certifying that the individual signing such instrument or writing
      acknowledged to him the execution thereof.  Where such execution is by
      a signer acting in a capacity other than his or her individual capacity, such
      certificate or affidavit shall also constitute sufficient proof of his or her
      authority.  The fact and date of the execution of any such instrument
      or writing, or the authority of the individual executing the same, may also
      be
      proved in any other manner which the Grantor Trust Trustee deems
      sufficient.

     

    (c) The
      ownership of Grantor Trust Certificates (notwithstanding any notation of
      ownership or other writing on such Grantor Trust Certificates, except an
      endorsement in accordance with Section 4.02 made on a Grantor Trust Certificates
      presented in accordance with Section 4.04) shall be proved by the Certificate
      Register, and neither the Grantor Trust Trustee, the Depositor, nor any
      successor to either such party shall be affected by any notice to the
      contrary.

     

    (d) Any
      request, demand, authorization, direction, notice, consent, waiver or other
      action of the holder of any Grantor Trust Certificate shall bind every future
      holder of the same Grantor Trust Certificate and the holder of every Grantor
      Trust Certificate issued upon the registration of transfer or exchange thereof,
      if applicable, or in lieu thereof with respect to anything done, omitted or
      suffered to be done by the Grantor Trust Trustee, the Depositor, or any
      successor to either such party in reliance thereon, whether or not notation
      of
      such action is made upon such Certificates.

     

    (e) In
      determining whether the Holders of the requisite Percentage Interest of Grantor
      Trust Certificates have given any request, demand, authorization, direction,
      notice, consent or waiver hereunder, Grantor Trust Certificates owned by the
      Grantor Trust Trustee or the Depositor or any Affiliate thereof shall be
      disregarded, except as otherwise provided in Section 8.01(b), except that,
      in
      determining whether the Grantor Trust Trustee shall be protected in relying
      upon
      any such request, demand, authorization, direction, notice, consent or waiver,
      only Grantor Trust Certificates which the Grantor Trust Trustee knows to be
      so
      owned shall be so disregarded.  Grantor Trust Certificates which have
      been pledged in good faith to the Grantor Trust Trustee or the Depositor or
      any
      Affiliate thereof may be regarded as outstanding if the pledgor establishes
      to
      the satisfaction of the Grantor Trust Trustee the pledgor’s right to act with
      respect to such Grantor Trust Certificates and that the pledgor is not an
      Affiliate of the Grantor Trust Trustee or the Depositor, as the case may
      be.

     

    
      
        
           

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

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	 	
                STRUCTURED
                  ASSET MORTGAGE 
INVESTMENTS II INC., as Depositor

              
	 	 
	 	 
	 	
                
                  By:
                    /s/ Joseph T. Jurkowski,
                    Jr.                              
                    

                

              
	 	
                Name:
                  Joseph T. Jurkowski, Jr. 

              
	 	
                Title:
                  Vice President

              
	 	 
	 	 
	 	
                WELLS
                  FARGO BANK, N.A., as Grantor Trust Trustee

              
	 	 
	 	
                By:
                  /s/ Stacey M.
                  Taylor                                         
                  

              
	 	
                Name:
                  Stacey M. Taylor

              
	 	
                Title:Vice
                  President

              
	 	 

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    
      	
              STATE
                OF NEW YORK

            	
              )

            	 
	 	 	
              ss.:

            
	
              COUNTY
                OF NEW YORK

            	
              )

            	 

    

    

    On
      the
      24th
      day of October, 2007 before me, a notary public in and for said State,
      personally appeared _____________________ known to me to be a Vice President
      of
      Structured Asset Mortgage Investments II Inc., the corporation that executed
      the
      within instrument, and also known to me to be the person who executed it on
      behalf of said corporation, and acknowledged to me that such corporation
      executed the within instrument.

     

    IN
      WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
      day and year in this certificate first above written.

     

    

    
      	 	 
	 	
              Notary
                Public

            
	 	 
	
              [Notarial
                Seal]

            	
              Commission
                Expires:

            

    

     

    

    
      
        
          

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              STATE
                OF MARYLAND

            	
              )

            	 
	 	 	
              ss.:

            
	
              COUNTY
                OF HOWARD

            	
              )

            	 

    

    

    On
      the
      24th
      day of October, 2007 before me, a notary public in and for said State,
      personally appeared ____________________________ known to me to be a(n)
      ________________________ of Wells Fargo Bank, N.A., the national banking
      association that executed the within instrument, and also known to me to be
      the
      person who executed it on behalf of said national banking association, and
      acknowledged to me that such national banking association executed the within
      instrument.

     

    IN
      WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
      day and year in this certificate first above written.

     

    

    
      	 	 
	 	
              Notary
                Public

            
	 	 
	
              [Notarial
                Seal]

            	
              Commission
                Expires:

            

    

    

    
      
        
          

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    EXHIBIT
      A

     

     FORM
      OF GRANTOR TRUST CERTIFICATE

     

    THE
      CURRENT PRINCIPAL AMOUNT OF THIS GRANTOR TRUST CERTIFICATE WILL BE DECREASED
      BY
      THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO. ACCORDINGLY,
      FOLLOWING THE INITIAL ISSUANCE OF THE GRANTOR TRUST CERTIFICATES, THE CURRENT
      PRINCIPAL AMOUNT OF THIS GRANTOR TRUST CERTIFICATE WILL BE DIFFERENT FROM THE
      DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS GRANTOR TRUST CERTIFICATE MAY
      ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE GRANTOR TRUST TRUSTEE
      NAMED HEREIN.

     

    UNLESS
      THIS GRANTOR TRUST CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
      OF
      THE DEPOSITORY TRUST COMPANY TO THE GRANTOR TRUST TRUSTEE OR ITS AGENT FOR
      REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GRANTOR TRUST CERTIFICATE
      ISSUED WILL BE REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
      REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
      ANY PAYMENT WILL BE MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
      HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
      REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

    

    
      
        
           

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              Grantor
                Trust Certificate No. [ ]

            	
              Variable
                Pass-Through Rate

            
	 	 
	
              Class
                A-1

            	 
	 	 
	
              Date
                of Grantor Trust Agreement:

              As
                of October 24, 2007

            	
              Aggregate
                Initial Current Principal Amount of all Grantor Trust Certificates
                of this
                Class as of the Closing Date:

              $[         ]

            
	 	 
	
              First
                Distribution Date:

              October
                25, 2007

            	
              Initial
                Current Principal Amount of this Grantor Trust Certificate as of
                the
                Closing Date:

              $[         ]

            
	 	 
	
              Grantor
                Trust Trustee:

              Wells
                Fargo Bank, N.A.

            	
              CUSIP:
                [         ]

            
	 	 
	
              Assumed
                Final Distribution Date:

              [_______]

            	 
	 	 

    

    BEAR
      STEARNS STRUCTURED PRODUCTS INC. TRUST 2007-R3

     

    GRANTOR
      TRUST CERTIFICATES

     

    SERIES
      2007-R3

     

    evidencing
      a Percentage Interest in the distributions allocable to the Class A-1 Grantor
      Trust Certificates with respect to a Trust Fund consisting primarily of the
      Underlying Securities sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II
      INC.

     

    This
      Grantor Trust Certificate is payable solely from the assets of the Trust Fund,
      and does not represent an obligation of or interest in Structured Asset Mortgage
      Investments II Inc., the Grantor Trust Trustee referred to below or any of
      their
      affiliates or any other person. Neither this Grantor Trust Certificate nor
      the
      Underlying Securities are guaranteed or insured by any governmental entity
      or by
      Structured Asset Mortgage Investments II Inc., the Grantor Trust Trustee or
      any
      of their affiliates or any other person. None of Structured Asset Mortgage
      Investments II Inc., the Grantor Trust Trustee or any of their affiliates will
      have any obligation with respect to any certificate or other obligation secured
      by or payable from payments on the Grantor Trust Certificates.

     

    This
      certifies that Cede & Co. is the registered owner of the Percentage Interest
      evidenced hereby in the beneficial ownership interest of Grantor Trust
      Certificates of the same Class as this Grantor Trust Certificate in a trust
      (the
“Trust Fund”) primarily consisting of the Underlying Securities sold by
      Structured Asset Mortgage Investments II Inc. (“SAMI II”). The Underlying
      Securities were sold by EMC Mortgage Corporation (“EMC”) to SAMI
      II.  The Trust Fund was created pursuant to the Grantor Trust
      Agreement, dated as of the Closing Date, (the “Agreement”), between SAMI II, as
      depositor (the “Depositor”) and Wells Fargo Bank, N.A., as grantor trust trustee
      (the “Grantor Trust Trustee”), a summary of certain of the pertinent provisions
      of which is set forth hereafter. To the extent not defined herein, capitalized
      terms used herein shall have the meaning ascribed to them in the Agreement.
      This
      Grantor Trust Certificate is issued under and is subject to the terms,
      provisions and conditions of the Agreement, to which Agreement the Holder of
      this Grantor Trust Certificate by virtue of its acceptance hereof assents and
      by
      which such Holder is bound.

     

      Interest
      on this Grantor Trust Certificate will accrue from and including the 25th day
      (or with respect to the First Distribution Date, the Closing Date) of the
      calendar month preceding the month in which a Distribution Date (as hereinafter
      defined) occurs to and including the 24th day of the calendar month in which
      that Distribution Date occurs (or with respect to the First Distribution Date,
      to but not including October 25, 2007) on the Current Principal Amount hereof
      at
      a per annum rate equal to the Pass-Through Rate as described in the
      Agreement.  The Grantor Trust Trustee will distribute on the
      Underlying Security Distribution Date of each month (each, a “Distribution
      Date”) to the Person in whose name this Grantor Trust Certificate is registered
      at the close of business on the last Business Day of the calendar month
      preceding the month of such Distribution Date (or with respect to the First
      Distribution Date, the Closing Date), an amount equal to the product of
      Percentage Interest evidenced by this Grantor Trust Certificate and the amount
      (of interest and principal, if any) required to be distributed to the Holders
      of
      Grantor Trust Certificates of the same Class as this Grantor Trust Certificate,
      commencing on the First Distribution Date specified above. The Underlying
      Security Distribution Date is the 25th day of each month, or, if such 25th
      day
      is not a Business Day, the immediately following Business Day.

     

    Distributions
      on this Grantor Trust Certificate will be made by the Grantor Trust Trustee
      by
      check mailed to the address of the Person entitled thereto as such name and
      address shall appear on the Certificate Register or, if such Person so requests
      by notifying the Grantor Trust Trustee in writing as specified in the Agreement,
      by wire transfer. Notwithstanding the above, the final distribution on this
      Grantor Trust Certificate will be made after due notice by the Grantor Trust
      Trustee of the pendency of such distribution and only upon presentation and
      surrender of this Grantor Trust Certificate at the office or agency appointed
      by
      the Grantor Trust Trustee for that purpose and designated in such notice. The
      Initial Current Principal Amount of this Grantor Trust Certificate is set forth
      above. The Current Principal Amount hereof will be reduced to the extent of
      distributions allocable to principal hereon and any Realized Losses allocable
      hereto.

     

    This
      Grantor Trust Certificate is one of a duly authorized issue of Grantor Trust
      Certificates designated as set forth on the face hereof (the “Grantor Trust
      Certificates”), issued in one Class. The Grantor Trust Certificates evidence the
      entire beneficial ownership interest in the Trust Fund formed pursuant to the
      Agreement.

     

    The
      Grantor Trust Certificateholder, by its acceptance of this Grantor Trust
      Certificate, agrees that it will look solely to the Trust Fund for payment
      hereunder and that none of the Depositor or the Grantor Trust Trustee are liable
      to the Grantor Trust Certificateholders for any amount payable under this
      Grantor Trust Certificate or the Agreement or, except as expressly provided
      in
      the Agreement, subject to any liability under the Agreement.

     

    This
      Grantor Trust 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 hereby, and the rights,
      duties and immunities of the Grantor Trust Trustee.

     

    The
      Agreement permits, with certain exceptions therein provided, the amendment
      thereof and the modification of the rights and obligations of the Depositor
      and
      the Grantor Trust Trustee and the rights of the Grantor Trust Certificateholders
      related to the Trust Fund under the Agreement from time to time by the parties
      thereto with the consent of the Holders of the Grantor Trust Certificates,
      evidencing Percentage Interests aggregating not less than 51% of the Grantor
      Trust Certificates (or in certain cases, Holders of the Grantor Trust
      Certificates of affected Classes evidencing such percentage of the Percentage
      Interests thereof). Any such consent by the Holder of this Grantor Trust
      Certificate shall be conclusive and binding on such Holder and upon all future
      Holders of this Grantor Trust Certificate and of any Grantor Trust Certificate
      issued upon the transfer hereof or in lieu hereof whether or not notation of
      such consent is made upon this Grantor Trust Certificate. The Agreement also
      permits the amendment thereof, in certain limited circumstances, without the
      consent of the Holders of any of the Grantor Trust Certificates.

     

    As
      provided in the Agreement and subject to certain limitations therein set forth,
      the transfer of this Grantor Trust Certificate is registrable with the Grantor
      Trust Trustee upon surrender of this Grantor Trust Certificate for registration
      of transfer at the offices or agencies maintained by the Grantor Trust Trustee
      for such purposes, duly endorsed by, or accompanied by a written instrument
      of
      transfer in form satisfactory to the Grantor Trust Trustee duly executed by
      the
      Holder hereof or such Holder’s attorney duly authorized in writing, and
      accompanied by the information required to be provided to the Grantor Trust
      Trustee for WHFIT reporting purposes as described in the Agreement, and
      thereupon one or more new Grantor Trust Certificates in authorized denominations
      representing a like aggregate Percentage Interest will be issued to the
      designated transferee.

     

    The
      Grantor Trust Certificates are issuable only as registered Grantor Trust
      Certificates without coupons in the Classes and denominations specified in
      the
      Agreement. As provided in the Agreement and subject to certain limitations
      therein set forth, this Grantor Trust Certificate is exchangeable for one or
      more new Grantor Trust Certificates evidencing the same Class and in the same
      aggregate Percentage Interest, as requested by the Holder surrendering the
      same.

     

    No
      service charge will be made to the Grantor Trust Certificateholders for any
      such
      registration of transfer, but the Grantor Trust Trustee may require payment
      of a
      sum sufficient to cover any tax or other governmental charge payable in
      connection therewith. The Depositor, Grantor Trust Trustee and any agent of
      any
      of them may treat the Person in whose name this Certificate is registered as
      the
      owner hereof for all purposes, and none of the Depositor, the Grantor Trust
      Trustee or any such agent shall be affected by notice to the contrary.

     

    The
      obligations created by the Agreement and the Trust Fund created thereby (other
      than the obligations to make payments to Grantor Trust Certificateholders with
      respect to the termination of the Agreement related to the Trust Fund) shall
      terminate upon the later of (i) the making of the final payment on or other
      liquidation of the Underlying Securities, or (ii) the payment to the Grantor
      Trust Certificateholders of all amounts required to be paid to them pursuant
      to
      the Agreement. In no event, however, will the Trust Fund created by the
      Agreement continue beyond the expiration of 21 years after the death of certain
      persons identified in the Agreement.

     

    Unless
      this Grantor Trust Certificate has been countersigned by an authorized signatory
      of the Grantor Trust Trustee by manual signature, this Grantor Trust Certificate
      shall not be entitled to any benefit under the Agreement, or be valid for any
      purpose.

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

     

    
      	
              Dated:
                October 24, 2007

            	
              WELLS
                FARGO BANK, N.A.,

            
	 	
              not
                in its individual capacity but solely as Grantor Trust Trustee

            
	 	 
	
               

            	 By:                                                                                      
	 	
                                    
                Authorized Signatory

            

    

    

    

    CERTIFICATE
      OF
      AUTHENTICATION

    

    This
      is one of the Class A-1 Grantor
      Trust Certificates referred to in the within-mentioned Agreement.

    

    
      	 	
              WELLS
                FARGO BANK, N.A.,

            
	 	
              Authorized
                signatory of Wells Fargo Bank, N.A., not in its individual capacity
                but
                solely as Grantor Trust Trustee

            
	 	 
	 	 By:                                                                                      
	 	
                                      
                Authorized Signatory

            
	 	 

    

    
      
        
           

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    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
      __________________________________ (Please print or typewrite name and address
      including postal zip code of assignee) a Percentage Interest evidenced by the
      within Grantor Trust Certificate and hereby authorizes the transfer of
      registration of such interest to assignee on the Certificate Register of the
      Trust Fund.

     

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

    
      	 
	 
	 

    

    

    

    
      	
              Dated:

            	

            	

            

    

    
      	
                      

            	
              Signature
                by or on behalf of assignor     

            
	 	 
	 	 
	 	 Signature
              Guaranteed

    

    
 

    

    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.

    
      
        
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    EXHIBIT
      B

     

    FORM
      OF
      CERTIFICATION TO BE

    PROVIDED
      BY THE GRANTOR
      TRUST TRUSTEE TO DEPOSITOR

    

    Re:           
      ________________________________ Trust 200_-____(the “Trust”), Grantor
      Trust Certificates, Series 200_-____, issued pursuant to the Grantor Trust
      Agreement, dated as of ________, 200_ (the “Agreement” or “Trust Agreement”),
      between Structured Asset Mortgage Investments II Inc., as Depositor and Wells
      Fargo Bank, National Association, as Grantor Trust Trustee

     

    The
      Grantor Trust Trustee hereby certifies to the Depositor, and its officers,
      directors and affiliates, and with the knowledge and intent that they will
      rely
      upon this certification, that:

     

     
      1.            I have
      reviewed the annual report on Form 10-K for the fiscal year [____] (the “Annual Report”), and
      all reports on Form 10-D required to be filed in respect of the period covered
      by the Annual Report (collectively with the Annual Report, the “Reports”), of the
      Trust;

     

     
      2.            To my
      knowledge, (a) the 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 the Annual
      Report, and (b) the Grantor Trust Trustee’s assessment of compliance and related
      attestation report referred to below, 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
      such
      assessment of compliance and attestation report;

     

     
      3.            To my
      knowledge, the distribution information required to be provided by the Grantor
      Trust Trustee under the Trust Agreement for inclusion in the Reports is included
      in the Reports;

     

     
      4.            I am
      responsible for reviewing the activities performed by the Grantor Trust Trustee
      under the Trust Agreement, and based on my knowledge and the compliance review
      conducted in preparing the compliance statement of the Grantor Trust Trustee
      required by the Trust Agreement, and except as disclosed in the Reports, the
      Grantor Trust Trustee has fulfilled its obligations under the Trust Agreement
      in
      all material respects; and

     

     
      5.            The report
      on assessment of compliance with servicing criteria applicable to the Grantor
      Trust Trustee for asset-backed securities of the Grantor Trust Trustee and
      each
      Subcontractor utilized by the Grantor Trust Trustee and related attestation
      report on assessment of compliance with servicing criteria applicable to it
      required to be included in the Annual Report in accordance with Item 1122 of
      Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has been included as
      an
      exhibit to the Annual Report. Any material instances of non-compliance are
      described in such report and have been disclosed in the Annual
      Report.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    In
      giving
      the certifications above, the Grantor Trust Trustee has reasonably relied on
      information provided to it by the following unaffiliated
      parties:  [names of servicer(s), master servicer, subservicer,
      depositor, Grantor Trust Trustee, custodian(s)]

     

    

    Date:                                                                           
      

     

    ________________________________

    [Signature]

    [Title]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      C

     

     
      SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

     

    Definitions

    Grantor
      Trust Trustee – waterfall calculator

    Grantor
      Trust Trustee – fiduciary of the transaction

     

    Note:  The
      definitions above describe the essential function that the party performs,
      rather than the party’s title.  So, for example, in a particular
      transaction, the Grantor Trust Trustee may perform the “paying agent” and
“securities administrator” functions, while in another transaction, the
      securities administrator may perform these functions.

     

    Where
      there are multiple checks for criteria the attesting party will identify in
      their management assertion that they are attesting only to the portion of the
      distribution chain they are responsible for in the related transaction
      agreements.

     

    Key: 
      X – obligation

    

     

    
      	
              Reg
                AB Reference

            	
              Servicing
                Criteria

            	
              Grantor
                Trust Trustee

            
	 	
              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.

            	
              X

            
	
              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.

            	
              X

            
	
              1122(d)(1)(iii)

            	
              Any
                requirements in the transaction agreements to maintain a back-up
                servicer
                for the Pool Assets are maintained.

            	 
	
              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.

            	 
	 	
              Cash
                Collection and Administration

            	 
	
              1122(d)(2)(i)

            	
              Payments
                on pool assets 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.

            	
              X

            
	
              1122(d)(2)(ii)

            	
              Disbursements
                made via wire transfer on behalf of an obligor or to an investor
                are made
                only by authorized personnel.

            	
              X

            
	
              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.

            	
              X

            
	
              1122(d)(2)(iv)

            	
              The
                related accounts for the transaction, such as cash reserve accounts
                or
                accounts established as a form of over collateralization, are separately
                maintained (e.g., with respect to commingling of cash) as set forth
                in the
                transaction agreements.

            	
              X

            
	
              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.

            	
              X

            
	
              1122(d)(2)(vi)

            	
              Unissued
                checks are safeguarded so as to prevent unauthorized access.

            	
              X

            
	
              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.

            	
              X

            
	 	
              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 Pool Assets serviced by the Servicer.

            	
              X

            
	
              1122(d)(3)(ii)

            	
              Amounts
                due to investors are allocated and remitted in accordance with timeframes,
                distribution priority and other terms set forth in the transaction
                agreements.

            	
              X

            
	
              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.

            	
              X

            
	
              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.

            	
              X

            
	 	
              Pool
                Asset Administration

            	 
	
              1122(d)(4)(i)

            	
              Collateral
                or security on pool assets is maintained as required by the transaction
                agreements or related pool asset documents.

            	 
	
              1122(d)(4)(ii)

            	
              Pool
                assets and related documents are safeguarded as required by the
                transaction agreements

            	 
	
              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.

            	 
	
              1122(d)(4)(iv)

            	
              Payments
                on pool assets, including any payoffs, made in accordance with the
                related
                pool asset 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 pool asset documents.

            	 
	
              1122(d)(4)(v)

            	
              The
                Servicer’s records regarding the pool assets agree with the Servicer’s
                records with respect to an obligor’s unpaid principal balance.

            	 
	
              1122(d)(4)(vi)

            	
              Changes
                with respect to the terms or status of an obligor's pool assets (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.

            	 
	
              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.

            	 
	
              1122(d)(4)(viii)

            	
              Records
                documenting collection efforts are maintained during the period a
                pool
                asset 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 pool assets including, for example,
                phone calls, letters and payment rescheduling plans in cases where
                delinquency is deemed temporary (e.g., illness or unemployment).

            	 
	
              1122(d)(4)(ix)

            	
              Adjustments
                to interest rates or rates of return for pool assets with variable
                rates
                are computed based on the related pool asset documents.

            	 
	
              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 pool asset 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 pool asset documents and
                state
                laws; and (C) such funds are returned to the obligor within 30 calendar
                days of full repayment of the related pool assets, or such other
                number of
                days specified in the transaction agreements.

            	 
	
              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.

            	 
	
              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.

            	 
	
              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.

            	 
	
              1122(d)(4)(xiv)

            	
              Delinquencies,
                charge-offs and uncollectible accounts are recognized and recorded
                in
                accordance with the transaction agreements.

            	 
	
              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.  (In this transaction there is no
                external enhancement or other support.)

            	 

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      D

     

     FORM
      10-D, FORM 8-K AND FORM 10-K REPORTING RESPONSIBILITY

     

    As
      to
      each item described below, the entity indicated as the Responsible Party shall
      be primarily responsible for reporting the information to the party identified
      as responsible for preparing the Securities Exchange Act Reports pursuant to
      Section 3.11 of the Grantor Trust Agreement.

     

    Under
      Item 1 of Form 10-D: a) items marked “Monthly Statement to Grantor Trust
      Certificateholders” are required to be included in the periodic Distribution
      Date statement under Section 3.06, provided by the Grantor Trust Trustee based
      on information received from the party providing such information; and b) items
      marked “Form 10-D report” are required to be in the Form 10-D report but not the
      Monthly Statements to Grantor Trust Certificateholders, provided by the party
      indicated.  Information under all other Items of Form 10-D is to be
      included in the Form 10-D report.  All such information and any other
      Items on Form 8-K and Form 10-D set forth in this Exhibit shall be sent to
      the
      Grantor Trust Trustee and the Depositor.

     

    
      	
              Form

            	
              Item

            	
              Description

            	
              Grantor
                Trust Trustee

            	
              Depositor

            	
              Sponsor

            	 
	
              10-D

            	
              Must
                be filed within 15 days of the distribution
                date for the asset-backed securities.

            	 	 	 
	
              1

            	
              Distribution
                and Pool Performance Information

            	 	 	 	 
	
              Item
                1121(a) – Distribution and Pool Performance Information

            	 	 	 	 
	
              (1)
                Any applicable record dates, accrual dates, determination dates for
                calculating distributions and actual distribution dates for the
                distribution period.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust  
                Certificateholders)

            	 	 	 
	
              (2)
                Cash flows received and the sources thereof for distributions, fees
                and
                expenses.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust 
                Certificateholders)

            	 	 	 
	
              (3)
                Calculated amounts and distribution of the flow of funds for the
                period
                itemized by type and priority of payment, including:

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              (i)
                Fees or expenses accrued and
                paid, with an identification of the general purpose of such fees
                and the
                party receiving such fees or expenses.

            	 	 	 	 
	
              (ii)
                Payments accrued or paid
                with respect to enhancement or other support identified in Item 1114
                of
                Regulation AB (such as insurance premiums or other enhancement maintenance
                fees), with an identification of the general purpose of such payments
                and
                the party receiving such payments.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              (iii)
                Principal, interest and
                other distributions accrued and paid on the asset-backed securities
                by
                type and by class or series and any principal or interest shortfalls
                or
                carryovers.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust 
                Certificateholders)

            	 	 	 
	
              (iv)
                The amount of excess cash
                flow or excess spread and the disposition of excess cash flow.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              (4)
                Beginning and ending principal balances of the asset-backed
                securities.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              (5)
                Interest rates applicable to the pool assets and the asset-backed
                securities, as applicable. Consider providing interest rate information
                for pool assets in appropriate distributional groups or incremental
                ranges.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              (6)
                Beginning and ending balances of transaction accounts, such as reserve
                accounts, and material account activity during the period.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              (7)
                Any amounts drawn on any credit enhancement or other support identified
                in
                Item 1114 of Regulation AB, as applicable, and the amount of coverage
                remaining under any such enhancement, if known and applicable.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              (8)
                Number and amount of pool assets at the beginning and ending of each
                period, and updated pool composition information, such as weighted
                average
                coupon, weighted average remaining term, pool factors and prepayment
                amounts.

            	
                
X

              
              

                
                (Monthly Statements to Grantor
   Trust  
                Certificateholders)

              
              

            	
              Updated
                pool composition information fields to be as specified by Depositor
                from
                time to time

            	 	 
	
              (9)
                Delinquency and loss information for the period.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              In
                addition, describe any material changes to the information specified
                in
                Item 1100(b)(5) of Regulation AB regarding the pool assets.
                (methodology)

            	 	 	 	 
	
              (10)
                Information on the amount, terms and general purpose of any advances
                made
                or reimbursed during the period, including the general use of funds
                advanced and the general source of funds for reimbursements.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              (11)
                Any material modifications, extensions or waivers to pool asset terms,
                fees, penalties or payments during the distribution period or that
                have
                cumulatively become material over time.

            	
                X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              (12)
                Material breaches of pool asset representations or warranties or
                transaction covenants.

            	
               
X

              
              

               
                (if agreed upon by the parties)

            	
              X

            	 	 
	
              (13)
                Information on ratio, coverage or other tests used for determining
                any
                early amortization, liquidation or other performance trigger and
                whether
                the trigger was met.

            	
               
X

              
              

               
                (Monthly Statements to Grantor
   Trust
                Certificateholders)

            	 	 	 
	
              (14)
                Information regarding any new issuance of asset-backed securities
                backed
                by the same asset pool,

            	 	
              X

            	 	 
	
              information
                regarding any pool asset changes (other than in connection with a
                pool
                asset converting into cash in accordance with its terms), such as
                additions or removals in connection with a prefunding or revolving
                period
                and pool asset substitutions and repurchases (and purchase rates,
                if
                applicable), and cash flows available for future purchases, such
                as the
                balances of any prefunding or revolving accounts, if applicable.

            	
               
X

            	
              X

            	 	 
	
              Disclose
                any material changes in the solicitation, credit-granting, underwriting,
                origination, acquisition or pool selection criteria or procedures,
                as
                applicable, used to originate, acquire or select the new pool
                assets.

            	 	
              X

            	
              X

            	 
	
              Item
                1121(b) – Pre-Funding or Revolving Period Information

              
              

              Updated
                pool information as required under Item 1121(b).

            	 	
              X

            	 	 
	
              2

            	
              Legal
                Proceedings

            	 	 	 	 
	
              Item
                1117 – Legal proceedings pending against the following entities, or their
                respective property, that is material to Grantor Trust Certificateholders,
                including proceedings known to be contemplated by governmental
                authorities:

            	 	 	 	 
	
              Sponsor
                (Seller)

            	 	 	
              X

            	 
	
              Depositor

            	 	
              X

            	 	 
	
              Grantor
                Trust Trustee

            	
               
X

              
              

            	 	 	 
	
              Issuing
                entity

            	 	
              X

            	 	 
	
              Master
                Servicer, affiliated Servicer, other Servicer servicing 20% or more
                of
                pool assets at time of report, other material servicers

            	
               
                N/A

            	 	 	 
	
              Securities
                Administrator

            	
               
                N/A

            	 	 	 
	
              Originator
                of 20% or more of pool assets as of the Cut-off Date

            	 	
              X

            	 	 
	
              Custodian

            	
               
                N/A

            	 	 	 
	
              3

            	
              Sales
                of Securities and Use of Proceeds

            	 	 	 	 
	
              Information
                from Item 2(a) of Part II of Form 10-Q:

              
              

              With
                respect to any sale of securities by the sponsor, depositor or issuing
                entity, that are backed by the same asset pool or are otherwise issued
                by
                the issuing entity, whether or not registered, provide the sales
                and use
                of proceeds information in Item 701 of Regulation S-K.  Pricing
                information can be omitted if securities were not registered.

            	 	
              X

            	 	 
	
              4

            	
              Defaults
                Upon Senior Securities

            	 	 	 	 
	
              Information
                from Item 3 of Part II of Form 10-Q:

              
              

              Report
                the occurrence of any Event of Default (after expiration of any grace
                period and provision of any required notice)

            	
               
X

            	 	 	 
	
              5

            	
              Submission
                of Matters to a Vote of Security Holders

            	 	 	 	 
	
              Information
                from Item 4 of Part II of Form 10-Q

            	
               
X

            	 	 	 
	
              6

            	
              Significant
                Obligors of Pool Assets

            	 	 	 	 
	
              Item
                1112(b) –Significant
                Obligor Financial
                Information*

            	 	
              X

            	 	 
	
              *This
                information need only be reported on the Form 10-D for the distribution
                period in which updated information is required pursuant to the
                Item.

            	 	 	 	 
	
              7

            	
              Significant
                Enhancement Provider Information

            	 	 	 	 
	
              Item
                1114(b)(2) – Credit Enhancement Provider Financial Information*

            	 	 	 	 
	
              Determining
                applicable disclosure threshold

            	 	 	 	 
	
              Requesting
                required financial information or effecting incorporation by
                reference

            	 	 	 	 
	
              Item
                1115(b) – Derivative Counterparty Financial Information*

            	 	 	 	 
	
              Determining
                current maximum probable exposure

            	 	
              X

            	 	 
	
              Determining
                current significance percentage

            	 	 	 	 
	
              Requesting
                required financial information or effecting incorporation by
                reference

            	 	 	 	 
	
              *This
                information need only be reported on the Form 10-D for the distribution
                period in which updated information is required pursuant to the
                Items.

            	 	 	 	 
	
              8

            	
              Other
                Information

            	 	 	 	 
	
              Disclose
                any information required to be reported on Form 8-K during the period
                covered by the Form 10-D but not reported

            	
                
                The Responsible Party for the applicable Form 8-K item as indicated
                below.

            	 
	
              9

            	
              Exhibits

            	 	 	 	 	 
	
              Distribution
                report

            	
                
X

            	 	 	 
	
              Exhibits
                required by Item 601 of Regulation S-K, such as material agreements

            	 	
              X

            	 	 
	
              8-K

            	
              Must
                be filed within four business days of an
                event reportable on Form 8-K.

            	 
	
              1.01

            	
              Entry
                into a Material Definitive Agreement

            	 	 	 	 
	
              Disclosure
                is required regarding entry into or amendment of any definitive agreement
                that is material to the securitization, even if depositor is not
                a
                party.

              
              

              Examples:
                servicing agreement, custodial agreement.

              
              

              Note:
                disclosure not required as to definitive agreements that are fully
                disclosed in the prospectus

            	
                
X

            	
              X

            	
              X

            	 
	
              1.02

            	
              Termination
                of a Material Definitive Agreement

            	
                
X

            	
              X

            	
              X

            	 
	
              Disclosure
                is required regarding termination of  any definitive agreement
                that is material to the securitization (other than expiration in
                accordance with its terms), even if depositor is not a party.

              
              

              Examples:
                servicing agreement, custodial agreement.

            	 	 	 	 
	
              1.03

            	
              Bankruptcy
                or Receivership

            	 	 	 	 
	
              Disclosure
                is required regarding the bankruptcy or receivership, if known, with
                respect to any of the following:

              
              

              Sponsor
                (Seller), Depositor, Master Servicer, affiliated Servicer, other
                Servicer
                servicing 20% or more of pool assets at time of report, other material
                servicers, Certificate Administrator, Grantor Trust Trustee, significant
                obligor, credit enhancer (10% or more), derivatives counterparty,
                Custodian

            	
                
X

            	
              X

            	
              X

            	 
	
              2.04

            	
              Triggering
                Events that Accelerate or Increase a Direct Financial Obligation
                or an
                Obligation under an Off-Balance Sheet Arrangement

            	 	 	 	 
	
              Includes
                an early amortization, performance trigger or other event, including
                event
                of default, that would materially alter the payment priority/distribution
                of cash flows/amortization schedule.

              
              

              Disclosure
                will be made of events other than waterfall triggers which are disclosed
                in the Monthly Statement to Grantor Trust Certificateholders

            	
                
X

            	 	 	 
	
              3.03

            	
              Material
                Modification to Rights of Security Holders

            	 	 	 	 
	
              Disclosure
                is required of any material modification to documents defining the
                rights
                of Grantor Trust Certificateholders, including the Pooling and Servicing
                Agreement

            	
                
X

            	
              X

            	 	 
	
              5.03

            	
              Amendments
                to Articles of Incorporation or Bylaws; Change in Fiscal Year

            	 	 	 	 
	
              Disclosure
                is required of any amendment “to the governing documents of the issuing
                entity”

            	 	
              X

            	 	 
	
              5.06

            	
              Change
                in Shell Company Status

            	 	 	 	 
	
              [Not
                applicable to ABS issuers]

            	 	
              X

            	 	 
	
              6.01

            	
              ABS
                Informational and Computational Material

            	 	 	 	 
	
              [Not
                included in reports to be filed under Section 3.18]

            	 	
              X

            	 	 
	
              6.02

            	
              Change
                of Servicer or Grantor Trust Trustee

            	 	 	 	 
	
              Requires
                disclosure of any removal, replacement, substitution or addition
                of any
                master servicer, affiliated servicer, other servicer servicing 10%
                or more
                of pool assets at time of report, other material servicers, certificate
                administrator or Grantor Trust Trustee.

            	
                
X

            	
              X

              
              

            	 	 
	 	
              Reg
                AB disclosure about any new servicer is also required.

            	
                
N/A

            	 	 	 
	
              Reg
                AB disclosure about any new Grantor Trust Trustee is also required.

            	
                
X

                
                (to the extent of a new Grantor
    Trust
                Trustee)

            	 	 	 
	
              Reg
                AB disclosure about any new securities administrator is also
                required.

            	
                
N/A

            	 	 	 
	
              6.03

            	
              Change
                in Credit Enhancement or Other External Support In this transaction
                there
                is no external enhancement or other support.

            	 	 	 	 
	
              Covers
                termination of any enhancement in manner other than by its terms,
                the
                addition of an enhancement, or a material change in the enhancement
                provided.  Applies to external credit enhancements as well as
                derivatives.

            	 	
              X

            	 	 
	 	
              Reg
                AB disclosure about any new enhancement provider is also required.

            	 	
              X

            	 	 
	
              6.04

            	
              Failure
                to Make a Required Distribution

            	
                
X

            	 	 	 
	
              6.05

            	
              Securities
                Act Updating Disclosure

            	 	 	 	 
	
              If
                any material pool characteristic differs by 5% or more at the time
                of
                issuance of the securities from the description in the final prospectus,
                provide updated Reg AB disclosure about the actual asset pool.

            	 	
              X

            	 	 
	
              If
                there are any new servicers or originators required to be disclosed
                under
                Regulation AB as a result of the foregoing, provide the information
                called
                for in Items 1108 and 1110 respectively.

            	 	
              X

            	 	 
	
              7.01

            	
              Regulation
                FD Disclosure

            	
                
X

            	
              X

            	 	 
	
              8.01

            	
              Other
                Events

            	 	 	 	 
	
              Any
                event, with respect to which information is not otherwise called
                for in
                Form 8-K, that the registrant deems of importance to security
                holders.

            	 	
              X

            	 	 
	
              9.01

            	
              Financial
                Statements and Exhibits

            	
                 
                The Responsible Party applicable to reportable event.

            	 
	
              10-K

            	
              Must
                be filed within 90 days of the fiscal year
                end for the registrant.

            	 
	
              9B

            	
              Other
                Information

            	 	 	 	 
	 	 	
              Disclose
                any information required to be reported on Form 8-K during the fourth
                quarter covered by the Form 10-K but not reported

            	
              The
                Responsible Party for the applicable Form 8-K item as indicated
                above.

            	 
	 	
              15

            	
              Exhibits
                and Financial Statement Schedules

            	 	 	 	 
	
              Item
                1112(b) –Significant
                Obligor Financial
                Information

            	 	
              X

            	 	 
	
              Item
                1114(b)(2) – Credit Enhancement Provider Financial Information

            	 	 	 	 
	
              Determining
                applicable disclosure threshold

            	 	 	 	 
	
              Requesting
                required financial information or effecting incorporation by
                reference

            	 	 	 	 
	
              Item
                1115(b) – Derivative Counterparty Financial Information

            	 	 	 	 
	
              Determining
                current maximum probable exposure

            	 	
              X

            	 	 
	 	 	
              Determining
                current significance percentage

            	 	 	 	 
	
              Requesting
                required financial information or effecting incorporation by
                reference

            	 	 	 	 
	
              Item
                1117 – Legal proceedings pending against the following entities, or their
                respective property, that is material to Grantor Trust Certificateholders,
                including proceedings known to be contemplated by governmental
                authorities:

            	 	 	 	 
	
              Sponsor
                (Seller)

            	 	 	
              X

            	 
	
              Depositor

            	 	
              X

            	 	 
	
              Grantor
                Trust Trustee

            	
               
X

            	 	 	 
	
              Issuing
                entity

            	 	
              X

            	 	 
	
              Master
                Servicer, affiliated Servicer, other Servicer servicing 20% or more
                of
                pool assets at time of report, other material servicers

            	
               
N/A

            	 	 	 
	
              Securities
                Administrator

            	
                
N/A

            	 	 	 
	
              Originator
                of 20% or more of pool assets as of the Cut-off Date

            	 	
              X

            	 	 
	
              Custodian

            	
                
N/A

            	 	 	 
	
              Item
                1119 – Affiliations and relationships between the following entities, or
                their respective affiliates, that are material to Grantor Trust
                Certificateholders:

            	 	 	 	 
	
              Sponsor
                (Seller)

            	 	 	
              X

            	 
	
              Depositor

            	 	
              X

            	 	 
	
              Grantor
                Trust Trustee

            	
                
X

            	 	 	 
	
              Master
                Servicer, affiliated Servicer, other Servicer servicing 20% or more
                of
                pool assets at time of report, other material servicers

            	
               
N/A

            	 	 	 
	
              Securities
                Administrator

            	
               
N/A

            	 	 	 
	
              Originator

            	 	
              X

            	 	 
	
              Custodian

            	
                
                N/A

            	 	 	 
	
              Credit
                Enhancer/Support Provider

            	 	
              X

            	 	 
	
              Significant
                Obligor

            	 	
              X

            	 	 
	
              Item
                1122 – Assessment of Compliance with Servicing Criteria

            	
                
X

            	 	 	 
	
              Item
                1123 – Servicer Compliance Statement

            	
                
X

            	 	 	 

    

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      E

     

    ADDITIONAL
      DISCLOSURE NOTIFICATION

     

    Wells
      Fargo Bank, N.A., as Grantor Trust Trustee

    9062
      Old
      Annapolis Road

    Columbia,
      Maryland 21045

    Fax:
      (410) 715-2380

    E-mail:  cts.sec.notifications@wellsfargo.com

     

    Attn:  Client
      Manager - BSSP 2007-R3 - SEC REPORT PROCESSING

     

    RE:  **Additional
      Form [  ] Disclosure**Required

    

     

    Ladies
      and Gentlemen:

     

    In
      accordance with Section 3.11 of the
      Grantor Trust Agreement, dated as of October 24, 2007, by and between Structured
      Asset Mortgage Investments II Inc., as depositor, and Wells Fargo Bank, N.A.,
      as
      grantor trust trustee.  The Undersigned, as
      [    ], hereby notifies you that certain events have come to
      our attention that [will][may] need to be disclosed on Form
      [   ].

     

    Description
      of Additional
      Form [   ] Disclosure:

     

    List
      of
      Any Attachments hereto to be included in the Additional Form [  ]
      Disclosure:

     

    Any
      inquiries related to this
      notification should be directed to [   ], phone
      number:  [   ]; email
      address:  [   ].

     

    
      	 	
              [NAME
                OF PARTY]

            
	 	
              as
                [role]

              
              

            
	 	 
	 	
              By:
                __________________

              
              

            
	 	
                    Name: 
                

            
	 	
                    Title:

              
              

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      F

     

    YIELD
      MAINTENANCE AGREEMENT

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
      A

     

     UNDERLYING
      SECURITIES

     

    

    
      	
              
                
                

                Full
                  Name of Series

              

            	 	
              
                Initial
                  and Current Principal Balance

              

            	 	
              
                Principal
                  Balance Included in Trust

              

            	 	
              
                
                

                Class
                  % in Trust

              

            
	
              Structured
                Asset Mortgage Investments II Trust 2007-AR7, Mortgage Pass-Through
                Certificates, Series 2007-AR7, Class III-A-2 Certificates

            	 	
              $10,759,000

            	 	
              $10,759,000

            	 	
              
              

              100.00%

              
              

            
	
              Structured
                Asset Mortgage Investments II Trust 2007-AR7, Mortgage Pass-Through
                Certificates, Series 2007-AR7, Class A-4 Certificates

            	 	
              $134,917,000

            	 	
              $14,000,000

            	 	
              
              

              10.3768%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}]]