Document:

Exhibit
      10.1

    

    SUBSCRIPTION
      AGREEMENT

    

    THIS
      SUBSCRIPTION AGREEMENT (this “Agreement”)
      made
      as of the date set forth on the signature page hereof between Manhattan
      Pharmaceuticals, Inc., a Delaware corporation having a place of business at
      810
      Seventh Avenue, 4th Floor, New York, New York 10019 (the “Company”),
      and
      the undersigned (the “Subscriber”).

    

    WITNESSETH:

    

    WHEREAS,
      the Company is offering (the “Offering”)
      to a
      limited number of “accredited investors,” as that term is defined by Rule 501(a)
      of Regulation D (“Regulation
      D”)
      of the
      Securities Act of 1933, as amended (the “Securities
      Act”),
      units
      of its securities each consisting of one share (each, a “Share”
and
      collectively, the “Shares”)
      of its
      common stock, par value $0.001 per share (“Common
      Stock”)
      and a
      warrant (each a “Warrant,”
and
      collectively, the “Warrants”
and
      together with the Shares, the “Securities”)
      to
      purchase 35% of a share of Common Stock (the “Warrant
      Shares”)
      on
      terms and conditions described in this Agreement; 

    

    WHEREAS,
      the Offering is contingent upon the Company making sales of a number of
      Securities which would provide
      the Company with aggregate gross proceeds of at least $2,000,000
      (the
“Minimum
      Offering”),
      and
      the
      Company
      will sell a maximum number
      of
      Securities which would result in aggregate gross proceeds of $7,500,000 (the
      “Maximum
      Offering”),
      although the Company, in its discretion, may increase the Maximum Offering
      by an
      additional $2,500,000 to cover over-allotments (the “Over-Allotment”);

    

    WHEREAS,
      Paramount BioCapital, Inc., is acting as exclusive placement agent (the
“Placement
      Agent”)
      for
      the Offering; and

    

    WHEREAS,
      on the terms and conditions hereinafter set forth, the Subscriber desires to
      purchase from the Company, and the Company desires to sell to the Subscriber,
      a
      number of Shares and Warrants.

    

    NOW,
      THEREFORE, in consideration of the promises and the mutual representations
      and
      covenants hereinafter set forth, the parties hereto do hereby agree as
      follows:

    

    
      	1.	
              PURCHASE
                AND SALE OF SECURITIES.

            

    

     

    1.1  Offering.
      The
      Company is offering to a limited number of persons who qualify as “accredited
      investors” as defined by Rule 501(a) of Regulation D, the Securities on terms
      and conditions described in this Agreement. The Minimum Offering will be offered
      on an “all or none, best efforts” basis. The Maximum Offering and the
      Over-Allotment, if exercised, will be offered on a “best efforts” basis. The
      Subscriber understands, however, that this purchase of the Securities is
      contingent upon the Company making aggregate sales of Securities equal to or
      exceeding the Minimum Offering. The Securities are being offered in units,
      with
      each unit consisting of one Share and a Warrant to purchase 35% of one Share
      (rounded down to the nearest whole share), at a purchase price per unit equal
      to
      the lesser of (i) $0.84 and (ii) the average closing sale price of the Common
      Stock as reported on the American Stock Exchange during the five business days
      immediately preceding the Closing Date, rounded to the nearest cent (the
“Market
      Price”).
      Each
      Warrant shall be exercisable during the period commencing on the six month
      anniversary of the Closing Date and ending on the five-year anniversary of
      the
      Closing Date. The Warrant shall be exercisable at a price per Warrant Share
      equal to 110% of the Market Price, but in no event less than the last closing
      sale price of the Common Stock on the trading day immediately preceding the
      Closing. Further, in the event that the closing sale price of the Common Stock
      for any 30 consecutive trading days is at least 300% of the Warrant exercise
      price, the Company shall be entitled to redeem not less than all of the Warrants
      at a per Warrant redemption price of $0.01, by providing 30 business days’
written notice to the holder. In
      the
      event that the Company decides to redeem the Warrants pursuant to this
Section
      1.1,
      such
      holders may
      exercise this Warrant
      during
such
      30-day period. The Warrant shall be in substantially the
      form
      attached as an
      exhibit
      to the
      Memorandum (as defined below).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    1.2  Closing.
      At each
      closing (each a “Closing,”
and
      the date thereof, the “Closing
      Date”),
      provided the Company has received subscriptions and proceeds for the amount
      of
      the Minimum Offering, the Company shall issue and sell to the Subscriber and
      the
      Subscriber shall purchase from the Company, (a) a number of Shares resulting
      from dividing the Subscriber’s “Aggregate
      Purchase Price”
set
      forth on the signature page hereof (and as further described below) by the
      Market Price (rounded down to the nearest whole Share) and (b) Warrants to
      purchase a number of Warrant Shares equal to 35% of the Shares purchased by
      the
      Subscriber; provided, however, that the Company and Placement Agent may, in
      their sole discretion, accept a lesser amount of Aggregate Purchase Price from
      the Subscriber. 

     

    1.3  Closing
      Mechanics.
      The
      Closing shall be held at a date and time designated by the Company and the
      Placement Agent prior to 11:59 p.m., New York City time, on February 28, 2007
      (subject to extension at the discretion of the Company and the Placement Agent
      without notice to the Subscriber of up to 60 days), which date shall be no
      later
      than five (5) Business Days (as defined in Article
      5)
      after
      satisfaction or waiver of the closing conditions set forth in Article
      4
      hereof.
      The Closing shall occur at the offices of the Placement Agent, located at 787
      Seventh Avenue, New York, New York 10019. Upon
      satisfaction or waiver of all conditions to the Closing, the Placement Agent
      and
      the Company shall instruct US Bank Trust National Association, as escrow agent
      (the “Escrow
      Agent”),
      to
      release the proceeds of the Offering to the Company, less fees and expenses
      due
      to the Placement Agent. Interest, if any, that has accrued with respect to
      the
      Aggregate Purchase Price while in escrow shall also be distributed to the
      Company at the Closing and the Subscriber will have no right to such interest,
      even if there is no Closing.

     

    1.4  Payment
      of Aggregate Purchase Price.
      Upon,
      or prior to, the execution of this Agreement by the Subscriber, the Subscriber
      shall deposit the amount of readily available funds equal to the Aggregate
      Purchase Price, as set forth on the signature page hereof, in a segregated
      escrow account with the Escrow Agent by check or wire transfer of immediately
      available funds pursuant to the instructions provided below. Subject to the
      terms and conditions of this Agreement (including, without limitation, the
      Company’s and the Placement Agent’s option, each at its sole discretion, to
      refuse to accept subscriptions, in whole or in part, from any Subscriber),
      the
      Subscriber hereby subscribes for and agrees to purchase from the Company such
      number of Shares and Warrants, as determined in accordance with Section
      1.2
      above,
      and the Company agrees to sell such number of Shares and Warrants as accepted
      by
      the Company and the Placement Agent.

     

    
      
        
        

      

      
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    US
      Bank Trust National Association

    ABA
      Routing Number: 091 000 022

    US
      Bank and Trust Corp. Account Number: 180121167365

    For:
      Manhattan/Paramount BioCapital

    SEI
      Number: 108950000

    Reference:
      [Investor Name]

    Attn:
      Andrea Friesen

    Tel:
      651-495-3725

    Fax:
      651-495-8087

    

    The
      Subscriber must complete and return a duly executed, unaltered copy of this
      Agreement (including the completed Confidential Investor Questionnaire included
      in Article
      7
      hereof
      (the “Confidential
      Investor Questionnaire”))
      to
      the Placement Agent at the Placement Agent’s address indicated in the Memorandum
      (as defined below) on or before the date indicated to the Subscriber by the
      Placement Agent to be eligible to participate in the Offering. The Company
      and
      the Placement Agent retain complete discretion to accept or reject any
      subscription unless and until the Company executes a counterpart to this
      Agreement that includes such Subscriber’s signature.

    

    1.5  Delivery
      of Certificates.
      The
      Company shall deliver, or cause to be delivered, the certificates representing
      the Securities purchased by the Subscriber hereunder as soon as practical after
      the Closing to the Subscriber’s residential or business address indicated on the
      signature page hereto.

     

    
      	2.	
              REPRESENTATIONS
                AND WARRANTIES OF SUBSCRIBER.

            

    

    

    The
      Subscriber hereby represents and warrants to the Company as of the date hereof
      and the Closing Date as follows:

    

    2.1 The
      Subscriber understands, acknowledges and agrees that the purchase of the
      Securities involves a high degree of risk including, but not limited to, the
      following: (i) an investment in the Company is highly speculative, and only
      investors who can afford the loss of their entire investment should consider
      investing in the Company and the Securities; (ii) the Subscriber may not be
      able
      to liquidate its investment; (iii) transferability of the Securities is
      extremely limited; (iv) in the event of a disposition of the Securities, the
      Subscriber could sustain the loss of its entire investment; and (v) since the
      Company has been a publicly-traded company, the Company has not paid any
      dividends on its Common Stock and does not anticipate the payment of dividends
      in the foreseeable future.

    

    2.2 The
      Subscriber is an “accredited investor” as such term is defined in Rule 501 of
      Regulation D promulgated under the Securities Act, as indicated by the
      Subscriber’s responses to the questions contained in the Confidential Investor
      Questionnaire, which are true and correct as of the date hereof and shall be
      true and correct as of the Closing Date, and that the Subscriber is able to
      bear
      the economic risk of an investment in the Company. If the Subscriber is a
      natural person, the Subscriber has reached the age of majority in the state
      or
      other jurisdiction in which the Subscriber resides, has adequate means of
      providing for the Subscriber’s current financial needs and contingencies, is
      able to bear the substantial economic risks of an investment in the Securities
      for an indefinite period of time, has no need for liquidity in such investment
      and, at the present time, could afford a complete loss of such
      investment.

     

    
      
        
        

      

      
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    2.3  The
      Subscriber understands, acknowledges and agrees that: (i) the Subscriber is
      knowledgeable, sophisticated and has experience in making, and is qualified
      to
      make, decisions with respect to investments representing an investment decision
      like that involved in the purchase of the Securities and has prior investment
      experience; (ii) the investment in the Securities is of a highly speculative
      nature and involves a significant degree of risk, that the market price of
      the
      Common Stock has been and continues to be volatile and that Subscriber has
      carefully evaluated the risks of an investment in the Securities; and (iii)
      the
      Subscriber is able to bear the economic risk of an investment in the Securities
      and the potential loss of such investment, which risk the Subscriber hereby
      assumes.

    

    2.4  The
      Subscriber has received and carefully reviewed this Agreement, the Company’s
      Confidential Offering Memorandum dated February 12, 2007 (together with all
      exhibits, appendices, supplements or amendments thereto, the “Memorandum”),
      including the following documents filed by the Company with the Securities
      and
      Exchange Commission (the “SEC”,
      and
      such documents, the “SEC
      Filings”)
      and
      included as exhibits to the Memorandum: Form 10-KSB for the year ended December
      31, 2005; Definitive Proxy Statement on Schedule 14-A filed on November 17,
      2006; Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2006
      (as
      amended), June 30, 2006 and September 30, 2006; and Current Reports on Form
      8-K
      filed on August 14, 2006, January 12, 2007 and February 5, 2007. The Subscriber
      further represents that the Subscriber has been furnished by the Company during
      the course of this transaction with all information regarding the Company which
      the Subscriber, its investment advisor, attorney and/or accountant has requested
      or desired to know or which is otherwise relevant to an investment decision,
      has
      been afforded the opportunity to ask questions of and receive answers from
      duly
      authorized officers or other representatives of the Company concerning the
      terms
      and conditions of the Offering, and has received any additional information
      which the Subscriber or its advisors or agents has requested.

    

    2.5 (a) The
      Subscriber has relied solely upon the information provided by the Company in
      making the decision to invest in the Securities. The Subscriber is familiar
      with
      and understands the terms of the Offering, including the rights to which the
      Subscriber is entitled under this Agreement. In evaluating the suitability
      of an
      investment in the Company, the Subscriber has not relied upon any representation
      or other information (whether oral or written) from the Company, or any agent,
      employee or Affiliate of the Company other than as set forth in the Memorandum,
      in this Agreement or resulting from the results of the Subscriber’s own
      independent investigation. The Subscriber understands and acknowledges that
      nothing in this Agreement, the Memorandum or any other materials provided to
      the
      Subscriber in connection with the subscription for the Securities or sale of
      the
      Securities constitutes investment, tax or legal advice. To the extent deemed
      necessary or advisable by the Subscriber in its sole discretion, the Subscriber
      has retained, at its sole expense, and relied upon appropriate professional
      advice regarding the investment, tax and legal merits and consequences of this
      Agreement and its purchase of the Securities hereunder. 

    

    
      
        
        

      

      
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    (b) No
      Securities were offered or sold to the Subscriber by means of any form of
      general solicitation or general advertising, and in connection therewith the
      Subscriber did not: (A) receive or review any advertisement, article, notice
      or
      other communication published in a newspaper or magazine or similar media or
      broadcast over television or radio whether closed circuit, or generally
      available; or (B) attend any seminar meeting or industry investor conference
      whose attendees were invited by any general solicitation or general
      advertising.

    

    2.6 The
      Subscriber, either by reason of the Subscriber’s business or financial
      experience or the business or financial experience of the Subscriber’s
      professional advisors, has the capacity to protect the Subscriber’s own
      interests in connection with the transaction contemplated hereby. 

    

    2.7 The
      Subscriber understands, acknowledges and agrees that the Offering has not been
      reviewed, recommended or endorsed by the SEC or any state securities regulatory
      authority or other governmental body or agency, since the Offering is intended
      to be exempt from the registration requirements of Section 5 of the Securities
      Act pursuant to Regulation D. The Subscriber shall not sell or otherwise
      transfer the Securities unless such transfer is registered under the Securities
      Act or unless an exemption from such registration is available. The Subscriber
      understands that if required by the laws or regulations or any applicable
      jurisdictions, the Offering contemplated hereby will be submitted to the
      appropriate authorities of such state(s) for registration of exemption
      therefrom. 

    

    2.8 The
      Subscriber understands, acknowledges and agrees that the Securities have not
      been registered under the Securities Act in reliance upon a claimed exemption
      under the provisions of the Securities Act which depends, in part, upon the
      Subscriber’s investment intention and the truth and accuracy of, and
      Subscriber’s compliance with, the representations, warranties, acknowledgments
      and covenants of Subscriber set forth herein. In this connection, the Subscriber
      hereby represents that the representations, warranties, acknowledgments and
      covenants of Subscriber set forth herein are true and correct, Subscriber will
      comply with the covenants set forth herein, and the Subscriber is purchasing
      the
      Securities for the Subscriber’s own account for investment purposes only and not
      with a view toward the resale or distribution to others and has no contract,
      undertaking, agreement or other arrangement, in existence or contemplated,
      to
      sell, pledge, assign or otherwise transfer the Securities to any other Person
      (as defined in Article
      5).
      The
      Subscriber, if an entity, also represents that it was not formed for the purpose
      of purchasing the Securities. The Subscriber has no current plans to effect
      a
“change of control” of the Company, as such term is understood in Rule 13d of
      the Exchange Act.

    

    
      
        
        

      

      
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    2.9 The
      Subscriber understands that the Securities will not be registered or available
      for sale in the public markets except as specifically provided herein, and
      Rule
      144 promulgated under the Securities Act (“Rule
      144”)
      requires, among other conditions, a one-year holding period prior to the resale
      (in limited amounts) of securities acquired in a non-public offering (and a
      two-year holding period for unlimited sales by non-Affiliates of the Company)
      without having to satisfy the registration requirements under the Securities
      Act. The Subscriber understands and hereby acknowledges that the Company is
      under no obligation to register any of the Securities under the Securities
      Act
      or any state securities or “blue sky” laws or assist the Subscriber in obtaining
      an exemption from various registration requirements, other than as set forth
      in
Article
      5
      herein.

    

    2.10 The
      Subscriber consents to the placement of a legend on any certificate or other
      document evidencing the Securities substantially as set forth below, that such
      Securities have not been registered under the Securities Act or any state
      securities or “blue sky” laws and setting forth or referring to the restrictions
      on transferability and sale thereof contained in this Agreement. The Subscriber
      is aware that the Company will make a notation in its appropriate records with
      respect to the restrictions on the transferability of the Securities.

    

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY
      STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
      RESALE AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
      EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
      AND
      APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
      AND SCOPE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
      REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT AND APPLICABLE STATE
      SECURITIES LAWS.

     

    2.11 The
      Subscriber agrees to supply
      the Company, within five (5) days after the Subscriber receives the request
      therefor from the Company, with such additional information concerning the
      Subscriber as the Company deems necessary or advisable in order to establish
      or
      verify the Subscriber’s representations contained herein.

    

    2.12 The
      address of the Subscriber furnished by Subscriber on the signature page hereof
      is the Subscriber’s principal residence if Subscriber is an individual or its
      principal business address if it is a corporation or other entity.

    

    2.13 The
      Subscriber has full power and authority (corporate or otherwise) to execute,
      deliver, and perform this Agreement and to purchase the Securities and has
      taken
      all action necessary to authorize the execution, delivery and performance of
      this Agreement. This Agreement constitutes the legal, valid and binding
      obligation of the Subscriber, enforceable against the Subscriber in accordance
      with its terms, subject to laws of general application relating to bankruptcy,
      insolvency and the relief of debtors and rules of law governing specific
      performance, injunctive relief or other equitable remedies, and to limitations
      of public policy.

    

    
      
        
        

      

      
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    2.14 If
      the
      Subscriber is a corporation, partnership, limited liability company, trust,
      employee benefit plan, individual retirement account, Keogh Plan, or other
      entity (a) it is authorized and qualified to become an investor in the Company
      and the Person signing this Agreement on behalf of such entity has been duly
      authorized by such entity to do so and (b) it is duly organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      organization.

    

    2.15 The
      Subscriber acknowledges that if he or she is a Registered Representative of
      an
      NASD member firm, he or she must give such firm the notice required by NASD
      Rule
      3050, receipt of which must be acknowledged by such firm in Section
      7.4
      below in
      accordance with such rules.

    

    2.16 The
      Subscriber understands, acknowledges and agrees that this subscription may
      be
      rejected, in whole or in part, by the Company or the Placement Agent, in each
      of
      their sole and absolute discretion, at any time before any Closing Date
      notwithstanding prior receipt by the Subscriber of notice of acceptance of
      the
      Subscriber’s subscription. The Subscriber hereby authorizes and directs the
      Company to return, without interest, any funds for unaccepted subscriptions
      to
      the same account from which the funds were drawn, including any customer account
      maintained by the Subscriber with the Placement Agent.

     

    2.17 The
      Subscriber understands, acknowledges and agrees with the Company that except
      as
      otherwise set forth herein, the subscription hereunder is irrevocable by the
      Subscriber, that, except as required by law, the Subscriber is not entitled
      to
      cancel, terminate or revoke this Agreement or any agreements of the Subscriber
      hereunder and that this Agreement and such other agreements shall survive the
      death or disability of the Subscriber and shall be binding upon and inure to
      the
      benefit of the parties and their heirs, executors, administrators, successors,
      legal representatives and permitted assigns. If the Subscriber is more than
      one
      Person, the obligations of the Subscriber hereunder shall be joint and several
      and the agreements, representations, warranties and acknowledgments herein
      contained shall be deemed to be made by and be binding upon each such Person
      and
      its heirs, executors, administrators, successors, legal representatives and
      permitted assigns.

    

    2.18  The
      Subscriber understands, acknowledges and agrees with the Company that, the
      Offering is intended to be exempt from registration under the Securities Act
      by
      virtue of Section 4(2) of the Securities Act and the provisions of Regulation
      D,
      and/or the provisions of Regulation S which is in part dependent upon the truth,
      completeness and accuracy of the statements made by the Subscriber.

    

    2.19  The
      Subscriber understands, acknowledges and agrees that there can be no assurance
      that the Subscriber will be able to sell or dispose of the Securities. It is
      understood than in order not to jeopardize the Offering’s exempt status under
      Section 4(2) of the Securities Act and Regulation D, in addition to any other
      restrictions on transfer set forth herein or in the Warrants, the Company may,
      at a minimum, require any transferee to fulfill the Subscriber suitability
      requirements thereunder and make the representations, warranties and covenants
      of Subscriber hereunder.

    

    
      
        
        

      

      
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    2.20  The
      Subscriber represents and warrants since the date that the Subscriber was first
      contacted with respect to the Offering (the “First
      Date”)
      the
      Subscriber has not, directly or indirectly, through related parties, Affiliates
      or otherwise, sold “short” or “short against the box” (as such terms are
      generally understood), and until the transactions contemplated by this Agreement
      are publicly announced, will not sell “short” or “short against the box” any
      equity security of the Company or take any action with respect to any equity
      security of the Company which would violate the Securities Act or the rules
      and
      regulations promulgated thereunder. 

    

    2.21 The
      Subscriber understands, acknowledges and agrees that the existence of and
      information contained in this Agreement, the Memorandum or otherwise made
      available to the Subscriber by the Company (collectively, the “Confidential
      Information”)
      is to
      be used solely for the purpose of evaluating a possible investment in the
      Securities and is confidential and non-public and agrees that all such
      Confidential Information shall be kept in confidence by the Subscriber and
      neither used by the Subscriber for the Subscriber’s personal benefit (other than
      in connection with evaluating a possible investment in the Securities) nor
      disclosed to any third party for any reason and in any manner, notwithstanding
      that a Subscriber’s subscription may not be accepted by the Company;
provided,
      however,
      that
      this obligation shall not apply to any such Confidential Information that (i)
      is
      part of the public knowledge or literature and readily accessible at the date
      hereof (except as a result of a breach of this provision by any party) or (ii)
      becomes part of the public knowledge or literature and readily accessible by
      publication (except as a result of a breach of this provision by any
      party).

    

    2.22 If
      the
      Subscriber is purchasing the Securities in a fiduciary capacity for another
      Person, including without limitation a corporation, partnership, trust or any
      other entity, the Subscriber has been duly authorized and empowered to execute
      this Agreement and all other subscription documents, and such other Person
      fulfills all the requirements for purchase of the Securities as such
      requirements are set forth herein, concurs in the purchase of the Securities
      and
      agrees to be bound by the obligations, representations, warranties and covenants
      contained herein. Upon request of the Company, the Subscriber will provide
      true,
      complete and correct copies of all relevant documents creating the Subscriber,
      authorizing its investment in the Company and/or evidencing the satisfaction
      of
      the foregoing.

    

    2.23  No
      authorization, approval, consent or license of any Person is required to be
      obtained for the purchase of the Securities
      by the
      Subscriber, other than as have been obtained and are in full force and effect.
      The execution and delivery of this Agreement does not, and the consummation
      of
      the transactions contemplated hereby will not, result in any violation of or
      constitute a default under any material agreement or other instrument to which
      the Subscriber is a party or by which the Subscriber or any of its properties
      are bound, or to the best of the Subscriber’s knowledge, any permit, franchise,
      judgment, order, decree, statute, rule or regulation to which the Subscriber
      or
      any of its businesses or properties is subject.

    

    
      
        
        

      

      
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    2.24  The
      Subscriber understands, acknowledges and agrees that the representations,
      warranties and agreements of the Subscriber contained herein (including the
      Confidential Investor Questionnaire), in the Registration Questionnaire attached
      hereto as Appendix
      A
      (the
“Registration
      Questionnaire”)
      and in
      any other writing delivered in connection with the transactions contemplated
      hereby shall be true and correct on the date hereof and as of the Closing Date
      as if made on and as of such date (except for representations, warranties and
      agreements as of a specific date, which shall be true and correct as of such
      date) and shall survive the execution and delivery of this Agreement and the
      purchase of the Securities. The Subscriber agrees that the Placement Agent
      shall
      be entitled to rely on the representations, warranties and agreements of the
      Subscriber contained herein as if such representations, warranties and
      agreements were made or provided directly to the Placement Agent.

    

    2.25  The
      Subscriber hereby covenants with the Company not to make any sale of the
      Securities under the Registration Statement without effectively causing the
      prospectus delivery requirements under the Securities Act to be satisfied,
      and
      further agrees to comply with reasonable requests of the Company or its transfer
      agent to provide additional information and representations concerning such
      sale.

    

    2.26  (a)
      The
      Subscriber agrees, acknowledges and understands that the Placement Agent is
      acting as placement agent for the Securities being offered hereby and will
      be
      compensated by the Company for acting in such capacity, including, but not
      limited to, by: (i) placement fees in cash equal to up to seven percent (7%)
      of
      the proceeds received by the Company at the Closing; and (ii) warrants (the
      “Placement
      Warrants”)
      to
      purchase a number of shares of Common Stock (the “Placement
      Warrant Shares”)
      equal
      to five percent (5%) of the number of Shares actually sold by the Company in
      connection with the Offering (not including shares of Common Stock issuable
      upon
      exercise or conversion of warrants or other securities for which no cash
      consideration was received upon issuance); and (iv) reimbursement of its
      reasonable, documented expenses (including reasonable legal fees) incurred
      in
      connection with the Offering (which reimbursement shall not exceed $50,000).
      The
      Placement Warrants shall have an exercise price per share equal to 110% of
      the
      Purchase Price per share and will be in substantially the same form as the
      Warrants issued to the Subscriber, except the Placement Warrants will also
      provide for cashless exercise. The Subscriber shall not be entitled to
      reimbursement of any expenses incurred by the Subscriber in connection with
      the
      Offering. The Placement Agent will receive the commissions and Placement
      Warrants discussed above on all subsequent investments in Company securities
      made by investors introduced to the Company by the Placement Agent in connection
      with this Offering for a period of twelve (12) months from the Final Closing
      Date.

    

    (b) The
      Subscriber agrees, acknowledges and understands that the Placement Agent may
      engage other Persons, selected by it in its discretion, who are members of
      the
      NASD or who are located outside the United States, to assist the Placement
      Agent
      in connection with this Offering. 

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    
      	
              
                3.

              

            	
              
                REPRESENTATIONS
                  BY AND COVENANTS OF THE COMPANY.

              

            

    

    

    The
      Company hereby represents and warrants to the Subscriber as of the date this
      Agreement is accepted by the Company hereof and, if later, the Closing Date
      that:

    

    3.1 Organization,
      Good Standing and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and has full corporate power and
      authority to conduct its business as currently conducted. The Company is duly
      qualified as a foreign corporation to do business and is in good standing in
      every jurisdiction in which the property owned or leased by it or the nature
      of
      the business conducted by it makes such qualification necessary, except to
      the
      extent that the failure to be so qualified or in good standing would not
      reasonably be expected to have, individually or in the aggregate, a material
      adverse effect on the business, operations, conditions (financial or otherwise),
      properties, assets, liabilities, or results of operations of that entity
      individually or of the Company and its Subsidiaries (as defined below) as a
      whole (a “Material
      Adverse Effect”).
      For
      purposes of this Section, “Subsidiary”
      means
      any corporation, partnership, limited liability company, association, or other
      business entity in which the Company owns or controls, directly or indirectly,
      any interest, including, without limitation, any joint venture, partnership,
      or
      similar arrangement.

    

    3.2 Capitalization.
      The
      authorized capital stock of the Company consists of 150,000,000 shares of Common
      Stock and 10,000,000 shares of preferred stock. As of January 31, 2007, there
      were 60,147,814 shares of Common Stock issued and outstanding, all of which
      are
      duly authorized, validly issued, fully paid and non-assessable, and no shares
      of
      preferred stock outstanding. In addition, as of such date, there are 13,839,895
      shares of Common Stock reserved for issuance pursuant to outstanding options
      and
      warrants. All of the securities issued by the Company have been issued in
      accordance with all applicable federal and state securities laws. Other than
      as
      set forth above, there are no other options, warrants, calls, rights,
      commitments or agreements of any character to which the Company is a party
      or by
      which the Company is bound or obligating the Company to issue, deliver, sell,
      repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
      redeemed, any shares of the capital stock of the Company or obligating the
      Company to grant, extend or enter into any such option, warrant, call, right,
      commitment or agreement. Except as set forth in the Memorandum, there are no
      preemptive rights or rights of first refusal or similar rights which are binding
      on the Company permitting any Person to subscribe for or purchase from the
      Company shares of its capital stock pursuant to any provision of law, the
      Company’s Certificate of Incorporation as in effect on the date hereof (the
“Certificate of Incorporation”) or the Company’s By-laws, as in effect on the
      date hereof (the “By-laws”) or by agreement or otherwise. Except as set forth in
      the Memorandum, there are no securities or instruments containing anti-dilution
      or similar provisions that will be triggered by the issuance of the Securities
      as described in this Agreement. The Company has made available to the Placement
      Agent true, correct and complete copies of the Company’s Certificate of
      Incorporation and By-laws.

    

    3.3 Authorization;
      Enforceability.
      The
      Company has all corporate right, power and authority to enter into this
      Agreement and to consummate the transactions contemplated hereby. All corporate
      action on the part of the Company, its directors and stockholders necessary
      for
      the (i) authorization execution, delivery and performance of this Agreement
      by
      the Company; and (ii) authorization, sale, issuance and delivery of the
      Securities contemplated hereby and the performance of the Company's obligations
      hereunder has been taken. This Agreement has been duly executed and delivered
      by
      the Company and constitutes a legal, valid and binding obligation of the
      Company, enforceable against the Company in accordance with its terms, subject
      to laws of general application relating to bankruptcy, insolvency and the relief
      of debtors and rules of law governing specific performance, injunctive relief
      or
      other equitable remedies, and to limitations of public policy. The Shares,
      when
      issued and fully paid for in accordance with the terms of this Agreement, will
      be validly issued, fully paid and non-assessable. The Warrant Shares, when
      issued in accordance with the terms of the Warrants, will be validly issued,
      full paid and non-assessable. The issuance and sale of the Securities
      contemplated hereby will not give rise to any preemptive rights or rights of
      first refusal on behalf of any person which have not been waived in connection
      with this Offering.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    3.4 No
      Conflict; Governmental Consents.

    

    (a) Except
      as
      would not reasonably be expected to have a Material Adverse Effect, the
      execution and delivery by the Company of this Agreement and the consummation
      of
      the transactions contemplated hereby will not result in the violation of any
      law, statute, rule, regulation, order, writ, injunction, judgment or decree
      of
      any court or governmental authority to or by which the Company is bound, or
      of
      any provision of the Certificate of Incorporation or By-Laws of the Company,
      and
      will not conflict with, or result in a breach or violation of, any of the terms
      or provisions of, or constitute (with due notice or lapse of time or both)
      a
      default under, any lease, loan agreement, mortgage, security agreement, trust
      indenture or other agreement or instrument to which the Company is a party
      or by
      which it is bound or to which any of its properties or assets is subject, nor
      result in the creation or imposition of any lien upon any of the properties
      or
      assets of the Company.

    

    (b) Other
      than the approval of the American Stock Exchange, no consent, approval,
      authorization or other order of any governmental authority or other third party
      is required to be obtained by the Company in connection with the authorization,
      execution and delivery of this Agreement or with the authorization, issue and
      sale of the Securities, except such filings as may be required to be made with
      the SEC and with any state or foreign blue sky or securities regulatory
      authority relating to an exemption from registration thereunder.

    

    3.5 Licenses.
      Except
      as otherwise set forth in the Memorandum or as would not reasonably be expected
      to have a Material Adverse Effect, the Company has sufficient licenses, permits
      and other governmental authorizations currently required for the conduct of
      its
      business or ownership of properties and is in all material respects complying
      therewith.

    

    3.6 Litigation.
      There
      is no pending, or to the Company’s knowledge, threatened legal or governmental
      proceedings against the Company which (i) adversely questions the validity
      of
      this Agreement or any agreements related to the transactions contemplated hereby
      or the right of the Company to enter into any of such agreements, or to
      consummate the transactions contemplated hereby or thereby or (ii) could, if
      there were an unfavorable decision, have a Material Adverse Effect. There is
      no
      action, suit, proceeding or investigation by the Company currently pending
      in
      any court or before any arbitrator or that the Company intends to
      initiate.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    3.7 Investment
      Company
      The
      Company is not an “investment company” within the meaning of such term under the
      Investment Company Act of 1940, as amended, and the rules and regulations of
      the
      SEC thereunder.

    

    3.8 Financial
      Statements.
      The
      financial statements of the Company included in the SEC Filings (as amended)
      (the “Financial
      Statements”)
      fairly
      present in all material respects the financial condition and position of the
      Company at the dates and for the periods indicated; and have been prepared
      in
      conformity with generally accepted accounting principles in the United States
      (“GAAP”)
      consistently applied throughout the periods covered thereby, except as may
      be
      otherwise specified in such Financial Statements or the notes thereto and except
      that unaudited financial statements may not contain all footnotes required
      by
      GAAP, and fairly present in all material respects the financial position of
      the
      Company as of and for the dates thereof and the results of operations and cash
      flows for the periods then ended, subject, in the case of unaudited statements,
      to normal, immaterial, year-end audit adjustments. Since the date of the most
      recent balance sheet included as part of the Financial Statements and except
      as
      disclosed in the SEC Filings, there has not been: (i) any change in the
      business, conditions (financial or otherwise), properties, assets, liabilities,
      or results of operations of the Company from that reflected in the Financial
      Statements, other than changes in the ordinary course of business, none of
      which
      individually or in the aggregate would reasonably be expected to have a Material
      Adverse Effect; or (ii) any other event or condition of any character that,
      either individually or cumulatively, would reasonably be expected to have a
      Material Adverse Effect, except for the expenses incurred in connection with
      the
      transactions contemplated by this Agreement.

    

    3.9 Title
      to Properties and Assets; Liens, Etc.
      The
      Company has good and marketable title to its properties and assets, including
      the properties and assets reflected in the most recent balance sheet included
      in
      the Financial Statements, and good title to its leasehold estates, in each
      case
      subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than
      (a) those resulting from taxes which have not yet become delinquent; (b) liens
      and encumbrances which do not materially detract from the value of the property
      subject thereto or materially impair the operations of the Company; (c) those
      that have otherwise arisen in the ordinary course of business; and (d) those
      that would not reasonably be expected to have a Material Adverse Effect. The
      Company is in compliance with all material terms of each lease to which it
      is a
      party or is otherwise bound.

    

    3.10 Obligations
      to Related Parties.
      Except
      as disclosed in the Memorandum, there are no obligations of the Company to
      officers, directors, stockholders, or employees of the Company other than (a)
      for payment of salary or other compensation for services rendered, (b)
      reimbursement for reasonable expenses incurred on behalf of the Company, (c)
      standard indemnification provisions in the certificate of incorporation and
      by-laws, and (d) for other standard employee benefits made generally available
      to all employees (including stock option agreements outstanding under any stock
      option plan approved by the Board of Directors of the Company). Except as may
      be
      disclosed in the Financial Statements, the Company is not a guarantor or
      indemnitor of any indebtedness of any other person, firm or
      corporation.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

       

    

    3.11 Employee
      Relations; Employee Benefit Plans.
      The
      Company is not a party to any collective bargaining agreement or union contract.
      The Company believes that its relations with its employees are good. No
      executive officer (as defined in Rule 501(f) of the Securities Act) of the
      Company has notified the Company that such officer intends to leave the Company
      or otherwise terminate such officer's employment with the Company. The Company
      is in compliance with all federal, state, local and foreign laws and regulations
      respecting employment and employment practices, terms and conditions of
      employment and wages and hours, except where failure to be in compliance would
      not, either individually or in the aggregate, reasonably be expected to result
      in a Material Adverse Effect. Except as disclosed in the Memorandum, the Company
      does not maintain any compensation or benefit plan, agreement, arrangement
      or
      commitment (including, but not limited to, “employee benefit plans”, as defined
      in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
      amended (“ERISA”)
      for any
      present or former employees, officers or directors of the Company or with
      respect to which the Company has liability or makes or has an obligation to
      make
      contributions, other than any such plans, agreements, arrangements or
      commitments made generally available to the Company’s employees.

    

    3.12 Environmental
      Laws.
      The
      Company (i) is in compliance with any and all Environmental Laws (as hereinafter
      defined), (ii) has received all permits, licenses or other approvals required
      of
      it under applicable Environmental Laws to conduct its business and (iii) is
      in
      compliance with all terms and conditions of any such permit, license or approval
      where, in each of the foregoing clauses (i), (ii) and (iii), the failure to
      so
      comply would reasonably be expected to have, individually or in the aggregate,
      a
      Material Adverse Effect. The term “Environmental
      Laws”
      means
      all federal, state, local or foreign laws relating to pollution or protection
      of
      human health or the environment (including, without limitation, ambient air,
      surface water, groundwater, land surface or subsurface strata), including,
      without limitation, laws relating to emissions, discharges, releases or
      threatened releases of chemicals, pollutants, contaminants, or toxic or
      hazardous substances or wastes (collectively, “Hazardous
      Materials”)
      into
      the environment, or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Hazardous Materials, as well as all authorizations, codes, decrees, demands
      or
      demand letters, injunctions, judgments, licenses, notices or notice letters,
      orders, permits, plans or regulations issued, entered, promulgated or approved
      thereunder.

    

    3.13 Tax
      Status.
      The
      Company (i) has made or filed all federal and state income and all other tax
      returns, reports and declarations required by any jurisdiction to which it
      is
      subject, (ii) has paid all taxes and other governmental assessments and charges
      that are material in amount, shown or determined to be due on such returns,
      reports and declarations, except those being contested in good faith and (iii)
      has set aside on its books provision reasonably adequate for the payment of
      all
      taxes for periods subsequent to the periods to which such returns, reports
      or
      declarations apply. There are no unpaid taxes in any material amount claimed
      to
      be due by the taxing authority of any jurisdiction, and the officers of the
      Company know of no basis for any such claim.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

    

    3.14 Proprietary
      Rights.
      The
      Company owns or possesses adequate and enforceable rights to use all patents,
      patent applications, trademarks, trade names, corporate names, copyrights,
      trade
      secrets, licenses, inventions, formulations, technology and know-how and other
      intangible property used in the conduct of its business as described in the
      Memorandum (the “Proprietary
      Rights”).
      The
      Company has not received any notice of, and there are no facts known to the
      Company that reasonably indicate the existence of (i) any infringement or
      misappropriation by any third party of any of the Proprietary Rights or (ii)
      any
      claim by a third party contesting the validity of any of the Proprietary Rights.
      The Company has not received any notice of any infringement, misappropriation
      or
      violation by the Company or any of its employees of any Proprietary Rights
      of
      third parties

     

    3.15 Absence
      of Certain Changes.
      Except
      as set forth in the Memorandum, since the date of the Memorandum, there has
      been
      no material adverse change in the business, operations, conditions (financial
      or
      otherwise), prospects, assets or results of operations of the Company or any
      of
      its Subsidiaries.

     

    3.16 Disclosure.
      The
      information set forth in the Memorandum as of the date hereof contains no untrue
      statement of a material fact nor omits to state a material fact necessary in
      order to make the statements contained therein, in light of the circumstances
      under which they were made, not misleading.

    

    
      	4.	
              CONDITIONS
                TO OBLIGATIONS OF EACH PARTY.

            

    

    

    4.1  Conditions
      to Obligations of the Company.
      The
      Company’s obligation to complete the sale and issuance of the Securities and
      deliver the Securities to the Subscriber at the Closing is subject to the
      fulfillment on or prior to the Closing of the following conditions, which
      conditions may be waived at the option of the Company to the extent permitted
      by
      law:

    

    (a) Representations
      and Warranties Correct.
      The
      representations and warranties made by the Subscriber in Article
      2
      hereof
      shall be true and correct when made, and shall be true and correct on and as
      of
      the Closing Date (except for any representation or warranty that speaks as
      of a
      specific date, which shall be true and correct as of such date).

    

    (b) Covenants.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      by the Subscriber on or prior to such sale and issuance shall have been
      performed or complied with in all material respects.

    

    (c) No
      Legal Order Pending.
      There
      shall not then be in effect any legal or other order enjoining or restraining
      the transactions contemplated by this Agreement.

    

    (d)  No
      Law
      Prohibiting or Restricting Such Sale.
      There
      shall not be in effect any law, rule or regulation prohibiting or restricting
      the issuance and sale of the Securities or requiring any consent or approval
      of
      any Person which shall not have been obtained to issue or sell the Securities,
      or in either case to otherwise consummate the transactions contemplated hereby
      (except as otherwise provided in this Agreement).

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    (e)  Payment
      of Consideration.
      The
      Company shall have received the full amount of the Aggregate Purchase Price
      for
      the Units being purchased hereunder at the Closing.

    

    (f)  Questionnaires.
      The
      Subscriber shall have completed, executed and delivered to the Company the
      Confidential Investor Questionnaire and the Registration Questionnaire, which
      questionnaires shall be true and correct as of the Closing and shall be
      satisfactory to the Placement Agent and the Company, each in their sole
      discretion.

    

    (g)  Minimum
      Offering.
      The
      Company shall have received duly executed subscriptions and corresponding
      readily available funds shall have been deposited into the Escrow Account from
      Subscribers equal to or in excess of the Minimum Offering.

     

    (h)  AMEX
      Listing.
      The
      American Stock Exchange shall have approved the Shares and Warrant Shares for
      listing on such exchange.

    

    4.2 The
      Subscriber’s obligation to purchase the Securities at the Closing is subject to
      the fulfillment on or prior to the Closing of the following conditions, which
      conditions may be waived at the option of each Subscriber to the extent
      permitted by law:

    

    (a) Representations
      and Warranties Correct.
      The
      representations and warranties made by the Company in Article
      3
      hereof
      shall be true and correct when made, and shall be true and correct on and as
      of
      the Closing Date (except for any representation or warranty that speaks as
      of a
      specific date, which shall be true and correct as of such date).

    

    (b) Covenants.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      by the Company on or prior to such purchase shall have been performed or
      complied with in all material respects.

    

    (c) No
      Legal Order Pending.
      There
      shall not then be in effect any legal or other order enjoining or restraining
      the transactions contemplated by this Agreement.

    

    (d)  No
      Law
      Prohibiting or Restricting Such Sale.
      There
      shall not be in effect any law, rule or regulation prohibiting or restricting
      the issuance and sale of the Securities or requiring any consent or approval
      of
      any Person which shall not have been obtained to issue or sell the Securities,
      or in either case to otherwise consummate the transactions contemplated hereby
      (except as otherwise provided in this Agreement).

    

    (e)  Minimum
      Offering.
      The
      Company shall have received duly executed subscriptions and corresponding
      readily available funds in the Escrow Account from Subscribers equal to or
      in
      excess of the Minimum Offering Amount.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

    

    (f)  AMEX
      Listing.
      The
      American Stock Exchange shall have approved the Shares and Warrant Shares for
      listing on such exchange.

     

    (g)  Legal
      Opinion.
      The
      Subscribers shall have received an opinion of counsel to the Company (which
      the
      Placement Agent may be permitted to rely on as if it were addressed to it)
      substantially in the form attached hereto as Appendix
      B.

    

    
      	5.	
              REGISTRATION
                RIGHTS.

            

    

    

    5.1 As
      used
      in this Agreement, the following terms shall have the following
      meanings:

    

    (a) “Affiliate”
shall
      mean, with respect to any Person (as defined below), any other Person
      controlling, controlled by or under direct or indirect common control with
      such
      Person (for the purposes of this definition “control,” when used with respect to
      any specified Person, shall mean the power to direct the management and policies
      of such Person, directly or indirectly, whether through ownership of voting
      securities, by contract or otherwise; and the terms “controlling” and
“controlled” shall have meanings correlative to the foregoing).

    

    (b) “Business
      Day”
shall
      mean a day Monday through Friday on which banks are generally open for business
      in New York, New York and on which the SEC is open.

    

    (c) “Holders”
shall
      mean the Subscribers and any Person holding Registrable Securities or any Person
      to whom the rights under this Article
      5
      have
      been transferred in accordance with Section
      5.9
      hereof.

    

    (d) “Person”
shall
      mean any person, individual, corporation, limited liability company,
      partnership, trust or other nongovernmental entity or any governmental agency,
      court, authority or other body (whether foreign, federal, state, local or
      otherwise).

    

    (e) The
      terms
“register,”
      “registered”
and
      “registration”
refer
      to the registration effected by preparing and filing a registration statement
      in
      compliance with the Securities Act, and the declaration or ordering of the
      effectiveness of such registration statement.

    

    (f) “Registrable
      Securities”
shall
      mean the Shares, the Warrant Shares and the Placement Warrant Shares and any
      shares of Common Stock issued as a dividend or distribution with respect to
      or
      in replacement of the Common Stock issued, directly or indirectly, in connection
      with this Offering; provided,
      however,
      that
      securities shall only be treated as Registrable Securities if and only for
      so
      long as they (i) have not been sold (A) pursuant to a registration statement;
      (B) to or through a broker, dealer or underwriter in a public distribution
      or a
      public securities transaction; and/or (C) in a transaction exempt from the
      registration and prospectus delivery requirements of the Securities Act under
      Section 4(1) thereof so that all transfer restrictions and restrictive legends
      with respect thereto, if any, are removed upon the consummation of such sale;
      (ii) are not held by a Holder or a permitted transferee; and (iii) are not
      eligible for sale pursuant to Rule 144(k) (or any successor thereto) under
      the
      Securities Act. 

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    (g)  “Registration
      Expenses”
shall
      mean all expenses incurred by the Company in complying with Section
      5.2
      hereof,
      including, without limitation, all registration, qualification and filing fees,
      printing expenses, escrow fees, fees and expenses of counsel for the Company,
      blue sky fees and expenses and the expense of any special audits incident to
      or
      required by any such registration (but excluding the fees of legal counsel
      for
      any Holder).

    

    (h)  “Selling
      Expenses”
shall
      mean all underwriting discounts and selling commissions applicable to the sale
      of Registrable Securities and, except to the extent set forth in the definition
      of Registration Expenses, all fees and expenses of legal counsel for any
      Holder.

    

    (i)  “Subsidiary”
shall
      mean, with respect to any Person, any other Person of which more than fifty
      percent (50%) of the shares of stock or other interests entitled to vote in
      the
      election of directors or comparable Persons performing similar functions
      (excluding shares or other interests entitled to vote only upon the failure
      to
      pay dividends thereon or other contingencies) are at the time owned or
      controlled, directly or indirectly through one or more Subsidiaries, by such
      Person.

    

    5.2 Subject
      to the terms, conditions and limitations set forth herein, the Company will
      use
      its reasonable best efforts to file a registration statement with the SEC on
      the
      appropriate form (the “Initial
      Registration Statement”)
      on or
      before the later of (A) forty-five (45) days following the final Closing Date,
      or (B) ten (10) days following the date on which the Company’s Annual Report on
      Form 10-KSB for the year ended December 31, 2006 is required to be filed with
      the SEC (the “Filing
      Deadline”),
      to
      allow the resale of the Registrable Securities under the Securities Act, and
      use
      its reasonable best efforts to have such Initial Registration Statement declared
      effective by the SEC on or before the date which is seventy-five (75) days
      after
      the Filing Deadline (the “Registration
      Effective Date”);
      provided,
      however,
      in the
      event the Filing Deadline or Registration Effective Date do not fall on a
      Business Day, then the Filing Deadline or Registration Effective Date shall
      be
      deemed to be the next Business Day thereafter. Notwithstanding the foregoing,
      in
      the event the SEC informs the Company that all of the Shares and Warrant Shares
      cannot, as a result of the application of Rule 415 under the Securities Act,
      be
      registered for resale on a single Registration Statement, the Company agrees
      to
      (i) promptly inform each of the holders thereof and use its best efforts to
      file
      amendments to the Initial Registration Statement as required by the SEC or
      to
      promptly withdraw the Initial Registration Statement and to file a registration
      statement covering the maximum number of Shares and Warrant Shares permitted
      to
      be registered by the SEC on Form S-3 or such other form available to register
      for resale the Shares and the Warrant Shares (the “Additional
      Registration Statement”)
      and
      (ii) in the event the Company files an Additional Registration Statement, to
      file with the SEC as promptly as allowed one or more registration statements
      on
      Form S-3 or such other form available to register for resale those Shares and
      Warrant Shares that were not registered for resale on the Additional
      Registration Statement (the “Remainder
      Registration Statements,”
and
      collectively with the Initial Registration Statement and Additional Registration
      Statement, the “Registration
      Statements”
and
      each, a “Registration
      Statement”).
      The
      Company shall cause such Registration Statements to remain effective (the
“Registration
      Period”)
      until
      the earlier of (i) the date on which such Registrable Securities are eligible
      for resale under Rule 144(k) of the Securities Act; or (ii) such time as all
      Securities held by the Subscriber and registered under the Registration
      Statements have been sold. To the extent permissible, such Registration
      Statements also shall include, or subsequently be amended to include, to the
      extent allowable under the Securities Act and the rules promulgated thereunder
      (including Rule 416 under the Securities Act), such indeterminate number of
      additional shares of Common Stock resulting from stock splits, stock dividends
      or similar transactions with respect to the Registrable Securities. In the
      event
      (x) the Company has not filed the Initial Registration Statements by the Filing
      Deadline, or (y) the Initial Registration Statement has not been declared
      effective by the Registration Effective Date, then in either case the Company
      shall make compensatory payments to the Holder in an amount equal to one percent
      (1%) of the Aggregate Purchase Price paid by the Subscriber for each monthly
      period (or prorated portion thereof) in which the Company is in default of
      its
      obligations under the first sentence of this Section
      5.2.
      Notwithstanding
      anything to the contrary contained herein, in no event shall the amount of
      compensatory payments payable by the Company pursuant to this Section
      5.2
      exceed
      ten percent (10%) of the Aggregate Purchase Price paid by each
      Subscriber.

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

    

    5.3 All
      Registration Expenses incurred in connection with any registration,
      qualification, exemption or compliance pursuant to Section
      5.2
      shall be
      borne by the Company. All Selling Expenses relating to the sale of securities
      registered by or on behalf of Holders shall be borne by such
      Holders.

    

    5.4 In
      the
      case of the registration, qualification, exemption or compliance effected by
      the
      Company pursuant to this Agreement, the Company shall, upon reasonable request,
      inform each Holder as to the status of such registration, qualification,
      exemption and compliance. At its expense the Company shall: 

    

    (a) use
      reasonable best efforts to keep such registration, and any qualification,
      exemption or compliance under state or federal securities laws which the Company
      determines to obtain, continuously effective until the termination of the
      Registration Period; 

    

    (b) advise
      the Holders as soon as practicable:

    

    (i) when
      any
      Registration Statement or any post-effective amendment thereto has become
      effective;

    

    (ii) of
      any
      request by the SEC for amendments or supplements to the Registration Statements
      or the prospectus included therein or for additional information;

    

    (iii) of
      the
      issuance by the SEC of any stop order suspending the effectiveness of the
      Registration Statements or the initiation of any proceedings for such
      purpose;

    

    (iv) of
      the
      receipt by the Company of any notification with respect to the suspension of
      the
      qualification of the Registrable Securities included therein for sale in any
      jurisdiction or the initiation or threatening of any proceeding for such
      purpose; and

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

       

    

    (v) of
      the
      happening of any event that requires the making of any changes in the
      Registration Statements or the prospectus so that, as of such date, the
      statements therein are not misleading and do not omit to state a material fact
      required to be stated therein or necessary to make the statements therein (in
      the case of the prospectus, in the light of the circumstances under which they
      were made) not misleading (which notice will be accompanied by an instruction
      to
      suspend the use of the prospectus until such changes have been
      made);

    

    (c) make
      every reasonable effort to obtain the withdrawal of any order suspending the
      effectiveness of any Registration Statement at the earliest possible
      time;

    

    (d) during
      the Registration Period, deliver to each Holder, without charge, as many copies
      of the prospectus included in such Registration Statements and any amendment
      or
      supplement thereto as such Holder may reasonably request; and the Company
      consents to the use, consistent with the provisions hereof, of the prospectus
      or
      any amendment or supplement thereto by each of the selling Holders of
      Registrable Securities in connection with the offering and sale of the
      Registrable Securities covered by the prospectus or any amendment or supplement
      thereto.

    

    (e) prior
      to
      any public offering of Registrable Securities pursuant to the Registration
      Statements, register or qualify or obtain an exemption for offer and sale under
      the securities or blue sky laws of such jurisdictions as any such Holders
      reasonably request in writing, provided that the Company shall not for any
      such
      purpose be required to qualify generally to transact business as a foreign
      corporation in any jurisdiction where it is not so qualified or to consent
      to
      general service of process in any such jurisdiction, and do any and all other
      acts or things reasonably necessary or advisable to enable the offer and sale
      in
      such jurisdictions of the Registrable Securities covered by such Registration
      Statements in the sole discretion of the Company;

    

    (f) upon
      the
      occurrence of any event contemplated by Section
      5.4(b)(v)
      above,
      the Company shall promptly prepare a post-effective amendment to the applicable
      Registration Statements or a supplement to the related prospectus, or file
      any
      other required document so that, as thereafter promptly delivered to purchasers
      of the Registrable Securities included therein, the prospectus will not include
      any untrue statement of a material fact or omit to state any material fact
      necessary to make the statements therein, in the light of the circumstances
      under which they were made, not misleading; and

    

    (g) use
      reasonable best efforts to comply with all applicable rules and regulations
      of
      the SEC, and use commercially reasonable efforts to make generally available
      to
      its security holders not later than 45 days (or 90 days if the fiscal quarter
      is
      the fourth fiscal quarter) after the end of its fiscal quarter in which the
      first anniversary date of the effective date of each Registration Statement
      occurs, an earnings statement satisfying the provisions of Section 11(a) of
      the
      Securities Act.

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

       

    

    Notwithstanding
      the foregoing, it shall be a condition precedent to the obligations of the
      Company to take any action pursuant to paragraphs (a) through (h) of this
Section
      5.4,
      that
      the Holder shall furnish to the Company such information regarding itself,
      the
      Securities to be sold by the Holder and the intended method of disposition
      of
      such Securities as shall be required to effect the registration of the
      Securities, all of which information shall be furnished to the Company in
      writing specifically for use in the Registration Statements.

    

    5.5 The
      Holders shall have no right to take any action to restrain, enjoin or otherwise
      delay any registration pursuant to Section
      5.2
      hereof
      as a result of any controversy that may arise with respect to the interpretation
      or implementation of this Agreement. 

     

    5.6 (a) To
      the
      extent permitted by law, the Company shall indemnify each Holder with respect
      to
      which any registration, qualification or compliance has been effected pursuant
      to this Agreement, against all claims, losses, damages and liabilities (or
      actions in respect thereof), including any of the foregoing incurred in
      settlement of any litigation, commenced or threatened (subject to Section
      5.6(c)
      below),
      arising out of or based on any untrue statement (or alleged untrue statement)
      of
      a material fact contained in the Registration Statements, or any amendment
      or
      supplement thereof, incident to any such registration, qualification or
      compliance, or based on any omission (or alleged omission) to state therein
      a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading, in light of the circumstances in which they were made,
      or (ii) any violation or alleged violation by the Company of the Securities
      Act,
      the Exchange Act, or any rule or regulation promulgated under the Securities
      Act, or the Exchange Act, and will reimburse each Holder for reasonable legal
      and other expenses reasonably incurred in connection with investigating or
      defending any such claim, loss, damage, liability or action as incurred;
provided,
      that
      the Company will not be liable in any such case to the extent that any such
      claim, loss, damage, liability or action arises out of, relates to or is based
      upon: (i) any untrue statement or omission or allegation thereof is made in
      reliance upon and in conformity with written information furnished to the
      Company by or on behalf of such Holder and stated to be specifically for use
      in
      preparation of such Registration Statement, prospectus or offering circular;
      or
      (ii) the failure of the Holder to comply with the covenants and agreements
      contained in this Agreement respecting sales of Registrable Securities.
      Notwithstanding the foregoing, and except that the foregoing indemnity agreement
      is subject to the condition that, insofar as it relates primarily to any such
      untrue statement or alleged untrue statement or omission or alleged omission
      made in the preliminary prospectus but eliminated or remedied in the amended
      prospectus on file with the SEC at the time any Registration Statement becomes
      effective or in the amended prospectus filed with the Commission pursuant to
      Rule 424(b) or in the prospectus subject to completion under Rule 434
      promulgated under the Securities Act, which together meet the requirements
      of
      Section 10(a) of the Securities Act (the “Final
      Prospectus”),
      such
      indemnity agreement shall not inure to the benefit of any such Holder, any
      such
      underwriter or any such controlling Person, if a copy of the Final Prospectus
      furnished by the Company to the Holder for delivery was not furnished by the
      Holder to the Person or entity asserting the loss, liability, claim, damage
      or
      at or prior to the time such furnishing is required by the Securities Act and
      the Final Prospectus would have cured the defect giving rise to such loss,
      liability, claim, damage or action.

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

       

    

    (b) Each
      Holder will severally, if Registrable Securities held by such Holder are
      included in the securities as to which such registration, qualification or
      compliance is being effected, indemnify the Company, each of its directors
      and
      officers, each underwriter of the Registrable Securities and each Person who
      controls the Company within the meaning of Section 15 of the Securities Act,
      against all claims, losses, damages and liabilities (or actions in respect
      thereof), including any of the foregoing incurred in settlement of any
      litigation, commenced or threatened (subject to Section
      5.6(c)
      below),
      arising out of or based on any untrue statement (or alleged untrue statement)
      of
      a material fact contained in any registration statement, prospectus or offering
      circular, or any amendment or supplement thereof, incident to any such
      registration, qualification or compliance, or based on any omission (or alleged
      omission) to state therein a material fact required to be stated therein or
      necessary to make the statements therein not misleading, in light of the
      circumstances in which they were made, and will reimburse the Company, such
      directors and officers, each underwriter of the Registrable Securities and
      each
      Person controlling the Company for reasonable legal and any other expenses
      reasonably incurred in connection with investigating or defending any such
      claim, loss, damage, liability or action as incurred, in each case to the
      extent, but only to the extent, that such untrue statement or omission or
      allegation thereof is made in reliance upon and in conformity with written
      information furnished to the Company by or on behalf of the Holder and stated
      to
      be specifically for use in preparation of such registration statement,
      prospectus or offering circular. Notwithstanding the foregoing, in no event
      shall a Holder be liable for any such claims, losses, damages or liabilities
      in
      excess of the net proceeds received by such Holder in the offering, except
      in
      the event of fraud or intentional misrepresentation by such Holder.

    

    (c) Each
      party entitled to indemnification under this Section
      5.6
      (the
“Indemnified
      Party”)
      shall
      give notice to the party required to provide indemnification (the “Indemnifying
      Party”)
      promptly after such Indemnified Party has actual knowledge of any claim as
      to
      which indemnity may be sought, and shall permit the Indemnifying Party to assume
      the defense of any such claim or any litigation resulting therefrom, provided
      that counsel for the Indemnifying Party, who shall conduct the defense of such
      claim or litigation, shall be approved by the Indemnified Party (whose approval
      shall not unreasonably be withheld), and the Indemnified Party may participate
      in such defense at such Indemnified Party’s expense, and provided further that
      the failure of any Indemnified Party to give notice as provided herein shall
      not
      relieve the Indemnifying Party of its obligations under this Agreement, unless
      such failure is materially prejudicial to the Indemnifying Party in defending
      such claim or litigation. An Indemnifying Party shall not be liable for any
      settlement of an action or claim effected without its written consent (which
      consent will not be unreasonably withheld).

    

    (d) If
      the
      indemnification provided for in this Section
      5.6
      is held
      by a court of competent jurisdiction to be unavailable to an Indemnified Party
      with respect to any loss, liability, claim, damage or expense referred to
      therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
      Party thereunder, shall contribute to the amount paid or payable by such
      Indemnified Party as a result of such loss, liability, claim, damage or expense
      in such proportion as is appropriate to reflect the relative fault of the
      Indemnifying Party on the one hand and of the Indemnified Party on the other
      in
      connection with the statements or omissions which resulted in such loss,
      liability, claim, damage or expense as well as any other relevant equitable
      considerations. The relative fault of the Indemnifying Party and of the
      Indemnified Party shall be determined by reference to, among other things,
      whether the untrue or alleged untrue statement of a material fact or the
      omission to state a material fact relates to information supplied by the
      Indemnifying Party or by the Indemnified Party and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      statement or omission. The Company and the Holders agree that it would not
      be
      just and equitable if contribution pursuant to this Section
      5.6(d)
      was
      based solely upon the number of entities from whom contribution was requested
      or
      by any other method of allocation which does not take account of the equitable
      considerations referred to above in this Section
      5.6(d).
      The
      amount paid or payable by an Indemnified Party as a result of the losses,
      claims, damages and liabilities (or actions in respect thereof) referred to
      above in this Section
      5.6(d)
      shall be
      deemed to include any legal or other expenses reasonably incurred by such
      Indemnified Party in connection with investigating or defending any such action
      or claim, subject to the provisions of Section
      5.6(d)
      hereof.
      The parties agree that it would not be just and equitable if contributions
      pursuant to this Section
      5.6
      were
      determined by pro rata allocation or by any other method of allocation which
      does not take account of the equitable considerations as set forth in this
      Section
      5.6.
      Notwithstanding the provisions of this Section
      5.6(d),
      in no
      event shall a Holder be required to contribute any amount or make any other
      payments under this Agreement which in the aggregate exceed the net proceeds
      received by such Holder from the sale of Registrable Securities covered by
      such
      Registration Statement. No Person guilty of fraudulent misrepresentation (within
      the meaning of the Securities Act) shall be entitled to contribution from any
      Person who was not guilty of such fraudulent misrepresentation. 

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

       

    

    5.7 (a) Each
      Holder agrees that, upon receipt of any notice from the Company of (i)
the
      need
      for an amendment or supplement to the Registration Statement or the prospectus
      forming a part thereof, (ii) that the Board of Directors has determined in
      good
      faith that offers and sales pursuant to the prospectus forming part of a
      Registration Statement should not be made by reason of the presence of material
      undisclosed circumstances or developments with respect to which the disclosure
      that would be required in a Registration Statement would be premature or would
      have a Material Adverse Effect or (iii) in
      connection with a primary underwritten offering of equity securities of the
      Company,
      each
      Holder will forthwith discontinue disposition of Registrable Securities pursuant
      to a Registration Statement contemplated by Section
      5.2
      until
      its receipt of copies of the supplemented or amended prospectus from the Company
      or confirmation of the filing of such report with the SEC by the Company, any
      such prospectus to be forwarded promptly to the Holder by the Company, and,
      if
      so directed by the Company, each Holder shall deliver to the Company all copies,
      other than permanent file copies then in such Holder’s possession, of the
      prospectus covering such Registrable Securities current at the time of receipt
      of such notice; provided,
      that
      the Company, may suspend the disposition of Registrable Securities pursuant
      to
      the Registration Statements pursuant to clause (ii) above not more
      than
      one time (not to exceed 30 days) during any
      three
      month period, nor
      more
      than two times (not to exceed 30 days each) in any twelve-month period.

     

    (b) As
      a
      condition to the inclusion of its Registrable Securities, each Holder shall
      furnish to the Company such information regarding such Holder and the
      distribution proposed by such Holder as the Company may reasonably request
      in
      writing or as shall be required in connection with any registration,
      qualification or compliance referred to in this Article
      5,
      including the information required by the Registration Questionnaire attached
      hereto as Appendix
      A.

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

    

    (c) Each
      Holder hereby covenants with the Company not to make any sale of the Registrable
      Securities without effectively causing the prospectus delivery requirements
      under the Securities Act to be satisfied.

    

    (d) Each
      Holder acknowledges and agrees that the Registrable Securities sold pursuant
      to
      the Registration Statements described in this Section are not transferable
      on
      the books of the Company unless the stock certificate submitted to the transfer
      agent evidencing such Registrable Securities is accompanied by a certificate
      reasonably satisfactory to the Company to the effect that (i) the
      Registrable Securities have been sold in accordance with such Registration
      Statement and (ii) the requirement of delivering a current prospectus has
      been satisfied.

    

    (e) Each
      Holder agrees not to take any action with respect to any distribution deemed
      to
      be made pursuant to such registration statement which would constitute a
      violation of Regulation M under the Exchange Act or any other applicable rule,
      regulation or law. 

    

    5.8 With
      a
      view to making available to the Holders the benefits of certain rules and
      regulations of the SEC which at any time permit the sale of the Registrable
      Securities to the public without registration, the Company shall use reasonable
      best efforts to:

    

    (a) make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144 under the Securities Act, at all times;

    

    (b) file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Exchange Act; and 

    

    (c) so
      long
      as a Holder owns any unregistered Registrable Securities, furnish to such
      Holder, upon any reasonable request, a written statement by the Company as
      to
      its compliance with Rule 144 under the Securities Act, and of the Exchange
      Act, a copy of the most recent annual or quarterly report of the Company, and
      such other reports and documents of the Company as such Holder may reasonably
      request in availing itself of any rule or regulation of the SEC allowing a
      Holder to sell any such securities without registration.

    

    5.9 The
      right
      to cause the Company to register Registrable Securities granted to the Holders
      by the Company under Section 5.2
      may be
      assigned in full by a Holder in connection with a transfer by such Holder of
      its
      Registrable Securities, but only if: (i) such transfer may otherwise be effected
      in accordance with applicable securities laws; (ii) such Holder gives prior
      written notice of the proposed transfer to the Company including the name and
      address of such transferee and a copy of the transfer documents and agreements;
      (iii) such transferee agrees in writing with the Company to be bound by and
      comply with the terms and provisions of this Agreement; (iv) the transferee
      is
      an “accredited investor” as that term is defined in Rule 501 of Regulation D;
      and (v) such transfer is otherwise in compliance with this Agreement. Except
      as
      specifically permitted by this Section
      5.9,
      the
      rights of a Holder with respect to Registrable Securities as set out herein
      shall not be transferable to any other Person, the Company may impose stop
      transfer orders with respect to any such transfer or attempted transfer, and
      any
      such transfer or attempted transfer shall be null and void. 

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

       

    

    5.10 The
      Company shall use reasonable best efforts to cause all Registrable Securities
      covered by a Registration Statement to be listed on each securities exchange,
      interdealer quotation system or other market on which similar securities issued
      by the Company are then listed.

    

    5.11 With
      the
      written consent of the Company and the Holders holding at least two-thirds
      of
      the Registrable Securities that are then outstanding, any provision of this
      Article
      5
      may be
      waived (either generally or in a particular instance, either retroactively
      or
      prospectively and either for a specified period of time or indefinitely) or
      amended. Upon the effectuation of each such waiver or amendment, the Company
      shall promptly give written notice thereof to the Holders, if any, who have
      not
      previously received notice thereof or consented thereto in writing.

    

    5.12 The
      legend set forth in Section 2.10 above shall be removed and the Company shall
      issue a certificate without such legend to the holder of the Securities upon
      which it is stamped or issue to such holder by electronic delivery at the
      applicable balance account at The Depository Trust Company (“DTC”),
      if
      (i) such Securities are registered for resale under the Securities Act, (ii)
      such Securities are sold or transferred pursuant to Rule 144 (assuming the
      transferor is not an Affiliate of the Company) or Rule 144A, or (iii) such
      Securities are eligible for sale under Rule 144(k). If any portion of a Warrant
      is exercised at a time when there is an effective registration statement to
      cover the resale of the Warrant Shares, or if such Warrant Shares may be sold
      under Rule 144(k), then such Warrant Shares shall be issued free of all legends.
      Following the effective date of the applicable Registration Statement covering
      the resale of Securities, or at such earlier time as a legend is no longer
      required for certain Securities, the Company will no later than three (3)
      Trading Days following the delivery by a Subscriber to the Company or the
      Transfer Agent (with notice to the Company) of (i) a legended certificate
      representing such Shares or Warrant Shares (endorsed or with stock powers
      attached, signatures guaranteed, and otherwise in form necessary to affect
      the
      reissuance and/or transfer) or (ii) an exercise notice in the manner stated
      in
      the Warrants to effect the exercise of such Warrant in accordance with its
      terms, deliver or cause to be delivered to such Subscriber a certificate
      representing such Securities that is free from all restrictive and other
      legends. 

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

       

    

    
      	
              
                6.

              

            	
              
                MISCELLANEOUS.

              

            

    

    

    6.1 The
      Company reserves the right to reject the subscription made hereby in its sole
      discretion. Unless terminated earlier in the Placement Agent’s or the Company’s
      sole discretion, the Offering will expire on February 28, 2007, (as such date
      may be extended by agreement of the Placement and the Company in their sole
      discretion without notice to the Subscribers for an additional 60 days (the
      “Termination
      Date”),
      if
      the conditions to closing set forth in Article
      4
      have not
      been satisfied or waived by such time.

    

    6.2 The
      Company’s agreement with each Subscriber is a separate agreement and each sale
      of the Securities to each Subscriber is a separate sale.

    

    6.3 All
      notices, requests and other communications under this Agreement shall be in
      writing, and shall be sufficiently given if delivered to the addressees in
      person or by recognized overnight courier, mailed by certified or registered
      mail, return receipt requested, or by facsimile or e-mail transmission, as
      follows: 

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    If
      to the
      Company:     Manhattan
      Pharmaceuticals, Inc.

    810
      Seventh Avenue, 4th
      Floor

    New
      York,
      NY 10019

    Facsimile:
      (212) 582-3957

    Attn:
      Chief Financial Officer

    Email:
      mgmcguinness@manhattanpharma.com 

    

    With
      a
      copy to:           Maslon
      Edelman Borman & Brand, LLP

    3300
      Wells Fargo Center

    90
      South
      7th Street

    Minneapolis,
      Minnesota 55402

    Facsimile:
      (612) 642-8343

    Attn:
      Christopher J. Melsha, Esq.

    Email:
      chris.melsha@maslon.com

    

    If
      to a
      Subscriber, at such address as such Subscriber shall have provided in writing
      to
      the Company or such other addresses as such Subscriber furnishes by notice
      given
      in accordance with this Section
      6.3 or
      such
      other address as may be designated in writing hereafter, in the same manner,
      by
      such Person. 

    

    6.4 Except
      as
      provided in Section
      5.11
      above,
      this Agreement shall not be changed, modified or amended except by a writing
      signed by the parties to be charged, and this Agreement may not be discharged
      except by performance in accordance with its terms or by a writing signed by
      the
      party to be charged.

    

    6.5 Subject
      to the provisions of Section
      5.9,
      this
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and to their respective heirs, legal representatives, successors and assigns.
      This Agreement sets forth the entire agreement and understanding between the
      parties as to the subject matter hereof and merges and supersedes all prior
      discussions, agreements and understandings of any and every nature among
      them.

    

    6.6 Upon
      the
      execution and delivery of this Agreement by the Subscriber, this Agreement
      shall
      become a binding obligation of the Subscriber with respect to the purchase
      of
      the Securities as herein provided; subject, however, to the right hereby
      reserved to the Company to reject this subscription in accordance with
Section
      2.16,
      enter
      into the same agreements with other subscribers and to add and/or delete other
      Persons as subscribers. 

    

    6.7 Notwithstanding
      the place where this Agreement may be executed by any of the parties hereto,
      the
      parties expressly agree that all the terms and provisions hereof shall be
      construed in accordance with and governed by the laws of the State of New York
      without regard to principles of conflicts of law.

    

    6.8 The
      holding of any provision of this Agreement to be invalid or unenforceable by
      a
      court of competent jurisdiction shall not affect any other provision of this
      Agreement, which shall remain in full force and effect. If any provision of
      this
      Agreement shall be declared by a court of competent jurisdiction to be invalid,
      illegal or incapable of being enforced in whole or in part, such provision
      shall
      be interpreted so as to remain enforceable to the maximum extent permissible
      consistent with applicable law and the remaining conditions and provisions
      or
      portions thereof shall nevertheless remain in full force and effect and
      enforceable to the extent they are valid, legal and enforceable, and no
      provisions shall be deemed dependent upon any other covenant or provision unless
      so expressed herein.

    

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

       

    

    6.9 It
      is
      agreed that a waiver by either party of a breach of any provision of this
      Agreement shall not operate, or be construed, as a waiver of any subsequent
      breach by that same party.

    

    6.10 The
      parties agree to execute and deliver all such further documents, agreements
      and
      instruments and take such other and further action as may be necessary or
      appropriate to carry out the purposes and intent of this Agreement.

    

    6.11 This
      Agreement may be executed in two or more counterparts each of which shall be
      deemed an original, but all of which shall together constitute one and the
      same
      instrument.

    

    6.12 (a) The
      Subscriber agrees not to issue any public statement with respect to the
      Subscriber’s investment or proposed investment in the Company or the terms of
      any agreement or covenant between them and the Company without the Company’s
      prior written consent, except such disclosures as may be required under
      applicable law or under any applicable order, rule or regulation.

    

    (b) The
      Company agrees not to disclose the names, addresses or any other information
      about the Subscriber, except as required by law or court order and to satisfy
      its obligations under Article
      5.

    

    6.13 The
      Subscriber represents and warrants that it has not engaged, consented to nor
      authorized any broker, finder or intermediary to act on its behalf, directly
      or
      indirectly, as a broker, finder or intermediary in connection with the
      transactions contemplated by this Agreement (other than the Placement Agent).
      The Subscriber hereby agrees to indemnify and hold harmless the Company from
      and
      against all fees, commissions or other payments owing to any such Person (other
      than the Placement Agent) acting on behalf of the Subscriber
      hereunder.

     

    6.14 This
      Agreement (including all exhibits, schedules and amendments hereto) (i)
      constitutes the entire Agreement and understandings of the parties hereto and
      supersedes all prior agreements and understandings, both written and oral,
      between the parties hereto with respect to the subject matter hereof and (ii)
      is
      not intended to confer upon any other Person other than the parties hereto
      any
      rights or remedies hereunder (except for the holders of Registrable Securities
      as set forth in Article
      5).

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    
      	
              7.

            	
              
                CONFIDENTIAL
                  INVESTOR QUESTIONNAIRE.

              

            

    

    

    7.1 The
      Subscriber represents and warrants that he, she or it comes within one category
      marked below, and that for any category marked, he, she or it has truthfully
      set
      forth, where applicable, the factual basis or reason the Subscriber comes within
      that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY
      CONFIDENTIAL except as otherwise required by law or as necessary for inclusion
      in the Registration Statement. The undersigned agrees to furnish any additional
      information which the Company deems necessary in order to verify the answers
      set
      forth below.

    

      
        	
                Category
                  A___

              	
                The
                  undersigned is an individual (not a partnership, corporation, etc.)
                  whose
                  individual net worth, or joint net worth with his or her spouse,
                  presently
                  exceeds $1,000,000.

              
	 	 
	 	
                Explanation:
                  In calculating net worth you may include equity in personal property
                  and
                  real estate, including your principal residence, cash, short-term
                  investments, stock and securities. Equity in personal property
                  and real
                  estate should be based on the fair market value of such property
                  less debt
                  secured by such property.

              
	 	 
	
                Category
                  B___

              	
                The
                  undersigned is an individual (not a partnership, corporation, etc.)
                  who
                  had an income in excess of $200,000 in each of the two most recent
                  years,
                  or joint income with his or her spouse in excess of $300,000 in
                  each of
                  those years (in each case including foreign income, tax exempt
                  income and
                  full amount of capital gains and losses but excluding any income
                  of other
                  family members and any unrealized capital appreciation) and has
                  a
                  reasonable expectation of reaching the same income level in the
                  current
                  year.

              
	 	 
	
                Category
                  C___

              	
                The
                  undersigned is a director or executive officer of the Company which
                  is
                  issuing and selling the Securities.

              
	 	 
	
                Category
                  D___

              	
                The
                  undersigned is a bank; a savings and loan association; insurance
                  company;
                  registered investment company; registered business development
                  company;
                  licensed small business investment company (“SBIC”); or employee benefit
                  plan within the meaning of Title 1 of ERISA and (a) the investment
                  decision is made by a plan fiduciary which is either a bank, savings
                  and
                  loan association, insurance company or registered investment advisor,
                  or
                  (b) the plan has total assets in excess of $5,000,000 or (c) is
                  a self
                  directed plan with investment decisions made solely by persons
                  that are
                  accredited investors. (describe
                  entity)

              

      

      
        
           

          
            

          

        

        
          
            

          

        

      

       

    

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

      
        	
                Category
                  E___

              	
                The
                  undersigned is a private business development company as defined
                  in
                  section 202(a)(22) of the Investment Advisors Act of 1940. (describe
                  entity)

              
	 	 
	 	 
	 	 
	
                Category
                  F___

              	
                The
                  undersigned is either a corporation, partnership, Massachusetts
                  business
                  trust, or non-profit organization within the meaning of Section
                  501(c)(3)
                  of the Internal Revenue Code, in each case not formed for the specific
                  purpose of acquiring the Securities and with total assets in excess
                  of
                  $5,000,000.(describe entity)

              
	 	 
	 	 
	 	 
	
                Category
                  G___

              	
                The
                  undersigned is a trust with total assets in excess of $5,000,000,
                  not
                  formed for the specific purpose of acquiring the Securities, where
                  the
                  purchase is directed by a “sophisticated investor” as defined in
                  Regulation 506(b)(2)(ii) under the Securities Act.

              
	 	 
	
                Category
                  H___

              	
                The
                  undersigned is an entity (other than a trust) in which all of the
                  equity
                  owners are “accredited investors” within one or more of the above
                  categories. If relying upon this Category alone, each equity owner
                  must
                  complete a separate copy of this Agreement. (describe
                  entity)

              
	 	 
	 	 
	
                Category
                  I___

              	
                The
                  undersigned is not within any of the categories above and is therefore
                  not
                  an accredited investor.

              

      

       

    

    The
      undersigned agrees that the undersigned will notify the Company at any time
      on
      or prior to the Closing Date in the event that the representations and
      warranties in this Agreement shall cease to be true, accurate and
      complete.

    

    7.2 SUITABILITY
      (please
      answer each question)

    

    (a)
       For
      an
      individual Subscriber, please describe your current employment, including the
      company by which you are employed and its principal business:

     

    
      
        

      

    

    
      
        

      

      
        

      

      
        

      

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

         

      

    

    (b)
       For
      an
      individual Subscriber, please describe any college or graduate degrees held
      by
      you:

     

    
      
        

      

    

    
      
        

      

      
        

      

    

    

    (c)
      For
      all Subscribers, please state whether you have you participated in other
private
      placements
      before:

    

    YES_______   NO_______

    

    (d)
      If
      your answer to question (d) above was “YES”, please indicate frequency of such
      prior participation in private
      placements
      of:

    

      
        	 	 	
                Public

              	
                 

              	
                Private

              	
                 

              	
                Public
                  or Private

              	
                 

              
	
                 

              	
                 

              	
                Companies

              	
                 

              	
                Companies

              	
                 

              	
                Biopharmaceutical
                  Companies

              	 
	 	 	 	 	 	 	 	 
	
                Frequently

              	 	                                 
                	 	          
                	 	                              
                	 
	
                Occasionally

              	 	                         
                	 	                      
                	 	                          
                	 
	
                Never

              	 	                       
                	 	                  
                	 	                
                	 

      

    

     

     (e)
       For
      individual Subscribers, do you expect your current level of income to
      significantly decrease in the foreseeable future:

    

    YES_______   NO_______

    

    (f)
       For
      trust, corporate, partnership and other institutional Subscribers, do you expect
      your total assets to significantly decrease in the foreseeable future:

    

    YES_______   NO_______

    

    (g)
       For
      all
      Subscribers, do you have any other investments or contingent liabilities which
      you reasonably anticipate could cause you to need sudden cash requirements
      in
      excess of cash readily available to you: 

    

    YES_______   NO_______

    

    (h)
       For
      all
      Subscribers, are you familiar with the risk aspects and the non-liquidity of
      investments such as the securities for which you seek to subscribe?

    

    YES_______   NO_______

    

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

       

    

    (i)  For
      all
      Subscribers, do you understand that there is no guarantee of financial return
      on
      this investment, that an investment in the Securities is highly speculative
      and
      risky and that you run the risk of losing your entire investment?

    

    YES_______   NO_______

    

    (j)
       For
      all
      Subscribers, will you have sufficient readily available cash to fund your
      obligation to purchase Securities at the Closing pursuant to your subscription
      if and when the Closing occurs?

    

    YES_______   NO_______

    

    7.3 MANNER
      IN WHICH TITLE IS TO BE HELD.
      (circle
      one)

    

    (a)   Individual
      Ownership

    (b)   Community
      Property

    (c)   Joint
      Tenant with Right of 

    Survivorship
      (both parties

    must
      sign)

    (d)   Partnership*

    (e)   Tenants
      in Common

    (f)    Corporation*

    (g)   Trust*

    (h)   Limited
      Liability Company*

    (i)    Other

    

    *If
      Securities are being subscribed for by an entity, the attached Certificate
      of
      Signatory must also be completed.

    

    7.4 NASD
      AFFILIATION.

    

    Are
      you
      affiliated or associated with an NASD member firm (please check
      one):

    

    Yes
      _________  No
      __________

    

    If
      Yes,
      please describe:

    _________________________________________________________

    _________________________________________________________

    _________________________________________________________

    

    *If
      Subscriber is a Registered Representative with an NASD member firm, have the
      following acknowledgment signed by the appropriate party:

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    The
      undersigned NASD member firm acknowledges receipt of the notice required by
      NASD
      Rule 3050.

    

    
      
        

      

    

    Name
      of
      NASD Member Firm

    

    By:

    
      

    

    Authorized
      Officer

    

    Date:
      

    
      
 

    

    7.5 The
      undersigned is informed of the significance to the Company of the foregoing
      representations and answers contained in the Confidential Investor Questionnaire
      contained in this Article
      7
      and such
      answers have been provided under the assumption that the Company will rely
      on
      them.

    

    Signature:  

    
      

    

     

    
      

    

    (If
      purchased jointly)

    

    Print
      Name: 

    
      

    

    

    
      

    

    (If
      purchased jointly)

    

    Date:

    
      

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGES TO FOLLOW]

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    [Subscriber
      Signature Page]

    

    Aggregate
      Purchase Price: $_________________ / Market Price =
       _________ Shares

    _________Warrant

                        
      Shares

    

      
        	 	 	 
	
                Signature

              	 	
                Signature
                  (if purchasing jointly)

              
	 	 	 
	
                Name
                  Typed or Printed

              	 	
                Name
                  Typed or Printed

              
	 	 	 
	
                Entity
                  Name

              	 	
                Entity
                  Name

              
	 	 	 
	
                Address

              	 	
                Address

              
	 	 	 
	
                City,
                  State and Zip Code

              	 	
                City,
                  State and Zip Code

              
	 	 	 
	
                Telephone-Business

              	 	
                Telephone--Business

              
	 	 	 
	
                Telephone-Residence

              	 	
                Telephone--Residence

              
	 	 	 
	
                Facsimile-Business

              	 	
                Facsimile--Business

              
	 	 	 
	
                Facsimile-Residence

              	 	
                Facsimile—Residence

              
	 	 	 
	
                Email
                  Address

              	 	
                Email
                  Address

              
	 	 	 
	
                Tax
                  ID # or Social Security # 

              	 	
                Tax
                  ID # or Social Security #

              

      

    

    

    Name
      in
      which securities should be issued:

    
      
        

      

    

    

    Dated:    __________________
      ,
      2007

    

    
      	INVESTORS:	
              PLEASE
                COMPLETE THE REGISTRATION QUESTIONNAIRE ATTACHED HERETO AS APPENDIX
                A.

            

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    [Company
      Signature Page]

    

    This
      Subscription Agreement is agreed to and accepted by the Company as of
      _____________, 2007.  

    
      	 	 	 
	 	
              MANHATTAN
                PHARMACEUTICALS, INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Name:
	 	Title:

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    

    CERTIFICATE
      OF SIGNATORY

    

    (To
      be
      completed if Securities are

    being
      subscribed for by an entity)

    

    I,____________________________,
      am the____________________________ of __________________________________________
      (the “Entity”).

    

    I
      certify
      that I am empowered and duly authorized by the Entity to execute and carry
      out
      the terms of the Subscription Agreement and to purchase and hold the Securities,
      and certify further that the Subscription Agreement has been duly and validly
      executed on behalf of the Entity and constitutes a legal and binding obligation
      of the Entity.

    

    IN
      WITNESS WHEREOF, I have set my hand this ______ day of _________________,
      2007.

     

    
      	 	 	 
	 	
              

              (Signature)

            

    

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    APPENDIX
      A

    

    Manhattan
      Pharmaceuticals, Inc.

    

    REGISTRATION
      QUESTIONNAIRE 

    FOR

    SELLING
      STOCKHOLDERS

    

    

    Name:
      ________________________________

    (Please
      Print)

    

    This
      questionnaire is intended to provide information for a registration statement
      (the “Registration
      Statement”)
      to be
      filed by Manhattan Pharmaceuticals, Inc. (the “Company”)
      covering the resale of the Shares and Warrant Shares acquired by you as
      contemplated by the accompanying Subscription Agreement. Please complete
      (attaching separate sheets if additional space is needed), date and sign this
      questionnaire and return it together with your completed subscription agreement.
      

    

    PLEASE
      ANSWER EVERY QUESTION. If a question is inapplicable to you, please so state
      by
      inserting “N/A.” If you are in doubt whether a particular question requires an
      affirmative response from you, please furnish full particulars so that those
      persons responsible for preparing the Registration Statement and Prospectus
      can
      determine whether any disclosure based on your answer is required. Information
      requested in this questionnaire is as of the date you complete the
      questionnaire, unless otherwise indicated. Your furnishing such information
      does
      not necessarily mean that such information will be disclosed.

    

    DEFINITIONS

    

    Your
      answers to this questionnaire should be made upon the basis of the following
      definitions of terms used in this questionnaire:

    

    The
      term
“beneficial
      owner”
of
      a
      security includes any Person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship or otherwise has or shares
      (1) voting
      power,
      which
      includes the power to vote, or direct the voting of, such security or
      (2) investment
      power,
      which
      includes the power to dispose or direct the disposition of such security. A
      Person may be regarded as having voting power of a security which is owned
      (i)
      by his spouse or minor children or by any of his relatives or his spouse’s
      relatives who share the same home with him, (ii) a partnership of
      which he is a partner or (iii) a corporation of which he is a substantial
      shareholder. A Person is also deemed to be the beneficial owner of shares which
      that Person has the right to acquire within 60 days, including but not limited
      to any right to acquire through the exercise of an option, through conversion
      of
      a security, pursuant to the power to revoke a trust or pursuant to the automatic
      termination of a trust. Please also disclose any other rights, which you have
      to
      acquire securities of the Company on or before June 30, 2007.

    

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

       

    

    The
      term
“material,”
when
      used to qualify a requirement for the furnishings of information as to any
      subject, limits the information required to those matters about which the
      average prudent investor should reasonably be informed before buying or selling
      the securities of the Company. If you are in doubt as to the materiality of
      certain information, you should relate sufficient facts to enable the Company
      and its advisors to reach a conclusion as to its materiality.

    

    The
      term
“Person”
means
      any person, individual, corporation, limited liability company, partnership,
      trust or other governmental agency, court, authority or other body (whether
      foreign, federal, state, local or otherwise.

    

    QUESTIONS

    

    QUESTION
      1:

    

    State
      your present position or positions with the Company (if any), including
      membership on any audit, personnel, compensation or similar committee or
      committees; any positions with the Company held by you during the previous
      three
      years; and any positions with the Company to which you have been elected or
      appointed but the duties of which you have not yet assumed. For each position,
      list the term or expected term of office.

    

    ANSWER:

    

    QUESTION
      2:

    

    Other
      than Shares and Warrant Shares that you will acquire in connection with the
      Offering,
      provide
      below information regarding the equity securities of the Company of which you
      are the “beneficial owner.” Please
      refer to the definition of “beneficial owner,” above.
      Under
      the column “Nature of Ownership,” please indicate amounts of securities for
      which you have (a) sole voting power, (b) shared voting power, (c) sole
      investment power, or (d) shared investment power. If your response covers any
      securities included because you have the right to acquire them on or before
      June
      30, 2007, please separately indicate the amount of such securities. Also, if
      you
      hold more than 5% of the Company’s securities pursuant to a voting trust or
      similar agreement, please separately state the amount of such securities held
      or
      to be held pursuant to the trust or agreement, the duration of the agreement
      and
      the names and addresses of the voting trustees, outlining briefly their voting
      rights and other powers under the trust or agreement. 

    

    ANSWER
      (attach additional pages if necessary):

    

    
      	
              Number
                of

            	 	
              Nature
                of

            	 	 
	
              Shares

            	 	
              Ownership

            	 	
              Title
                of
                Securities

            

    

    
QUESTION
      3:

    

    If
      you
      plan to offer your shares of Common Stock through the selling efforts of brokers
      or dealers, describe the terms (and attach copies) of any agreement,
      arrangement, or understanding entered into with broker(s) or dealer(s),
      including volume limitations on sales, parties to the agreement and the
      conditions under which the agreement may be terminated. If known, identify
      the
      broker(s) or dealer(s), which will participate in the offering and state the
      amount to be offered through each.

    

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

       

    

    ANSWER:

    

    QUESTION
      4:

    

    Describe
      below any information known to you, and if none state “none,” pertaining to
      underwriting compensation and arrangements or any dealings between any
      underwriter or related person, member of the NASD or a person associated with
      a
      member of the NASD, and the Company or any controlling stockholder thereof
      since
      January 1, 2005.

     

    ANSWER:

    

    QUESTION
      5:

    

    State
      below whether you or any of your associates are a member of NASD, a controlling
      shareholder of a member, a person associated or affiliated with a member or
      an
      underwriter or related person with respect to the proposed offering. If you
      responded “yes,” describe such relationship:

    

    ANSWER:

    

    QUESTION
      6:

    

    Are
      you a
      broker-dealer?

    

    ANSWER:  Yes
      ______ No______

    

    QUESTION
      7:

    

    If
      you
      are not a broker-dealer, are you affiliated with a broker-dealer?

    

    ANSWER:  Yes
      ______ No______

    

    QUESTION
      8:

    

    If
      you
      are a broker-dealer or are affiliated with a broker-dealer, did you purchase
      the
      securities in the ordinary course of business?

    

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

       

    

    ANSWER:  Yes
      ______ No______

    

    QUESTION
      9:

    

    If
      you
      are a broker-dealer or are affiliated with a broker-dealer, did you have any
      agreements or understandings, directly or indirectly, with any person to
      distribute the securities at the time that you purchased the
      securities?

    

    ANSWER:  Yes
      ______ No______

    

    Please
      note that the SEC takes the position that if you are a broker-dealer, you are to
      be identified in the Registration Statement as an underwriter. In the “Plan of
      Distribution,” the Registration Statement will provide substantially as
      follows:

    

    “The
      selling stockholders and any broker-dealers, agents or underwriters that
      participate with the selling stockholders in the distribution of the issued
      and
      outstanding shares of common stock or the shares of stock issuable upon exercise
      of warrants may be deemed to be “underwriters” within the meaning of the
      Securities Act, in which event any commissions received by these broker-dealers,
      agents or underwriters and any profits realized by the selling stockholders
      on
      the resales of the securities may be deemed to be underwriting commissions
      or
      discounts under the Securities Act. Selling stockholders who are broker-dealers
      are deemed to be underwriters. If any selling stockholders are deemed to be
      underwriters, the selling stockholders may be subject to certain statutory
      and
      regulatory liabilities, including liabilities imposed pursuant to Sections
      11,
      12 and 17 of the Securities Act and Rule 10b-5 under the Exchange Act.”

     

    QUESTION
      10:

     

    Are
      their
      specific individuals who have voting or investment control over the securities?
      If you are an entity, you must answer “yes” to this question and identify such
      individual(s) by name below.

     

    ANSWER:  Yes
      ______ No______

    

    If
      you
      answered “yes”, please list the names of such individuals: 

     

    
      
        

      

    

    
      
        

      

    

    

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

      
        

        The
          answers to the foregoing questions are true and correct to the best of
          the
          undersigned’s knowledge, information and belief. The undersigned agrees to
          promptly notify the Company in writing in care of the Chief Financial Officer
          of
          (a) any transfer by you of your Shares or Warrants, (b) sales of common
          stock of
          the Company (giving the number of shares sold and the name of the broker-dealer
          used) and (c) any other changes in the answers to this questionnaire that
          should
          be made as a result of any material development occurring subsequent to
          the date
          hereof.

      

       

    

    Dated:
      ___________, 2007.

    
      
        	 	 	 
	 	
                
Signature

      

       

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

    

    Appendix
      B

     

    Form
      of Legal Opinion

    

    1. The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Delaware and has all requisite corporate
      power and authority to carry on its business and to own its property as now
      conducted and owned. 

    

    2. The
      Company has full power and authority, and all requisite corporate action on
      the
      part of the Company has been taken, which is necessary for (a) the
      authorization, execution and delivery of the Transaction Documents and (b)
      the
      performance of all obligations of the Company under the Transaction
      Documents.

    

    3. The
      Transaction Documents have been duly authorized, executed and delivered on
      behalf of the Company and constitute the valid and binding obligations of the
      Company, enforceable against it in accordance with their respective
      terms.

    

    4. The
      Securities to be sold by the Company pursuant to the Subscription Agreements,
      when issued and delivered in accordance with the provisions of the Subscription
      Agreements, including payment by the investors therefor, will be duly
      authorized, validly issued, fully paid and nonassessable and, to our knowledge,
      none of them will have been issued in violation of any preemptive right or
      any
      similar right. Upon delivery of and payment for the Securities in accordance
      with the Subscription Agreements, each Purchaser will receive good title to
      the
      Securities purchased by it, free and clear of all encumbrances and restrictions,
      other than restrictions on transfer imposed by applicable securities laws.
      

    

    5. The
      Warrant Shares have been duly authorized and reserved for issuance and, when
      issued and delivered upon exercise of the Warrants in accordance with the terms
      thereof, will be duly authorized, validly issued, fully paid and nonassessable
      and, to our knowledge, none of them will have been issued in violation of any
      preemptive right or any similar right. Upon delivery of and payment for the
      Warrant Shares in accordance with the terms of the Warrants, each recipient
      of
      the respective Warrant Shares will receive good title to such shares, free
      and
      clear of all encumbrances and restrictions, other than restrictions on transfer
      imposed by applicable securities laws.

    

    6. The
      Placement Warrant Shares (as defined in the Agency Agreement) have been duly
      authorized and reserved for issuance and, when issued and delivered upon
      exercise of the Placement Warrants (as defined in the Agency Agreement), will
      be
      duly authorized, validly issued, fully paid and nonassessable and, to our
      knowledge, none of them will have been issued in violation of any preemptive
      right or any similar right. Upon delivery of and payment for the Placement
      Warrant Shares in accordance with the Placement Warrants, each recipient of
      the
      respective securities will receive good title to such shares, free and clear
      of
      all encumbrances and restrictions, other than restrictions on transfer imposed
      by applicable securities laws. 

    

    7. The
      execution, delivery and performance by the Company of the Subscription
      Agreements and the offer, issuance and sale of the Securities and the Placement
      Warrants require no consent of, action by or in respect of, or filing with,
      any
      person, court, governmental body, agency, or official, other than filings (if
      any) required to be made pursuant to applicable state securities laws and
      post-sale filings pursuant to applicable state and federal securities
      laws.

    

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

       

    

    8. Subject
      to the Agent’s compliance with applicable securities laws and to the accuracy of
      the representations and warranties of each Purchaser made in such purchaser’s
      Subscription Agreement, the offer, issuance, sale and delivery of the Shares
      and
      the Placement Warrants under the circumstances contemplated by the Transaction
      Documents constitute exempt transactions under Rule 506 of Regulation D under
      the Securities Act of 1933, as amended (the “Securities
      Act”),
      and
      do not require registration under the Securities Act.

    

    9. The
      execution, delivery and performance of the Subscription Agreements by the
      Company and the issuance and sale of the Securities and Placement Warrants
      will
      not result in a breach or violation of any of the terms and provisions of,
      or
      constitute a default under (1) any statute, rule, regulation or, to our
      knowledge, order of any governmental agency or body of any court, domestic
      or
      foreign, having jurisdiction over the Company, or (2) the Certificate of
      Incorporation or By-Laws of the Company.

    

    10. Except
      as
      described in the Subscription Agreements or Memorandum, to our knowledge, there
      are no legal or governmental proceedings pending or threatened to which the
      Company is a party or to which the property of the Company is subject, which
      singly or in the aggregate could have a material adverse effect on the Company’s
      results of operations or condition (financial or otherwise).

    

    
      
        
        

      

      
        B-2FIRST
      HORIZON ASSET SECURITIES INC.

     

    Depositor

     

    FIRST
      HORIZON HOME LOAN CORPORATION

     

    Master
      Servicer

     

    and

     

    THE
      BANK
      OF NEW YORK

     

    Trustee

     

    
      
        

      

    

     

    POOLING
      AND SERVICING AGREEMENT

     

    Dated
      as
      of March 1, 2007

     

    
      
 

    FIRST
      HORIZON ALTERNATIVE MORTGAGE SECURITIES TRUST 2007-FA2

     

    MORTGAGE
      PASS-THROUGH CERTIFICATES, SERIES 2007-FA2

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

    

     

    TABLE
      OF
      CONTENTS

    

      
        	 	 	
                Page

              
	
                ARTICLE
                  I DEFINITIONS

              	 	
                6

              
	
                ARTICLE
                  II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
                  WARRANTIES

              	 	
                42

              
	
                SECTION
                  2.1 Conveyance of Mortgage Loans.

              	 	
                42

              
	
                SECTION
                  2.2 Acceptance by Trustee of the Mortgage Loans.

              	 	
                46

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

              	 	
                49

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

              	 	
                51

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

              	 	
                51

              
	
                SECTION
                  2.6 Execution and Delivery of Certificates.

              	 	
                52

              
	
                SECTION
                  2.7 REMIC Matters.

              	 	
                52

              
	
                SECTION
                  2.8 Covenants of the Master Servicer.

              	 	
                56

              
	
                ARTICLE
                  III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

              	 	
                57

              
	
                SECTION
                  3.1 Master Servicer to Service Mortgage Loans.

              	 	
                57

              
	
                SECTION
                  3.2 Subservicing; Enforcement of the Obligations of
                  Servicers.

              	 	
                58

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

              	 	
                59

              
	
                SECTION
                  3.4 Trustee to Act as Master Servicer.

              	 	
                59

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

              	 	
                59

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

              	 	
                63

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

              	 	
                63

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

              	 	
                64

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

              	 	
                65

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

              	 	
                67

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

              	 	
                68

              
	
                SECTION
                  3.12 Trustee to Cooperate; Release of Mortgage Files.

              	 	
                71

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

              	 	
                72

              
	
                SECTION
                  3.14 Master Servicing Compensation.

              	 	
                72

              
	
                SECTION
                  3.15 Access to Certain Documentation.

              	 	
                73

              
	
                SECTION
                  3.16 Annual Statement as to Compliance.

              	 	
                73

              
	
                SECTION
                  3.17 Errors and Omissions Insurance; Fidelity Bonds.

              	 	
                73

              
	
                ARTICLE
                  IV DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER

              	 	
                74

              
	
                SECTION
                  4.1 Advances.

              	 	
                74

              
	
                SECTION
                  4.2 Priorities of Distribution.

              	 	
                74

              
	
                SECTION
                  4.3 Method of Distribution.

              	 	
                80

              
	
                SECTION
                  4.4 Allocation of Losses.

              	 	
                81

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

         

      

      
        	
                SECTION
                  4.5 Reserved.

              	 	
                83

              
	
                SECTION
                  4.6 Monthly Statements to Certificateholders.

              	 	
                83

              
	
                SECTION
                  4.7 Reserve Fund.

              	 	
                85

              
	
                SECTION
                  4.8 Separate Interest Trust.

              	 	
                87

              
	
                SECTION
                  4.9 Determination of Pass-Through Rates for LIBOR
                  Certificates.

              	 	
                88

              
	
                ARTICLE
                  V THE CERTIFICATES

              	 	
                90

              
	
                SECTION
                  5.1 The Certificates.

              	 	
                90

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

              	 	
                90

              
	
                SECTION
                  5.3 Mutilated, Destroyed, Lost or Stolen Certificates.

              	 	
                97

              
	
                SECTION
                  5.4 Persons Deemed Owners.

              	 	
                98

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

              	 	
                98

              
	
                SECTION
                  5.6 Maintenance of Office or Agency.

              	 	
                98

              
	
                ARTICLE
                  VI THE DEPOSITOR AND THE MASTER SERVICER

              	 	
                98

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

              	 	
                98

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

              	 	
                98

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

              	 	
                99

              
	
                SECTION
                  6.4 Limitation on Resignation of Master Servicer.

              	 	
                100

              
	
                ARTICLE
                  VII DEFAULT

              	 	
                100

              
	
                SECTION
                  7.1 Events of Default.

              	 	
                100

              
	
                SECTION
                  7.2 Trustee to Act; Appointment of Successor.

              	 	
                102

              
	
                SECTION
                  7.3 Notification to Certificateholders.

              	 	
                104

              
	
                ARTICLE
                  VIII CONCERNING THE TRUSTEE

              	 	
                104

              
	
                SECTION
                  8.1 Duties of Trustee.

              	 	
                104

              
	
                SECTION
                  8.2 Certain Matters Affecting the Trustee.

              	 	
                106

              
	
                SECTION
                  8.3 Trustee Not Liable for Certificates or Mortgage Loans.

              	 	
                108

              
	
                SECTION
                  8.4 Trustee May Own Certificates.

              	 	
                108

              
	
                SECTION
                  8.5 Trustee’s Fees and Expenses.

              	 	
                108

              
	
                SECTION
                  8.6 Eligibility Requirements for Trustee.

              	 	
                109

              
	
                SECTION
                  8.7 Resignation and Removal of Trustee.

              	 	
                109

              
	
                SECTION
                  8.8 Successor Trustee.

              	 	
                110

              
	
                SECTION
                  8.9 Merger or Consolidation of Trustee.

              	 	
                111

              
	
                SECTION
                  8.10 Appointment of Co-Trustee or Separate Trustee.

              	 	
                111

              
	
                SECTION
                  8.11 Tax Matters.

              	 	
                112

              
	
                ARTICLE
                  IX TERMINATION

              	 	
                114

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

              	 	
                114

              
	
                SECTION
                  9.2 Final Distribution on the Certificates.

              	 	
                115

              
	
                SECTION
                  9.3 Additional Termination Requirements.

              	 	
                116

              
	
                ARTICLE
                  X EXCHANGE ACT REPORTING

              	 	
                117

              
	
                SECTION
                  10.1 Filing Obligations.

              	 	
                117

              
	
                SECTION
                  10.2 Form 10-D Filings.

              	 	
                117

              
	
                SECTION
                  10.3 Form 8-K Filings.

              	 	
                118

              
	
                SECTION
                  10.4 Form 10-K Filings.

              	 	
                119

              
	
                SECTION
                  10.5 Sarbanes-Oxley Certification.

              	 	
                119

              
	
                SECTION
                  10.6 Form 15 Filing.

              	 	
                120

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

         

      

      
        	
                SECTION
                  10.7 Report on Assessment of Compliance and Attestation.

              	 	
                120

              
	
                SECTION
                  10.8 Use of Subservicers and Subcontractors.

              	 	
                121

              
	
                SECTION
                  10.9 Amendments.

              	 	
                122

              
	
                ARTICLE
                  XI MISCELLANEOUS PROVISIONS

              	 	
                123

              
	
                SECTION
                  11.1 Amendment.

              	 	
                123

              
	
                SECTION
                  11.2 Recordation of Agreement; Counterparts.

              	 	
                124

              
	
                SECTION
                  11.3 Governing Law.

              	 	
                124

              
	
                SECTION
                  11.4 Intention of Parties.

              	 	
                125

              
	
                SECTION
                  11.5 Notices.

              	 	
                125

              
	
                SECTION
                  11.6 Severability of Provisions.

              	 	
                126

              
	
                SECTION
                  11.7 Assignment.

              	 	
                126

              
	
                SECTION
                  11.8 Limitation on Rights of Certificateholders.

              	 	
                126

              
	
                SECTION
                  11.9 Inspection and Audit Rights.

              	 	
                127

              
	
                SECTION
                  11.10 Certificates Nonassessable and Fully Paid.

              	 	
                128

              
	
                SECTION
                  11.11 Limitations on Actions; No Proceedings.

              	 	
                128

              
	
                SECTION
                  11.12 Acknowledgment of Seller.

              	 	
                128

              

      

    

    
       

      
        	
                SCHEDULES

              
	 
	
                Schedule
                  I:

              	
                Mortgage
                  Loan Schedule

              	 	
                I-1

              
	
                Schedule
                  II:

              	
                Representations
                  and Warranties of the Master Servicer

              	 	
                II-1

              
	
                Schedule
                  III:

              	
                Form
                  of Monthly Master Servicer Report

              	 	
                III-1

              
	 	 	 	 
	
                EXHIBITS

              
	 
	
                Exhibit
                  A-1:

              	
                Form
                  of Senior Certificate

              	 	
                A-1-1

              
	
                Exhibit
                  A-2:

              	
                Form
                  of Senior Certificate/Class I-A-PO/Class II-A-PO
                  Certificate

              	 	
                A-2-1

              
	
                Exhibit
                  A-3

              	
                Form
                  of ERISA Restricted Yield Supplemented Restricted
                  Certificate

              	 	
                 

              
	
                Exhibit
                  B:

              	
                Form
                  of Subordinated Certificate

              	 	
                B-1

              
	
                Exhibit
                  C:

              	
                Form
                  of Residual Certificate

              	 	
                C-1

              
	
                Exhibit
                  D:

              	
                Form
                  of Reverse of Certificates

              	 	
                D-1

              
	
                Exhibit
                  E:

              	
                Form
                  of Initial Certification

              	 	
                E-1

              
	
                Exhibit
                  F:

              	
                Form
                  of Delay Delivery Certification

              	 	
                F-1

              
	
                Exhibit
                  G:

              	
                Form
                  of Subsequent Certification of Custodian

              	 	
                G-1

              
	
                Exhibit
                  H:

              	
                Transfer
                  Affidavit

              	 	
                H-1

              
	
                Exhibit
                  I:

              	
                Form
                  of Transferor Certificate

              	 	
                I-1

              
	
                Exhibit
                  J:

              	
                Form
                  of Investment Letter [Non-Rule 144A]

              	 	
                J-1

              
	
                Exhibit
                  K:

              	
                Form
                  of Rule 144A Letter

              	 	
                K-1

              
	
                Exhibit
                  L:

              	
                Request
                  for Release (for Trustee)

              	 	
                L-1

              
	
                Exhibit
                  M:

              	
                Request
                  for Release (Mortgage Loan)

              	 	
                M-1

              
	
                Exhibit
                  N-1:

              	
                Form
                  of Annual Certification (Subservicer)

              	 	
                N-1-1

              
	
                Exhibit
                  N-2:

              	
                Form
                  of Annual Certification (Trustee)

              	 	
                N-2-1

              
	
                Exhibit
                  O:

              	
                Form
                  of Servicing Criteria to be Addressed in Assessment of
                  Compliance

              	 	
                O-1

              
	
                Exhibit
                  P:

              	
                List
                  of Item 1119 Parties

              	 	
                P-1

              
	
                Exhibit
                  Q:

              	
                Form
                  of Sarbanes-Oxley Certification

              	 	
                Q-1

              

      

    

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

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

     

    WITNESSETH
      THAT

     

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

     

    PRELIMINARY
      STATEMENT

     

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

     

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

     

    [Remainder
      of Page Intentionally Left Blank]

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              Class
                Designation

            	 	
              Initial
                Class 

              Certificate
                Balance 

            	 	
              Pass-Through
                Rate

            	 	
              Minimum
                Denominations

            	 	
              Integral
                Multiples in Excess Minimum

            	 	
              Final
                Scheduled Distribution Date(1)

            	 
	
              Class
                I-A-1

            	 	
              $

            	
              55,220,000.00

            	 	 	
              5.500

            	
              %

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-2

            	 	
              $

            	
              92,040,000.00

            	 	 	
              5.870

            	
              %(2)

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-3

            	 	
              $

            	
              3,946,000.00

            	 	 	
              6.000

            	
              %

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-4

            	 	
              $

            	
              34,872,000.00

            	 	 	
              5.750

            	
              %

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-5

            	 	
              $

            	
              75,146,000.00

            	 	 	
              5.620

            	
              %(3)

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-6

            	 	
              $

            	
              92,040,000.00

            	
              (4)

            	 	
              0.230

            	
              %(5)

            	
              $

            	
              500,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-7

            	 	
              $

            	
              1,534,000.00

            	 	 	
              N/A

            	
              (6)

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-8

            	 	
              $

            	
              75,146,000.00

            	
              (7)

            	 	
              1.380

            	
              %(8)

            	
              $

            	
              500,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-9

            	 	
              $

            	
              10,216,000.00

            	 	 	
              6.000

            	
              %

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-10

            	 	
              $

            	
              27,610,000.00

            	 	 	
              5.570

            	
              %(9)

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-11

            	 	
              $

            	
              27,610,000.00

            	
              (10)

            	 	
              1.430

            	
              %(11)

            	
              $

            	
              500,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-12

            	 	
              $

            	
              1,453,000.00

            	
              (12)

            	 	
              6.000

            	
              %

            	
              $

            	
              500,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-PO

            	 	
              $

            	
              1,819,336.00

            	 	 	
              N/A

            	
              (6)

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                I-A-R

            	 	
              $

            	
              100.00

            	 	 	
              6.250

            	
              %

            	
              $

            	
              100

            	 	 	
              N/A

            	 	 	
              April
                2037

            	 
	
              Class
                II-A-1

            	 	
              $

            	
              9,427,000.00

            	 	 	
              5.750

            	
              %

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                II-A-PO

            	 	
              $

            	
              26,805.00

            	 	 	
              N/A

            	
              (6)

            	
              $

            	
              25,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                B-1

            	 	
              $

            	
              8,746,000.00

            	 	 	
              6.235

            	
              %(13)

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                B-2

            	 	
              $

            	
              3,300,000.00

            	 	 	
              6.235

            	
              %(13)

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                B-3

            	 	
              $

            	
              2,310,000.00

            	 	 	
              6.235

            	
              %(13)

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                B-4

            	 	
              $

            	
              1,485,000.00

            	 	 	
              6.235

            	
              %(13)

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                B-5

            	 	
              $

            	
              1,155,000.00

            	 	 	
              6.235

            	
              %(13)

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 
	
              Class
                B-6

            	 	
              $

            	
              1,555,272.56

            	 	 	
              6.235

            	
              %(13)

            	
              $

            	
              100,000

            	 	
              $

            	
              1,000

            	 	 	
              April
                2037

            	 

    

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (2)
       The
      Pass-Through Rate with respect to any Distribution Date for the Class I-A-2
      Certificates is the per annum rate equal to (a) 5.87% with respect to the first
      Distribution Date, and (b) thereafter, the lesser of (i) LIBOR plus 0.55% and
      (ii) 6.10%, subject to a minimum rate of 0.55%.

     

    (3)
       The
      Pass-Through Rate with respect to any Distribution Date for the Class I-A-5
      Certificates is the per annum rate equal to (a) 5.62% with respect to the first
      Distribution Date, and (b) thereafter, the lesser of (i) LIBOR plus 0.30% and
      (ii) 7.00%, subject to a minimum rate of 0.30%.

     

    (4)
       The
      Class
      I-A-6 Certificates are Notional Amount Certificates and will accrue interest
      during each interest accrual period on a Notional Amount equal to the Class
      Certificate Balance of the Class I-A-2 Certificates.

     

    (5)
       The
      Pass-Through Rate with respect to any Distribution Date for the Class I-A-6
      Certificates is the per annum rate equal to (a) 0.23% with respect to the first
      Distribution Date, and (b) thereafter, the lesser of (i) 5.55% minus LIBOR
      and
      (ii) 5.55%, subject to a minimum rate of 0.00%.

     

    (6)
       The
      Class
      I-A-7, Class I-A-PO and Class II-A-PO Certificates are Principal Only
      Certificates and will not accrue interest.

     

    (7)
       The
      Class
      I-A-8 Certificates are Notional Amount Certificates and will accrue interest
      during each interest accrual period on a Notional Amount equal to the Class
      Certificate Balance of the Class I-A-5 Certificates.

     

    (8)
       The
      Pass-Through Rate with respect to any Distribution Date for the Class I-A-8
      Certificates is the per annum rate equal to (a) 1.38% with respect to the first
      Distribution Date, and (b) thereafter, the lesser of (i) 6.70% minus LIBOR
      and
      (ii) 6.70%, subject to a minimum rate of 0.00%.

     

    (9)
       The
      Pass-Through Rate with respect to any Distribution Date for the Class I-A-10
      Certificates is the per annum rate equal to (a) 5.57% with respect to the first
      Distribution Date, and (b) thereafter, the lesser of (i) LIBOR plus 0.25% and
      (ii) 7.00%, subject to a minimum rate of 0.25%.

     

    (10)
       The
      Class
      I-A-11 Certificates are Notional Amount Certificates and will accrue interest
      during each interest accrual period on a Notional Amount equal to the Class
      Certificate Balance of the Class I-A-10 Certificates.

     

    (11)
       The
      Pass-Through Rate with respect to any Distribution Date for the Class I-A-11
      Certificates is the per annum rate equal to (a) 1.43% with respect to the first
      Distribution Date, and (b) thereafter, the lesser of (i) 6.75% minus LIBOR
      and
      (ii) 6.75%, subject to a minimum rate of 0.00%.

     

    (12)
       The
      Class
      I-A-12 Certificates are Notional Amount Certificates and will accrue interest
      during each interest accrual period on a Notional Amount equal to the Class
      Certificate Balance of the Class I-A-4 Certificates multiplied by
      4.16666666666667%.

     

    (13)
      The
      Pass-Through Rate on each Class of Subordinated Certificates is variable and
      will be equal to the weighted average of the Designated Mortgage Pool Rates,
      weighted on the basis of the Group Subordinate Amount for each Mortgage Pool.
      The initial Pass-Through Rate on each Class of Subordinated Certificates for
      the
      first Interest Accrual Period will be 6.235% per annum.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              Accretion
                Directed Certificates

            	 	
              None.

            
	 	 	 
	
              Accrual
                Certificates

            	 	
              None.

            
	 	 	 
	
              Accrual
                Components

            	 	
              None.

            
	 	 	 
	
              Book-Entry
                Certificates

            	 	
              All
                Classes of Certificates other than the Physical
                Certificates.

            
	 	 	 
	
              Certificate
                Group

            	 	
              With
                respect to Pool I, the Group I Senior Certificates and with respect
                to
                Pool II, the Group II Senior Certificates. The Subordinated Certificates
                correspond to both of the Mortgage Pools.

            
	 	 	 
	
              COFI
                Certificates

            	 	
              None.

            
	 	 	 
	
              Component
                Certificates

            	 	
              None.

            
	 	 	 
	
              Components

            	 	
              None.

            
	 	 	 
	
              Delay
                Certificates

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

            
	 	 	 
	
              ERISA-Restricted
                Certificates

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

            
	 	 	 
	
              ERISA-Restricted
                Yield Supplement Certificates

            	 	
              The
                Class I-A-2 Certificates.

            
	 	 	 
	
              Floating
                Rate Certificates

            	 	
              The
                Class I-A-2, Class I-A-5 and Class I-A-10 Certificates.

            
	 	 	 
	
              Group
                I Senior Certificates

            	 	
              The
                Class I-A-1, Class I-A-2, Class I-A-3, Class I-A-4, Class I-A-5,
                Class
                I-A-6, Class I-A-7, Class I-A-8, Class I-A-9, Class I-A-10, Class
                I-A-11,
                Class I-A-12, Class I-A-PO and Class I-A-R
                Certificates.

            
	 	 	 
	
              Group
                II Senior Certificates

            	 	
              The
                Class II-A-1 and Class II-A-PO Certificates.

            
	 	 	 
	
              Inverse
                Floating Rate Certificates

            	 	
              The
                Class I-A-6, Class I-A-8 and Class I-A-11 Certificates.

            
	 	 	 
	
              LIBOR
                Certificates

            	 	
              The
                Floating Rate Certificates and the Inverse Floating Rate
                Certificates.

            
	 	 	 
	
              NAS
                Certificates

            	 	
              The
                Class I-A-4 and Class I-A-9 Certificates.

            
	 	 	 
	
              Non-Delay
                Certificates

            	 	
              The
                LIBOR Certificates.

            
	 	 	 
	
              Notional
                Amount Certificates

            	 	
              The
                Class I-A-6, Class I-A-8, Class I-A-11 and Class I-A-12
                Certificates.

            
	 	 	 
	
              Offered
                Certificates

            	 	
              All
                Classes of Certificates other than the Private
                Certificates.

            
	 	 	 
	
              PAC
                Certificates

            	 	
              None.

            
	 	 	 
	
              Physical
                Certificates

            	 	
              The
                Private Certificates and the Residual Certificates.

            
	 	 	 
	
              Principal
                Only Certificates

            	 	
              The
                Class I-A-7, Class I-A-PO and Class II-A-PO
                Certificates.

            
	 	 	 
	
              Private
                Certificates

            	 	
              The
                Class I-A-PO and Class II-A-PO Certificates and the Class B-4, Class
                B-5
                and Class B-6 Certificates.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    
      	
              Rating
                Agencies

            	 	
              With
                respect to the Senior Certificates, Fitch and S&P; except that the
                Class I-A-2 and Class I-A-4 Certificates will also be rated by Moody’s.
                With respect to the Subordinated Certificates, other than the Class
                B-6
                Certificates, Fitch. The Class B-6 Certificates will not be
                rated

            
	 	 	 
	
              Regular
                Certificates

            	 	
              All
                Classes of Certificates, other than the Residual
                Certificates.

            
	 	 	 
	
              Residual
                Certificates

            	 	
              The
                Class I-A-R Certificates.

            
	 	 	 
	
              Retail/Lottery
                Certificates

            	 	
              None.
                

            
	 	 	 
	
              Scheduled
                Certificates

            	 	
              None.

            
	 	 	 
	
              Senior
                Certificates

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

            
	 	 	 
	
              Senior
                Mezzanine Certificates

            	 	
              The
                Class I-A-9 Certificates.

            
	 	 	 
	
              Subordinated
                Certificates

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

            
	 	 	 
	
              Super
                Senior Certificates

            	 	
              The
                Class I-A-1, Class I-A-2, Class I-A-3 and Class I-A-4
                Certificates.

            
	 	 	 
	
              Support
                Classes

            	 	
              None.

            
	 	 	 
	
              TAC
                Certificates

            	 	
              None.
                

            
	 	 	 
	
              Underwriters

            	 	
              Citigroup
                Global Markets Inc. and Banc of America Securities
                LLc.

            

    

     

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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      I

    DEFINITIONS

     

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

     

    Accretion
      Directed Certificates: As specified in the Preliminary Statement. 

     

    Accrual
      Certificates: As specified in the Preliminary Statement.

     

    Accrued
      Certificate Interest: For any Class of Certificates entitled to distributions
      of
      interest for any Distribution Date, the interest accrued during the related
      Interest Accrual Period at the applicable Pass-Through Rate on the Class
      Certificate Balance (or Notional Amount, in the case of the Notional Amount
      Certificates) of such Class of Certificates immediately prior to such
      Distribution Date, less such Class’ share of any Net Interest Shortfall
      allocable between the outstanding Classes of Certificates based on the Accrued
      Certificate Interest otherwise distributable thereto.

     

    Additional
      Designated Information: As defined in Section 10.2.

     

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

     

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

     

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

     

    Aggregate
      Senior Percentage: For any Distribution Date, the percentage equal to (x) the
      sum of the Class Certificate Balances of the Senior Certificates of all
      Certificate Groups (other than the Class PO Certificates immediately prior
      to
      such Distribution Date), divided by (y) the aggregate Pool Principal Balance
      for
      all of the Mortgage Pools (excluding the aggregate of the applicable PO
      Percentage of the Stated Principal Balances of the Discount Mortgage Loans)
      on
      such Distribution Date.

     

    Aggregate
      Subordinated Percentage: For any Distribution Date, the percentage equal to
      (x)
      the sum of the Class Certificate Balances of the Subordinated Certificates
      immediately prior to such Distribution Date, divided by (y) the aggregate Pool
      Principal Balance for all of the Mortgage Pools (excluding the aggregate of
      the
      applicable PO Percentage of the Stated Principal Balances of the Discount
      Mortgage Loans) on such Distribution Date.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

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

     

    Allocable
      Share: With respect to any Class of Subordinated Certificates on any
      Distribution Date, such Class’ pro rata share (based on the Class Certificate
      Balance of each Class entitled thereto) of each of the components of the
      Subordinated Optimal Principal Amount for each Mortgage Pool; provided that,
      solely for purposes of this definition, the applicable Subordinated Optimal
      Principal Amount for each Mortgage Pool will be reduced by the amounts required
      to be distributed to the related Class PO Certificates in respect of the
      applicable Class PO Deferred Amount on such Distribution Date, and any such
      reduction in the applicable Subordinate Optimal Principal Amount for a Mortgage
      Pool shall reduce the amounts calculated pursuant to clauses (1), (4), (2),
      (3)
      and (5) of the definition thereof, in that order, and the Class Certificate
      Balances of each Class of Subordinated Certificates will be reduced by such
      amounts in reverse order of priority until the respective Class Certificate
      Balances of each Class of Subordinated Certificates has been reduced to zero;
      provided further, that,
      except
      as
      provided in this Agreement, no Subordinated Certificates (other than the Class
      of Subordinated Certificates with the highest priority of distribution, the
      Class B-1 Certificates) shall be entitled on any Distribution Date to receive
      distributions pursuant to clauses (2), (3) and (5) of the definition of
      Subordinated Optimal Principal Amount unless the Class Prepayment Distribution
      Trigger for such Class is satisfied for such Distribution Date.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (d)

            	
              any
                Compensating Interest in respect of Principal Prepayments in Full
                received
                in respect of the Mortgage Loans in such Mortgage Pool during the
                period
                from the sixteenth day of the month (or, in the case of the first
                Distribution Date, from the Cut-off Date) prior to the month of such
                Distribution Date through the last day of such month;
                and

            

    

     

    
      	 	
              (e)

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

            

    

     

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

     

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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Basis
      Risk Shortfall: With respect to any Distribution Date and the Class I-A-2
      Certificates, the excess, if any, of (a) the amount of interest that such Class
      of Certificates would have been entitled to receive if the Pass-Through Rate
      for
      such Class was calculated without regard to the maximum per annum Pass-Through
      Rate for such Class as described in the Preliminary Statement, over (b) the
      actual amount of interest such Class of Certificates is entitled to receive
      for
      such Distribution Date.

     

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

     

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

     

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

     

    Carryover
      Unpaid Basis Risk Shortfall: With respect to any Distribution Date and the
      Class
      I-A-2 Certificates, the aggregate amount of Unpaid Basis Risk Shortfalls in
      respect of such Class of Certificates that remain unpaid, if any, from previous
      Distribution Dates.

     

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

     

    Certificate
      Account: The separate Eligible Account or Accounts created and maintained by
      the
      Master Servicer pursuant to Section 3.5 with a depository institution in the
      name of the Master Servicer for the benefit of the Trustee on behalf of
      Certificateholders and designated “First Horizon Home Loan Corporation in trust
      for the registered holders of First Horizon Asset Securities Inc. Mortgage
      Pass-Through Certificates, Series 2007-FA2.”

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Certificate
      Group: As specified in the Preliminary Statement.

     

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

     

    Certificate
      Principal Balance: With respect to any Certificate (other than a Notional Amount
      Certificate) and as of any Distribution Date, the principal balance of such
      Certificate on the date of the initial issuance of such Certificate, as reduced
      by:

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

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

     

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

     

    Certification
      Party: As defined in Section 10.5.

     

    Certifying
      Person: As defined in Section 10.5.

     

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

     

    Class
      I-A-PO Deferred Amount: With respect to the Class I-A-PO Certificates and any
      Distribution Date through the Cross-over Date, the sum of (1) the Class I-A-PO
      Percentage of the principal portion of Non-Excess Losses on a Discount Mortgage
      Loan in Pool I allocated to the Class I-A-PO Certificates on such date, and
      (2)
      all amounts previously allocated to the Class I-A-PO Certificates in respect
      of
      such losses and not distributed to the Class I-A-PO Certificates on prior
      Distribution Dates.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Class
      I-A-PO Percentage: (a) With respect to any Discount Mortgage Loan in Pool I,
      the
      fraction, expressed as a percentage, equal to (6.25% - Adjusted Net Mortgage
      Rate) divided by 6.25%, and (b) with respect to any Non-Discount Mortgage Loan
      in Pool I, 0%.

     

    Class
      II-A-PO Deferred Amount: With respect to the Class II-A-PO Certificates and
      any
      Distribution Date through the Cross-over Date, the sum of (1) the Class II-A-PO
      Percentage of the principal portion of Non-Excess Losses on a Discount Mortgage
      Loan in Pool II allocated to the Class II-A-PO Certificates on such date, and
      (2) all amounts previously allocated to the Class II-A-PO Certificates in
      respect of such losses and not distributed to the Class II-A-PO Certificates
      on
      prior Distribution Dates.

     

    Class
      II-A-PO Percentage: (a) With respect to any Discount Mortgage Loan in Pool
      II,
      the fraction, expressed as a percentage, equal to (5.75% - Adjusted Net Mortgage
      Rate) divided by 5.75, and (b) with respect to any Non-Discount Mortgage Loan
      in
      Pool II, 0%.

     

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

     

    Class
      PO
      Certificates: The Class I-A-PO and Class II-A-PO Certificates.

     

    Class
      PO
      Deferred Amount: (a)
      With
      respect to the Class I-A-PO Certificates, the Class I-A-PO Deferred Amount;
      and
      (b) with respect to the Class II-A-PO Certificates, the Class II-A-PO Deferred
      Amount.

     

    Class
      PO
      Deferred Payment Writedown Amount: For any Distribution Date and any Class
      of
      Class PO Certificates, the amount, if any, distributed on such date in respect
      of the related Class PO Deferred Amount pursuant to Section 4.2(a)(iv) herein.
      The Subordinated Certificate Writedown Amount and the Class PO Deferred Payment
      Writedown Amount will be allocated to the Classes of Subordinated Certificates
      in inverse order of priority, until the Class Certificate Balance of each such
      Class has been reduced to zero. 

     

    Class
      PO
      Principal Distribution Amount: With respect to each Distribution Date and any
      Class of Class PO Certificates, an amount equal to the sum of:

     

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

     

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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (3) the
      applicable PO Percentage of the sum of (a) all partial Principal Prepayments
      for
      each Mortgage Loan in the related Mortgage Pool received by the Master Servicer
      during the related Prepayment Period and (b) all Unanticipated Recoveries in
      respect of each Mortgage Loan in the related Mortgage Pool received by the
      Master Servicer during the calendar month preceding such Distribution
      Date;

     

    (4) the
      applicable PO Percentage of the sum of (a) the net Liquidation Proceeds
      allocable to principal on each Mortgage Loan in the related Mortgage Pool which
      became a Liquidated Mortgage Loan during the related Prepayment Period, other
      than Mortgage Loans described in clause (b), and (b) the principal
      balance of each Mortgage Loan in the related Mortgage Pool that was purchased
      by
      a private mortgage insurer during the related Prepayment Period as an
      alternative to paying a claim under the related mortgage insurance policy;
      and

     

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

     

    For
      purposes of clauses (2) and (5) above, the Stated Principal Balance of a
      Mortgage Loan will be reduced by the amount of any Deficient Valuation that
      occurred prior to the reduction of the Bankruptcy Loss Coverage Amount to
      zero.

     

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

     

    Closing
      Date: March 30, 2007.

     

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

     

    COFI:
      Not
      applicable.

     

    COFI
      Certificates: Not applicable.

     

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Component:
      Not applicable.

     

    Component
      Balance: Not applicable.

     

    Component
      Certificates: Not applicable.

     

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

     

    Coop
      Shares: Shares issued by a Cooperative Corporation.

     

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

     

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

     

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

     

    Corporate
      Trust Office: The designated office of the Trustee in the State of New York
      at
      which at any particular time its corporate trust business with respect to this
      Agreement shall be administered, which office at the date of the execution
      of
      this Agreement is located at The Bank of New York, 101 Barclay Street, 4W,
      New
      York, New York 10286 (Attn: Corporate Trust Administration - First Horizon
      Asset
      Securities Inc. Series 2007-FA2), facsimile no. (212) 815-3986, and which is
      the
      address to which notices to and correspondence with the Trustee should be
      directed.

     

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

     

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

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Corridor
      Contract: The
      transaction evidenced by that certain Confirmation between the Separate Interest
      Trust and the Corridor Contract Counterparty with a Trade Date of March
      27,
      2007
      and a
      reference number of
      FXNEC9333.

     

    Corridor
      Contract Counterparty: Bear Stearns Financial Products Inc. 

     

    Corridor
      Contract Termination Date: The Distribution Date in December 2013.

     

    Corridor
      Contract Notional Balance: With respect to the Corridor Contract, the “Notional
      Amount” specified therein.

     

    Corridor
      Residual Owner: Citigroup Global Markets Inc. and its successors and
      assigns.

     

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

     

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

     

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

     

    Cut-off
      Date: March 1, 2007.

     

    Cut-off
      Date Pool Principal Balance: With respect to Pool I, $320,004,747.37 and with
      respect to Pool II, $10,003,767.05.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Delay
      Certificates: As specified in the Preliminary Statement.

     

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

     

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

     

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

     

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

     

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

     

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

     

    Designated
      Mortgage Pool Rates: With respect to Pool I, 6.25% and with respect to Pool
      II,
      5.75%.

     

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

     

    Discount
      Mortgage Loan: Any Mortgage Loan in Pool I with an Adjusted Net Mortgage Rate
      of
      less than 6.25% and any Mortgage Loan in Pool II with an Adjusted Net Mortgage
      Rate of less than 5.75%.

     

    Distribution
      Account: The separate Eligible Account created and maintained by the Trustee
      pursuant to Section 3.5 in the name of the Trustee for the benefit of the
      Certificateholders and designated “The Bank of New York, in trust for registered
      Holders of First Horizon Asset Securities Inc. Mortgage Pass-Through
      Certificates, Series 2007-FA2.” Funds in the Distribution Account shall be held
      in trust for the Certificateholders for the uses and purposes set forth in
      this
      Agreement.

     

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

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    ERISA-Restricted
      Yield Supplemented Certificates: As specified in the Preliminary
      Statement.

     

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

     

    Event
      of
      Default: As defined in Section 7.1 hereof.

     

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

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Floating
      Rate Certificates: As specified in the Preliminary Statement.

     

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

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Fraud
      Loss Coverage Amount: As of the Closing Date, $9,900,255. As of any Distribution
      Date from the first anniversary of the Cut-off Date and prior to the third
      anniversary of the Cut-off Date, the Fraud Loss Coverage Amount will equal
      $6,600,170 minus the aggregate amount of Fraud Losses that would have been
      allocated to the Subordinated Certificates in the absence of the Loss Allocation
      Limitation since the Cut-off Date. As of any Distribution Date from the third
      anniversary of the Cut-off Date and prior to the fifth anniversary of the
      Cut-off Date, the Fraud Loss Coverage Amount will equal $3,300,085 minus the
      aggregate amount of Fraud Losses that would have been allocated to the
      Subordinated Certificates in the absence of the Loss Allocation Limitation
      since
      the Cut-off Date. As of any Distribution Date on or after the earlier of the
      Cross-over Date or the fifth anniversary, the Fraud Loss Coverage Amount shall
      be zero.

     

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

     

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

     

    FTBNA:
      First Tennessee Bank National Association, a national banking
      association.

     

    Group
      I
      Senior Certificates: As specified in the Preliminary Statement.

     

    Group
      II
      Senior Certificates: As specified in the Preliminary Statement.

     

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

     

    Index: LIBOR.

     

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

     

    Initial
      Bankruptcy Coverage Amount: $150,000.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    Initial
      Component Balance: Not applicable.

     

    Initial
      LIBOR Rate: With respect to the calculation of the initial Pass-Through Rate
      for
      the LIBOR Certificates, 5.32% per annum. 

     

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

     

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

     

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

     

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

     

    Inverse
      Floating Rate Certificates: As specified in the Preliminary
      Statement.

     

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

     

    Latest
      Possible Maturity Date: As to the Group I Senior Certificates, each Class of
      Subordinated Certificates, and each Lower REMIC Interest and each Middle REMIC
      Interest, the Distribution Date following the third anniversary of the scheduled
      maturity date of the Mortgage Loan in Pool I having the latest scheduled
      maturity date as of the Cut-off Date. As to the Group II Senior Certificates,
      the Distribution Date following the third anniversary of the scheduled maturity
      date of the Mortgage Loan in Pool II having the latest scheduled maturity date
      as of the Cut-off Date.

     

    Lender
      PMI Mortgage Loan: Not applicable.

     

    LIBOR:
      The London interbank offered rate for one month United States dollar deposits
      calculated in the manner described in Section 4.9.

     

    LIBOR
      Business Day: Any day on which banks in London, England and The City of New
      York
      are open and conducting transactions in foreign currency and
      exchange.

     

    LIBOR
      Certificates: As specified in the Preliminary Statement.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    LIBOR
      Determination Date: For the LIBOR Certificates, the second LIBOR Business Day
      immediately preceding the commencement of each Interest Accrual Period for
      each
      LIBOR Certificate.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Master
      Servicing Fee Rate: For each Mortgage Loan a per annum rate equal to 0.244%.
      

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      	 	
              (A)

            	
              the
                loan number;

            

    

     

    
      	 	
              (B)

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

            

    

     

    
      	 	
              (C)

            	
              the
                maturity date;

            

    

     

    
      	 	
              (D)

            	
              the
                original principal balance;

            

    

     

    
      	 	
              (E)

            	
              the
                Cut-off Date Principal Balance;

            

    

     

    
      	 	
              (F)

            	
              the
                first payment date of the Mortgage
                Loan;

            

    

     

    
      	 	
              (G)

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

            

    

     

    
      	 	
              (H)

            	
              the
                Loan-to-Value Ratio at origination;

            

    

     

    
      	 	
              (I)

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

            

    

     

    
      	 	
              (J)

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

            

    

     

    
      	 	
              (K)

            	
              the
                Mortgage Rate;

            

    

     

    
      	 	
              (L)

            	
              the
                purpose for the Mortgage Loan;

            

    

     

    
      	 	
              (M)

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

            

    

     

    
      	 	
              (N)

            	
              the
                Master Servicing Fee for the Mortgage Loan;
                and

            

    

     

    
      	 	
              (O)

            	
              a
                code indicating whether the Mortgage Loan is a MERS Mortgage
                Loan.

            

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

    

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

     

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

     

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

     

    Mortgage
      Pool: Any of Pool I or Pool II.

     

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

     

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

     

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

     

    NAS
      Certificates: As specified in the Preliminary Statement.

     

    NAS
      Distribution Percentage: 0% through the Distribution Date in March 2012; 30%
      of
      the applicable NAS Percentage thereafter through the Distribution Date in March
      2013; 40% of the applicable NAS Percentage thereafter through the Distribution
      Date in March 2014; 60% of the applicable NAS Percentage thereafter through
      the
      Distribution Date in March 2015; 80% of the applicable NAS Percentage thereafter
      through the Distribution Date in March 2016; and 100% of the applicable NAS
      Percentage thereafter.

     

    NAS
      Percentage: 0% through the Distribution Date in March 2012, and for any
      Distribution Date thereafter, the lesser of (x) 100% and (y) the percentage
      obtained by dividing (1) the aggregate Class Certificate Balance of the Class
      I-A-4 and Class I-A-9 Certificates immediately preceding such Distribution
      Date
      by (2) the aggregate Class Certificate Balance of all the Classes of Senior
      Certificates related to Pool I (other than the Notional Amount Certificates,
      the
      Class I-A-PO Certificates and the Class I-A-5 Certificates) immediately
      preceding such Distribution Date.

     

    NAS
      Principal Distribution Amount: For any Distribution Date, the product of (x)
      the
      NAS Distribution Percentage and (ii) the Senior Optimal Principal Amount
      available for distribution pursuant to Section 4.2(b)(ii)(B)
      hereof.

     

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

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Non-Class
      I-A-PO Percentage: (a) With respect to a Discount Mortgage Loan in Pool I,
      the
      fraction, expressed as a percentage, equal to the Adjusted Net Mortgage Rate
      divided by 6.25%, and (b) with respect to each Non-Discount Mortgage Loan in
      Pool I, 100%.

     

    Non-Class
      II-A-PO Percentage: (a) With respect to a Discount Mortgage Loan in Pool II,
      the
      fraction, expressed as a percentage, equal to the Adjusted Net Mortgage Rate
      divided by 5.75%, and (b) with respect to each Non-Discount Mortgage Loan in
      Pool II, 100%.

     

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

     

    Non-Discount
      Mortgage Loan: Any Mortgage Loan in Pool I with an Adjusted Net Mortgage Rate
      that is equal to or greater than 6.25% per annum; and any Mortgage Loan in
      Pool
      II with an Adjusted Net Mortgage Rate that is equal to or greater than 5.75%
      per
      annum.

     

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

     

    Non-PO
      Percentage: (a) With respect to Pool I, the Non-Class I-A-PO Percentage; and
      (b)
      with respect to Pool II, the Non-Class II-A-PO Percentage.

     

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

     

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

     

    Notional
      Amount: As specified in the Preliminary Statement.

     

    Notional
      Amount Component: Not applicable.

     

    Notional
      Amount Certificates: As specified in the Preliminary Statement.

     

    Offered
      Certificates: As specified in the Preliminary Statement.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    OTS:
      The
      Office of Thrift Supervision.

     

    Outside
      Reference Date: Not applicable.

     

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

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

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

     

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

     

    PAC
      Certificates: Not applicable.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Performance
      Certification: As defined in Section 10.5.

     

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

     

    
      	 	
              (i)

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

            

    

     

    
      	 	
              (ii)

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

            

    

     

    
      	 	
              (iii)

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

            

    

     

    
      	 	
              (iv)

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

            

    

     

    
      	 	
              (v)

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

            

    

     

    
      	 	
              (vi)

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

            

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (vii)

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

            

    

     

    
      	 	
              (viii)

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

            

    

     

    
      	 	
              (ix)

            	
              units
                of a taxable money-market portfolio having the highest rating assigned
                by
                each Rating Agency (except if Fitch is a Rating Agency and has not
                rated
                the portfolio, the highest rating assigned by Moody’s) and restricted to
                obligations issued or guaranteed by the United States of America
                or
                entities whose obligations are backed by the full faith and credit
                of the
                United States of America and repurchase agreements collateralized
                by such
                obligations; and

            

    

     

    
      	 	
              (x)

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

            

    

     

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

     

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

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

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

     

    Physical
      Certificates: As specified in the Preliminary Statement.

     

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

     

    PO
      Percentage: (a) With respect to Pool I, the Class I-A-PO Percentage, and (b)
      with respect to Pool II, the Class II-A-PO Percentage.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Principal
      Only Certificates: As specified in the Preliminary Statement.

     

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

     

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

     

    Private
      Certificates: As specified in the Preliminary Statement.

     

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

     

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

     

    Prospectus
      Supplement: The Prospectus Supplement, dated March 26, 2007, relating to the
      Offered Certificates.

     

    PUD:
      Planned Unit Development.

     

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

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    Reference
      Bank: A leading bank with an established place of business in London engaged
      in
      transactions in Eurodollar deposits in the international Eurocurrency market,
      not controlled by, or under the common control with, the Trustee.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

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

     

    Regular
      Certificates: As specified in the Preliminary Statement.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Required
      Coupon: With respect to Pool I, 6.50% per annum; with respect to Pool II, 6.00%
      per annum.

     

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

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

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

     

    Reserve
      Fund: A fund created as part of the Separate Interest Trust pursuant to Section
      4.7(a) of this Agreement.

     

    Residual
      Certificates: As specified in the Preliminary Statement.

     

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

     

    Retail/Lottery
      Certificates: Not applicable.

     

    Retained
      Yield: As
      to
      each Mortgage Loan and any Distribution Date, an amount payable to (i) First
      Horizon Home Loan Corporation, in its individual capacity as Seller, or (ii)
      the
      subsequent owner of such amount though Seller’s sale, assignment, or
      certification of its rights to such amount, out of each full payment of interest
      received on such Mortgage Loan and equal to one-twelfth of the Retained Yield
      Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of
      the
      Due Date in the month of such Distribution Date (prior to giving effect to
      any
      Scheduled Payments due on such Mortgage Loan on such Due Date).

     

    Retained
      Yield Rate: For any Non-Discount Mortgage Loan, a per annum rate equal to the
      excess of (a) the applicable Mortgage Rate over (b) the Required Coupon. For
      any
      Discount Mortgage Loan, 0%. 

     

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

     

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

     

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

     

    Sarbanes-Oxley
      Certification: As defined in Section 10.5.

     

    Scheduled
      Balances: Not applicable.

     

    Scheduled
      Certificates: Not applicable.

     

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

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    Senior
      Certificates: As specified in the Preliminary Statement.

     

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

     

    Senior
      Mezzanine Certificates: As specified in the Preliminary Statement.

     

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

     

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

     

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

     

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

     

    (4) the
      lesser of:

     

    
      	 	
              (a)

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

            

    

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (b)

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

            

    

     

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

     

    Senior
      Percentage: On any Distribution Date for a Certificate Group, the lesser of
      100%
      and the percentage obtained by dividing the aggregate Class Certificate Balances
      of all Classes of Senior Certificates of such Certificate Group (other than
      the
      Notional Amount Certificates and the Class PO Certificates) immediately
      preceding such Distribution Date by the Pool Principal Balance of the related
      Mortgage Pool (excluding the aggregate of the applicable PO Percentage of the
      principal balance of each Discount Mortgage Loan in the related Mortgage Pool)
      for the immediately preceding Distribution Date.

     

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

     

    
      	
              Period
                (Dates Inclusive)

            	 	
              Senior
                Prepayment Percentage

            
	
              April
                2007 - March 2012

            	 	
              100%

            
	
              April
                2012 - March 2013

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

            
	
              April
                2013 - March 2014

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

            
	
              April
                2014 - March 2015

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

            
	
              April
                2015 - March 2016

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

            
	
              April
                2016 and thereafter

            	 	
              The
                related Senior Percentage.

            

    

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

       

    

    provided,
      however,
      if on
      any Distribution Date, the Aggregate Senior Percentage exceeds such percentage
      calculated as of the Closing Date, then the Senior Prepayment Percentage for
      all
      of the Certificate Groups for such Distribution Date will equal
      100%.

     

    The
      reductions in the Senior Prepayment Percentage for each Certificate Group
      described above will not occur and will remain at the level in effect for the
      most recent prior period specified in the table above, unless both of the
      following step-down conditions are satisfied with respect to each Mortgage
      Pool,
      as of the last day of the month preceding the Distribution Date:

     

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

     

    (2) cumulative
      Realized Losses in all of the Mortgage Pools do not exceed:

     

    
      	 	
              (a)

            	
              30%
                of the Original Subordinated Principal Balance if such Distribution
                Date
                occurs between and including April 2012 and March
                2013;

            

    

     

    
      	 	
              (b)

            	
              35%
                of the Original Subordinated Principal Balance if such Distribution
                Date
                occurs between and including April 2013 and March
                2014;

            

    

     

    
      	 	
              (c)

            	
              40%
                of the Original Subordinated Principal Balance if such Distribution
                Date
                occurs between and including April 2014 and March
                2015;

            

    

     

    
      	 	
              (d)

            	
              45%
                of the Original Subordinated Principal Balance if such Distribution
                Date
                occurs between and including April 2015 and March 2016;
                and

            

    

     

    
      	 	
              (e)

            	
              50%
                of the related Original Subordinated Principal Balance if such
                Distribution Date occurs during or after April
                2016.

            

    

     

    Separate
      Interest Trust: A trust created pursuant to Section 4.8(a) of this Agreement
      which is not an asset of any REMIC created hereunder.

     

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

     

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

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    (1) normal
      wear and tear;

     

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

     

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

     

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

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	
              (i)

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

            

    

     

    
      	 	
              (ii)

            	
              by
                military, naval or air forces; or

            

    

     

    
      	 	
              (iii)

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

            

    

     

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

     

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

     

    Special
      Hazard Loss Coverage Amount: Upon the initial issuance of the Certificates,
      $4,000,000.
      As of
      any Distribution Date, the Special Hazard Loss Coverage Amount will equal the
      greater of

     

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

     

    (b) twice
      the
      outstanding principal balance of the Mortgage Loan which has the largest
      outstanding principal balance as of the related Determination Date,

     

    less,
      in
      each case, the aggregate amount of Special Hazard Losses that would have been
      previously allocated to the Subordinated Certificates in the absence of the
      Loss
      Allocation Limitation. As of any Distribution Date on or after the Cross-over
      Date, the Special Hazard Loss Coverage Amount will be zero.

     

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

     

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

     

    Startup
      Day: The Closing Date.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Subordinated
      Certificates: As specified in the Preliminary Statement.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    Substitute
      Mortgage Loan: A Mortgage Loan substituted by the Seller for a Deleted Mortgage
      Loan which must, on the date of such substitution, as confirmed in a Request
      for
      Release, substantially in the form of Exhibit L, (i) have a Stated Principal
      Balance, after deduction of the principal portion of the Scheduled Payment
      due
      in the month of substitution, not in excess of, and not more than 10% less
      than
      the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have an Adjusted
      Net Mortgage Rate not lower than the lower of (a) the Adjusted Net Mortgage
      Rate
      of the Deleted Mortgage Loan or (b) 6.25% in the case of a Deleted Mortgage
      Loan
      from Pool I; or 5.75% in the case of a Deleted Mortgage Loan from Pool II;
      provided that the Master Servicing Fee for the Substitute Mortgage Loan shall
      be
      equal to or greater than that of the Deleted Mortgage Loan; (iii) be accruing
      interest at a rate no lower than and not more than 1% per annum higher than,
      that of the Deleted Mortgage Loan; (iv) have a Loan-to-Value Ratio no higher
      than that of the Deleted Mortgage Loan; (v) have a remaining term to maturity
      no
      greater than (and not more than one year less than that of) the Deleted Mortgage
      Loan; (vi) not be a Cooperative Loan unless the Deleted Mortgage Loan was a
      Cooperative Loan and (vii) comply with each representation and warranty set
      forth in Section 2.3 hereof.

     

    
      
        
        

      

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

     

    Super
      Senior Certificates: As specified in the Preliminary Statement.

     

    Support
      Classes: Not applicable.

     

    TAC
      Certificates: Not applicable.

     

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

     

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

     

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

     

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

     

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

     

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

     

    Trustee
      Fee Rate: For each Mortgage Loan a per annum rate equal to 0.006%.

     

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

     

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

     

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

     

    
      
        
        

      

      
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    Underwriters:
      As specified in the Preliminary Statement.

     

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

     

    Unpaid
      Basis Risk Shortfall: With respect to any Distribution Date and the Class I-A-2
      Certificates, the excess, if any, of (x) the Basis Risk Shortfall for such
      Class
      of Certificates for such Distribution Date, over (y) the Yield Supplement
      Amount, if any, distributed in respect of such Class of Certificates on such
      Distribution Date.

     

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

     

    Voting
      Rights: The portion of the voting rights of all of the Certificates which is
      allocated to any Certificate. As of any date of determination, (a) 98% of all
      Voting Rights will be allocated among all Holders of the Certificates, other
      than the Notional Amount Certificates and the Class I-A-R Certificates, in
      proportion to their then outstanding Class Certificate Balance; and (b) 1.0%
      of
      all Voting Rights will be allocated among the Holders of the Notional Amount
      Certificates (such Voting Rights to be allocated among the Holders of Notional
      Amount Certificates in accordance with their respective Notional Amounts);
      and
      (c) 1.0% of all Voting Rights will be allocated to the Holders of the Class
      I-A-R Certificates (such Voting Rights to be allocated among the Holders of
      Certificates of such Class in accordance with their respective Percentage
      Interests).

     

    Yield
      Supplement Amount: For any Distribution Date on or prior to the Corridor
      Contract Termination date on which the LIBOR exceeds 5.55%, the lesser of (a)
      the Class Certificate Balance of the Class I-A-2 Certificates immediately prior
      to such Distribution Date and (b) the Corridor Contract Notional Amount for
      such
      Distribution Date, multiplied by a rate equal to one twelfth of the excess
      of
      (i) the lesser of (A) LIBOR and (B) 8.95%, over (ii) 5.55%.

     

    ARTICLE
      II

    CONVEYANCE
      OF MORTGAGE LOANS; 

    REPRESENTATIONS
      AND WARRANTIES

     

    SECTION
      2.1 Conveyance of Mortgage Loans. 

     

    
      	 	
              (a)

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

            

    

     

    
      
        
        

      

      
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              (b)

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

            

    

     

    
      	 	
              (i)

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

            

    

     

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

     

    
      	 	
              (ii)

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

            

    

     

    
      	 	
              (iii)

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

            

    

     

    
      
        
        

      

      
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              (iv)

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

            

    

     

    
      	 	
              (v)

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

            

    

     

    
      	 	
              (vi)

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

            

    

     

    
      	 	
              1.

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

            

    

     

    
      	 	
              2.

            	
              The
                executed Security Agreement;

            

    

     

    
      	 	
              3.

            	
              The
                executed Proprietary Lease;

            

    

     

    
      	 	
              4.

            	
              The
                executed Recognition Agreement;

            

    

     

    
      	 	
              5.

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

            

    

     

    
      	 	
              6.

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

            

    

     

    
      
        
        

      

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

     

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

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    Subject
      to the immediately following sentence, as promptly as practicable subsequent
      to
      such transfer and assignment, and in any event, within thirty (30) days
      thereafter, the Master Servicer shall (i) complete each assignment of Mortgage,
      as follows: “First Horizon Mortgage Pass-Through Certificates, Series 2007-FA2,
      The Bank of New York, as trustee for the holders of the Certificates”, (ii)
      cause such assignment to be in proper form for recording in the appropriate
      public office for real property records and (iii) cause to be delivered for
      recording in the appropriate public office for real property records the
      assignments of the Mortgages to the Trustee, except that, with respect to any
      assignments of Mortgage as to which the Master Servicer has not received the
      information required to prepare such assignment in recordable form, the Master
      Servicer’s obligation to do so and to deliver the same for such recording shall
      be as soon as practicable after receipt of such information and in any event
      within thirty (30) days after receipt thereof. Notwithstanding the foregoing,
      the Master Servicer need not cause to be recorded any assignment which relates
      to a Mortgage Loan in any state other than the Required Recordation
      States.

     

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

     

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

     

    SECTION
      2.2 Acceptance by Trustee of the Mortgage Loans.

     

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

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

       

    

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

     

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

     

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

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      	 	
              (a)

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

            

    

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (b)

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

            

    

     

    SECTION
      2.6 Execution and Delivery of Certificates.

     

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

     

    SECTION
      2.7 REMIC Matters. 

     

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

     

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

     

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

     

    The
      assets of the Upper REMIC shall be as set forth in the definition thereof.
      The
“regular interests” in the Upper REMIC are represented by the Regular
      Certificates. The Class I-A-2 Certificates shall also represent the right to
      receive the Yield Supplement Amount, which shall not be a part of any REMIC
      hereunder but shall constitute contractual rights coupled with a regular
      interest within the meaning of Treasury regulations section 1.860G-2(i). The
      RU
      Interest shall be the sole class of residual interest in the Upper REMIC. The
      Class I-A-R Certificate shall represent ownership of the RL Interest, RM
      Interest and RU Interest. 

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

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

     

    
      	
              Lower REMIC Interest or 

            	 	
              Lower
                REMIC

            	 	Lower
              REMIC 	 	
              Corresponding
                Class of Middle REMIC Interests

            	 
	
              Residual

            	 	
               Interest
                Balance

            	 	
              Interest
                Rate

            	 	
              Interest

            	 	
              Principal

            	 
	
              L-I-A-1

            	 	
              $

            	
              158,411.79

            	 	 	
              6.25

            	
              %

            	 	
              (1

            	
              )

            	 	
              (1

            	
              )

            
	
              L-I-A-2

            	 	
              $

            	
              17,601.31

            	 	 	
              6.25

            	
              %

            	 	
              (1

            	
              )

            	 	
              (1

            	
              )

            
	
              L-I-ZZZ

            	 	
              $

            	
              318,009,397.42

            	 	 	
              6.25

            	
              %

            	 	
              (1

            	
              )

            	 	
              (1

            	
              )

            
	
              L-I-PO

            	 	
              $

            	
              1,819,336.85

            	 	 	
              N/A

            	 	 	
              (1

            	
              )

            	 	
              (1

            	
              )

            
	
              RL

            	 	
              $

            	
              0.00

            	 	 	
              N/A

            	 	 	
              N/A

            	 	 	
              N/A

            	 
	
              L-II-A-1

            	 	
              $

            	
              4,949.66

            	 	 	
              5.75

            	
              %

            	 	
              (1

            	
              )

            	 	
              (1

            	
              )

            
	
              L-II-A-2

            	 	
              $

            	
              549.96

            	 	 	
              5.75

            	
              %

            	 	
              (1

            	
              )

            	 	
              (1

            	
              )

            
	
              L-II-ZZZ

            	 	
              $

            	
              9,971,462.42

            	 	 	
              5.75

            	
              %

            	 	
              (1

            	
              )

            	 	
              (1

            	
              )

            
	
              L-II-PO

            	 	
              $

            	
              26,805.01
                

            	 	 	
              N/A

            	 	 	
              (1

            	
              )

            	 	
              (1

            	
              )

            
	
              Total

            	 	
              $

            	
              330,008,514.42

            	 	 	 	 	 	 	 	 	 	 

    

     

    (1) The
      Lower
      REMIC Interest L-I-A-1, Lower REMIC Interest L-I-A-2 and Lower REMIC Interest
      L-I-ZZZ shall be Corresponding Classes to these classes of Middle REMIC
      Interests: M-I-A-1, M-I-A-2, M-I-A-3, M-I-A-4, M-I-A-5, M-I-A-7, M-I-A-9,
      M-I-A-10, M-I-A-RU, M-B-1, M-B-2, M-B-3, M-B-4, M-B-5 and M-B-6 (provided that
      with respect to M-B-1, M-B-2, M-B-3, M-B-4, M-B-5 and M-B-6, such Lower REMIC
      Interests shall only correspond to the portion supported by Pool I). The
      Lower REMIC Interest L-I-PO corresponds to the Middle REMIC Interest M-I-PO.
      The
      Lower REMIC Interest L-II-A-1, Lower REMIC L-II-A-2 and Lower REMIC Interest
      L-II-ZZZ shall be Corresponding Classes to these classes of Middle REMIC
      Interests: M-II-A-1, M-B-1, M-B-2, M-B-3, M-B-4, M-B-5 and M-B-6 (provided
      that
      with respect to M-B-1, M-B-2, M-B-3, M-B-4, M-B-5 and M-B-6, such Lower REMIC
      Interests shall only correspond to the portion supported by Pool II). The Lower
      REMIC Interest L-II-PO corresponds to the Middle REMIC Interest M-II-PO.

     

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

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    
       

      If
        a
        Cross-over Situation exists, the aggregate principal balances of the outstanding
        L1 and L2 Interests of all of the Mortgage Pools shall not be reduced below
        one
        percent of the aggregate Pool Principal Balance of all of the Mortgage Pools
        for
        the following Distribution Date in excess of the Senior Certificates as of
        the
        related Distribution Date (after taking into account distributions of principal
        and allocations of Realized Losses on such Distribution Date). To the extent
        this limitation prevents the distribution of principal to the L1 and L2
        Interests of a Mortgage Pool and the related LZZZ Interest has already been
        reduced to zero, such excess principal from such Mortgage Pool shall be paid
        proportionately to the LZZZ Interests of the Mortgage Pool or Mortgage Pools
        whose aggregate L1 and L2 Interests are less than one percent of the related
        Group Subordinate Amount. Any such shortfall as a result of the Mortgage
        Pool or
        Mortgage Pools receiving the extra payment having a Designated Mortgage Pool
        Rate (as defined below) lower than the Designated Mortgage Pool Rate of the
        Mortgage Pool or Mortgage Pools from which the payment was reallocated shall
        be
        treated as a Realized Loss and if excess arises as a result of the Mortgage
        Pool
        receiving the extra payment having a Designated Mortgage Pool Rate higher
        than
        the Mortgage Pool from which the payment was reallocated it shall reimburse
        the
        Middle REMIC for prior Realized Losses. 

      

        
          	 	 	 	 	 	 	
                   

                	
                   

                	
                   

                	
                  Corresponding
                    Class or Interest

                	
                   

                
	
                   

                  Middle
                    REMIC
                    Interest or Residual

                	
                   

                	
                   

                	
                  Middle
                    REMIC 

                  Interest
                    Balance

                	
                   

                	
                   

                	
                  Middle
                    REMIC 

                  Interest
                    Rate

                	
                   

                	
                   

                	

                  Interest

                	
                   

                	
                   

                	

                  Principal

                	
                   

                
	
                  M-I-A-1

                	 	
                  $

                	
                  55,220,000.00

                	 	 	
                  5.50

                	
                  %

                	 	
                  I-A-1

                	 	 	
                  I-A-1

                	 
	
                  M-I-A-2

                	 	
                  $

                	
                  92,040,000.00

                	 	 	
                  6.10

                	
                  %

                	 	
                  I-A-2,
                    I-A-6

                	 	 	
                  I-A-2

                	 
	
                  M-I-A-3

                	 	
                  $

                	
                  3,946,000.00

                	 	 	
                  6.00

                	
                  %

                	 	
                  I-A-3

                	 	 	
                  I-A-3

                	 
	
                  M-I-A-4

                	 	
                  $

                	
                  34,872,000.00

                	 	 	
                  6.00

                	
                  %

                	 	
                  I-A-4,
                    I-A-12

                	 	 	
                  I-A-4

                	 
	
                  M-I-A-5

                	 	
                  $

                	
                  75,146,000.00

                	 	 	
                  7.00

                	
                  %

                	 	
                  I-A-5,
                    I-A-8

                	 	 	
                  I-A-5

                	 
	
                  M-I-A-7

                	 	
                  $

                	
                  1,534,000.00

                	 	 	
                  N/A

                	 	 	
                  N/A

                	 	 	
                  I-A-7

                	 
	
                  M-I-A-9

                	 	
                  $

                	
                  10,216,000.00

                	 	 	
                  6.00

                	
                  %

                	 	
                  I-A-9

                	 	 	
                  I-A-9

                	 
	
                  M-I-A-10

                	 	
                  $

                	
                  27,610,000.00

                	 	 	
                  7.00

                	
                  %

                	 	
                  I-A-10,
                    I-A-11

                	 	 	
                  I-A-10

                	 
	
                  M-I-A-RU

                	 	
                  $

                	
                  100.00

                	 	 	
                  6.25

                	
                  %

                	 	
                  RU
                    Interest

                	 	 	
                  RU
                    Interest

                	 
	
                  M-I-PO

                	 	
                  $

                	
                  1,819,336.85

                	 	 	
                  N/A

                	 	 	
                  N/A

                	 	 	
                  I-A-PO

                	 
	
                  M-II-A-1

                	 	
                  $

                	
                  9,427,000.00

                	 	 	
                  5.75

                	
                  %

                	 	
                  II-A-1

                	 	 	
                  II-A-1

                	 
	
                  M-II-PO

                	 	
                  $

                	
                  26,805.01

                	 	 	
                  N/A

                	 	 	
                  N/A

                	 	 	
                  II-A-PO

                	 
	
                  M-B-1

                	 	
                  $

                	
                  8,746,000.00

                	 	 	
                  (1

                	
                  )

                	 	
                  B-1

                	 	 	
                  B-1

                	 
	
                  M-B-2

                	 	
                  $

                	
                  3,300,000.00

                	 	 	
                  (1

                	
                  )

                	 	
                  B-2

                	 	 	
                  B-2

                	 
	
                  M-B-3

                	 	
                  $

                	
                  2,310,000.00

                	 	 	
                  (1

                	
                  )

                	 	
                  B-3

                	 	 	
                  B-3

                	 
	
                  M-B-4

                	 	
                  $

                	
                  1,485,000.00

                	 	 	
                  (1

                	
                  )

                	 	
                  B-4

                	 	 	
                  B-4

                	 
	
                  M-B-5

                	 	
                  $

                	
                  1,155,000.00

                	 	 	
                  (1

                	
                  )

                	 	
                  B-5

                	 	 	
                  B-5

                	 
	
                  M-B-6

                	 	
                  $

                	
                  1,155,272.56

                	 	 	
                  (1

                	
                  )

                	 	
                  B-6

                	 	 	
                  B-6

                	 
	
                  RM

                	 	
                  $

                	
                  0.00

                	 	 	
                  N/A

                	 	 	
                  N/A

                	 	 	
                  N/A

                	 
	
                  Total

                	 	
                  $

                	
                  330,008,514.42

                	 	 	 	 	 	 	 	 	 	 

        

      

       

      (1) The
        Middle REMIC Interest Rate for the Middle REMIC Interest M-B-1, Middle REMIC
        Interest M-B-2, Middle REMIC Interest M-B-3, Middle REMIC Interest M-B-4,
        Middle
        REMIC Interest M-B-5, Middle REMIC Interest M-B-6 shall equal the Calculation
        Rate as defined in this Section 2.7. The Pass-Through Rate on each Class
        of
        Subordinated Certificates is variable and will be equal to the weighted average
        of the Middle REMIC Interest Rates on Middle REMIC Interest M-B-1, Middle
        REMIC
        Interest M-B-2, Middle REMIC Interest M-B-3, Middle REMIC Interest M-B-4,
        Middle
        REMIC Interest M-B-5, Middle REMIC Interest M-B-6, weighted on the basis
        of the
        principal balance of each such Middle REMIC Interest.

       

      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

       

      On
        each
        Distribution Date Available Funds shall be distributed with respect to the
        Middle REMIC Interests in a manner such that:

       

      
        	 	
                (a)

              	
                interest
                  accrued, if any, on each Middle REMIC Interest is distributed with
                  respect
                  to each such Middle REMIC Interest in the same manner that Accrued
                  Certificate Interest is distributed with respect to the Corresponding
                  Class or Classes of Certificates pursuant to Section 4.2;
                  and

              

      

       

      
        	 	
                (b)

              	
                principal
                  is distributed (and Realized Losses shall be allocated) with respect
                  to
                  each such Middle REMIC Interest in the same manner that principal
                  is
                  distributed (and Realized Losses is allocated) with respect to
                  the
                  Corresponding Class or Classes of Certificates pursuant to
                  Section 4.2 and
                  Section 4.4.

              

      

       

      The
        Class
        L-I-PO Interest shall be entitled to receive the Class PO Principal Distribution
        Amount for Pool I.

       

      The
        Class
        L-II-PO Interest shall be entitled to receive the Class PO Principal
        Distribution Amount for Pool II.

       

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

       

      SECTION
        2.8 Covenants of the Master Servicer.

       

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

       

      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (b)

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

              

      

       

      ARTICLE
        III

      ADMINISTRATION
        AND SERVICING OF MORTGAGE LOANS

       

      SECTION
        3.1 Master Servicer to Service Mortgage Loans.

       

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

       

      
        
          
          

        

        
          57

          
            

          

        

        
          
          

        

      

       

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

       

      SECTION
        3.2 Subservicing; Enforcement of the Obligations of Servicers.

       

      
        	 	
                (a)

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

              

      

       

      
        
          
          

        

        
          58

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (b)

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

              

      

       

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

       

      The
        Depositor may, but is not obligated to, enforce the obligations of the Master
        Servicer hereunder and may, but is not obligated to, perform, or cause a
        designee to perform, any defaulted obligation of the Master Servicer hereunder
        and in connection with any such defaulted obligation to exercise the related
        rights of the Master Servicer hereunder; provided that the Master Servicer
        shall
        not be relieved of any of its obligations hereunder by virtue of such
        performance by the Depositor or its designee. Neither the Trustee nor the
        Depositor shall have any responsibility or liability for any action or failure
        to act by the Master Servicer nor shall the Trustee or the Depositor be
        obligated to supervise the performance of the Master Servicer hereunder or
        otherwise.

       

      SECTION
        3.4 Trustee to Act as Master Servicer.

       

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

       

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

       

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

       

      
        
          
          

        

        
          59

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (b)

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

              

      

       

      
        	 	
                (i)

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

              

      

       

      
        	 	
                (ii)

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

              

      

       

      
        	 	
                (iii)

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

              

      

       

      
        
          
          

        

        
          60

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (iv)

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

              

      

       

      
        	 	
                (v)

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

              

      

       

      
        	 	
                (vi)

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

              

      

       

      
        	 	
                (vii)

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

              

      

       

      
        	 	
                (viii)

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

              

      

       

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

       

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

       

      
        	 	
                (c)

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

              

      

       

      
        	 	
                (i)

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

              

      

       

      
        
          
          

        

        
          61

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (ii)

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

              

      

       

      
        	 	
                (iii)

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

              

      

       

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

       

      
        	 	
                (iv)

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

              

      

       

      
        	 	
                (v)

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

              

      

       

      
        
          
          

        

        
          62

          
            

          

        

        
          
          

        

      

       

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

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (b)

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

              

      

       

      
        	 	
                (c)

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

              

      

       

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

       

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

       

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

       

      
        
          
          

        

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

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (i)

              	
                to
                  the extent not previously retained by the Master Servicer, to pay
                  the
                  Retained Yield to (a) First Horizon, in its individual capacity
                  as Seller,
                  or (b) a
                  subsequent owner of such Retained Yield through Seller’s sale, assignment,
                  or certification of its rights to such Retained Yield,
                  and to pay to the Master Servicer the master servicing compensation
                  to
                  which it is entitled pursuant to Section 3.14, and earnings on
                  or
                  investment income with respect to funds in or credited to the Certificate
                  Account as additional master servicing
                  compensation;

              

      

       

      
        	 	
                (ii)

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

              

      

       

      
        	 	
                (iii)

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

              

      

       

      
        	 	
                (iv)

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

              

      

       

      
        	 	
                (v)

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

              

      

       

      
        	 	
                (vi)

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

              

      

       

      
        	 	
                (vii)

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

              

      

       

      
        	 	
                (viii)

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

              

      

       

      
        
          
          

        

        
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                (ix)

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

              

      

       

      
        	 	
                (x)

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

              

      

       

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

       

      The
        Master Servicer shall distribute the Retained Yield, if any, to (i) First
        Horizon, in its individual capacity as Seller, or (ii) a
        subsequent owner of the Retained Yield through Seller’s sale, assignment, or
        certification of its rights to such Retained Yield,
        on each
        Distribution Account Deposit Date during the term of this
        Agreement.

       

      
        	 	
                (b)

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

              

      

       

      
        	 	
                (i)

              	
                to
                  pay to itself the Trustee Fee for the related Distribution
                  Date;

              

      

       

      
        	 	
                (ii)

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

              

      

       

      
        	 	
                (iii)

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

              

      

       

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

       

      
        
          
          

        

        
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                (a)

              	
                The
                  Master Servicer shall cause to be maintained, for each Mortgage
                  Loan,
                  hazard insurance with extended coverage in an amount not to exceed
                  the
                  highest value placed by the insurer on the improvements securing
                  such
                  Mortgage Loan. The required coverage under any such hazard insurance
                  policy will be equal to the lesser of (i) the aggregate principal
                  amount
                  of all liens against the related Mortgaged Property, including
                  the
                  proposed loan/line amount as long as it equals at least 80% of
                  the value
                  of the improvements/replacement cost of the structure, and (ii)
                  the
                  replacement cost of the insurable improvements securing such Mortgage
                  Loan. Each such policy of standard hazard insurance shall contain,
                  or have
                  an accompanying endorsement that contains, a standard mortgagee
                  clause.
                  Any amounts collected by the Master Servicer under any such policies
                  (other than the amounts to be applied to the restoration or repair
                  of the
                  related Mortgaged Property or amounts released to the Mortgagor
                  in
                  accordance with the Master Servicer’s normal servicing procedures) shall
                  be deposited in the applicable subaccount of the Certificate Account.
                  Any
                  cost incurred by the Master Servicer in maintaining any such insurance
                  shall not, for the purpose of calculating monthly distributions
                  to the
                  Certificateholders or remittances to the Trustee for their benefit,
                  be
                  added to the principal balance of the Mortgage Loan, notwithstanding
                  that
                  the terms of the Mortgage Loan so permit. Such costs shall be recoverable
                  by the Master Servicer out of late payments by the related Mortgagor
                  or
                  out of Liquidation Proceeds to the extent permitted by Section
                  3.8 hereof.
                  It is understood and agreed that no earthquake or other additional
                  insurance is to be required of any Mortgagor or maintained on property
                  acquired in respect of a Mortgage other than pursuant to such applicable
                  laws and regulations as shall at any time be in force and as shall
                  require
                  such additional insurance. If the Mortgaged Property is located
                  at the
                  time of origination of the Mortgage Loan in a federally designated
                  special
                  flood hazard area and such area is participating in the national
                  flood
                  insurance program, the Master Servicer shall cause flood insurance
                  to be
                  maintained with respect to such Mortgage Loan. Such flood insurance
                  shall
                  be in an amount equal to the least of (i) the original principal
                  balance
                  of the related Mortgage Loan, (ii) the replacement value of the
                  improvements which are part of such Mortgaged Property, and (iii)
                  the
                  maximum amount of such insurance available for the related Mortgaged
                  Property under the national flood insurance
                  program.

              

      

       

      
        	 	
                (b)

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

              

      

       

      
        
          
          

        

        
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                (c)

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

              

      

       

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

       

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

       

      
        	 	
                (d)

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

              

      

       

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

       

      
        	 	
                (a)

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

              

      

       

      
        
          
          

        

        
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                (b)

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

              

      

       

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

       

      
        
          
          

        

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

       

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

       

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

       

      
        
          
          

        

        
          69

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

      
        
          
          

        

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

       

      SECTION
        3.12 Trustee to Cooperate; Release of Mortgage Files.

       

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

       

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

       

      
        
          
          

        

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

       

      Notwithstanding
        any other provisions of this Agreement, the Master Servicer shall transmit
        to
        the Trustee as required by this Agreement all documents and instruments in
        respect of a Mortgage Loan coming into the possession of the Master Servicer
        from time to time and shall account fully to the Trustee for any funds received
        by the Master Servicer or which otherwise are collected by the Master Servicer
        as Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage
        Loan.
        All Mortgage Files and funds collected or held by, or under the control of,
        the
        Master Servicer in respect of any Mortgage Loans, whether from the collection
        of
        principal and interest payments or from Liquidation Proceeds, including but
        not
        limited to, any funds on deposit in the Certificate Account, shall be held
        by
        the Master Servicer for and on behalf of the Trustee and shall be and remain
        the
        sole and exclusive property of the Trustee, subject to the applicable provisions
        of this Agreement. The Master Servicer also agrees that it shall not create,
        incur or subject any Mortgage File or any funds that are deposited in the
        Certificate Account, Distribution Account or any Escrow Account, or any funds
        that otherwise are or may become due or payable to the Trustee for the benefit
        of the Certificateholders, to any claim, lien, security interest, judgment,
        levy, writ of attachment or other encumbrance, or assert by legal action
        or
        otherwise any claim or right of setoff against any Mortgage File or any funds
        collected on, or in connection with, a Mortgage Loan, except, however, that
        the
        Master Servicer shall be entitled to set off against and deduct from any
        such
        funds any amounts that are properly due and payable to the Master Servicer
        under
        this Agreement.

       

      SECTION
        3.14 Master Servicing Compensation.

       

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

       

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

       

      
        
          
          

        

        
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      SECTION
        3.15 Access to Certain Documentation.

       

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

       

      SECTION
        3.16 Annual Statement as to Compliance.

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (b)

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

              

      

       

      SECTION
        3.17 Errors and Omissions Insurance; Fidelity Bonds.

       

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

       

      
        
          
          

        

        
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      ARTICLE
        IV

      DISTRIBUTIONS
        AND ADVANCES BY THE MASTER SERVICER

       

      SECTION
        4.1 Advances.

       

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

       

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

       

      SECTION
        4.2 Priorities of Distribution.

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (i)

              	
                to
                  the Classes of Senior Certificates of the related Certificate Group
                  entitled to distributions of interest, the Accrued Certificate
                  Interest on
                  each such Class for such Distribution Date, any shortfall in available
                  amounts being allocated among such Classes in proportion to the
                  amount of
                  Accrued Certificate Interest otherwise distributable
                  thereon;

              

      

       

      
        
          
          

        

        
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                (ii)

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

              

      

       

      
        	 	
                (iii)

              	
                (1)
                  to the Classes of Senior Certificates of the related Certificate
                  Group
                  entitled to distributions of principal, other than the Principal
                  Only
                  Certificates, in reduction of the Class Certificate Balances thereof,
                  to
                  the extent of remaining Available Funds from the related Mortgage
                  Pool,
                  the related Senior Optimal Principal Amount for such Distribution
                  Date,
                  (in
                  the order of priority set forth below in Sections 4.2(b), (c) and
                  (d), as
                  applicable),
                  until the respective Class Certificate Balances thereof have been
                  reduced
                  to zero, and (2) concurrently with the Group I Senior Certificates
                  from
                  the Available Funds for Pool I, to the Class I-A-PO Certificates
                  in
                  reduction of the Class Certificate Balance thereof; and concurrently
                  with
                  the Group II Senior Certificates from the available Funds for Pool
                  II, to
                  the Class II-A-PO Certificates in reduction of the Class Certificate
                  Balance thereof, in each case, the applicable Class PO Principal
                  Distribution Amount for such Distribution Date until their respective
                  Class Certificate Balances have each been reduced to zero;
                  

              

      

       

      
        	 	
                (iv)

              	
                to
                  the Class PO Certificates, the applicable Class PO Deferred Amount
                  for
                  such Distribution Date, until the Class Certificate Balance thereof
                  has
                  been reduced to zero; provided that, (1) on any Distribution Date,
                  distributions pursuant to this Section 4.2(a)(iv) shall not exceed
                  the
                  related Subordinated Optimal Principal Amount for the Mortgage
                  Pools for
                  such Distribution Date, (2) such distributions shall not reduce
                  the Class
                  Certificate Balances of the Class PO Certificates and (3) no distribution
                  will be made in respect of the applicable Class PO Deferred Amount
                  after
                  the Cross-over Date;

              

      

       

      
        	 	
                (v)

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

              

      

       

      
        	 	
                (vi)

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

              

      

       

      
        
          
          

        

        
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                (vii)

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

              

      

       

      
        	 	
                (viii)

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

              

      

       

      
        	 	
                (ix)

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

              

      

       

      
        	 	
                (x)

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

              

      

       

      
        	 	
                (b)

              	
                Amounts
                  allocated to the Group I Senior Certificates pursuant to clause
                  (1) of
                  Section 4.2(a)(iii) above will be distributed sequentially, in
                  the
                  following order of priority:

              

      

       

      
        	 	
                (i)

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

              

      

       

      
        	 	
                (ii)

              	
                concurrently,
                  as follows:

              

      

       

      
        	 	
                (A)

              	
                25%
                  of the remaining Senior Optimal Principal Amount for Pool I for
                  such
                  Distribution Date to the Class I-A-5 Certificates, until
                  the Class Certificate Balance thereof has been reduced to zero;
                  and

              

      

       

      
        
          
          

        

        
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                (B)

              	
                75%
                  of the remaining Senior Optimal Principal Amount for Pool I for
                  such
                  Distribution Date, sequentially, as
                  follows:

              

      

       

      
        	 	
                (I)

              	
                concurrently,
                  to the Class I-A-4 and Class I-A-9 Certificates, pro
                  rata,
                  in an amount up to the NAS Principal Distribution Amount for such
                  Distribution Date, until the respective Class Certificate Balances
                  thereof
                  have each been reduced to zero; 

              

      

       

      
        	 	
                (II)

              	
                concurrently,
                  to the Class I-A-2 and Class I-A-7 Certificates, pro
                  rata,
                  in an amount up to $100 for such Distribution Date, until the Class
                  Certificate Balances thereof have each been reduced to
                  zero;

              

      

       

      
        	 	
                (III)

              	
                concurrently,
                  to the Class I-A-1 and Class I-A-10 Certificates, pro
                  rata,
                  in an amount up to $1,255,000 for such Distribution Date, until
                  the Class
                  Certificate Balances thereof have each been reduced to
                  zero;

              

      

       

      
        	 	
                (IV)

              	
                concurrently,
                  to the Class I-A-2 and Class I-A-7 Certificates, pro
                  rata,
                  until the Class Certificate Balances thereof have each been reduced
                  to
                  zero;

              

      

       

      
        	 	
                (V)

              	
                concurrently,
                  to the Class I-A-1 and Class I-A-10 Certificates, pro
                  rata,
                  until the Class Certificate Balances thereof have each been reduced
                  to
                  zero;

              

      

       

      
        	 	
                (VI)

              	
                to
                  the Class I-A-3 Certificates, until
                  the Class Certificate Balance thereof has been reduced to zero;
                  and

              

      

       

      
        	 	
                (VII)

              	
                concurrently,
                  to the Class I-A-4 and Class I-A-9 Certificates, pro
                  rata,
                  without regard to the NAS Principal Distribution Amount for such
                  Distribution Date, until their respective Class Certificate Balances
                  have
                  each been reduced to zero.

              

      

       

      
        	 	
                (c)

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

              

      

       

      
        	 	
                (d)

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

              

      

       

      
        
          
          

        

        
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                (e)

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

              

      

       

      
        	 	
                (f)

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

              

      

       

      
        	 	
                (g)

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

              

      

       

      
        
          
          

        

        
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      For
        purposes of the preceding paragraph, the share of an Unanticipated Recovery
        allocable to any Class of Certificates with respect to a Mortgage Loan shall
        be
        (i) with
        respect to the Class PO Certificates, based on the applicable PO Percentage
        of
        the principal portion of the Realized Loss previously allocated thereto with
        respect to such Mortgage Loan (or all Mortgage Loans for purposes of the
        next to
        last sentence of the preceding paragraph), and (ii) with respect to any other
        Class of Certificates, based on its pro
        rata
        share
        (in proportion to the Class Certificate Balances thereof with respect to
        such
        Distribution Date) of the applicable Non-PO Percentage of the principal portion
        of any such Realized Loss previously allocated with respect to such Mortgage
        Loan (or Loans); provided
        however, that (i) the share of an Unanticipated Recovery allocable to a
        Principal Only Certificate with respect to any Mortgage Loan (or Loans) shall
        be
        reduced by the applicable PO Percentage of the aggregate amount previously
        distributed to such Class in respect of such Mortgage Loan (or Loans) and
        (ii)
        the amount by which the distributions to the Class PO Certificates have been
        so
        reduced shall be distributed to the Classes of Certificates described in
        clause
        (ii) of the preceding paragraph in the same proportion as described in such
        clause (ii). For purposes of the preceding sentence, any Class PO Deferred
        Amount distributable to a Principal Only Certificate on previous Distribution
        Dates shall be deemed to have been allocated in respect of the Mortgage Loans
        as
        to which the applicable PO Percentage of the principal portion of Realized
        Losses has previously been allocated to such Class on a pro
        rata
        basis
        (based on the amount of Realized Losses so allocated).

       

      
        	 	
                (h)

              	
                On
                  any Distribution Date on which any Certificate Group constitutes
                  an
                  Undercollateralized Group, all amounts otherwise distributable
                  as
                  principal on the Subordinated Certificates, in reverse order of
                  priority
                  (or, following the Cross-over Date, such other amounts described
                  in the
                  immediately following sentence), will be distributed as principal
                  to the
                  Senior Certificates of such Undercollateralized Group (other than
                  the
                  Class PO Certificates) in accordance with the priorities set forth
                  in
                  Section 4.2(a)(iii), until the total Class Certificate Balance
                  of such
                  Senior Certificates equals the Pool Principal Balance of the related
                  Mortgage Pool (such distribution, an “Undercollateralization
                  Distribution”). If the Senior Certificates of a Certificate Group (other
                  than the Class PO Certificates) constitute an Undercollateralized
                  Group on
                  any Distribution Date following the Cross-over Date,
                  Undercollateralization Distributions will be made from the excess
                  of the
                  Available Funds for the other Mortgage Pools remaining after all
                  required
                  amounts for that Distribution Date have been distributed to the
                  Senior
                  Certificates of the other Certificate Group (other than the Class
                  PO
                  Certificates). In addition, the amount of any unpaid Accrued Certificate
                  Interest with respect to an Undercollateralized Group on any Distribution
                  Date (including any Accrued Certificate Interest for the related
                  Distribution Date) will be distributed to the Senior Certificates
                  of the
                  Undercollateralized Group (other than the Class PO Certificates)
                  prior to
                  the payment of any Undercollateralization Distributions from amounts
                  otherwise distributable as principal on the Subordinated Certificates,
                  in
                  reverse order of priority (or, following the Cross-over Date, as
                  provided
                  in the preceding sentence). Except as provided otherwise in this
                  Section
                  4.2(h), no distribution of principal will be made to any Class
                  of
                  Subordinated Certificates until each Undercollateralized Group
                  is no
                  longer undercollateralized.

              

      

       

      
        
          
          

        

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

       

      SECTION
        4.3 Method of Distribution.

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (b)

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

              

      

       

      
        
          
          

        

        
          80

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (c)

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

              

      

       

      SECTION
        4.4 Allocation of Losses. 

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (b)

              	
                The
                  principal portion of each Realized Loss with respect to a Mortgage
                  Pool
                  shall be allocated as follows:

              

      

       

      
        	 	
                (i)

              	
                with
                  respect to any Distribution Date, the applicable PO Percentage
                  of the
                  principal portion of any such Realized Loss on a Discount Mortgage
                  Loan in
                  such Mortgage Pool shall be allocated to the applicable PO Certificates
                  until the Class Certificate Balance thereof has been reduced to
                  zero;
                  and

              

      

       

      
        	 	
                (ii)

              	
                prior
                  to the Cross-over Date, the
                  applicable Non-PO Percentage of the principal portion of any such
                  Realized
                  Loss (except Excess Losses) (or the applicable PO Percentage thereof,
                  in
                  the case of the related Class PO Certificates) shall be allocated
                  in the
                  following order of priority:

              

      

       

      
        
          
          

        

        
          81

          
            

          

        

        
          
          

        

      

       

      first,
        to
        the
        Class B-6 Certificates until the Class Certificate Balance thereof has been
        reduced to zero;

       

      second,
        to
        the
        Class B-5 Certificates until the Class Certificate Balance thereof has been
        reduced to zero;

       

      third,
        to
        the
        Class B-4 Certificates until the Class Certificate Balance thereof has been
        reduced to zero;

       

      fourth,
        to
        the
        Class B-3 Certificates until the Class Certificate Balance thereof has been
        reduced to zero;

       

      fifth,
        to
        the
        Class B-2 Certificates until the Class Certificate Balance thereof has been
        reduced to zero;

       

      sixth,
        to the
        Class B-1 Certificates until the Class Certificate Balance thereof has been
        reduced to zero; and

       

      seventh,
        to the
        Classes of Senior Certificates of the related Certificate Group (other than
        the
        Class PO Certificates),
        pro
        rata,
        in
        accordance with their Class Certificate Balances.

       

      
        	 	
                (iii)

              	
                From
                  and after the Cross-over Date, the applicable Non-PO Percentage
                  of the
                  principal portion of any Realized Loss for a Mortgage Pool will
                  be
                  allocated among the outstanding Classes of Senior Certificates
                  of the
                  related Certificate Group entitled to principal distributions (other
                  than
                  (i) in respect of Realized Losses not constituting Excess Losses,
                  the
                  Class I-A-1, Class I-A-2, Class I-A-3 and Class I-A-4 Certificates,
                  so
                  long as the Class I-A-9 Certificates are outstanding; and (ii)
                  the Class
                  PO Certificates), pro
                  rata,
                  based upon their Class Certificate Balances within that Certificate
                  Group.

              

      

       

      
        	 	
                (c)

              	
                From
                  and after the Cross-over Date, (i) up to $2,630,000 of the principal
                  portion of Realized Losses (other than Excess Losses) on the Class
                  I-A-1
                  Certificates, (ii) up to $5,364,000 of the principal portion of
                  Realized
                  Losses (other than Excess Losses) on the Class I-A-2 Certificates,
                  (iii)
                  up to $188,000 of the principal portion of Realized Losses (other
                  than
                  Excess Losses) on the Class I-A-3 Certificates, and (iv) up to
                  $2,034,000
                  of the principal portion of Realized Losses (other than Excess
                  Losses) on
                  the Class I-A-4 Certificates, will instead first be allocated pro
                  rata
                  (based on the respective Class Certificate Balances of the Class
                  I-A-1,
                  Class I-A-2, Class I-A-3 and Class I-A-4 Certificates) to the Class
                  I-A-9
                  Certificates (in addition to other Realized Losses allocable to
                  the Class
                  I-A-9 Certificates), and not to the Class I-A-1, Class I-A-2, Class
                  I-A-3
                  or Class I-A-4 Certificates, in each case until the Class Certificate
                  Balance of the Class I-A-9 Certificates has been reduced to
                  zero.

              

      

       

      
        	 	
                (d)

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

              

      

       

      
        
          
          

        

        
          82

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (e)

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

              

      

       

      
        	 	
                (f)

              	
                Realized
                  Losses allocated in accordance with this Section 4.4 shall be allocated
                  on
                  the Distribution Date in the month following the month in which
                  such loss
                  was incurred and in the case of the principal portion thereof,
                  after
                  giving effect to the distributions made on such Distribution Date.
                  The
                  aggregate amount of Realized Losses to be allocated to the Class
                  PO
                  Certificates on such Distribution Date will be taken into account
                  in
                  determining distributions in respect of any Class PO Deferred Amount
                  for
                  such Distribution Date.

              

      

       

      
        	 	
                (g)

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

              

      

       

      
        	 	
                (h)

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

              

      

       

      SECTION
        4.5 Reserved.

       

      SECTION
        4.6 Monthly Statements to Certificateholders.

       

      
        
          
          

        

        
          83

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (i)

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

              

      

       

      
        	 	
                (ii)

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

              

      

       

      
        	 	
                (iii)

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

              

      

       

      
        	 	
                (iv)

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

              

      

       

      
        	 	
                (v)

              	
                the
                  Pool Principal Balance for each Mortgage Pool for the following
                  Distribution Date;

              

      

       

      
        	 	
                (vi)

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

              

      

       

      
        	 	
                (vii)

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

              

      

       

      
        	 	
                (viii)

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

              

      

       

      
        	 	
                (ix)

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

              

      

       

      
        	 	
                (x)

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

              

      

       

      
        
          
          

        

        
          84

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (xi)

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

              

      

       

      
        	 	
                (xii)

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

              

      

       

      
        	 	
                (xiii)

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

              

      

       

      
        	 	
                (xiv)

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

              

      

       

      
        	 	
                (xv)

              	
                the
                  cumulative amount of Realized Losses applied in reduction of the
                  principal
                  balance of each Class of Certificates since the Closing
                  Date;

              

      

       

      
        	 	
                (xvi)

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

              

      

       

      
        	 	
                (xvii)

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

              

      

       

      
        	 	
                (b)

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

              

      

       

      
        	 	
                (c)

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

              

      

       

      
        	 	
                (d)

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

              

      

      
         

        SECTION
          4.7 Reserve Fund.

      

       

      
        
          
          

        

        
          85

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (a)

              	
                On
                  the Closing Date, the Trustee shall (1) establish and maintain
                  in its
                  name, in trust for the benefit of the holders of the Class I-A-2
                  Certificates, the Reserve Fund, and (ii) the Depositor will deposit
                  or
                  cause to be deposited $1,000 in the Reserve Fund. The Reserve Fund
                  shall
                  be an Eligible Account, and funds on deposit therein shall be held
                  separate and apart from, and shall not be commingled with, any
                  other
                  moneys, including without limitation other moneys of the Trustee
                  held
                  pursuant to this Agreement. The Corridor Residual Owner will own
                  the
                  residual interest in the Reserve Fund. The Reserve Fund shall be
                  an asset
                  of the Separate Interest Trust. 

              

      

       

      
        	 	
                (b)

              	
                On
                  each Distribution Date prior to the Corridor Contract Termination
                  Date,
                  the Trustee will deposit any amounts received under the Corridor
                  Contract
                  into the Reserve Fund. Amounts on deposit, if any, in the Reserve
                  Fund
                  shall be distributed in the following order of
                  priority:

              

      

       

      
        	 	
                (i)

              	
                on
                  any Distribution Date for which a Basis Risk Shortfall exists in
                  respect
                  of the Class I-A-2 Certificates, the Trustee shall withdraw from
                  the
                  Reserve Fund an amount equal to the lesser of (i) the Yield Supplement
                  Amount for such Distribution Date and (ii) the remaining balance
                  in the
                  Reserve Fund on such Distribution Date, and distribute such amount
                  to the
                  Holders of the Class I-A-2
                  Certificates;

              

      

       

      
        	 	
                (ii)

              	
                on
                  any Distribution Date for which an Unpaid Basis Risk Shortfall
                  exists on
                  the Class I-A-2 Certificates, the Trustee shall withdraw from the
                  Reserve
                  Fund an amount equal to the lesser of (i) the amount of such Unpaid
                  Basis
                  Risk Shortfall for such Distribution Date and (ii) the remaining
                  balance
                  in the Reserve Fund on such Distribution Date, and distribute such
                  amount
                  to the Holders of the Class I-A-2 Certificates;
                  and

              

      

       

      
        	 	
                (iii)

              	
                on
                  any Distribution Date for which a Carryover Unpaid Basis Risk Shortfall
                  exists on the Class I-A-2 Certificates, the Trustee shall withdraw
                  from
                  the Reserve Fund an amount equal to the lesser of (i) the amount
                  of such
                  Carryover Unpaid Basis Risk Shortfall with interest thereon at
                  the
                  applicable Pass-Through Rate (calculated without regard to the
                  maximum
                  Pass-Through Rate limitation) for such Distribution Date and (ii)
                  the
                  remaining balance in the Reserve Fund on such Distribution Date,
                  and
                  distribute such amount to the Corridor Residual
                  Owner.

              

      

       

      
        	 	
                (c)

              	
                Any
                  amounts remaining on deposit in the Reserve Fund after the Trustee
                  has
                  made the foregoing distributions shall remain in the Reserve Fund
                  to be
                  used as necessary to pay the amounts described in clauses (i) through
                  (iii) of Section 4.7(b) above. On the Distribution Date immediately
                  following the date on which the Class Certificate Balance of the
                  Class
                  I-A-2 Certificates is reduced to zero, the Trustee shall distribute
                  any
                  amounts remaining in the Reserve Fund to the Corridor Residual
                  Owner and
                  terminate the Reserve Fund.

              

      

       

      
        
          
          

        

        
          86

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (d)

              	
                If
                  the Corridor Contract is terminated early and the Corridor Contract
                  Counterparty owes a termination payment thereunder, the Trustee
                  shall
                  allocate the amount of any such termination payment between the
                  Reserve
                  Fund and the Corridor Residual Owner, as follows, (A) with respect
                  to the
                  Reserve Fund, an amount equal to the product of (i) a fraction,
                  the
                  numerator of which is the lesser of (x) the Corridor Contract Notional
                  Amount for the first Distribution Date on or after the early termination
                  and (y) the Class Certificate Balance of the Class I-A-2 Certificates
                  immediately prior to the first Distribution Date on or after the
                  early
                  termination, and the denominator of which is the Corridor Contract
                  Notional Amount for the first Distribution Date on or after the
                  early
                  termination and (ii) the termination payment amount, and (B) with
                  respect
                  to the Corridor Reserve Owner, an amount equal to any excess of
                  the
                  termination payment amount over the amounts payable pursuant to
                  clause (A)
                  above, if any. The Trustee shall apply the portion of any termination
                  payment that is allocated to the Reserve Fund on future Distribution
                  Dates
                  to pay any Yield Supplement Amounts on the Class I-A-2 Certificates,
                  until
                  the Corridor Contract Termination
                  Date.

              

      

       

      
        	 	
                (e)

              	
                Funds
                  in the Reserve Fund shall be invested in Permitted Investments.
                  Any
                  earnings on amounts in the Reserve Fund shall be for the benefit
                  of the
                  Corridor Residual Owner. The Corridor Residual Owner shall own
                  the Reserve
                  Fund for federal income tax purposes and the Corridor Residual
                  Owner shall
                  direct the Trustee, in writing, as to investment of amounts on
                  deposit
                  therein.  The Corridor Residual Owner shall be liable for any losses
                  incurred on such investments.  In the absence of written instructions
                  from the Corridor Residual Owner as to investment of funds on deposit
                  in
                  the Reserve Fund, such funds shall be held uninvested.
                  

              

      

       

      SECTION
        4.8 Separate Interest Trust.

       

      
        	 	
                (a)

              	
                The
                  Depositor hereby creates a trust, separate from the Trust, for
                  the benefit
                  of the holders of the Class I-A-2 (such trust is referred to herein
                  as the
                  “Separate Interest Trust”) and hereby transfers, assigns and conveys the
                  sum of $1.00 into the Separate Interest Trust. The Corridor Contract
                  and
                  the Reserve Fund will also be assets of the Separate Interest Trust.
                  The
                  Trustee shall be the trustee of the Separate Interest Trust and
                  shall have
                  no responsibility for the contents, adequacy or sufficiency of
                  the
                  Corridor Contract, including, without limitation, the representations
                  and
                  warranties of the parties contained therein. The Corridor Residual
                  Owner
                  will own the residual interest in the Separate Interest Trust.
                  The
                  Separate Interest Trust shall not be an asset of the Trust Fund
                  or any
                  REMIC established hereby. 

              

      

       

      
        	 	
                (b)

              	
                In
                  addition to the deposits to be made on each Distribution Date pursuant
                  to
                  Section 4.7(b), the Trustee shall deposit into the Reserve Fund
                  any and
                  all amounts received from time to time from the Corridor Contract
                  Counterparty in respect of the Corridor
                  Contract.

              

      

       

      
        
          
          

        

        
          87

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (c)

              	
                The
                  Trustee will treat the Separate Interest Trust for Federal tax
                  purposes as
                  a grantor trust with the Corridor Residual Owner as the sole beneficiary
                  and will apply for a separate Federal tax identification number
                  for the
                  Separate Interest Trust.

              

      

       

      
        	 	
                (d)

              	
                Upon
                  the termination of the Reserve Fund, as provided in Section 4.7(c),
                  the
                  Trustee shall terminate the Separate Interest Trust. Upon termination
                  of
                  the Reserve Fund and the Separate Interest Trust, any amounts remaining
                  in
                  the Reserve Fund and Separate Interest Trust after payment of the
                  amounts,
                  if any, owed to the holders of the Class I-A-2 Certificates, shall
                  be
                  distributed to the Corridor Residual
                  Owner.

              

      

       

      SECTION
        4.9 Determination of Pass-Through Rates for LIBOR Certificates.

       

      
        	 	
                (a)

              	
                On
                  each LIBOR Determination Date so long as any LIBOR Certificates
                  are
                  outstanding, the Trustee will determine LIBOR on the basis of the
                  British
                  Bankers’ Association (“BBA”) “Interest Settlement Rate” for one-month
                  deposits in U.S. dollars as found on Telerate page 3750 as of 11:00
                  a.m.
                  London time on each LIBOR Determination Date. “Telerate Page 3750” means
                  the display page currently so designated on the Bridge Telerate
                  Service
                  (formerly the Dow Jones Markets) or such other page as may replace
                  that
                  page on that service for the purpose of displaying comparable rates
                  or
                  prices. LIBOR for the initial LIBOR Determination Date will be
                  equal to
                  the Initial LIBOR Rate. 

              

      

       

      
        	 	
                (b)

              	
                If
                  LIBOR cannot be determined as provided in paragraph (a) of this
                  Section
                  4.9, the Trustee shall either (i) request each Reference Bank inform
                  the
                  Trustee of the quotation offered by such Reference Bank’s principal London
                  office for making one-month United States dollar deposits in leading
                  banks
                  in the London interbank market, as of 11:00 a.m. (London time)
                  on such
                  LIBOR Determination Date or (ii) in lieu of making any such request,
                  rely
                  on such Reference Bank quotations that appear at such time on the
                  Reuters
                  Screen LIBOR Page (as defined in the International Swap Dealers
                  Association Inc. Code of Standard Wording, Assumptions and Provisions
                  for
                  Swaps, 1986 Edition) to the extent available. With respect to clause
                  (i)
                  above, LIBOR for the next Interest Accrual Period will be established
                  by
                  the Trustee on each LIBOR Determination Date as
                  follows:

              

      

       

      
        	 	
                (i)

              	
                If
                  on any LIBOR Determination Date two or more Reference Banks provide
                  such
                  offered quotations, LIBOR for the next Interest Accrual Period
                  shall be
                  the arithmetic mean of such offered quotations (rounding such arithmetic
                  mean upwards if necessary to the nearest whole multiple of
                  1/32%).

              

      

       

      
        	 	
                (ii)

              	
                If
                  on any LIBOR Determination Date only one or none of the Reference
                  Banks
                  provides such offered quotations, LIBOR for the next Interest Accrual
                  Period shall be whichever is the higher of (i) LIBOR as determined
                  on the
                  previous LIBOR Determination Date or (ii) the Reserve Interest
                  Rate. The
                  “Reserve Interest Rate” shall be the rate per annum which the Trustee
                  determines to be either (i) the arithmetic mean (rounded upwards
                  if
                  necessary to the nearest whole multiple of 1/32%) of the one-month
                  United
                  States dollar lending rates that New York City banks selected by
                  the
                  Trustee are quoting, on the relevant LIBOR Determination Date,
                  to the
                  principal London offices of at least two of the Reference Banks
                  to which
                  such quotations are, in the opinion of the Trustee, being so made,
                  or (ii)
                  in the event that the Trustee can determine no such arithmetic
                  mean, the
                  lowest one-month United States dollar lending rate which New York
                  City
                  banks selected by the Trustee are quoting on such LIBOR Determination
                  Date
                  to leading European banks.

              

      

       

      
        
          
          

        

        
          88

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (iii)

              	
                If
                  on any LIBOR Determination Date the trustee is required but is
                  unable to
                  determine the Reserve Interest Rate in the manner provided in paragraph
                  (b) above, LIBOR shall be LIBOR as determined on the preceding
                  LIBOR
                  Determination Date.

              

      

       

      The
        Master Servicer shall designate at least four Reference Banks. Until all
        of the
        LIBOR Certificates are paid in full, the Trustee will refer to the four
        Reference Banks designated by the Master Servicer to determine LIBOR with
        respect to each LIBOR Determination Date. Each “Reference Bank” shall be a
        leading bank engaged in transactions in Eurodollar deposits in the international
        Eurocurrency market, shall not control, be controlled by, or be under common
        control with, the Trustee and shall have an established place of business
        in
        London. If any such Reference Bank should be unwilling or unable to act as
        such,
        the Master Servicer shall promptly appoint or cause to be appointed another
        Reference Bank. The Trustee shall have no liability or responsibility to
        any
        Person for (i) the selection of any Reference Bank for purposes of determining
        LIBOR or (ii) any inability of the Master Servicer to designate at least
        four
        Reference Banks. 

       

      
        	 	
                (c)

              	
                The
                  Pass-Through Rate for each Class of LIBOR Certificates for each
                  Interest
                  Accrual Period shall be determined by the Trustee on each LIBOR
                  Determination Date so long as the LIBOR Certificates are outstanding
                  on
                  the basis of LIBOR and the respective formulae appearing in footnotes
                  corresponding to the LIBOR Certificates in the table relating to
                  the
                  Certificates in the Preliminary Statement.

              

      

       

      In
        determining LIBOR, any Pass-Through Rate for the LIBOR Certificates, any
        Interest Settlement Rate, or any Reserve Interest Rate, the Trustee may
        conclusively rely and shall be protected in relying upon the offered quotations
        (whether written, oral or on the Bridge Telerate Service) from the BBA
        designated banks, the Reference Banks or the New York City banks as to LIBOR,
        the Interest Settlement Rate or the Reserve Interest Rate, as appropriate,
        in
        effect from time to time. The Trustee shall not have any liability or
        responsibility to any Person for (i) the Trustee’s selection of New York City
        banks for purposes of determining any Reserve Interest Rate or (ii) its
        inability, following a good-faith reasonable effort, to obtain such quotations
        from, the BBA designated banks, the Reference Banks or the New York City
        banks
        or to determine such arithmetic mean, all as provided for in this Section
        4.9.

       

      
        
          
          

        

        
          89

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (d)

              	
                The
                  establishment of LIBOR and each Pass-Through Rate for the LIBOR
                  Certificates by the Trustee shall (in the absence of manifest error)
                  be
                  final, conclusive and binding upon each Holder of a Certificate
                  and the
                  Trustee.

              

      

       

      ARTICLE
        V

      THE
        CERTIFICATES

       

      SECTION
        5.1 The Certificates.

       

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

       

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

       

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

       

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

       

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

       

      
        	 	
                (a)

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

              

      

       

      
        
          
          

        

        
          90

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

      
        	 	
                (b)

              	
                No
                  transfer of a Private Certificate shall be made unless such transfer
                  is
                  made pursuant to an effective registration statement under the
                  Securities
                  Act and any applicable state securities laws or is exempt from
                  the
                  registration requirements under said Act and such state securities
                  laws.
                  In the event that a transfer is to be made in reliance upon an
                  exemption
                  from the Securities Act and such laws, in order to assure compliance
                  with
                  the Securities Act and such laws, any Holder of a Private Certificate
                  (other than a Private Certificate that is a Book-Entry Certificate)
                  desiring to effect such transfer and such Certificateholder’s prospective
                  transferee shall each certify to the Trustee in writing the facts
                  surrounding the transfer in substantially the forms set forth in
                  Exhibit I
                  (the “Transferor Certificate”) and (i) deliver a letter in substantially
                  the form of either Exhibit J (the “Investment Letter”) or Exhibit K (the
                  “Rule 144A Letter”) or (ii) there shall be delivered to the Trustee at the
                  expense of the transferor an Opinion of Counsel that such transfer
                  may be
                  made pursuant to an exemption from the Securities Act.
                  

              

      

       

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

       

      
        
          
          

        

        
          91

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      
        
          
          

        

        
          92

          
            

          

        

        
          
          

        

      

       

      Each
        Holder of a Private Certificate that is a Book-Entry Certificate, by its
        acquisition thereof (or a beneficial interest therein) shall be deemed to
        have
        represented and warranted for the benefit of the Depositor, the Servicer,
        the
        Trustee and the other Certificateholders, that (a) it is not an employee
        benefit
        plan or arrangement that is subject to Section 406 of ERISA, or a plan or
        arrangement that is subject to Section 4975 of the Internal Revenue Code
        of
        1986, as amended, nor is it acting on behalf of any such plan or arrangement
        or
        using the assets of any such plan or arrangement to effect such acquisition,
        or
        (b) if it is an insurance company, in the case of Private Certificates that
        have
        been the subject of an ERISA-Qualifying Underwriting, it is purchasing the
        Private Certificates with funds contained in an “insurance company general
        account” (as defined in Section V(e) of Prohibited Transaction Class Exemption
        95-60 (“PTCE 95-60”)) and its purchase and holding of the Private Certificates
        are covered under Sections I and III of PTCE 95-60.

       

      To
        the
        extent permitted under applicable law (including, but not limited to, ERISA),
        the Trustee shall be under no liability to any Person for any registration
        of
        transfer of any ERISA-Restricted Certificate that is in fact not permitted
        by
        this Section 5.2(b) or for making any payments due on such Certificate to
        the
        Holder thereof or taking any other action with respect to such Holder under
        the
        provisions of this Agreement so long as the transfer was registered by the
        Trustee in accordance with the foregoing requirements. The Trustee shall
        be
        entitled, but not obligated, to recover from any Holder of any ERISA-Restricted
        Certificate that was in fact a Plan or a Person acting on behalf of any such
        Plan any payments made on such ERISA-Restricted Certificate at and after
        either
        such time. Any such payments so recovered by the Trustee shall be paid and
        delivered by the Trustee to the last preceding Holder of such Certificate
        that
        is not such a Plan or Person acting on behalf of a Plan. 

       

      
        
          
          

        

        
          93

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (c)

              	
                No
                  transfer of an ERISA-Restricted Yield Supplement Certificate in
                  the form
                  of a Definitive Certificate shall be made unless the Trustee shall
                  have
                  received a representation letter from the transferee of such Certificate
                  to the effect that either (i) such transferee is neither a Plan
                  nor a
                  Person acting on behalf of any such Plan or using the assets of
                  any such
                  Plan to effect such transfer or (ii) the acquisition and holding
                  of the
                  ERISA-Restricted Yield Supplement Certificate are eligible for
                  exemptive
                  relief under Prohibited Transaction Class Exemption (“PTCE”) 84-14, PTCE
                  90-1, PTCE 91-38, PTCE 95-60 or PTCE 96-23. Any purported transfer
                  of an
                  ERISA-Restricted Yield Supplement Certificate in the form of a
                  Definitive
                  Certificate on behalf of a Plan without the delivery to the Trustee
                  of a
                  representation letter as described above shall be void and of no
                  effect.
                  If the ERISA-Restricted Yield Supplement Certificate is a Book-Entry
                  Certificate, the transferee will be deemed to have made a representation
                  as provided in clause (i) or (ii) of this paragraph, as
                  applicable.

              

      

       

      
        	 	
                (d)

              	
                If
                  any ERISA-Restricted Yield Supplement Certificate, or any interest
                  therein, is acquired or held in violation of the provisions of
                  the
                  preceding paragraph, the next preceding permitted beneficial owner
                  will be
                  treated as the beneficial owner of that Certificate, retroactive
                  to the
                  date of transfer to the purported beneficial owner. Any purported
                  beneficial owner whose acquisition or holding of an ERISA-Restricted
                  Yield
                  Supplement Certificate, or interest therein, was effected in violation
                  of
                  the provisions of the preceding paragraph shall indemnify to the
                  extent
                  permitted by law and hold harmless the Depositor, Custodian, the
                  Trustee,
                  and the Master Servicer from and against any and all liabilities,
                  claims,
                  costs or expenses incurred by such parties as a result of such
                  acquisition
                  or holding.

              

      

       

      
        	 	
                (e)

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

              

      

       

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

       

      
        	 	
                (f)

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

              

      

       

      
        
          
          

        

        
          94

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (i)

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

              

      

       

      
        	 	
                (ii)

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

              

      

       

      
        	 	
                (iii)

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

              

      

       

      
        	 	
                (iv)

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

              

      

       

      
        
          
          

        

        
          95

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (v)

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

              

      

       

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

       

      
        	 	
                (g)

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

              

      

       

      
        	 	
                (h)

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

              

      

       

      
        
          
          

        

        
          96

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      
        SECTION
          5.3 Mutilated, Destroyed, Lost or Stolen Certificates.

      

       

      
        
          
          

        

        
          97

          
            

          

        

        
          
          

        

      

       

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

       

      SECTION
        5.4 Persons Deemed Owners.

       

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

       

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

       

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

       

      SECTION
        5.6 Maintenance of Office or Agency.

       

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

       

      ARTICLE
        VI

      THE
        DEPOSITOR AND THE MASTER SERVICER

       

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

       

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

       

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

       

      
        
          
          

        

        
          98

          
            

          

        

        
          
          

        

      

       

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

       

      Any
        Person into which the Depositor or the Master Servicer may be merged or
        consolidated, or any Person resulting from any merger or consolidation to
        which
        the Depositor or the Master Servicer shall be a party, or any person succeeding
        to the business of the Depositor or the Master Servicer, shall be the successor
        of the Depositor or the Master Servicer, as the case may be, hereunder, without
        the execution or filing of any paper or any further act on the part of any
        of
        the parties hereto, anything herein to the contrary notwithstanding; provided,
        however, that the successor or surviving Person to the Master Servicer shall
        be
        qualified to sell mortgage loans to, and to service mortgage loans on behalf
        of,
        FNMA or FHLMC.

       

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

       

      None
        of
        the Depositor, the Master Servicer or any of the directors, officers, employees
        or agents of the Depositor or the Master Servicer shall be under any liability
        to the Certificateholders for any action taken or for refraining from the
        taking
        of any action in good faith pursuant to this Agreement, or for errors in
        judgment; provided, however, that this provision shall not protect the
        Depositor, the Master Servicer or any such Person against any breach of
        representations or warranties made by it herein or protect the Depositor,
        the
        Master Servicer or any such Person from any liability which would otherwise
        be
        imposed by reasons of willful misfeasance, bad faith or gross negligence
        in the
        performance of duties or by reason of reckless disregard of obligations and
        duties hereunder. The Depositor, the Master Servicer and any director, officer,
        employee or agent of the Depositor or the Master Servicer may rely in good
        faith
        on any document of any kind prima facie properly executed and submitted by
        any
        Person respecting any matters arising hereunder. The Depositor, the Master
        Servicer and any director, officer, employee or agent of the Depositor or
        the
        Master Servicer shall be indemnified by the Trust Fund and held harmless
        against
        any loss, liability or expense incurred in connection with any audit,
        controversy or judicial proceeding relating to a governmental taxing authority
        or any legal action relating to this Agreement or the Certificates, other
        than
        any loss, liability or expense related to any specific Mortgage Loan or Mortgage
        Loans (except as any such loss, liability or expense shall be otherwise
        reimbursable pursuant to this Agreement) and any loss, liability or expense
        incurred by reason of willful misfeasance, bad faith or gross negligence
        in the
        performance of duties hereunder or by reason of reckless disregard of
        obligations and duties hereunder. Neither the Depositor nor the Master Servicer
        shall be under any obligation to appear in, prosecute or defend any legal
        action
        that is not incidental to its respective duties hereunder and which in its
        opinion may involve it in any expense or liability; provided, however, that
        either the Depositor or the Master Servicer may in its discretion undertake
        any
        such action that it may deem necessary or desirable in respect of this Agreement
        and the rights and duties of the parties hereto and interests of the Trustee
        and
        the Certificateholders hereunder. In such event, the legal expenses and costs
        of
        such action and any liability resulting therefrom shall be expenses, costs
        and
        liabilities of the Trust Fund, and the Depositor and the Master Servicer
        shall
        be entitled to be reimbursed therefor out of the applicable subaccount of
        the
        Certificate Account.

       

      
        
          
          

        

        
          99

          
            

          

        

        
          
          

        

      

       

      SECTION
        6.4 Limitation on Resignation of Master Servicer.

       

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

       

      ARTICLE
        VII

      DEFAULT

       

      SECTION
        7.1 Events of Default.

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (i)

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

              

      

       

      
        	 	
                (ii)

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

              

      

       

      
        	 	
                (iii)

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

              

      

       

      
        
          
          

        

        
          100

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (iv)

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

              

      

       

      
        	 	
                (v)

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

              

      

       

      
        	 	
                (vi)

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

              

      

       

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

       

      
        
          
          

        

        
          101

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      In
        the
        event the Master Servicer is terminated pursuant to this Section 7.1, the
        Retained Yield shall remain payable to (a) First Horizon, in its individual
        capacity as Seller, or (b) a
        subsequent owner of such Retained Yield through Seller’s sale, assignment, or
        certification of its rights to such Retained Yield,
        and
        shall not be payable to the Trustee or any successor to the Master Servicer.
        Seller’s exclusive right to receive payments of Retained Yield or sell, assign,
        certificate or otherwise dispose of such right to receive such Retained Yield
        is
        enforceable against the Master Servicer or its successor thereto.

       

      SECTION
        7.2 Trustee to Act; Appointment of Successor.

       

      
        
          
          

        

        
          102

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      
        
          
          

        

        
          103

          
            

          

        

        
          
          

        

      

       

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

       

      SECTION
        7.3 Notification to Certificateholders.

       

      
        	 	
                (a)

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

              

      

       

      
        	 	
                (b)

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

              

      

       

      ARTICLE
        VIII

      CONCERNING
        THE TRUSTEE

       

      SECTION
        8.1 Duties of Trustee.

       

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

       

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

       

      
        
          
          

        

        
          104

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      
        	 	
                (i)

              	
                unless
                  an Event of Default of which a Responsible Officer of the Trustee
                  has
                  actual knowledge shall have occurred and be continuing, the duties
                  and
                  obligations of the Trustee shall be determined solely by the express
                  provisions of this Agreement, the Trustee shall not be liable except
                  for
                  the performance of such duties and obligations as are specifically
                  set
                  forth in this Agreement, no implied covenants or obligations shall
                  be read
                  into this Agreement against the Trustee and the Trustee may conclusively
                  rely, as to the truth of the statements and the correctness of
                  the
                  opinions expressed therein, upon any certificates or opinions furnished
                  to
                  the Trustee and conforming to the requirements of this Agreement
                  which it
                  believed in good faith to be genuine and to have been duly executed
                  by the
                  proper authorities respecting any matters arising
                  hereunder;

              

      

       

      
        	 	
                (ii)

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

              

      

       

      
        	 	
                (iii)

              	
                the
                  Trustee shall not be liable with respect to any action taken, suffered
                  or
                  omitted to be taken by it in good faith in accordance with the
                  direction
                  of Holders of Certificates evidencing not less than 25% of the
                  Voting
                  Rights of Certificates relating to the time, method and place of
                  conducting any proceeding for any remedy available to the Trustee,
                  or
                  exercising any trust or power conferred upon the Trustee under
                  this
                  Agreement;

              

      

       

      
        	 	
                (iv)

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

              

      

       

      
        
          
          

        

        
          105

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (v)

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

              

      

       

      SECTION
        8.2 Certain Matters Affecting the Trustee.

       

      
        	 	
                (a)

              	
                Except
                  as otherwise provided in Section
                  8.1:

              

      

       

      
        	 	
                (i)

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

              

      

       

      
        	 	
                (ii)

              	
                the
                  Trustee may consult with counsel, financial advisers or accountants
                  and
                  the advice of any such counsel, financial advisers or accountants
                  and any
                  Opinion of Counsel shall be full and complete authorization and
                  protection
                  in respect of any action taken or suffered or omitted by it hereunder
                  in
                  good faith and in accordance with such Opinion of
                  Counsel;

              

      

       

      
        	 	
                (iii)

              	
                the
                  Trustee shall not be liable for any action taken, suffered or omitted
                  by
                  it in good faith and believed by it to be authorized or within
                  the
                  discretion or rights or powers conferred upon it by this
                  Agreement;

              

      

       

      
        	 	
                (iv)

              	
                the
                  Trustee shall not be bound to make any investigation into the facts
                  or
                  matters stated in any resolution, certificate, statement, instrument,
                  opinion, report, notice, request, consent, order, approval, bond
                  or other
                  paper or document, unless requested in writing so to do by Holders
                  of
                  Certificates evidencing not less than 25% of the Voting Rights
                  allocated
                  to each Class of Certificates; provided, however, that if the payment
                  within a reasonable time to the Trustee of the costs, expenses
                  or
                  liabilities likely to be incurred by it in the making of such
                  investigation is, in the opinion of the Trustee, not assured to
                  the
                  Trustee by the security afforded to it by the terms of this Agreement,
                  the
                  Trustee may require indemnity satisfactory to the Trustee against
                  such
                  cost, expense or liability as a condition to taking any such action.
                  The
                  reasonable expense of every such examination shall be paid by the
                  Master
                  Servicer or, if paid by the Trustee, shall be repaid by the Master
                  Servicer upon demand from the Servicer’s own
                  funds.

              

      

       

      
        
          
          

        

        
          106

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (v)

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

              

      

       

      
        	 	
                (vi)

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

              

      

       

      
        	 	
                (vii)

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

              

      

       

      
        	 	
                (viii)

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

              

      

       

      
        	 	
                (ix)

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

              

      

       

      
        	 	
                (x)

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

              

      

       

      
        
          
          

        

        
          107

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (xi)

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

              

      

       

      SECTION
        8.3 Trustee Not Liable for Certificates or Mortgage Loans.

       

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

       

      SECTION
        8.4 Trustee May Own Certificates.

       

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

       

      SECTION
        8.5 Trustee’s Fees and Expenses.

       

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

       

      
        
          
          

        

        
          108

          
            

          

        

        
          
          

        

      

       

      SECTION
        8.6 Eligibility Requirements for Trustee.

       

      The
        Trustee hereunder shall at all times be a corporation or association organized
        and doing business under the laws of a state or the United States of America,
        authorized under such laws to exercise corporate trust powers, having a combined
        capital and surplus of at least $50,000,000, subject to supervision or
        examination by federal or state authority and with a credit rating which
        would
        not cause either of the Rating Agencies to reduce their respective then current
        ratings of the Certificates (or having provided such security from time to
        time
        as is sufficient to avoid such reduction). If such corporation or association
        publishes reports of condition at least annually, pursuant to law or to the
        requirements of the aforesaid supervising or examining authority, then for
        the
        purposes of this Section 8.6 the combined capital and surplus of such
        corporation or association shall be deemed to be its combined capital and
        surplus as set forth in its most recent report of condition so published.
        In
        case at any time the Trustee shall cease to be eligible in accordance with
        the
        provisions of this Section 8.6, the Trustee shall resign immediately in the
        manner and with the effect specified in Section 8.7 hereof. The entity serving
        as Trustee may have normal banking and trust relationships with the Depositor
        and its affiliates or the Master Servicer and its affiliates; provided, however,
        that such entity cannot be an affiliate of the Master Servicer other than
        the
        Trustee in its role as successor to the Master Servicer.

       

      SECTION
        8.7 Resignation and Removal of Trustee.

       

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

       

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

       

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

       

      
        
          
          

        

        
          109

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      SECTION
        8.8 Successor Trustee.

       

      Any
        successor trustee appointed as provided in Section 8.7 hereof shall execute,
        acknowledge and deliver to the Depositor and to its predecessor trustee and
        the
        Master Servicer an instrument accepting such appointment hereunder and thereupon
        the resignation or removal of the predecessor trustee shall become effective
        and
        such successor trustee, without any further act, deed or conveyance, shall
        become fully vested with all the rights, powers, duties and obligations of
        its
        predecessor hereunder, with the like effect as if originally named as trustee
        herein. The Depositor, the Master Servicer and the predecessor trustee shall
        execute and deliver such instruments and do such other things as may reasonably
        be required for more fully and certainly vesting and confirming in the successor
        trustee all such rights, powers, duties, and obligations.

       

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

       

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

       

      
        
          
          

        

        
          110

          
            

          

        

        
          
          

        

      

    

    SECTION
      8.9 Merger or Consolidation of Trustee.

     

    Any
      corporation into which the Trustee may be merged or converted or with which
      it
      may be consolidated or any corporation resulting from any merger, conversion
      or
      consolidation to which the Trustee shall be a party, or any corporation
      succeeding to the business of the Trustee, shall be the successor of the Trustee
      hereunder, provided that such corporation shall be eligible under the provisions
      of Section 8.6 hereof without the execution or filing of any paper or further
      act on the part of any of the parties hereto, anything herein to the contrary
      notwithstanding.

     

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

     

    SECTION
      8.10 Appointment of Co-Trustee or Separate Trustee.

     

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

     

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

     

    
      	 	
              (i)

            	
              To
                the extent necessary to effectuate the purposes of this Section 8.10,
                all
                rights, powers, duties and obligations conferred or imposed upon
                the
                Trustee shall be conferred or imposed upon and exercised or performed
                by
                the Trustee and such separate trustee or co-trustee jointly (it being
                understood that such separate trustee or co-trustee is not authorized
                to
                act separately without the Trustee joining in such act), except to
                the
                extent that under any law of any jurisdiction in which any particular
                act
                or acts are to be performed (whether as Trustee hereunder or as successor
                to the Master Servicer hereunder), the Trustee shall be incompetent
                or
                unqualified to perform such act or acts, in which event such rights,
                powers, duties and obligations (including the holding of title to
                the
                applicable Trust Fund or any portion thereof in any such jurisdiction)
                shall be exercised and performed singly by such separate trustee
                or
                co-trustee, but solely at the direction of the
                Trustee;

            

    

     

     

    
      
        
        

      

      
        111

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              (ii)

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

            

    

     

    
      	 	
              (iii)

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

            

    

     

    
      	 	
              (iv)

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

            

    

     

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

     

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

     

    SECTION
      8.11 Tax Matters.

     

    
      
        
        

      

      
        112

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      
        
        

      

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

     

    Each
      Class I-A-2 Certificate shall be treated as representing not only ownership
      of
      regular interests in the Upper Tier REMIC, but also ownership of an interest
      in
      the Corridor Contract. For tax purposes, the Corridor Contract shall be deemed
      to have a value $271,000 as of the Closing Date.

     

    ARTICLE
      IX

    TERMINATION

     

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

     

    Subject
      to Section 9.3, the obligations and responsibilities of the Depositor, the
      Master Servicer and the Trustee created hereby with respect to the Trust Fund
      shall terminate upon the earlier of (a) the purchase by the Master Servicer
      of
      all Mortgage Loans (and REO Properties) remaining in the Trust Fund at the
      price
      equal to the sum of (i) 100% of the Stated Principal Balance of each Mortgage
      Loan (other than a Mortgage Loan that has been foreclosed and subject to clause
      (ii)) plus one month’s accrued interest thereon at the applicable Adjusted
      Mortgage Rate, (ii) the lesser of (x) the appraised value of any REO Property
      as
      determined by the higher of two appraisals completed by two independent
      appraisers selected by the Master Servicer at the expense of the Master Servicer
      and (y) the Stated Principal Balance of each Mortgage Loan related to any REO
      Property, plus accrued and unpaid interest thereon at the applicable Adjusted
      Mortgage Rate, and (iii) any costs and damages incurred by the Trust in
      connection with the noncompliance of such Mortgage Loan with any specifically
      applicable predatory or abusive lending law, and (b) the later of (i) the
      maturity or other liquidation (or any Advance with respect thereto) of the
      last
      Mortgage Loan remaining in the Trust Fund and the disposition of all REO
      Property and (ii) the distribution to Certificateholders of all amounts required
      to be distributed to them pursuant to this Agreement. In no event shall the
      trusts created hereby continue beyond the earlier of (i) the expiration of
      21
      years from the death of the survivor of the descendants of Joseph P. Kennedy,
      the late Ambassador of the United States to the Court of St. James’s, living on
      the date hereof, and (ii) the Latest Possible Maturity Date. The right to
      purchase all Mortgage Loans and REO Properties pursuant to clause (a) above
      shall be conditioned upon the aggregate of the Pool Principal Balances of all
      of
      the Mortgage Pools, at the time of any such repurchase, being less than ten
      percent (10%) of the aggregate Cut-off Date Pool Principal Balance of all of
      the
      Mortgage Pools. The Master Servicer will deposit the funds for such purchase
      into the Certificate Account pursuant to Section 3.5(b)viii).

     

    
      
        
        

      

      
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    SECTION
      9.2 Final Distribution on the Certificates.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

    SECTION
      9.3 Additional Termination Requirements.

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (I)

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

            

    

     

    
      	 	
              (II)

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

            

    

     

     

    
      
        
        

      

      
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              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    ARTICLE
      X

    EXCHANGE
      ACT REPORTING

     

    SECTION
      10.1 Filing Obligations.

     

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

     

    SECTION
      10.2 Form 10-D Filings.

     

    
      	 	
              (a)

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

            

    

     

     

    
      
        
        

      

      
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              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    SECTION
      10.3 Form 8-K Filings.

     

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

     

    
      
        
        

      

      
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    SECTION
      10.4 Form 10-K Filings.

     

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

     

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

     

    SECTION
      10.5 Sarbanes-Oxley Certification.

     

    Each
      Form
      10-K shall include a certification (the “Sarbanes-Oxley Certification”) required
      by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section
      302
      of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC
      promulgated thereunder (including any interpretations thereof by the SEC’s
      staff)). No later than March 15 of each year in which a Form 10-K is required
      to
      be filed on behalf of the Trust Fund, beginning in 2008, the Master Servicer
      (unless such Person is the Certifying Person) and the Trustee shall, and the
      Master Servicer shall cause each Subservicer to, provide to the Person who
      signs
      the Sarbanes-Oxley Certification (the “Certifying Person”) a certification
      (each, a “Performance Certification”), substantially in the form attached hereto
      as Exhibit N-1 (in the case of a Subservicer) and Exhibit N-2 (in the case
      of
      the Trustee), unless such other form is mutually agreed upon, on which the
      Certifying Person, the entity for which the Certifying Person acts as an
      officer, and such entity’s officers, directors and Affiliates (collectively with
      the Certifying Person, “Certification Parties”) can reasonably rely. The senior
      officer in charge of the servicing function of the Master Servicer shall serve
      as the Certifying Person on behalf of the Trust Fund. Neither the Master
      Servicer nor the Depositor will request delivery of a certification under this
      clause unless the Depositor is required under the Exchange Act to file an annual
      report on Form 10-K with respect to the Trust Fund. In the event that prior
      to
      the filing date of the Form 10-K in March of each year, a Responsible Officer
      of
      the Trustee or the Depositor has actual knowledge of information material to
      the
      Sarbanes-Oxley Certification, the Trustee or the Depositor, as the case may
      be,
      shall promptly notify the Master Servicer and the Depositor. The respective
      parties hereto agree to cooperate with all reasonable requests made by any
      Certifying Person or Certification Party in connection with such Person’s
      attempt to conduct any due diligence that such Person reasonably believes to
      be
      appropriate in order to allow it to deliver any Sarbanes-Oxley Certification
      or
      portion thereof with respect to the Trust Fund.

     

    
      
        
        

      

      
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    SECTION
      10.6 Form 15 Filing.

     

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

     

    SECTION
      10.7 Report on Assessment of Compliance and Attestation.

     

    
      	 	
              (a)

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

            

    

     

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

     

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

     

    
      
        
        

      

      
        120

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      	 	
              (b)

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

            

    

     

    SECTION
      10.8 Use of Subservicers and Subcontractors.

     

    
      	 	
              (a)

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

            

    

     

     

    
      
        
        

      

      
        121

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              (b)

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

            

    

     

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

            

    

     

    SECTION
      10.9 Amendments.

     

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

     

    
      
        
        

      

      
        122

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      XI

    MISCELLANEOUS
      PROVISIONS

     

    SECTION
      11.1 Amendment.

     

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

     

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

     

    
      
        
        

      

      
        123

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    SECTION
      11.2 Recordation of Agreement; Counterparts.

     

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

     

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

     

    SECTION
      11.3 Governing Law.

     

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

     

    
      
        
        

      

      
        124

        
          

        

      

      
        
        

      

    

     

    SECTION
      11.4 Intention of Parties.

     

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

     

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

     

    SECTION
      11.5 Notices.

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (A)

            	
              Any
                material change or amendment to this
                Agreement;

            

    

     

    
      	 	
              (B)

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

            

    

     

    
      	 	
              (C)

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

            

    

     

    
      	 	
              (D)

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

            

    

     

    
      	 	
              (E)

            	
              The
                final payment to
                Certificateholders.

            

    

     

    
      	 	
              (F)

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

            

    

     

     

    
      
        
        

      

      
        125

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	
              (G)

            	
              Each
                report to Certificateholders described in Section
                4.6;

            

    

     

    
      	 	
              (H)

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

            

    

     

    
      	 	
              (I)

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

            

    

     

    
      	 	
              (b)

            	
              All
                directions, demands, authorizations, consents, waivers, communications
                and
                notices hereunder shall be in writing and shall be deemed to have
                been
                duly given when delivered to by first class mail, facsimile or courier
                (a)
                in the case of the Depositor, First Horizon Asset Securities Inc.,
                4000
                Horizon Way, Irving, Texas 75063, Attention: Alfred Chang; (b) in
                the case
                of the Master Servicer, First Horizon Home Loan Corporation, 4000
                Horizon
                Way, Irving, Texas 75063, Attention: Larry P. Cole or such other
                address
                as may be hereafter furnished to the Depositor and the Trustee by
                the
                Master Servicer in writing; (c) in the case of the Trustee, The Bank
                of
                New York, 101 Barclay Street, 4W, New York, New York 10286, Attention:
                Corporate Trust Administration - First Horizon 2007-FA2, or such
                other
                address as the Trustee may hereafter furnish to the Depositor or
                Master
                Servicer, and (d) in the case of the Rating Agencies, the address
                specified therefor in the definition corresponding to the name of
                such
                Rating Agency. Notices to Certificateholders shall be deemed given
                when
                mailed, first class postage prepaid, to their respective addresses
                appearing in the Certificate
                Register.

            

    

     

    SECTION
      11.6 Severability of Provisions.

     

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

     

    SECTION
      11.7 Assignment.

     

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

     

    SECTION
      11.8 Limitation on Rights of Certificateholders.

     

    
      
        
        

      

      
        126

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    SECTION
      11.9 Inspection and Audit Rights.

     

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

     

    
      
        
        

      

      
        127

        
          

        

      

      
        
        

      

    

     

    SECTION
      11.10 Certificates Nonassessable and Fully Paid.

     

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

     

    SECTION
      11.11 Limitations on Actions; No Proceedings.

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    SECTION
      11.12 Acknowledgment of Seller.

     

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

     

    *
      * * * *
      *

     

    
      
        
        

      

      
        128

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	 
	 	
              FIRST
                HORIZON ASSET SECURITIES INC.,

              as
                Depositor

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Alfred
              Chang
	 	Vice President 

    

    
       

      
        	 	 	 
	 	
                THE
                  BANK OF NEW YORK,

                not
                  in its individual capacity, but solely as Trustee

              
	 
 	 
 	 
 
	
              	By:  	
              
	 	
                
Name: 
	 	
                
                  

                

                Title: 

              
	 	
                
                  

                

              

      

       

      
        
          	 	 	 
	 	
                  FIRST HORIZON HOME LOAN 

                  CORPORATION, in its capacity as Master
                    Servicer

                
	 
 	 
 	 
 
	
                	By:  	
                
	 	
                  
Terry
                  L. McCoy
	 	Executive Vice President

        

         

      

    

    The
      foregoing agreement is hereby

    acknowledged
      and accepted as of the

    date
      first above written:

    
      	 	 	 	 
	
              FIRST
                HORIZON HOME LOAN CORPORATION,

              in
                its capacity as Seller

            	 	 	 
	 	 	 	 
	By:	 	 	
            
	
              
                

              

              Terry
                L. McCoy

            	 	 	
            
	
              Executive
                Vice President

            	 	 	
            

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    SCHEDULE
      I

     

    First
      Horizon Asset Securities Inc.

    Mortgage
      Pass-Through Certificates Series 2007-FA2

     

    Mortgage
      Loan Schedule

     

    [Available
      Upon Request from Trustee]

     

    
      
        
        

      

      
        I-1

        
          

        

      

      
        
        

      

    

    SCHEDULE
      II

     

    First
      Horizon Asset Securities Inc.

    Mortgage
      Pass-Through Certificates Series 2007-FA2

     

    Representations
      and Warranties of the Master Servicer

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        II-1

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      
        
        

      

      
        II-2

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      III

     

    First
      Horizon Asset Securities Inc.

    Mortgage
      Pass-Through Certificates Series 2007-FA2

     

    Form
      of Monthly Master Servicer Report

     

    [Begins
      on Next Page]

     

    
      
        
        

      

      
        III-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A-1

     

    [FORM
      OF
      SENIOR CERTIFICATE

    OTHER
      THAN THE CLASS [I-A-PO][II-A-PO] CERTIFICATES]

     

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

     

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

     

    [In
      the
      case of an ERISA Restricted Yield Supplement Certificate the following legend
      shall appear:

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
      TRANSFEREE REPRESENTS IN WRITING TO THE TRUSTEE THAT SUCH
      TRANSFEREE IS NEITHER A PLAN NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN
      OR
      USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH TRANSFER, OR THAT THE
      ACQUISITION AND HOLDING OF THE ERISA-RESTRICTED YIELD SUPPLEMENT CERTIFICATE
      ARE
      ELIGIBLE FOR EXEMPTIVE RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION
      (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 OR PTCE 96-23.
      SUCH
      REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO THE TRUSTEE BY THE
      TRANSFEREE’S ACCEPTANCE OF A CERTIFICATE OF THIS CLASS AND BY A BENEFICIAL
      OWNER’S ACCEPTANCE OF ITS INTEREST IN A CERTIFICATE OF THIS CLASS.
      NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER
      OF
      THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA
      OR
      TO THE CODE WITHOUT THE WRITTEN REPRESENTATION AS DESCRIBED ABOVE SHALL BE
      VOID
      AND OF NO EFFECT.]

     

    
      
        
        

      

      
        A-1-1

        
          

        

      

      
        
        

      

    

    
      	
              Certificate
                No.

            	:
	 	 
	
              Cut-off
                Date

            	: 
	 	 
	
              First
                Distribution Date

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

            	
               

              : 
                $

            
	 	 
	
              Initial
                Certificate 

              Balances
                of all 

              Certificate
                of this 

              Class

            	
              : 
                $

            
	 	 
	
              CUSIP

            	: 

    

     

    First
      Horizon Alternative Mortgage Securities Trust 2007-FA2

    Mortgage
      Pass-Through Certificates, Series 2007-FA2

    Class
      [________]

     

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

     

    First
      Horizon Asset Securities Inc., as Depositor

     

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

     

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

     

    
      
        
        

      

      
        A-1-2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      
        
        

      

      
        A-1-3

        
          

        

      

      
        
        

      

    

     

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

     

    Dated:
      March __, 2007

    
      	 	 	 
	 	
              THE
                BANK OF NEW YORK,

              not
                in its individual capacity, but solely as Trustee

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Authorized
              Signatory of 
	 	
              THE
                BANK OF NEW YORK

              not
                in its individual capacity,

              but
                solely as Trustee

            

    

    

      	Countersigned:	 	 	 
	 	 	 	 
	 	 	 	 
	By 	 	 	
            
	
              
                

              

              Authorized
                Signatory of 

            	 	 	
            
	
              THE
                BANK OF NEW YORK, 

              not
                in its individual capacity,  

              but
                solely as Trustee

            	 	 	
            

    

    

     

    
      
        
        

      

      
        A-1-4

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A-2

     

    [FORM
      OF
      SENIOR CERTIFICATE

     

    [CLASS
      [I-A-PO][II-A-PO] CERTIFICATE]

     

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

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
      TRANSFEREE REPRESENTS TO THE TRUSTEE THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
      BENEFIT PLAN SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
      ACT OF 1974, AS AMENDED (“ERISA”), OR A PLAN SUBJECT TO SECTION 4975 OF THE
      CODE, OR, IF THE CERTIFICATE HAS BEEN SUBJECT TO AN ERISA-QUALIFYING
      UNDERWRITING, A REPRESENTATION IN ACCORDANCE WITH THE PROVISIONS OF THE
      AGREEMENT REFERRED TO HEREIN, OR DELIVERS TO THE TRUSTEE AN OPINION OF COUNSEL
      IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. SUCH
      REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO THE TRUSTEE BY THE
      TRANSFEREE’S ACCEPTANCE OF A CERTIFICATE OF THIS CLASS AND BY A BENEFICIAL
      OWNER’S ACCEPTANCE OF ITS INTEREST IN A CERTIFICATE OF THIS CLASS.

     

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

     

    THIS
      CLASS [I-A-PO][II-A-PO] CERTIFICATE SHALL NOT BE ENTITLED TO ANY PAYMENTS IN
      RESPECT OF INTEREST.

     

    
      
        
        

      

      
        A-2-1

        
          

        

      

      
        
        

      

    

    

     

    
      	
              Certificate
                No.

            	:
	 	 
	
              Cut-off
                Date

            	:
	 	 
	
              First
                Distribution Date

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

            	
               

              : 
                $

            
	 	 
	
              Initial
                Certificate 

              Balances
                of all 

              Certificate
                of this 

              Class

            	
              : 
                $

            
	 	 
	
              CUSIP

            	:

    

     

    First
      Horizon Alternative Mortgage Securities Trust 2007-FA2

    Mortgage
      Pass-Through Certificates, Series 2007-FA2

    Class
      [I-A-PO][II-A-PO]

     

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

     

    First
      Horizon Asset Securities Inc., as Depositor

     

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

     

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

     

    
      
        
        

      

      
        A-2-2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      
        
        

      

      
        A-2-3

        
          

        

      

      
        
        

      

    

     

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

     

    Dated:
      March __, 2007

    
      	 	 	 
	 	
              THE
                BANK OF NEW YORK,

              not
                in its individual capacity, but solely as Trustee

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Authorized
              Signatory of 
	 	
              THE
                BANK OF NEW YORK

              not
                in its individual capacity,

              but
                solely as Trustee

            

    

     

    
      	Countersigned:	 	 	 
	 	 	 	 
	 	 	 	 
	By 	 	 	
            
	
              
                
Authorized
                Signatory of 

            	 	 	
            
	
              THE
                BANK OF NEW YORK, 

              not
                in its individual capacity,  

              but
                solely as Trustee

            	 	 	
            

    

    

    

    
      
        
        

      

      
        A-2-4

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    [FORM
      OF
      SUBORDINATED CERTIFICATE]

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

    

     

    
      	
              Certificate
                No.

            	:
	 	 
	
              Cut-off
                Date

            	:
	 	 
	
              First
                Distribution Date

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

            	
              :
                $

            
	 	 
	
              Initial
                Certificate 

              Balances
                of all 

              Certificate
                of this 

              Class

            	
              : 
                $

            
	 	 
	
              CUSIP

            	:

    

     

    First
      Horizon Alternative Mortgage Securities Trust 2007-FA2

    Mortgage
      Pass-Through Certificates, Series 2007-FA2 

    Class
      [___]

     

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

     

    First
      Horizon Asset Securities Inc., as Depositor

     

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

     

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

     

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      
        
        

      

      
        B-4

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Dated:
      March __, 2007

    
      	 	 	 
	 	
              THE
                BANK OF NEW YORK,

              not
                in its individual capacity, but solely as Trustee

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Authorized
              Signatory of 
	 	
              THE
                BANK OF NEW YORK

              not
                in its individual capacity,

              but
                solely as Trustee

            

    

     

    
      	Countersigned:	 	 	 
	 	 	 	 
	 	 	 	 
	By 	 	 	
            
	
              
                
Authorized
                Signatory of 

            	 	 	
            
	
              THE
                BANK OF NEW YORK, 

              not
                in its individual capacity,  

              but
                solely as Trustee

            	 	 	
            

    

    

    

    
      
        
        

      

      
        B-5

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

     

    [FORM
      OF
      RESIDUAL CERTIFICATE]

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

    

     

    
      	
              Certificate
                No.:

            	 
	 	 
	
              Cut-off
                Date:

            	 
	 	 
	
              First
                Distribution Date:

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

            	
               

              $

            
	 	 
	
              Initial
                Certificate 

              Balances
                of all 

              Certificate
                of this 

              Class:

            	
              $

            
	 	 
	
              CUSIP:

            	 

    

     

    First
      Horizon Alternative Mortgage Securities Trust 2007-FA2

    Mortgage
      Pass-Through Certificates, Series 2007-FA2

     

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

     

    First
      Horizon Asset Securities Inc., as Depositor

     

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

     

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

     

    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    
      
        
        

      

      
        C-3

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      
        
        

      

      
        C-4

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      March __, 2007

    
      	 	 	 
	 	
              THE
                BANK OF NEW YORK,

              not
                in its individual capacity, but solely as Trustee

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Authorized
              Signatory of 
	 	
              THE
                BANK OF NEW YORK

              not
                in its individual capacity,

              but
                solely as Trustee

            

    

     

    
      	Countersigned:	 	 	 
	 	 	 	 
	 	 	 	 
	By	 	 	
            
	
              
                
Authorized
                Signatory of 

            	 	 	
            
	
              THE
                BANK OF NEW YORK, 

              not
                in its individual capacity,  

              but
                solely as Trustee

            	 	 	
            

    

    
      
        
        

      

      
        C-5

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

     

    [Form
      of
      Reverse of Certificates]

     

    First
      Horizon Alternative Mortgage Securities Trust 2007-FA2

    Mortgage
      Pass-Through Certificates

     

    This
      Certificate is one of a duly authorized issue of Certificates designated as
      First Horizon Alternative Mortgage Securities Trust 2007-FA2 Mortgage
      Pass-Through Certificates, of the Series specified on the face hereof (herein
      collectively called the “Certificates”), and representing a beneficial ownership
      interest in the Trust Fund created by the Agreement.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        D-2

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    ______________________________

    (Please
      insert social security or

    other
      identifying number of assignee)

     

    ________________________________________________________________________

     

    ________________________________________________________________________

    (Please
      print or typewrite name and address

    including
      postal zip code of assignee)

     

    ________________________________________________________________________

     

    the
      Percentage Interest evidenced by the within Certificate and hereby authorizes
      the transfer of 

    registration
      of such Percentage Interest to assignee on the Certificate Register of the
      Trust
      Fund.

     

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

     

    ________________________________________________________________________

     

    ________________________________________________________________________

     

    ________________________________________________________________________

     

    
      	Dated: __________________ 	 
	 	 
	 	
              ______________________________________

              Signature
                by or on behalf of assignor 

            

    

    
       

    

    DISTRIBUTION
      INSTRUCTIONS

     

    The
      assignee should include the following for purposes of distribution:

     

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

     

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

    

    
      
        
        

      

      
        D-3

        
          

        

      

      
        
        

      

    

    EXHIBIT
      E

     

    FORM
      OF
      INITIAL CERTIFICATION OF CUSTODIAN

     

    [date]

     

    First
      Horizon Asset Securities Inc. 

    First
      Horizon Home Loan Corporation 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286

     

    
      	 	
              Re:

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

            

    

     

    Gentlemen:

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        E-1

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	 
	 	
              FIRST
                TENNESSEE BANK NATIONAL ASSOCIATION,

              as
                Custodian

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Name:
	 	
              
                

              
Title: 
	 	
              
                

              

            

    

    

    
      
        
        

      

      
        E-2

        
          

        

      

      
        
        

      

    

    EXHIBIT
      F

     

    FORM
      OF
      DELAY DELIVERY CERTIFICATION

     

    [date]

     

    First
      Horizon Asset Securities Inc. 

    First
      Horizon Home Loan Corporation 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286

     

    
      	 	
              Re:

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

            

    

     

    Ladies
      and Gentlemen:

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        F-1

        
          

        

      

      
        
        

      

    

     

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

     

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

    
       

      
        	 	 	 
	 	
                FIRST
                  TENNESSEE BANK NATIONAL ASSOCIATION,

                as
                  Custodian

              
	 
 	 
 	 
 
	
              	By:  	
              
	 	
                
Name:
	 	
                
                  

                
Title: 
	 	
                
                  

                

              

      

      

      
        
          
          

        

        
          F-2

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      G

     

    FORM
      OF
      SUBSEQUENT CERTIFICATION OF CUSTODIAN

     

    [date]

     

    First
      Horizon Asset Securities Inc. 

    First
      Horizon Home Loan Corporation 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286

     

     

    
      	 	
              Re:

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

            

    

     

    Ladies
      and Gentlemen:

     

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

     

    
      	
            	(A)	
              The
                original Mortgage Note endorsed by manual or facsimile signature
                in blank
                in the following form: “Pay to the order of ____________without recourse,”
                with all intervening endorsements showing a complete chain of endorsements
                from the originator to the Person endorsing the Mortgage Note (each
                such
                endorsement being sufficient to transfer all right, title and interest
                of
                the party so endorsing, as noteholder or assignee thereof, in and
                to that
                Mortgage Note); or

            

    

     

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

            

    

     

    
      	 	
              (ii)

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

            

    

     

     

    
      
        
        

      

      
        G-1

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              (iii)

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

            

    

     

    
      	 	
              (iv)

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

            

    

     

    
      	 	
              (v)

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

            

    

     

    
      	 	
              (vi)

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

            

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

            	
              The
                executed Security Agreement;

            

    

     

    
      	 	
              (c)

            	
              The
                executed Proprietary Lease;

            

    

     

    
      	 	
              (d)

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

            

    

     

    
      	 	
              (e)

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

            

    

     

    
      
        
        

      

      
        G-2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

    

      
        	 	FIRST
                TENNESSEE BANK NATIONAL ASSOCIATION,
                
                  as
                    Custodian

                

              
	 	 	 
	
              	
                By:

              	 
	 	 	
                

              
	
              	
                 

              	
                
                  Name:

                  
                    
 

                

              
	
              	
              	
                
                  Title:

                  
                    
 

                

              

      

    

     

    
      
        
        

      

      
        G-3

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      H

     

    TRANSFER
      AFFIDAVIT

     

    First
      Horizon Alternative Mortgage Securities Trust 2007-FA2

    Mortgage
      Pass-Through Certificates

    Series
      2007-FA2

     

    
      	STATE OF	)
	 	) ss.:
	COUNTY OF	)

    

            

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        H-1

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        H-2

        
          

        

      

      
        
        

      

    

     

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

     

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

    
       

    

    
      
        
          	 	 	 
	 	
                  
                    

                  

                  Print
                    Name of Transferee

                
	 	 	 
	
                	
                  By:

                	 
	 	 	
                  

                
	
                	
                   

                	
                  
                    Name:

                    
                      
 

                  

                
	
                	
                	
                  
                    Title:

                    
                      
 

                  

                

        

      

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

       

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

       

    

    
      
        	 	 
	 	
                
                  

                

                NOTARY
                  PUBLIC

              
	 	 
	 	
                My
                  Commission expires the ___ day of 

              
	 	
                ________________,
                  20___.

              

      

    

     

    
      
        
        

      

      
        H-3

        
          

        

      

      
        
        

      

    

    EXHIBIT
      1
      to EXHIBIT H

     

    Certain
      Definitions

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        H-4

        
          

        

      

      
        
        

      

    

    

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

       

      
        
          
          

        

        
          H-5

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      2
      to EXHIBIT H

     

    Section
      5.2(c) of the Agreement

     

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

     

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

     

    (ii) No
      Ownership Interest in a Residual Certificate may be registered on the Closing
      Date or thereafter transferred, and the Trustee shall not register the Transfer
      of any Residual Certificate unless, in addition to the certificates required
      to
      be delivered to the Trustee under subparagraph (b) above, the Trustee shall
      have
      been furnished with an affidavit (a “Transfer Affidavit”) of the initial owner
      or the proposed transferee in the form attached hereto as Exhibit H. The
      Transferee does not hold REMIC residual interests as nominee to facilitate
      the
      clearance and settlement of such interests through electronic book-entry changes
      in accounts of participating organizations. 

     

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

     

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

     

    
      
        
        

      

      
        H-6

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      
        
        

      

      
        H-7

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      I

     

    FORM
      OF
      TRANSFEROR CERTIFICATE

     

    _______________,
      20___

     

    First
      Horizon Asset Securities Inc. 

    First
      Horizon Home Loan Corporation 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286

     

    Re: First
      Horizon Alternative Mortgage Securities Trust 2007-FA2 Mortgage Pass-Through
      Certificates, Series 2007-FA2, Class _____

     

    Ladies
      and Gentlemen:

     

    In
      connection with our disposition of the above Certificates we certify that (a)
      to
      the extent we are disposing of a Private Certificate, we understand that the
      Private Certificate has not been registered under the Securities Act of 1933,
      as
      amended (the “Act”), and is being disposed of by us in a transaction that is
      exempt from the registration requirements of the Act, (b) we have not offered
      or
      sold any Certificates to, or solicited offers to buy any Certificates from,
      any
      person, or otherwise approached or negotiated with any person with respect
      thereto, in a manner that would be deemed, or taken any other action which
      would
      result in, a violation of Section 5 of the Act, and (c) to the extent we are
      disposing of a Residual Certificate, we have no knowledge the transferee is
      not
      a Permitted Transferee.

     

    Capitalized
      terms used herein shall have the meaning ascribed to such terms in the Pooling
      and Servicing Agreement dated as of March 1, 2007, by and among First Horizon
      Asset Securities Inc., as depositor, First Horizon Home Loan Corporation, as
      master servicer, and The Bank of New York, as trustee, pursuant to which the
      Residual Certificates were issued. 

    

      
        	 	Very
                truly yours,
	 	 
	 	
                
                  

                

                Print
                  Name of Transferor

              
	 	 
	 	
                By:

              	
              
	 	 	
                
                  

                

                Authorized
                  Officer

              

      

    

     

    
      
        
        

      

      
        I-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      J

     

    FORM
      OF
      INVESTMENT LETTER (NON-RULE 144A)

     

    _____________,
      20___

     

    First
      Horizon Asset Securities Inc. 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286 

    Attention:
      Mortgage-Backed Securities Group 

     

     

    
      	 	
              Re:

            	
              First
                Horizon Alternative Mortgage Securities Trust 2007-FA2 Mortgage
                Pass-Through Certificates, Series 2007-FA2, Class
                ___

            

    

     

    Ladies
      and Gentlemen:

     

    In
      connection with our acquisition of the above Certificates we certify that (a)
      we
      understand that the Certificates are not being registered under the Securities
      Act of 1933, as amended (the “Act”), or any state securities laws and are being
      transferred to us in a transaction that is exempt from the registration
      requirements of the Act and any such laws, (b) we are an “accredited investor,”
as defined in Regulation D under the Act, and have such knowledge and experience
      in financial and business matters that we are capable of evaluating the merits
      and risks of investments in the Certificates, (c) we have had the opportunity
      to
      ask questions of and receive answers from the Depositor concerning the purchase
      of the Certificates and all matters relating thereto or any additional
      information deemed necessary to our decision to purchase the Certificates,
      (d)
      either (i) we are not an employee benefit plan or arrangement that is subject
      to
      the Employee Retirement Income Security Act of 1974, as amended, or a plan
      or
      arrangement that is subject to Section 4975 of the Internal Revenue Code of
      1986, as amended, nor are we acting on behalf of any such plan or arrangement
      nor are we using the assets of any such plan or arrangement to effect such
      acquisition or (ii) if, in the case of ERISA-Restricted Certificates that have
      been the subject of an ERISA-Qualifying Underwriting, we are an insurance
      company, a representation that we are an insurance company which is purchasing
      such Certificates with funds contained in an “insurance company general account”
(as such term is defined in Section V(e) of Prohibited Transaction Class
      Exemption 95-60 (“PTCE 95-60”)) and that the purchase and holding of such
      Certificates are covered under Sections I and III PTCE 95-60, (e) we are
      acquiring the Certificates for investment for our own account and not with
      a
      view to any distribution of such Certificates (but without prejudice to our
      right at all times to sell or otherwise dispose of the Certificates in
      accordance with clause (g) below), (f) we have not offered or sold any
      Certificates to, or solicited offers to buy any Certificates from, any person,
      or otherwise approached or negotiated with any person with respect thereto,
      or
      taken any other action which would result in a violation of Section 5 of the
      Act, and (g) we will not sell, transfer or otherwise dispose of any Certificates
      unless (1) such sale, transfer or other disposition is made pursuant to an
      effective registration statement under the Act or is exempt from such
      registration requirements, and if requested, we will at our expense provide
      an
      opinion of counsel satisfactory to the addressees of this Certificate that
      such
      sale, transfer or other disposition may be made pursuant to an exemption from
      the Act, (2) the purchaser or transferee of such Certificate has executed and
      delivered to you a certificate to substantially the same effect as this
      certificate, and (3) the purchaser or transferee has otherwise complied with
      any
      conditions for transfer set forth in the Pooling and Servicing
      Agreement.

     

    
      
        
        

      

      
        J-1

        
          

        

      

      
        
        

      

    

     

    
      	 	Very
              truly yours,
	 	 
	 	
              
                

              

              Print
                Name of Transferee

            
	 	 
	 	
              By:

            	
            
	 	 	
              
                

              

              Authorized
                Officer

            

    

    

    
      
        
        

      

      
        J-2

        
          

        

      

      
        
        

      

    

    EXHIBIT
      K

     

    FORM
      OF
      RULE 144A LETTER

     

    ___________,
      20__

     

    First
      Horizon Asset Securities Inc. 

    4000
      Horizon Way 

    Irving,
      Texas 75063

     

    The
      Bank
      of New York 

    101
      Barclay Street, 4W 

    New
      York,
      New York 10286 

    Attention:
      Mortgage-Backed Securities Group 

     

    
      	 	
              Re:

            	
              First
                Horizon Alternative Mortgage Securities Trust 2007-FA2 Mortgage
                Pass-Through Certificates, Series 2007-FA2, Class
                ___

            

    

     

    Ladies
      and Gentlemen:

     

    In
      connection with our acquisition of the above Certificates we certify that (a)
      we
      understand that the Certificates are not being registered under the Securities
      Act of 1933, as amended (the “Act”), or any state securities laws and are being
      transferred to us in a transaction that is exempt from the registration
      requirements of the Act and any such laws, (b) we have such knowledge and
      experience in financial and business matters that we are capable of evaluating
      the merits and risks of investments in the Certificates, (c) we have had the
      opportunity to ask questions of and receive answers from the Depositor
      concerning the purchase of the Certificates and all matters relating thereto
      or
      any additional information deemed necessary to our decision to purchase the
      Certificates, (d) we are not an employee benefit plan or arrangement that is
      subject to the Employee Retirement Income Security Act of 1974, as amended,
      or a
      plan or arrangement that is subject to Section 4975 of the Internal Revenue
      Code
      of 1986, as amended, nor are we acting on behalf of any such plan or arrangement
      nor using the assets of any such plan or arrangement to effect such acquisition,
      (e) if an insurance company, in the case of ERISA-restricted Certificates that
      have been the subject of an ERISA-Qualifying Underwriting, we are purchasing
      the
      Certificates with funds contained in an “insurance company general account” (as
      defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 (“PTCE
      95-60”)) and our purchase and holding of the Certificates are covered under
      Sections I and III of PTCE 95-60, (f) we have not, nor has anyone acting on
      our
      behalf offered, transferred, pledged, sold or otherwise disposed of the
      Certificates, any interest in the Certificates or any other similar security
      to,
      or solicited any offer to buy or accept a transfer, pledge or other disposition
      of the Certificates, any interest in the Certificates or any other similar
      security from, or otherwise approached or negotiated with respect to the
      Certificates, any interest in the Certificates or any other similar security
      with, any person in any manner, or made any general solicitation by means of
      general advertising or in any other manner, or taken any other action, that
      would constitute a distribution of the Certificates under the Act or that would
      render the disposition of the Certificates a violation of Section 5 of the
      Act
      or require registration pursuant thereto, nor will act, nor has authorized
      or
      will authorize any person to act, in such manner with respect to the
      Certificates, (g) we are a “qualified institutional buyer” as that term is
      defined in Rule 144A under the Act (“Rule 144A”) and have completed either of
      the forms of certification to that effect attached hereto as Annex 1 or Annex
      2,
      (h) we are aware that the sale to us is being made in reliance on Rule 144A,
      and
      (i) we are acquiring the Certificates for our own account or for resale pursuant
      to Rule 144A and further, understand that such Certificates may be resold,
      pledged or transferred only (A) to a person reasonably believed to be a
      qualified institutional buyer that purchases for its own account or for the
      account of a qualified institutional buyer to whom notice is given that the
      resale, pledge or transfer is being made in reliance on Rule 144A, or (B)
      pursuant to another exemption from registration under the Act.

     

    
      
        
        

      

      
        K-1

        
          

        

      

      
        
        

      

    

     

    
      	 	Very
              truly yours,
	 	 
	 	
              
                

              

              Print
                Name of Transferee

            
	 	 
	 	
              By:

            	
            
	 	 	
              
                

              

              Authorized
                Officer

            

    

    
       

      
        
        

      

      
        K-2

        
          

        

      

      
        
        

      

    

    ANNEX
      1
      TO EXHIBIT K

     

    QUALIFIED
      INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

     

    [For
      Transferees Other Than Registered Investment Companies]

     

    The
      undersigned (the “Buyer”) hereby certifies as follows to the parties listed in
      the Rule 144A Transferee Certificate to which this certification relates with
      respect to the Certificates described therein:

     

    1.
       As
      indicated below, the undersigned is the President, Chief Financial Officer,
      Senior Vice President or other executive officer of the Buyer.

     

    2.
       In
      connection with purchases by the Buyer, the Buyer is a “qualified institutional
      buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as
      amended (“Rule 144A”) because (i) the Buyer owned and/or invested on a
      discretionary basis $ ______1 
      in
      securities (except for the excluded securities referred to below) as of the
      end
      of the Buyer’s most recent fiscal year (such amount being calculated in
      accordance with Rule 144A and (ii) the Buyer satisfies the criteria in the
      category marked below.

     

    ___ Corporation,
      etc.
      The
      Buyer is a corporation (other than a bank, savings and loan association or
      similar institution), Massachusetts or similar business trust, partnership,
      or
      charitable organization described in Section 501(c)(3) of the Internal Revenue
      Code of 1986, as amended.

     

    ___ Bank.
      The
      Buyer (a) is a national bank or banking institution organized under the laws
      of
      any State, territory or the District of Columbia, the business of which is
      substantially confined to banking and is supervised by the State or territorial
      banking commission or similar official or is a foreign bank or equivalent
      institution, and (b) has an audited net worth of at least $25,000,000 as
      demonstrated in its latest annual financial statements, a
      copy
      of which is attached hereto.

     

    ___ Savings
      and Loan.
      The
      Buyer (a) is a savings and loan association, building and loan association,
      cooperative bank, homestead association or similar institution, which is
      supervised and examined by a State or Federal authority having supervision
      over
      any such institutions or is a foreign savings and loan association or equivalent
      institution and (b) has an audited net worth of at least $25,000,000 as
      demonstrated in its latest annual financial statements, a
      copy
      of which is attached hereto.

     

    ___ Broker-dealer.
      The
      Buyer is a dealer registered pursuant to Section 15 of the Securities Exchange
      Act of 1934.

    
       

      
        

      

      1
        Buyer
        must own and/or invest on a discretionary basis at least $100,000,000 in
        securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
        invest on a discretionary basis at least $10,000,000 in securities.

       

      
        
          
          

        

        
          K-3

          
            

          

        

        
          
          

        

      

       

    

    ___ Insurance
      Company.
      The
      Buyer is an insurance company whose primary and predominant business activity
      is
      the writing of insurance or the reinsuring of risks underwritten by insurance
      companies and which is subject to supervision by the insurance commissioner
      or a
      similar official or agency of a State, territory or the District of
      Columbia.

     

    ___ State
      or Local Plan.
      The
      Buyer is a plan established and maintained by a State, its political
      subdivisions, or any agency or instrumentality of the State or its political
      subdivisions, for the benefit of its employees.

     

    ___ ERISA
      Plan.
      The
      Buyer is an employee benefit plan within the meaning of Title I of the Employee
      Retirement Income Security Act of 1974.

     

    ___ Investment
      Advisor.
      The
      Buyer is an investment advisor registered under the Investment Advisors Act
      of
      1940.

     

    ___ Small
      Business Investment Company.
      Buyer
      is a small business investment company licensed by the U.S. Small Business
      Administration under Section 301(c) or (d) of the Small Business Investment
      Act
      of 1958.

     

    ___ Business
      Development Company.
      Buyer
      is a business development company as defined in Section 202(a)(22) of the
      Investment Advisors Act of 1940.

     

    3.
       The
      term
“securities”
as
      used
      herein does
      not include
      (i)
      securities of issuers that are affiliated with the Buyer, (ii) securities that
      are part of an unsold allotment to or subscription by the Buyer, if the Buyer
      is
      a dealer, (iii) securities issued or guaranteed by the U.S. or any
      instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
      (v) loan participations, (vi) repurchase agreements, (vii) securities owned
      but
      subject to a repurchase agreement and (viii) currency, interest rate and
      commodity swaps.

     

    4.
       For
      purposes of determining the aggregate amount of securities owned and/or invested
      on a discretionary basis by the Buyer, the Buyer used the cost of such
      securities to the Buyer and did not include any of the securities referred
      to in
      the preceding paragraph, except (i) where the Buyer reports its securities
      holdings in its financial statements on the basis of their market value, and
      (ii) no current information with respect to the cost of those securities has
      been published. If clause (ii) in the preceding sentence applies, the securities
      may be valued at market. Further, in determining such aggregate amount, the
      Buyer may have included securities owned by subsidiaries of the Buyer, but
      only
      if such subsidiaries are consolidated with the Buyer in its financial statements
      prepared in accordance with generally accepted accounting principles and if
      the
      investments of such subsidiaries are managed under the Buyer’s direction.
      However, such securities were not included if the Buyer is a majority-owned,
      consolidated subsidiary of another enterprise and the Buyer is not itself a
      reporting company under the Securities Exchange Act of 1934, as
      amended.

     

    5.
       The
      Buyer
      acknowledges that it is familiar with Rule 144A and understands that the seller
      to it and other parties related to the Certificates are relying and will
      continue to rely on the statements made herein because one or more sales to
      the
      Buyer may be in reliance on Rule 144A.

     

    
      
        
        

      

      
        K-4

        
          

        

      

      
        
        

      

    

     

    6.
       Until
      the
      date of purchase of the Rule 144A Securities, the Buyer will notify each of
      the
      parties to which this certification is made of any changes in the information
      and conclusions herein. Until such notice is given, the Buyer’s purchase of the
      Certificates will constitute a reaffirmation of this certification as of the
      date of such purchase. In addition, if the Buyer is a bank or savings and loan
      is provided above, the Buyer agrees that it will furnish to such parties updated
      annual financial statements promptly after they become available.

    
      
         

      

      
        
          
            	 	 	 
	 	
                    
                      

                    

                    Print
                      Name of Transferee

                  
	 	 	 
	
                  	
                    By:

                  	 
	 	 	
                    

                  
	
                  	
                     

                  	
                    
                      Name:

                      
                        
 

                    

                  
	
                  	
                  	
                    
                      Title:

                      
                        
 

                    

                  
	 	 	
                    Date:

                    
                      
 

                  

 

        

      

    

    
      
        
        

      

      
        K-5

        
          

        

      

      
        
        

      

    

    ANNEX
      2
      TO EXHIBIT K

     

    QUALIFIED
      INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

     

    [For
      Transferees That are Registered Investment Companies]

     

    The
      undersigned (the “Buyer”) hereby certifies as follows to the parties listed in
      the Rule 144A Transferee Certificate to which this certification relates with
      respect to the Certificates described therein:

     

    1.
       As
      indicated below, the undersigned is the President, Chief Financial Officer
      or
      Senior Vice President of the Buyer or, if the Buyer is a “qualified
      institutional buyer” as that term is defined in Rule 144A under the Securities
      Act of 1933, as amended (“Rule 144A”) because Buyer is part of a Family of
      Investment Companies (as defined below), is such an officer of the
      Adviser.

     

    2.
       In
      connection with purchases by Buyer, the Buyer is a “qualified institutional
      buyer” as defined in SEC Rule 144A because (i) the Buyer is an investment
      company registered under the Investment Company Act of 1940, as amended and
      (ii)
      as marked below, the Buyer alone, or the Buyer’s Family of Investment Companies,
      owned at least $100,000,000 in securities (other than the excluded securities
      referred to below) as of the end of the Buyer’s most recent fiscal year. For
      purposes of determining the amount of securities owned by the Buyer or the
      Buyer’s Family of Investment Companies, the cost of such securities was used,
      except (i) where the Buyer or the Buyer’s Family of Investment Companies reports
      its securities holdings in its financial statements on the basis of their market
      value, and (ii) no current information with respect to the cost of those
      securities has been published. If clause (ii) in the preceding sentence applies,
      the securities may be valued at market.

     

    ___ The
      Buyer
      owned $ in securities (other than the excluded securities referred to below)
      as
      of the end of the Buyer’s most recent fiscal year (such amount being calculated
      in accordance with Rule 144A).

     

    ___ The
      Buyer
      is part of a Family of Investment Companies which owned in the aggregate $
      in
      securities (other than the excluded securities referred to below) as of the
      end
      of the Buyer’s most recent fiscal year (such amount being calculated in
      accordance with Rule 144A).

     

    3.
       The
      term
“Family
      of Investment Companies”
as
      used
      herein means two or more registered investment companies (or series thereof)
      that have the same investment adviser or investment advisers that are affiliated
      (by virtue of being majority owned subsidiaries of the same parent or because
      one investment adviser is a majority owned subsidiary of the
      other).

     

    4.
       The
      term
“securities”
as
      used
      herein does not include (i) securities of issuers that are affiliated with
      the
      Buyer or are part of the Buyer’s Family of Investment Companies, (ii) securities
      issued or guaranteed by the U.S. or any instrumentality thereof, (iii) bank
      deposit notes and certificates of deposit, (iv) loan participations, (v)
      repurchase agreements, (vi) securities owned but subject to a repurchase
      agreement and (vii) currency, interest rate and commodity swaps.

     

    
      
        
        

      

      
        K-6

        
          

        

      

      
        
        

      

    

     

    5.
       The
      Buyer
      is familiar with Rule 144A and understands that the parties listed in the Rule
      144A Transferee Certificate to which this certification relates are relying
      and
      will continue to rely on the statements made herein because one or more sales
      to
      the Buyer will be in reliance on Rule 144A. In addition, the Buyer will only
      purchase for the Buyer’s own account.

     

    6.
       Until
      the
      date of purchase of the Certificates, the undersigned will notify the parties
      listed in the Rule 144A Transferee Certificate to which this certification
      relates of any changes in the information and conclusions herein. Until such
      notice is given, the Buyer’s purchase of the Certificates will constitute a
      reaffirmation of this certification by the undersigned as of the date of such
      purchase.

     

     

     

    
      	
            	 
	 	
              
                

              

              Print
                Name of Transferee

            
	 	 	 
	 	
              By:

            	 

              

            
	 	
            	
              Name:

              
                
 

            
	 	
            	
              Title:

              
                
 

            
	 	 	 
	 	
              IF
                AN ADVISER:

            
	 	 
	 	
              
                

              

              Print
                Name of Buyer

            
	 	 	 
	 	
            	
              Date:

              
                
  

            

    

     

    
      
        
        

      

      
        K-7

        
          

        

      

      
        
        

      

    

    EXHIBIT
      L

     

    REQUEST
      FOR RELEASE

     

    [Substitution
      of Deleted Mortgage Loans

    or

    Mortgage
      Loans Paid in Full]

     

    ____________________________________
      Mortgage Loan Files

     

    _____________________
      hereby certifies that he/she is an officer of _____________________, holding
      the
      office set forth beneath his/her signature, and hereby further certifies as
      follows:

     

    (Check
      One)

     

    
      	
              o

            	
              With
                respect to the mortgage loans described in the attached schedule,
                each
                such mortgage loan constitutes a “Substitute Mortgage Loan” (as the term
                is defined in the Pooling and Servicing
                Agreement).

            

    

     

    
      	
              
                o

              

            	
              With
                respect to the “Mortgage Loans” (as the term is defined in the custodial
                agreement) described in the attached
                schedule:

            

    

     

    All
      payments of principal, premium (if any), and interest have been made with
      respect to the following:

     

    Loan
      Number: _________________________________

     

    Borrower’s
      Name: ______________________________

     

    County:
      ______________________________________

     

    We
      hereby
      certify that all amounts to be received in connection with such payments have
      been received.

     

    ______________________________

     

    Dated:
      ______________________

     

    / 
      / Vice President

     

    / 
/
      Assistant Vice President

    
       

      
        
          
          

        

        
          L-1

          
            

          

        

        
          
          

        

      

    

    EXHIBIT
      M

     

    REQUEST
      FOR RELEASE AND RECEIPT

    [For
      Servicing and Foreclosure]

     

    _____________________________________
      Mortgage Loan Files

     

    LOAN
      INFORMATION

     

    Name
      of
      Mortgagor:  __________________________________       

     

    Loan
      No.:
  __________________________________ 

     

    The
      undersigned hereby acknowledges that it has received from FIRST TENNESSEE BANK
      NATIONAL ASSOCIATION, as Custodian for ____________________ Mortgage Loan Files,
      the documents referred to below (the “Documents”). All capitalized terms not
      otherwise defined in this Request for Release and Receipt shall have the
      meanings ascribed to them in the Custodial Agreement dated as of
      __________________ among ___________________ and FIRST TENNESSEE BANK NATIONAL
      ASSOCIATION, as Custodian (the “Custodial Agreement”).

     

    [complete
      as necessary]

     

    The
      undersigned hereby acknowledges an agrees as follows:

     

    (1) The
      undersigned shall hold and retain possession of the Documents in trust for
      the
      benefit of __________________, solely for the purposes provided in the Custodial
      Agreement.

     

    (2) The
      undersigned shall not cause or permit the Documents to become subject to, or
      encumbered by, any claim, liens, security interest, charges, writs of attachment
      or other impositions nor shall the undersigned assert or seek to assert any
      claims or rights of setoff to or against the Documents or any proceeds
      thereof.

     

    (3) The
      undersigned shall return each and every Document previously requested from
      the
      Mortgage File to the Custodian when the need therefor no longer exists, unless
      the Mortgage Loan relating to the Documents has been liquidated.

     

    Date: _____________________  

     

    
      	 	NAME
	 	 	 
	 	
              By:

            	 
	 	 	
              

            
	 	
            	
              Name:

              
                
 

            
	 	
            	
              Title:

              
                
 

            

    

    

    
      
        
        

      

      
        M-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      N-1

     

    FORM
      OF
      ANNUAL CERTIFICATION

     

    (Subservicer)

     

    Re: First
      Horizon Alternative Mortgage Securities Trust 2007-FA2 (the “Trust”),
      Mortgage Pass-Through Certificates, Series 2007-FA2, issued pursuant to the
      Pooling and Servicing Agreement, dated as of March 1, 2007 (the “Pooling
      and Servicing Agreement”),
      among
      First Horizon Asset Securities Inc., as depositor (the “Depositor”),
      First
      Horizon Home Loan Corporation, as master servicer (the “Master Servicer”) and
      The Bank of New York, as trustee (the “Trustee”)

     

    I,
      [identify the certifying individual], a [title of certifying individual] of
      [name of company] (the “Company”), hereby certify to the Depositor, the Trustee,
      the Master Servicer, and their officers, directors and affiliates, and with
      the
      knowledge and intent that they will rely upon this certification,
      that:

     

    1. I
      have
      reviewed the servicer compliance statement of the Company provided in accordance
      with Item 1123 of Regulation AB (the “Compliance
      Statement”),
      the
      report on assessment of the Company’s compliance with the servicing criteria set
      forth in Item 1122(d) of Regulation AB (the “Servicing
      Criteria”),
      provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
      Act of 1934, as amended (the “Exchange
      Act”)
      and
      Item 1122 of Regulation AB (the “Servicing
      Assessment”),
      the
      registered public accounting firm’s attestation report provided in accordance
      with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
      Regulation AB (the “Attestation
      Report”),
      and
      all servicing reports, officer’s certificates and other information relating to
      the servicing of the Mortgage Loans by the Company during 200[ ] that were
      delivered by the Company to the [Depositor] [Master Servicer] [Trustee] pursuant
      to the Pooling and Servicing Agreement (collectively, the “Company
      Servicing Information”);

     

    2. Based
      upon my knowledge, the Company Servicing Information, taken as a whole, does
      not
      contain any untrue statement of a material fact or omit to state a material
      fact
      necessary to make the statements made, in light of the circumstances under
      which
      such statements were made, not misleading with respect to the period of time
      covered by the Company Servicing Information;

     

    3. Based
      on
      my knowledge, all of the Company Servicing Information required to be provided
      by the Company under the Pooling and Servicing Agreement has been provided
      to
      the [Depositor] [Master Servicer] [Trustee];

     

    4. I
      am
      responsible for reviewing the activities performed by the Company as a servicer
      under the Pooling and Servicing Agreement, and based on my knowledge and the
      compliance review conducted in preparing the Compliance Statement and except
      as
      disclosed in the Compliance Statement, the Servicing Assessment or the
      Attestation Report, the Company has fulfilled its obligations under the Pooling
      and Servicing Agreement in all material respects; and

     

    
      
        
        

      

      
        N-1-1

        
          

        

      

      
        
        

      

    

     

    5. The
      Compliance Statement required to be delivered by the Company pursuant to the
      Pooling and Servicing Agreement, and the Servicing Assessment and Attestation
      Report required to be provided by the Company and by any Subservicer or
      Subcontractor pursuant to the Pooling and Servicing Agreement, have been
      provided to the [Depositor] [Master Servicer]. Any material instances of
      noncompliance described in such reports have been disclosed to the [Depositor]
      [Master Servicer]. Any material instance of noncompliance with the Servicing
      Criteria has been disclosed in such reports.

     

    
      	 	
            	 
	 	
              Date:

            	 
	 	 	
              

            
	 	
            	
              
                

              

              [Signature]

              [Title]

            

    

     

    
      
        
        

      

      
        N-1-2

        
          

        

      

      
        
        

      

    

    EXHIBIT
      N-2

     

    FORM
      OF
      ANNUAL CERTIFICATION

     

    (Trustee)

     

    Re: First
      Horizon Alternative Mortgage Securities Trust 2007-FA2 (the “Trust”),
      Mortgage Pass-Through Certificates, Series 2007-FA2, issued pursuant to the
      Pooling and Servicing Agreement, dated as of March 1, 2007 (the “Pooling
      and Servicing Agreement”),
      among
      First Horizon Asset Securities Inc., as depositor (the “Depositor”),
      First
      Horizon Home Loan Corporation, as master servicer (the “Master Servicer”) and
      The Bank of New York, as trustee (the “Trustee”)

     

    I,
      [identify the certifying individual], a [title of certifying individual] of
      the
      Trustee, hereby certify to the Depositor, the Master Servicer, and their
      officers, directors and affiliates, and with the knowledge and intent that
      they
      will rely upon this certification, that:

     

    1. I
      have
      reviewed the report on assessment of the Trustee’s compliance with the servicing
      criteria set forth in Item 1122(d) of Regulation AB (the “Servicing
      Criteria”),
      provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
      Act of 1934, as amended (the “Exchange
      Act”)
      and
      Item 1122 of Regulation AB (the “Servicing
      Assessment”),
      and
      the registered public accounting firm’s attestation report provided in
      accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section
      1122(b) of Regulation AB (the “Attestation
      Report”)
      (collectively, the “Trustee
      Information”);

     

    2. Based
      upon my knowledge, the Trustee Information, taken as a whole, does not contain
      any untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances under
      which
      such statements were made, not misleading with respect to the period of time
      covered by the Trustee Information;

     

    3. Based
      on
      my knowledge, all of the Trustee Information required to be provided by the
      Trustee under the Pooling and Servicing Agreement has been provided to the
      [Depositor] [Master Servicer];

     

    4. I
      am
      responsible for reviewing the activities performed by the Trustee as trustee
      under the Pooling and Servicing Agreement, and based on my knowledge and the
      compliance review conducted in preparing the Compliance Statement and except
      as
      disclosed in the Servicing Assessment or the Attestation Report, the Trustee
      has
      fulfilled its obligations under the Pooling and Servicing Agreement in all
      material respects; and

     

    5. The
      Servicing Assessment and Attestation Report required to be provided by the
      Trustee pursuant to the Pooling and Servicing Agreement have been provided
      to
      the [Depositor] [Master Servicer]. Any material instances of noncompliance
      described in such reports have been disclosed to the [Depositor] [Master
      Servicer]. Any material instance of noncompliance with the Servicing Criteria
      has been disclosed in such reports.

     

    
      
        
        

      

      
        N-2-1

        
          

        

      

      
        
        

      

    

    
       

      
        	 	
              	 
	 	
                Date:

              	 
	 	 	
                

              
	 	
              	
                
                  

                

                [Signature]

                [Title]

              

      

       

    

    
      
        
        

      

      
        N-2-2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      O

     

    [FORM
      OF]
      SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
      STATEMENT

     

    The
      assessment of compliance to be delivered by [the Master Servicer] [Trustee]
      [Name of Subservicer] shall address, at a minimum, the criteria identified
      as
      below as “Applicable Servicing Criteria”:

     

    
      SERVICING
        CRITERIA 

    

     

    
      	
              Reference

            	 	
              Criteria

            	 	
              Responsible
                Party *

            
	 	 	
              General
                Servicing Considerations

            	 	 
	
              1122(d)(1)(i)

            	 	
              Policies
                and procedures are instituted to monitor any performance or other
                triggers
                and events of default in accordance with the transaction
                agreements.

            	 	
              Master
                Servicer

              Trustee

            
	 	 	 	 	 
	
              1122(d)(1)(ii)

            	 	
              If
                any material servicing activities are outsourced to third parties,
                policies and procedures are instituted to monitor the third party’s
                performance and compliance with such servicing activities.

            	 	
              Master
                Servicer

              Trustee

            
	 	 	 	 	 
	
              1122(d)(1)(iii)

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

            	 	
              N/A

            
	 	 	 	 	 
	
              1122(d)(1)(iv)

            	 	
              A
                fidelity bond and errors and omissions policy is in effect on the
                party
                participating in the servicing function throughout the reporting
                period in
                the amount of coverage required by and otherwise in accordance with
                the
                terms of the transaction agreements.

            	 	
              Master
                Servicer

            
	 	 	 	 	 
	 	 	
              Cash
                Collection and Administration

            	 	 
	 	 	 	 	 
	
              1122(d)(2)(i)

            	 	
              Payments
                on mortgage loans are deposited into the appropriate custodial bank
                accounts and related bank clearing accounts no more than two business
                days
                following receipt, or such other number of days specified in the
                transaction agreements.

            	 	
              Master/Sub
                Servicer (Certificate Account)

            
	 	 	 	 	 
	
              1122(d)(2)(ii)

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

            	 	
              Master
                Servicer

              Trustee

            

    

    

      *Unless
        otherwise agreed upon by the parties.

       

    

    
      
        
        

      

      
        O-1

        
          

        

      

      
        
        

      

    

    
      	
              1122(d)(2)(iii)

            	 	
              Advances
                of funds or guarantees regarding collections, cash flows or distributions,
                and any interest or other fees charged for such advances, are made,
                reviewed and approved as specified in the transaction
                agreements.

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(2)(iv)

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

            	 	
              Master/Sub
                Servicer

              Trustee

            
	 	 	 	 	 
	
              1122(d)(2)(v)

            	 	
              Each
                custodial account is maintained at a federally insured depository
                institution as set forth in the transaction agreements. For purposes
                of
                this criterion, “federally insured depository institution” with respect to
                a foreign financial institution means a foreign financial institution
                that
                meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
                Act.

            	 	
              Trustee
                (Distribution Account)*; Master/Sub Servicer (Certificate
                Account)

            
	 	 	 	 	 
	
              1122(d)(2)(vi)

            	 	
              Unissued
                checks are safeguarded so as to prevent unauthorized
                access.

            	 	
              N/A

            
	 	 	 	 	 
	
              1122(d)(2)(vii)

            	 	
              Reconciliations
                are prepared on a monthly basis for all asset-backed securities related
                bank accounts, including custodial accounts and related bank clearing
                accounts. These reconciliations are (A) mathematically accurate;
                (B)
                prepared within 30 calendar days after the bank statement cutoff
                date, or
                such other number of days specified in the transaction agreements;
                (C)
                reviewed and approved by someone other than the person who prepared the
                reconciliation; and (D) contain explanations for reconciling items.
                These
                reconciling items are resolved within 90 calendar days of their original
                identification, or such other number of days specified in the transaction
                agreements.

            	 	
              Master/Sub
                Servicer

              Trustee

            
	 	 	 	 	 
	 	 	
              Investor
                Remittances and Reporting

            	 	 
	 	 	 	 	 

    

    
      	
              1122(d)(3)(i)

            	 	
              Reports
                to investors, including those to be filed with the Commission, are
                maintained in accordance with the transaction agreements and applicable
                Commission requirements. Specifically, such reports (A) are prepared
                in
                accordance with timeframes and other terms set forth in the transaction
                agreements; (B) provide information calculated in accordance with
                the
                terms specified in the transaction agreements; (C) are filed with
                the
                Commission as required by its rules and regulations; and (D) agree
                with
                investors’ or the trustee’s records as to the total unpaid principal
                balance and number of mortgage loans serviced by the
                Servicer.

            	 	
              Trustee

            

    

    

      *Pending
        further clarification from the SEC.

       

    

    
      
        
        

      

      
        O-2

        
          

        

      

      
        
        

      

    

     

    
      	
              1122(d)(3)(ii)

            	 	
              Amounts
                due to investors are allocated and remitted in other terms set forth
                in
                the transaction agreements.

            	 	
              Master
                Servicer

              Trustee

            
	 	 	 	 	 
	
              1122(d)(3)(iii)

            	 	
              Disbursements
                made to an investor are posted within two business days to the Servicer’s
                investor records, or such other number of days specified in the
                transaction agreements.

            	 	
              Trustee

            
	 	 	 	 	 
	
              1122(d)(3)(iv)

            	 	
              Amounts
                remitted to investors per the investor reports agree with cancelled
                checks, or other form of payment, or custodial bank
                statements.

            	 	
              Trustee

            
	 	 	 	 	 
	 	 	
              Pool
                Asset Administration

            	 	 
	 	 	 	 	 
	
              1122(d)(4)(i)

            	 	
              Collateral
                or security on mortgage loans is maintained as required by the transaction
                agreements or related mortgage loan documents.

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(ii)

            	 	
              Mortgage
                loan and related documents are safeguarded as required by the transaction
                agreements.

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(iii)

            	 	
              Any
                additions, removals or substitutions to the asset pool are made,
                reviewed
                and approved in accordance with any conditions or requirements in
                the
                transaction agreements.

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(iv)

            	 	
              Payments
                on mortgage loans, including any payoffs, made in accordance with
                the
                related mortgage loan documents are posted to the Servicer’s obligor
                records maintained no more than two business days after receipt,
                or such
                other number of days specified in the transaction agreements, and
                allocated to principal, interest or other items (e.g., escrow) in
                accordance with the related mortgage loan documents.

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(v)

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

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(vi)

            	 	
              Changes
                with respect to the terms or status of an obligor’s mortgage loans (e.g.,
                loan modifications or re-agings) are made, reviewed and approved
                by
                authorized personnel in accordance with the transaction agreements
                and
                related pool asset documents.

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 

    

    
      	
              1122(d)(4)(vii)

            	 	
              Loss
                mitigation or recovery actions (e.g., forbearance plans, modifications
                and
                deeds in lieu of foreclosure, foreclosures and repossessions, as
                applicable) are initiated, conducted and concluded in accordance
                with the
                timeframes or other requirements established by the transaction
                agreements

            	 	
              Master/Sub
                Servicer

            

    

     

    
      
        
        

      

      
        O-3

        
          

        

      

      
        
        

      

    

     

    
      	
              1122(d)(4)(viii)

            	 	
              Records
                documenting collection efforts are maintained during the period a
                mortgage
                loan is delinquent in accordance with the transaction agreements.
                Such
                records are maintained on at least a monthly basis, or such other
                period
                specified in the transaction agreements, and describe the entity’s
                activities in monitoring delinquent mortgage loans including, for
                example,
                phone calls, letters and payment rescheduling plans in cases where
                delinquency is deemed temporary (e.g., illness or
                unemployment).

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(ix)

            	 	
              Adjustments
                to interest rates or rates of return for mortgage loans with variable
                rates are computed based on the related mortgage loan
                documents.

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(x)

            	 	
              Regarding
                any funds held in trust for an obligor (such as escrow accounts):
                (A) such
                funds are analyzed, in accordance with the obligor’s mortgage loan
                documents, on at least an annual basis, or such other period specified
                in
                the transaction agreements; (B) interest on such funds is paid, or
                credited, to obligors in accordance with applicable mortgage loan
                documents and state laws; and (C) such funds are returned to the
                obligor
                within 30 calendar days of full repayment of the related mortgage
                loans,
                or such other number of days specified in the transaction
                agreements.

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(xi)

            	 	
              Payments
                made on behalf of an obligor (such as tax or insurance payments)
                are made
                on or before the related penalty or expiration dates, as indicated
                on the
                appropriate bills or notices for such payments, provided that such
                support
                has been received by the servicer at least 30 calendar days prior
                to these
                dates, or such other number of days specified in the transaction
                agreements.

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(xii)

            	 	
              Any
                late payment penalties in connection with any payment to be made
                on behalf
                of an obligor are paid from the servicer’s funds and not charged to the
                obligor, unless the late payment was due to the obligor’s error or
                omission.

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(xiii)

            	 	
              Disbursements
                made on behalf of an obligor are posted within two business days
                to the
                obligor’s records maintained by the servicer, or such other number of days
                specified in the transaction agreements.

            	 	
              Master/Sub

              Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(xiv)

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

            	 	
              Master/Sub
                Servicer

            
	 	 	 	 	 
	
              1122(d)(4)(xv)

            	 	
              Any
                external enhancement or other support, identified in Item 1114(a)(1)
                through (3) or Item 1115 of Regulation AB, is maintained as set forth
                in
                the transaction agreements.

            	 	
              Trustee*;

              Master/Sub
                Servicer

            

    

    

      *Solely
        with respect to disbursements to the enhancement provider required by the
        transaction documents.

       

    

    
      
        
        

      

      
        O-4

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              [NAME
                OF MASTER SERVICER] [NAME OF TRUSTEE] [NAME OF CO-TRUSTEE]
                [SUBSERVICER]

            
	 	 
	 	
              Date:

            	 
	 	 	 
	 	By:	 
	 	 	 

              

            
	 	
            	
              Name: 

              
                
 

            
	 	
            	
              Title: 

              
                
 

            

    

     

    
      
        
        

      

      
        O-5

        
          

        

      

      
        
        

      

    

    EXHIBIT
      P

     

    FORM
      OF
      LIST OF ITEM 1119 PARTIES

    FIRST
      HORIZON ALTERNATIVE MORTGAGE SECURITIES TRUST 200_-___

     

    Mortgage
      Pass-Through Certificates,

    Series
      200__-___

     

    
      	
              Party

            	 	
              Contact
                Information

            

    

     

    
      
        
        

      

      
        P-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      Q

     

    FORM
      OF
      SARBANES-OXLEY CERTIFICATION

    (Replacement
      of the Master Servicer) 

     

    I,
      [identify the certifying individual], a [title of certifying individual] of
      First Horizon Home Loan Corporation (the “Company”),
      hereby certify that:

     

    1. I
      have
      reviewed the report on Form 10-K and all reports on Form 10-D required to be
      filed in respect of the period covered by this report on Form 10-K of First
      Horizon Alternative Mortgage Trust 2007-FA2 (the “Exchange
      Act Reports”);

     

    2. Based
      upon my knowledge, the Exchange Act Reports, taken as a whole, do not contain
      any untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances under
      which
      such statements were made, not misleading with respect to the period covered
      by
      this report;

     

    3. Based
      on
      my knowledge, all of the distribution, servicing and other information required
      to be provided under Form 10-D for the period covered by this report is included
      in the Exchange Act Reports;

     

    4. I
      am
      responsible for reviewing the activities performed by the Company as master
      servicer under the Pooling and Servicing Agreement and, based on my knowledge
      and the compliance review(s) conducted in preparing the servicer compliance
      statement(s) required in this report under Item 1123 of Regulation AB (the
      “Compliance
      Statements”),
      and
      except as disclosed in the Exchange Act Reports, the Company has fulfilled
      its
      obligations as master servicer under the Pooling and Servicing Agreement; and
      

     

    5. All
      of
      the reports on assessment of compliance with servicing criteria for asset-backed
      securities and their related attestation reports on assessment of compliance
      with servicing criteria for asset-backed securities required to be included
      in
      this report in accordance with Item 1122 of Regulation AB and Exchange Act
      Rules
      13a-18 and 15d-18 have been included as an exhibit to this report, except as
      otherwise disclosed in this report. Any material instances of noncompliance
      described in such reports have been disclosed in this report on Form 10-K.
      [In
      giving the certifications above, I have reasonably relied on information
      provided to me by the following unaffiliated parties [name of servicer,
      sub-servicer, co-servicer, depositor or trustee].

    
      
         

        
          	 	
                	 
	 	
                  Date:

                	 
	 	 	
                  

                
	 	
                	
                  
                    

                  

                  [Signature]

                  [Title]

                

        

         

      

    

    
      
        
        

      

      
        Q-1

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