Document:

Exhibit 10.18

EMPLOYMENT AGREEMENT

          THIS AGREEMENT (“Agreement”) is made and entered into as of January 8, 2007 (the “Effective Date”), by and between Steven R. Norton (the “Executive”) and MERGE TECHNOLOGIES INCORPORATED, a Wisconsin corporation (the “Company”).

R E C I T A L S:

          A.     The Company is engaged in the provision of medical diagnostic imaging software and professional services for healthcare facilities and medical equipment manufacturers. The business in which the Company is engaged in from time-to-time during the term of this Agreement, inclusive of new lines of business, if any, are hereinafter collectively referred to as the “Business”; and

          B.     The Company desires to employ the Executive and the Executive desires to accept such employment;

A G R E E M E N T:

                    NOW THEREFORE, in consideration of the foregoing Recitals, as well as the promises, mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive do hereby agree as follows:

                    1.      Employment and Duties. On the terms and subject to the conditions set forth in this Agreement, the Company agrees to employ the Executive as its Executive Vice President and Chief Financial Officer (and principal financial and accounting officer for SEC purposes) to perform such duties as are consistent with such position(s) as may be assigned, from time to time, by the Board of Directors (the “Board”), the Audit Committee of the Board (the “Audit Committee”), or the Chief Executive Officer of the Company and to render such additional services and discharge such other responsibilities as the Board, the Audit Committee, or Chief Executive Officer may, from time to time, stipulate consistent with such senior management position. During the first year of employment, the
Executive’s principal place of employment shall be the Company’s current corporate headquarters in Milwaukee, Wisconsin, or at one of the Company’s other offices as mutually agreed between Executive and the Chief Executive Officer.

                    2.      Performance. The Executive accepts the employment described in Section 1 of this Agreement and agrees to devote substantially all of his/her working time and efforts to the faithful and diligent performance of the services described herein, including the performance of such other services and responsibilities as the Board, the Audit Committee or the Chief Executive Officer may, from time to time, stipulate consistent with such senior management position.

                    3.      Term. The term of Executive’s employment with the Company under this Agreement shall commence January 8, 2007 (“Start Date”). The term of employment shall remain in effect until and unless terminated in accordance with the terms and conditions set forth in this Agreement. The period of time in which Executive is employed shall constitute the “Employment Period,” and each calendar year or portion of a calendar year during the Employment Period is hereinafter sometimes referred to as a “Year.” The Board or appropriate committee thereof will review the terms and conditions of this Employment Agreement at its sole discretion, but no less frequently than once every three (3) years subsequent to the Effective Date.

                    4.      Salary. For all the services to be rendered by the Executive hereunder, commencing on the Start Date, the Company agrees to pay a salary of no less than Three Hundred Thousand, U.S. Dollars (U.S. $300,000) per year, payable in the manner and frequency in which the Company’s payroll is customarily handled, which amount shall be subject to annual review and possible adjustment as provided in Section 5, below (“Salary”).

                    5.      Bonus. The Executive shall be eligible for an annual performance bonus targeted at sixty percent (60%) of Salary, with the exact amount paid dependent on achievement of defined Company and individual performance targets. As an Executive Officer of the Company, adjustments to the Executive’s compensation package, including Salary, annual bonus and annual stock option awards, will be recommended annually by the Company’s Chief Executive Officer and subject to approval of the Board or appropriate committee thereof. For each Year the annual performance bonus is to be paid, it shall be paid within thirty (30) days of the completion of the year-end financial statements for that Year, but in no event later than May 31 of the following year. The Chief Executive Officer, subject to approval of the
Board or appropriate committee thereof, may change the bonus target annually and any dispute as to whether Executive met the performance targets for a Year shall be determined conclusively by the Chief Executive Officer and Compensation Committee of the Board (the “Compensation Committee”). Such determination will be communicated in writing to the Executive by the Chief Executive Officer or the Compensation Committee.

                    6.      Paid Time Off. The Executive shall be entitled to paid time off for vacation, illness, holidays and personal reasons in accordance with the Company’s paid time off policy at the rate generally offered to other executives of the Company, provided that Executive’s paid vacation shall be no less than twenty (20) days per calendar year.

                    7.      Disability Benefit. If at any time during the Employment Period the Executive is unable to perform fully the material and substantial duties of the Executive’s regular job position hereunder by reason of illness, accident, or other disability (as confirmed by competent medical evidence by a physician selected by the Executive Committee of the Board), the Executive shall be entitled to receive periodic payments of Salary, bonus and any and all benefits to which he would otherwise be entitled pursuant to Section 4, 5, 6, 8, 10 and 11 of this Agreement by reason of his employment for a period of ninety (90) days. If the Executive is prevented by reason of any illness, accident or other disability from performing the material and substantial duties of his regular job position for a period of
180 days, whether or not consecutive, in any twelve (12) month period which, in the opinion of a physician selected by the Compensation Committee, is likely to continue to the same degree, he will be considered to be suffering from a Disability (“Disability”). Notwithstanding the foregoing provisions, (i) the amounts payable to the Executive pursuant to this Section 7 shall be reduced by any amounts received by the Executive with respect to any such incapacity pursuant to any insurance policy, plan, or other employee benefit provided to the Executive by the Company; and (ii) in no event will the terms of this Agreement supersede any health or disability benefit to which Executive is entitled under applicable law.

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                    8.      Stock Options. Executive may be granted stock options at various future dates on an annual or other basis upon recommendation by the Chief Executive Officer and approval by the Board or the Compensation Committee. Conditioned upon the execution of this Agreement, the Compensation Committee has approved a grant to the Executive under the Company’s 2005 Equity Incentive Plan, of an option to purchase 225,000 shares of the Company’s Common Stock, such option to be issued as of the date of the dissemination of the press release announcing the appointment of Executive as the Company’s CFO (the “Release Date”), to vest in 48 equal monthly portions on each monthly anniversary of the Release Date, and to have an exercise price equal to the closing price of the Company’s
Common Stock on the Release Date.

                    9.      Change in Control. Upon a “Change in Control” of the Company (as defined below), all of the Executive’s then-outstanding and non-exercised options will immediately vest and become exercisable. If a Change in Control occurs and in the event of the Executive’s “Separation From Service” (as defined in Section 409A of the Internal Revenue Code of 1986 as amended, and any regulations thereunder) with the Company due to: (i) the involuntary termination of his employment within 365 days following the Change in Control; or (ii) his voluntarily terminating his employment with the Company within 365 days, following either: (a) any substantial and continuing reduction in Executive’s responsibilities or authority with respect to the Company; (b) a reduction in
Executive’s compensation package, including Salary, in effect immediately prior to the Change in Control; or (c) the Executive is required to change the location of his principal place of employment more than 20 miles from Executive’s current residence, then the Executive will be entitled to receive the greater of: (I) any minimum severance payments required under applicable federal, state and local law; or (II) all of the following: (A) his then-current Salary for twelve additional months, as a Change in Control allowance, to be paid pursuant to the Company’s standard payroll policies; (B) an amount equal to the product of (x) one-twelfth of the maximum amount of the Executive’s then-current annual bonus set forth in Section 5, determined without regard to the achievement of performance targets, multiplied by (y) the sum of twelve (12) plus the number of months of the current plan year during which the Executive was employed, to be paid in a single payment concurrently with
the Executive’s final payment of the Change in Control allowance; and (C) a continuation of the welfare benefits of health care, life and accidental death and dismemberment, and disability insurance coverage (collectively, “Supplemental Benefits”) for twelve (12) months after the effective date of his Separation From Service. These benefits shall be provided at the same cost to the Executive (if any), and at the same coverage level, as in effect as of the effective date of Executive’s Separation From Service. However, in the event the premium cost and/or level of coverage shall change for all management employees with respect to Supplemental Benefits, the cost and/or coverage level, likewise, shall change for the Executive in a corresponding manner. The continuation of Supplemental Benefits shall be discontinued in the event Executive has available substantially similar welfare benefits at a comparable cost from a subsequent employer. For the purposes of this Section
9, “Change in Control” of the Company shall mean (i) a change in the ownership of stock of the Company having fifty percent (50%) or more of the voting power, in a single transaction or series of transactions effected by a third party or third parties acting in concert, or (ii) a change of fifty percent (50%) or more of the members of the Board in a single transaction or series of transactions effected by any third party or third parties acting in concert, other than pursuant to nomination of a new slate of directors where there has been no material change in beneficial ownership of the Company’s voting stock within 365 days preceding such nomination or a sale of substantially all of the Company’s assets.

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                    10.     Other Benefits. Except as otherwise specifically provided herein, during the Employment Period, the Executive shall be eligible for all non-wage benefits the Company provides generally for its executive employees.

	
  
 
  	
  
          11.     Business   Expenses.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)     Reimbursement.   The Company shall reimburse the Executive for the reasonable, ordinary, and   necessary business expenses incurred by him in connection with the   performance of his duties hereunder, including, but not limited to, ordinary   and necessary travel expenses and entertainment expenses and mobile phone   expenses.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)     Accounting.   The Executive shall provide the Company with an accounting of his expenses,   which accounting shall clearly reflect which expenses are reimbursable by the   Company. The Executive shall provide the Company with such other supporting   documentation and other substantiation of reimbursable expenses as will   conform to Internal Revenue Service or other requirements. All such   reimbursements shall be payable by the Company to the Executive promptly   after receipt by the Company of appropriate documentation therefor.
  

                    12.     Termination. This Agreement may be terminated by the Company or the Board or appropriate committee thereof at any time for the following reasons:

	
  
 
  	
  
          (a)     For Cause, by   written notice to the Executive. “Cause” shall mean termination for gross   negligence, commission of a felony or material violation of any Company   policies;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)     In the event of   the death of the Executive;
  

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          (c)     Upon the   Executive’s resignation or retirement from employment with the Company (this   clause shall not be construed as an agreement to employ the Executive for a   defined term), upon thirty (30) days advance written notice to the Company;
  
	
   
  	
  
 
  
	
  
 
  	
  
          (d)     In the event of   the Disability of the Executive as defined in Section 7 of this   Agreement, subject to the Company discharging its duty to accommodate under   applicable law, by written notice to the Executive;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)     By the Executive   upon written notice of the occurrence of “Good Reason,” which shall   be defined to include only:
  

	
  
 
  	
  
a.
  	
  
constructive   termination;
  
	
  
 
  	
  
b.
  	
  
a   material reduction in Salary or target bonus percentage (%);
  
	
   
  	
  
c.
  	
  
the   Executive is required to change the location of his principal place of   employment to more than 20 miles from Executive’s current residence; or
  
	
  
 
  	
  
d.
  	
  
a   material reduction in responsibility; or
  

	
  
 
  	
  
          (f)     Without Cause   for any reason other than as set forth above in Subsection 12 (a), (b),   (c), (d) or (e) by written notice to the Executive.
  

If this Agreement is terminated pursuant to this Section 12, the Executive shall be deemed to have incurred a Separation From Service with the Company.

                    13.     Severance. In the event of the Executive’s Separation From Service with the Company pursuant to Subsection 12 (d), (e) or (f), the Company shall pay the Executive, as a severance allowance, the greater of (I) any minimum severance payments required under applicable federal, state and local common law; or (II) all of the following: (A) an amount equal to twelve (12) months of his then-current Salary plus (B) the product of (i) one-twelfth of the Executive’s maximum amount of bonus in effect for the then-current year times (ii) the sum of the number of months of the current plan year during which the Executive was employed plus an additional twelve (12) months and (C) a continuation of Supplemental Benefits for twelve (12) months after the effective date of the Executive’s
Separation From Service. These benefits shall be provided at the same cost to the Executive (if any), and at the same coverage level, as in effect as of the effective date of the Executive’s Separation From Service. However, in the event the premium cost and/or level of coverage shall change for all management employees with respect to Supplemental Benefits, the cost and/or coverage level, likewise, shall change for the Executive in a corresponding manner. The amount of the severance allowance provided for in subsections (A) and (B) of this Section 13 shall be paid out in equal installments over the severance period. Notwithstanding anything to the contrary contained herein, in the event the Executive receives (pursuant to the operation of Section 9, above) severance benefits following the Executive’s Separation From Service with the Company after a Change in Control of the Company, then Executive shall not be entitled to any payment of a severance allowance pursuant to
this Section 13. If the Executive is not entitled severance benefits pursuant to Section 9, then the Executive shall continue to be eligible for a severance allowance per this Section 13.

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                    14.     Surrender of Properties. Upon termination of the Executive’s employment with the Company, regardless of the cause therefor, the Executive shall promptly surrender to the Company all property provided him by the Company for use in relation to his employment, and, in addition, the Executive shall surrender to the Company any and all confidential sales materials, lists of customers and prospective customers, price lists, files, patent applications, records, models, or other materials and information of or pertaining to the Company or its customers or prospective customers or the products, Business, and operations of the Company in his possession.

	
  
 
  	
  
          15.     Inventions.   Except as otherwise provided in this Section 15 the Executive:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)     shall   hold in a fiduciary capacity for the benefit of the Company all secret or   confidential information, knowledge, or data of the Company or its Business   or production operations obtained by the Executive during his employment by   the Company, which shall not be generally known to the public or recognized   as standard practice (whether or not developed by the Executive);
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)     shall   promptly disclose to the Company all inventions, ideas, devices, and   processes made or conceived by him alone or jointly with others, from the   time of entering the Company’s employ until such employment is terminated,   relevant or pertinent in any way, whether directly or indirectly, to the   Company’s Business or production operations or resulting from or suggested by   any work which he may have done for the Company or at its request;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)     shall,   at all times during his employment with the Company, assist the Company   (entirely at the Company’s expense) to obtain and develop for the Company’s   benefit patents on such inventions, ideas, devices and processes, whether or   not patented; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)     shall   do all such acts and execute, acknowledge and deliver all such instruments as   may be necessary or desirable in the opinion of the Company to vest in the Company   the entire interest in such inventions, ideas, devices, and processes   referred to above.
  

          The foregoing
to the contrary notwithstanding, the Executive shall not be required to assign
or offer to assign to the Company any of the Executive’s rights in any
invention for which no equipment, supplies, facility, or trade secret
information of the Company was used and which was developed entirely on the
Executive’s own time, unless: (A) the invention related to (i) the
Business; or (ii) the Company’s actual or demonstrably anticipated (with
the realistic prospect of occurring) research or development; or (B) the
invention results from any work performed by the Executive for the Company. The
Executive acknowledges his prior receipt of written notification of the
limitation set forth in the preceding sentence on the Executive’s
obligation to assign or offer to assign to the Company the Executive’s
rights in inventions.

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          16.     Confidentiality   of Information: Duty of Non-Disclosure.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)     The   Executive acknowledges and agrees that his employment by the Company under   this Agreement necessarily involves his understanding of and access to   certain trade secrets and confidential information pertaining to the Business   of the Company. Accordingly, the Executive agrees that after the Effective   Date at all times he will not, directly or indirectly, without the express   consent of the Company, disclose to or use for the benefit of any person,   corporation or other entity, or for himself any and all files, trade secrets   or other confidential information concerning the internal affairs of the   Company, including, but not limited to, information pertaining to its   customers, prospective customers, services, products, earnings, finances,   operations, methods or other activities, provided, however, that the   foregoing shall not apply to information which
is of public record or is   generally known, disclosed or available to the general public or the industry   generally, or known by Executive prior to his employment with the Company.   Further, the Executive agrees that he shall not, directly or indirectly,   remove or retain, without the express prior written consent of the Company,   and upon termination of this Agreement for any reason shall return to the   Company, any confidential figures, calculations, letters, papers, records,   computer disks, computer print-outs, lists, documents, instruments, drawings,   designs, programs, brochures, sales literature, or any copies thereof, or any   information or instruments derived therefrom, or any other similar information   of any type or description, however such information might be obtained or   recorded, arising out of or in any way relating to the Business of the   Company or obtained as a result of his employment by the Company. The   Executive acknowledges that all of the foregoing are
proprietary information,   and are the exclusive property of the Company. The covenants contained in   this Section 16 shall survive the termination of this Agreement for up   to two years, and shall apply to Executive everywhere in the United States   and Canada. Nothing in this Section 16 is intended to, nor does it,   limit Executive’s ability to be employed by another after his employment with   the Company ends; those limitations are contained in Section 17).
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)     Notwithstanding   the above, nothing in this Section 16 shall limit Executive’s duties   or obligations to comply with any applicable state’s trade secret laws.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)     The   Executive agrees and acknowledges that the Company does not have any adequate   remedy at law for the breach or threatened breach by the Executive of his   covenant, and agrees that the Company shall be entitled to injunctive relief   to bar the Executive from such breach or threatened breach in addition to any   other remedies which may be available to the Company at law or in equity.
  

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          17.     Covenant   Not to Compete.
  
	
  
 
  	
  
 
  
	
   
  	
  
          (a)     During   Employment Period. During the Employment Period, the Executive shall not,   without the prior written consent of the Company, which consent may be   withheld at the sole and reasonable discretion of the Company, engage in any   other business activity for gain, profit, or other pecuniary advantage   (excepting the investment of funds in such form or manner as will not require   any services on the part of the Executive in the operation of the affairs of   the companies in which such investments are made) or engage in or in any   manner be connected or concerned, directly or indirectly, whether as an   officer, director, stockholder, partner, owner, employee, creditor, manager,   or otherwise, with the operation, management, or conduct of any business that   competes with the Business.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)     Following Termination of Employment
Period. Within the twelve (12) month period immediately following the end of
the Employment Period, regardless of the reason therefore, the Executive shall
not, without the Company’s prior written consent, which consent may be
withheld in the Company’s sole and reasonable discretion, provide the same
or similar services as provided to the Company to another entity or person
within the United States or Canada that is engaged in a business similar to the
Business being conducted at the time of such termination.
 
	
  
 
  	
  
 
  
	
  
 
  	
  
          18.     Covenant Not to   Deal or Solicit.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (a)     During   Employment Period. During the Employment Period, the Executive   shall not, without the Company’s prior written consent, which consent may be   withheld in the Company’s sole and reasonable discretion, directly or   indirectly, solicit, contact, interfere with, or divert any Customer of the   Company (as defined below) or any of its affiliates or subsidiaries for the   purpose of selling to those Customers any products or services whatsoever.   For the purposes of this Section 18: a “Customer” shall mean any   person who has purchased services or products from the Company, its   Affiliates or subsidiaries, during any time during the Employment Period or,   to the knowledge of the Executive, at any time prior to the Employment   Period; and “Affiliates” shall mean entities controlling, controlled by   or
under common control with the Company.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)     Following   Termination of Employment Period. Within the twelve (12) month period   immediately following the end of the Employment Period, regardless of the   reason therefore, the Executive shall not, without the prior written consent   of the Company, which consent may be withheld at the sole and reasonable   discretion of the Company, engage in any of the following:
  

	
  
 
  	
  
(i)
  	
  
contact   or solicit any Customer of the Company or any of its Affiliates or   subsidiaries for the purposes of selling to those Customers any product or   services which are the same as, or substantially similar to, or competitive   with, products or services sold by the Company or any of its Affiliates or   subsidiaries as of the end of the Employment Period;
  

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(ii)
  	
  
transact   any business with any Customer of the Company or any of its Affiliates or   subsidiaries with respect to any product or services which are the same as,   or substantially similar to, or competitive with, products or services sold   by the Company or any of its Affiliates or Subsidiaries as of the end of the   Employment Period; or
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
(iii)
  	
  
directly   solicit any employee then employed by the Company or any of its Affiliates or   subsidiaries, or previously employed by any such company within the one-year   period preceding the end of the Employment Period, to join the Executive,   whether as an officer, director, stockholder, partner, owner, employee,   manager, or otherwise, in any enterprise engaged in a business similar to the   Business being conducted at the time of such termination.
  

	
  
 
  	
  

          19.     General
Provisions.
 
	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)     Goodwill.   The Company has invested substantial time and money in the development of its   products, services, territories, advertising and marketing thereof,   soliciting clients and creating goodwill. By accepting employment with the   Company, the Executive acknowledges that the Customers are the customers of   the Company and that any goodwill created by the Executive belongs to and   shall inure to the benefit of the Company.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)     Acknowledgment.   The Executive acknowledges that the restrictions set forth in Sections 17   and 18 are reasonable in scope and essential to the preservation of the   Business and proprietary properties that belong to the Company and that the   enforcement thereof will not in any manner preclude the Executive, in the   event of the Executive’s termination of employment with the Company, from   becoming gainfully employed in such manner and to such extent as to provide a   standard of living for himself, the members of his family, and those   dependent upon him of at least the sort and fashion to which he and they have   become accustomed and may expect.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)     Severability. The covenants   of the Executive contained in Sections 16, 17 and 18 of this Agreement   shall each be construed as an agreement independent of any other provision in   this Agreement, and the existence of any claim or cause of action of the   Executive against the Company, whether predicated on this Agreement or   otherwise, shall not constitute a defense to the enforcement by the Company   of such covenants. In the event that any part of any covenant of this   Agreement is determined by a court of law to be overly broad thereby making   the covenant unenforceable, the parties hereto agree, and it is their desire,   that such court shall, to the extent permitted, substitute a judicially   enforceable limitation in its place, and that as so modified, the covenant   shall be binding upon the parties as if originally set forth herein.
Additionally, both parties hereby expressly agree and contract that it is not   the intention of either party to violate any public policy, or statutory or   common law, and that if any provision of this Agreement shall, for any   reason, be held unenforceable and a court is not permitted to substitute a   judicially enforceable limitation in its place, such provision shall be   severed from this Agreement unless, as a result of such severance, the   Agreement fails to reflect the basic intent of the parties. If the Agreement   continues to reflect the basic intent of the parties, then the invalidity of   such specific provision shall not affect the enforceability of any other   provision herein, and the remaining provisions shall remain in full force and   effect.
  

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         (d)     Notices.   Any notice required or permitted hereunder shall be made in writing (i)   either by actual delivery of the notice into the hands of the party   thereunder entitled, or (ii) by depositing the notice with a nationally   recognized overnight delivery service, all shipping costs prepaid and   addressed to the party to whom the notice is to be given, at the party’s   respective address set forth below, or such other address as the parties may   from time to time designate by written notice as herein provided.
  

	
  
 
  	
  
As addressed to the Company:
  	
  
With a copy to:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
Merge   Technologies Incorporated
  	
  
Merge   Technologies Incorporated
  	
  
 
  
	
  
 
  	
  
6737   W. Washington Street
  	
  
6737   W. Washington Street
  	
  
 
  
	
  
 
  	
  
Milwaukee,   Wisconsin 53214-5650
  	
  
Milwaukee,   Wisconsin 53214-5650
  	
  
 
  
	
  
 
  	
  
Attention:   Chief Executive Officer
  	
  
Attention:   General Counsel
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
As addressed to the Executive:
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
Steven   R. Norton, at the home address on record with the Company
  	
  
 
  	
  
 
  

	
  
 
  	
  
The notice shall be deemed to be received on the date of its actual delivery to the address of the party entitled thereto.
 
	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)     Amendment   and Waiver. No amendment or modification of this Agreement shall be valid   or binding upon the Company unless made in writing and signed by an officer   of the Company duly authorized by the Board or upon the Executive unless made   in writing and signed by him. The waiver by the Company of the breach of any   provision of this Agreement by the Executive shall not operate or be   construed as a waiver of any subsequent breach by him.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)     Entire   Agreement. This Agreement constitutes the entire Agreement between the   parties with respect to the Executive’s duties and compensation as an   executive of the Company, and there are no representations, warranties,   agreements or commitments between the parties hereto with respect to his   employment except as set forth herein. No presumption shall be made in favor   or against either party based upon who has served as draftsman of this   Agreement.
  

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          (g)     Governing   Law. This Agreement shall be governed by and construed in accordance with   the internal laws (and not the law of conflicts) of the State of Wisconsin.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (h)     Assignment.   The Executive may not under any circumstances assign any of his rights or   delegate any of his obligations hereunder without first obtaining the prior   written consent of the Company. This Agreement and all of the Company’s   rights and obligations hereunder may be assigned or transferred by it, in   whole or in part, to be binding upon and inure to the benefit of any parent,   subsidiary or successor of the Company, provided either the successor has a   net worth greater than the Company at the time of assignment or the Company   remains primarily liable with respect to the obligations so assigned.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (i)     Costs   of Enforcement, Litigation. In the event of any suit or proceeding   seeking to enforce the terms, covenants, or conditions of this Agreement, the   prevailing party shall, in addition to all other remedies and relief that may   be available under this Agreement or applicable law, recover his or its   reasonable attorneys’ fees and costs as shall be determined and awarded by   the court. Any controversy or dispute with respect to the terms of Section   14, 15, 16, 17 or 18 of this Agreement will survive termination of this   Agreement and shall be litigated in the state or federal courts of competent   jurisdiction situated in Milwaukee, Wisconsin or Atlanta, Georgia, to which   jurisdiction and venue all parties consent.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (j)     Mitigation.   The Executive shall not be obligated to seek other employment in mitigation   of the amounts payable under this Agreement, and the obtaining of any such   other employment shall in no event effect any reduction of the Company’s   obligations to make payments hereunder. Notwithstanding the foregoing, if   Executive receives the payments described in Section 9 by terminating   his employment following a Change in Control and Executive subsequently   becomes re-employed by the Company or by the party or parties effecting the   Change in Control, the amounts earned on re-employment (up to a period of one   year’s compensation) shall be repaid to the Company.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          20.     Executive   Acknowledgement. The Executive acknowledges that:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)     the   Executive has had sufficient time to review this Employment Agreement   thoroughly;
  
	
  
 
  	
  
 
  
	
   
  	
  
          (b)     the   Executive has read and understands the terms of this Employment Agreement and   the obligations hereunder;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)     the   Executive has received good and adequate consideration for entering into this   Employment Agreement; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)     the   Executive has been given an opportunity to obtain independent legal advice   concerning the interpretation and effect of this Employment Agreement.
  

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          IN WITNESS WHEREOF, the Company and
the Executive have entered into this Agreement as of the Effective
Date.

	
   
  	
  
COMPANY:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
MERGE TECHNOLOGIES INCORPORATED
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/   Kenneth D. Rardin
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
Kenneth   D. Rardin
  
	
   
  	
  
 
  	
  
President   and Chief Executive Officer
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
EXECUTIVE:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/   Steven R. Norton
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
Steven   R. Norton
  

12HSI ASSET SECURITIZATION CORPORATION,
                                   Depositor,

                               CITIMORTGAGE, INC.,
                                Master Servicer,

                                 CITIBANK, N.A.,
                            Securities Administrator

                             WELLS FARGO BANK, N.A.,
                                   Custodian,

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                     Trustee

                         POOLING AND SERVICING AGREEMENT
                          Dated as of December 1, 2006

                     HSI ASSET LOAN OBLIGATION TRUST 2006-2

                       MORTGAGE PASS THROUGH CERTIFICATES,
                                  SERIES 2006-2

<PAGE>

                             TABLE OF CONTENTS

                                                                            Page
                                 ARTICLE I
                                DEFINITIONS

                                ARTICLE II
       CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES

Section 2.01    Conveyance of Mortgage Loans..................................50

Section 2.02    Acceptance by the Custodian of the Mortgage Loans.............53

Section 2.03    Remedies for Breaches of Representations and Warranties
                with Respect to the Mortgage Loans............................54

Section 2.04    Execution and Delivery of Certificates........................55

Section 2.05    [Reserved]....................................................55

Section 2.06    [Reserved]....................................................55

Section 2.07    Representations and Warranties of the Depositor...............55

                               ARTICLE III
             ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

Section 3.01    Establishment of Certain Accounts.............................57

Section 3.02    Investment of Funds in the Distribution Account and
                the Master Servicing Account..................................58

Section 3.03    Report on Assessment of Compliance with Relevant
                Servicing Criteria............................................59

Section 3.04    Report on Attestation of Compliance with Relevant
                Servicing Criteria............................................60

Section 3.05    Annual Officer's Certificates.................................61

Section 3.06    Indemnification...............................................62

Section 3.07    Advances......................................................62

                                ARTICLE IV
                               DISTRIBUTIONS

Section 4.01    The Distribution Account......................................64

Section 4.02    Priorities of Distribution....................................64

Section 4.03    Monthly Statements to Certificateholders......................72

Section 4.04    Allocation of Realized Losses.................................74

Section 4.05    The Yield Maintenance Agreement...............................76

Section 4.06    Certain Matters Relating to the Determination of LIBOR........77

                                  ARTICLE V
                              THE CERTIFICATES

Section 5.01    The Certificates..............................................78

Section 5.02    Certificate Register; Registration of Transfer and
                Exchange of Certificates......................................78

Section 5.03    Mutilated, Destroyed, Lost or Stolen Certificates.............84

Section 5.04    Persons Deemed Owners.........................................84

Section 5.05    Access to List of Certificateholders' Names and Addresses.....84

Section 5.06    Maintenance of Office or Agency...............................84

                                  ARTICLE VI
                                 THE DEPOSITOR

Section 6.01    Liabilities of the Depositor..................................85

Section 6.02    Merger or Consolidation of the Depositor......................85

Section 6.03    Limitation on Liability of the Depositor and Others...........85

                                 ARTICLE VII
                                   DEFAULT

Section 7.01    Master Servicer to Act; Appointment of Successor..............86

Section 7.02    Notification to Certificateholders............................88

                                       -i-

<PAGE>

                                ARTICLE VIII
                           CONCERNING THE TRUSTEE

Section 8.01    Duties of the Trustee.........................................88

Section 8.02    Certain Matters Affecting the Trustee.........................89

Section 8.03    Trustee Not Liable for Certificates or Mortgage Loans.........91

Section 8.04    Trustee May Own Certificates..................................91

Section 8.05    Trustee's Fees Indemnification and Expenses...................91

Section 8.06    Eligibility Requirements for the Trustee......................92

Section 8.07    Resignation and Removal of the Trustee........................93

Section 8.08    Successor Trustee.............................................93

Section 8.09    Merger or Consolidation of the Trustee........................94

Section 8.10    Appointment of Co-Trustee or Separate Trustee.................94

Section 8.11    [Reserved]....................................................95

Section 8.12    Commission Reporting..........................................95

                               ARTICLE IX
         ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER

Section 9.01    Duties of the Master Servicer; Enforcement of each
                Servicer's Obligations.......................................102

Section 9.02    Provision to the Securities Administrator of
                Loan-Level Information.......................................104

Section 9.03    [Reserved]...................................................104

Section 9.04    Maintenance of Fidelity Bond and Errors and
                Omissions Insurance..........................................104

Section 9.05    Representations and Warranties of the Master Servicer........104

Section 9.06    Master Servicer Events of Default............................106

Section 9.07    Waiver of Default............................................107

Section 9.08    Successor to the Master Servicer.............................107

Section 9.09    [Reserved]...................................................109

Section 9.10    Merger or Consolidation......................................109

Section 9.11    Resignation of the Master Servicer...........................109

Section 9.12    Assignment or Delegation of Duties by the Master Servicer....109

Section 9.13    Limitation on Liability of the Master Servicer...............110

Section 9.14    Indemnification; Third Party Claims..........................110

                                    ARTICLE X
                     CONCERNING THE SECURITIES ADMINISTRATOR

Section 10.01   Duties of Securities Administrator...........................111

Section 10.02   Certain Matters Affecting the Securities Administrator.......112

Section 10.03   Securities Administrator Not Liable for Certificates
                or Mortgage Loans............................................114

Section 10.04   Securities Administrator May Own Certificates................115

Section 10.05   Securities Administrator's Fees and Expenses.................115

Section 10.06   Eligibility Requirements for Securities Administrator........115

Section 10.07   Resignation and Removal of Securities Administrator..........116

Section 10.08   Successor Securities Administrator...........................117

Section 10.09   Merger or Consolidation of Securities Administrator..........118

Section 10.10   Assignment or Delegation of Duties by the Securities
                Administrator................................................118

                                   ARTICLE XI
                                REMIC provisions

Section 11.01   REMIC Administration.........................................118

Section 11.02   [Reserved]...................................................121

Section 11.03   Designation of REMIC(s)......................................122

Section 11.04   Distributions on Uncertificated REMIC 1 Regular Interests,
                REMIC 2 Regular Interests, and REMIC 3 Regular Interests.....122

                                      -ii-
<PAGE>

                                 ARTICLE XII
                                 TERMINATION

Section 12.01   Termination upon Liquidation or Purchase of the
                Mortgage Loans...............................................125

Section 12.02   Final Distribution on the Certificates.......................125

Section 12.03   Additional Termination Requirements..........................126

                                ARTICLE XIII
                          MISCELLANEOUS PROVISIONS

Section 13.01   Amendment....................................................127

Section 13.02   Recordation of Agreement; Counterparts.......................129

Section 13.03   Governing Law................................................129

Section 13.04   Intention of Parties.........................................129

Section 13.05   Notices......................................................130

Section 13.06   Severability of Provisions...................................131

Section 13.07   [Reserved.]..................................................131

Section 13.08   Limitation on Rights of Certificateholders...................131

Section 13.09   Certificates Nonassessable and Fully Paid....................132

Section 13.10   Rule of Construction.........................................132

Section 13.11   Waiver of Jury Trial.........................................132

                                      -iii-

<PAGE>

EXHIBITS

Exhibit A       Form of Senior Certificates and Senior Subordinate Certificate

Exhibit B       Form of Junior Subordinate Certificate

Exhibit C       Form of Class R Certificate

Exhibit D       Form of Class P Certificate

Exhibit E       Form of Initial Certification of Custodian

Exhibit F       Form of Document Certification and Exception Report of Custodian

Exhibit G       Form of Residual Transfer Affidavit

Exhibit H       Form of Transferor Certificate

Exhibit I       Form of Rule 144A Investment Letter

Exhibit J       Form of Request for Release

Exhibit K       Contents for Each Mortgage File

Exhibit L       Form of Sarbanes-Oxley Certification to be provided with
                Form 10 K

Exhibit M       List of Servicing Agreements

Exhibit N       Form of Servicing Function Participant Back-up Sarbanes Oxely
                Certification

Exhibit O       Form of Yield Maintenance Agreement

Exhibit P       [Reserved]

Exhibit Q       Transfer Agreements

Exhibit R       [Reserved]

Exhibit S       Servicing Criteria Matrix

Exhibit T       Transaction Parties

Exhibit U       Form of Annual Compliance Certificate

Exhibit V       Additional Form 10-D Disclosure

Exhibit W       Additional Form 10-K Disclosure

Exhibit X       Form 8-K Disclosure Information

Exhibit Y       Additional Disclosure Notification

                                      -iv-

<PAGE>

     THIS POOLING AND SERVICING  AGREEMENT,  dated as of December 1, 2006, among
HSI  ASSET   SECURITIZATION   CORPORATION,   as  depositor  (the   "Depositor"),
CITIMORTGAGE,  INC., a New York corporation (the "Master  Servicer"),  CITIBANK,
N.A., a national banking  association ( the "Securities  Administrator"),  WELLS
FARGO BANK, N.A., a national banking  association (the "Custodian") and DEUTSCHE
BANK NATIONAL TRUST COMPANY,  a national  banking  association,  as trustee (the
"Trustee").

                              W I T N E S S E T H:

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

                             PRELIMINARY STATEMENT:

     The   Depositor   intends  to  sell  Mortgage   Pass-Through   Certificates
(collectively, the "Certificates"),  to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the  Trust  Fund  (as  defined  herein).  As  provided  herein,  the  Securities
Administrator  will make an  election  to treat the  entire  segregated  pool of
assets relating to the Mortgage Loans, as described in the definition of REMIC 1
below,  as a real estate  mortgage  investment  conduit (a "REMIC")  for federal
income tax purposes,  and such  segregated  pool of assets will be designated as
"REMIC 1." The Class R-I Certificates will represent the sole class of "residual
interests" in REMIC 1 for purposes of the REMIC  Provisions (as defined  herein)
under federal  income tax law. The following  table  irrevocably  sets forth the
designation,  the REMIC 1 Remittance Rate, the initial Uncertificated  Principal
Balance,  and solely for  purposes of  satisfying  Treasury  Regulation  Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 1
Regular Interests. None of the REMIC 1 Regular Interests will be certificated.

<PAGE>

<TABLE>
<CAPTION>
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
          REMIC 1                   REMIC 1                Initial             Latest Possible             Related
 Regular Interests and           Remittance Rate        Uncertificated         Maturity Date(1)        Subgroup/Class of
    Residual Interests                                Principal Balance                                 Certificates
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
<S>                                  <C>                  <C>                 <C>                       <C>
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class 1-A                            6.00%                 $564.72            December 26, 2036         Subgroup I-1
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class 2-A                            7.00%                 $659.06            December 26, 2036         Subgroup I-2
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class 3-A                            7.50%                 $188.75            December 26, 2036         Subgroup I-3
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class 4-A                            8.00%                 $137.66            December 26, 2036         Subgroup I-4
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class 5-A                            5.50%                 $300.10            December 26, 2021         Subgroup II-1
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class P                              0.00%                   $100             December 26, 2026              All
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class I-PO                           0.00%                 $251,132           December 26, 2036          Class I-PO
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class I-IO                           6.00%                   (2)              December 26, 2036          Class I-IO
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class II-PO                          0.00%                 $18,382            December 26, 2026          Class II-PO
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class II-IO                          5.50%                   (2)              December 26, 2026          Class II-IO
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class 1-ZZZ                          6.00%                $5,647,155          December 26, 2036         Subgroup I-1
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class 2-ZZZ                          7.00%                $6,590,564          December 26, 2036         Subgroup I-2
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class 3-ZZZ                          7.50%                $1,887,545          December 26, 2036         Subgroup I-3
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class 4-ZZZ                          8.00%                $1,376,647          December 26, 2036         Subgroup I-4
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
Class 5-ZZZ                          5.50%                $3,001,797          December 26, 2036         Subgroup II-1
----------------------------  ---------------------  ---------------------  ----------------------  ----------------------
</TABLE>

----------------------------------
(1)  Solely  for  purposes  of  Section   1.860G-1(a)(4)(iii)  of  the  Treasury
     regulations,  the Distribution Date immediately following the maturity date
     for the Mortgage Loan with the latest  maturity date has been designated as
     the "latest possible maturity date" for each REMIC 1 Regular Interest.

(2)  Neither the Class I-IO nor the Class II-IO has an Uncertificated  Principal
     Balance  and  each is  entitled  to  receive  on each  Distribution  Date a
     specified portion of the interest payable on certain Subgroup I-4 Loans and
     Subgroup II-1 Loans, respectively,  equal to the Class I-IO Notional Amount
     or the Class I-IO Notional Amount, as the case may be.

                                       -2-

<PAGE>

     As provided herein,  the Securities  Administrator  will elect to treat the
segregated  pool of  assets  consisting  of the  Uncertificated  REMIC 1 Regular
Interests as a REMIC for federal income tax purposes,  and such  segregated pool
of assets  will be  designated  as "REMIC 2." The Class R-II  Certificates  will
represent the sole class of "residual  interests" in REMIC 2 for purposes of the
REMIC Provisions  under federal income tax law. The following table  irrevocably
sets forth the  designation,  the REMIC 2 Remittance  Through Rate,  the initial
Uncertificated   Balance,   and  solely  for  purposes  of  satisfying  Treasury
Regulation Section 1.860G-1(a)(4)(iii),  the "latest possible maturity date" for
each of the REMIC 2 Regular  Interests and the general  description of the Class
R-II Certificates. None of the REMIC 2 Regular Interests will be certificated.

<TABLE>
<CAPTION>
      REMIC 2
Regular Interests          REMIC 2         Initial                  Latest          Related
 and Residual            Remittance     Uncertificated             Possible         Class of
    Interests               Rate           Balance              Maturity Date(1)   Certificates
    ---------              -----           -------              ----------------   ------------
  <S>                 <C>                       <C>     <C>                        <C>
    Class I-A-1             6.00%                       $     December 26, 2036    Class I-A-1
    Class I-A-2             6.00%                             December 26, 2036    Class I-A-2
    Class I-A-3             6.00%                             December 26, 2036    Class I-A-3,
                                                                                   Class I-A-4
    Class I-A-5             6.00%                             December 26, 2036    Class I-A-5
    Class I-A-6             6.00%                             December 26, 2036    Class I-A-6
    Class I-A-7             7.00%                             December 26, 2036    Class I-A-7,
                                                                                   Class I-A-8
    Class I-A-9             7.50%                             December 26, 2036    Class I-A-9,
                                                                                   Class I-A-10
   Class I-A-11             8.00%                             December 26, 2036    Class I-A-11
                                                                                   Class I-A-12
      Class P               0.00%               $100             ___________       Class P
    Class I-IO              6.00%                             December 26, 2036    Class I-IO
    Class I-PO              0.00%                             December 26, 2036    Class I-PO
   Class II-A-1             5.50%                             December 26, 2026    Class II-A-1
    Class II-IO             5.50%                             December 26, 2026    Class II-IO
    Class II-PO             0.00%                             December 26, 2026    Class II-PO
     Class B-1        Variable Rate(2)                        December 26, 2036    Class B-1
     Class B-2        Variable Rate(2)                        December 26, 2036    Class B-2
     Class B-3        Variable Rate(2)                        December 26, 2036    Class B-3
     Class B-4        Variable Rate(2)                        December 26, 2036    Class B-4
</TABLE>

----------------------------------
(1)  Solely  for  purposes  of  Section   1.860G-1(a)(4)(iii)  of  the  Treasury
     regulations,  the Distribution Date immediately following the maturity date
     for the Mortgage Loan with the latest  maturity date has been designated as
     the "latest possible maturity date" for each REMIC 2 Regular Interest.

(2)  The REMIC 2  Remittance  Rate for the REMIC 2 Regular  Interest  Class B-1,
     B-2, B-3, B-4, B-5 and B-6 will be a variable rate of interest equal to the
     weighted  average of the  designated  rates of each  subgroup.  For federal
     income  tax  purposes,  however,  such  REMIC  2  Remittance  Rate  on  any
     Distribution Date shall be expressed as the weighted average of the REMIC 1
     Remittance  Rates of the REMIC 1 Regular  Interests  Class 1-A,  Class 2-A,
     Class 3-A,  Class 4-A and Class 5-A,  weighted  on the basis of the related
     Uncertificated Principal Balances of such REMIC 1 Regular Interests.

<PAGE>

<TABLE>
<CAPTION>
      REMIC 2
Regular Interests          REMIC 2         Initial                  Latest          Related
 and Residual            Remittance     Uncertificated             Possible         Class of
    Interests               Rate           Balance              Maturity Date(1)   Certificates
    ---------              -----           -------              ----------------   ------------
     <S>              <C>                  <C>                <C>                  <C>
     Class B-5        Variable Rate(2)                        December 26, 2036    Class B-5
     Class B-6        Variable Rate(2)                        December 26, 2036    Class B-6
</TABLE>

     As provided herein,  the Securities  Administrator  will elect to treat the
segregated pool of assets consisting of the REMIC 2 Regular Interests as a REMIC
for federal  income tax  purposes,  and such  segregated  pool of assets will be
designated  as REMIC 3. The Class R-III  Certificates  will  represent  the sole
class of "residual  interests"  in REMIC 3 for purposes of the REMIC  Provisions
under federal  income tax law. The following  table  irrevocably  sets forth the
designation,  remittance rate (the "REMIC 3 Remittance  Rate") and Initial Class
Certificate Balance for each of the "regular interests" in REMIC 3 (the "REMIC 3
Regular  Interests").  None  of the  Class  R-I,  Class  R-II  and  Class  R-III
Certificates have a principal balance nor an interest rate. The "latest possible
maturity date" (determined solely for purposes of satisfying Treasury regulation
Section  1.860G-1(a)(4)(iii))  for each  REMIC 3 Regular  Interest  shall be the
first  Distribution  Date that follows the stated maturity date for the Mortgage
Loan  included  in the  Trust  Fund as of the  Closing  Date  with  the  longest
remaining term to stated maturity.

                                       -3-

<PAGE>

                         THE SERIES 2006-2 CERTIFICATES

<TABLE>
<CAPTION>
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
                  Initial Principal     Related                Initial
                     Balance or         Loan       Related     Interest                        Summary Interest   Moody's     S&P
Class            Notional Amount (1)    Group      Subgroup      Rate            Designation    Rate Formula(7)    Rating     Rating
================ ==================== ========== =========== ============ =================== ================== =========== =======
<S>              <C>                    <C>          <C>     <C>          <C>                 <C>                <C>         <C>
Offered
Certificates:
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-1          $17,337,000          1          I-1     6.00000%     Super               Fixed              Aaa         AAA
                                                                          Senior/
                                                                          Non-Accelerating(6)
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-2          $40,672,000          1          I-1     6.00000%     Senior/Sequential   Fixed              Aaa         AAA
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-3          $40,672,000          1          I-1     Adjustable   Super               LIBOR + 0.60%(7)   Aaa         AAA
                                                             Rate         Senior/Sequential/
                                                                          Floater
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-4          $40,672,000(2)       1          I-1     Adjustable   Senior/Notional/    5.40% - LIBOR(7)   Aaa         AAA
                                                             Rate         Inverse Floater
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-5           $189,699            1          I-1     6.00000%     Senior/Sequential   Fixed              Aaa         AAA
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-6          $3,047,000           1          I-1     6.00000%     Senior              Fixed              Aaa         AAA
                                                                          Support/
                                                                          Non-Accelerating(6)
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-7         $118,943,983          1          I-2     Adjustable   Senior/Pass-Through LIBOR + 0.37%(7)   Aaa         AAA
                                                             Rate         Floater
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-8         $118,943,983(2)       1          I-2     Adjustable   Senior/Notional     6.63% - LIBOR(7)   Aaa         AAA
                                                             Rate         Inverse Floater
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-9          $34,065,691          1          I-3     Adjustable   Senior/Pass-Through LIBOR + 0.30%(7)   Aaa         AAA
                                                             Rate         Floater
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-10         $34,065,691(2)       1          I-3     Adjustable   Senior/Notional     7.20% - LIBOR(7)   Aaa         AAA
                                                             Rate         Inverse Floater
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-11         $24,845,192          1          I-4     Adjustable   Senior/Pass-Through LIBOR + 0.20%(7)   Aaa         AAA
                                                             Rate         Floater
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-A-12         $24,845,192(2)       1          I-4     Adjustable   Senior/Notional     7.80% - LIBOR(7)   Aaa         AAA
                                                             Rate         Inverse Floater
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-IO            $590,041(2)         1          I-4     6.00000%     Senior/Notional     Fixed              Aaa         AAA
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class I-PO           $251,132(3)          1          I-1         (3)      Senior/Principal    N/A                Aaa         AAA
                                                                          Only
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class II-A-1         $54,156,905          2          II-1    5.50000%     Senior/Pass-Through Fixed              Aaa         AAA
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class II-IO                               2          II-1    5.50000%     Senior/Notional     Fixed              Aaa         AAA
                 $6,991,827(2)
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class II-PO          $18,382(3)           2          II-1        (3)      Senior/Principal    N/A                Aaa         AAA
                                                                          Only
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class B-1            $8,275,332         1, 2         (5)     Variable     Subordinate         weighted average   Aa3         AA
                                                             Rate                             rate -
                                                                                              0.57687234%
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class B-2            $3,527,027         1, 2         (5)     Variable     Subordinate         weighted average   A3          A
                                                             Rate                             rate - 0.32687234%
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class B-3            $2,116,216         1, 2         (5)     Variable     Subordinate         weighted average   Baa3        BBB
                                                             Rate                             rate
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Total Offered:      $348,117,559
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Non-Offered
Certificates(4):
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class B-4            $2,116,216         1, 2         (5)     Variable     Subordinate         weighted average   NR          BB
                                                             Rate                             rate
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class B-5            $1,763,513         1, 2         (5)     Variable     Subordinate         weighted average   NR          B
                                                             Rate                             rate
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class B-6             $705,404          1, 2         (5)     Variable     Subordinate         (8)                NR          NR
                                                             Rate
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Class P                 $100            1, 2         (5)     0.00%        Prepayment Charges  N.A                NR          NR
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
</TABLE>

                                      -4-
<PAGE>

<TABLE>
<S>                 <C>               <C>        <C>         <C>          <C>                 <C>                <C>         <C>
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Total                $4,585,133
Non-Offered:
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
Total:              $352,702,692
---------------- -------------------- ---------- ----------- ------------ ------------------- ------------------ ----------- -------
</TABLE>

(1)  Approximate. Subject to variance of plus or minus 5%.
(2)  Interest-only  certificates that will accrue interest on a notional amount.
     These certificates will not receive distributions of principal.
(3)  The Class I-PO and Class II-PO certificates are principal-only certificates
     and are not entitled to payment of interest.
(4)  The issuing entity will also issue the Class R certificates and the Class P
     Certificates, which are entitled to receive any prepayment penalties on the
     mortgage loans.
(5)  The Class B-1,  Class B-2,  Class B-3,  Class B-4,  Class B-5 and Class B-6
     certificates  will be related to subgroups  I-1, I-2, I-3, I-4 and II-1 and
     will receive a variable rate of interest  based on the weighted  average of
     the designated rates of each subgroup.
(6)  The Class I-A-1 and Class  I-A-6  certificates  will not receive  principal
     payments  at  the  same  rate  as the  other  Senior  Certificates  because
     principal  payments  generally will not be distributable to the Class I-A-1
     and Class I-A-6 certificates until the Distribution Date in January 2012.
(7)  Subject to minimum and maximum rates as described in this Agreement.
(8)  The Class B-6  Certificates  will accrue interest at a per annum rate equal
     to (i) the weighted average of the designated rates applicable to subgroups
     I-1, I-2, I-3, I-4 and II-1 on the basis of the group  subordinate  amounts
     thereof plus ((0.57687234%  multiplied by the Class Certificate  Balance of
     the Class  B-1  Certificates)  plus  (0.32687234%  multiplied  by the Class
     Certificate  Balance  of the Class B-2  Certificates)  divided by the Class
     Certificate Balance of the Class B-6 Certificates.

                                       -5-

<PAGE>

<TABLE>
<CAPTION>
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
                                             Final Scheduled
               Record      Delay/Acrual       Distribution          Minimum        Incremental
Class          Date(1)       Period(2)           Date(3)        Denomination(4)   Denomination       CUSIP Number       ISIN Number
=============  =========  ================  =================  ================  ================  ==================  =============
<S>               <C>         <C>             <C>                   <C>                <C>            <C>               <C>
Offered
Certificates:
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-1       DD          24 day          December 2036         $25,000            $1             40431H AA 5       US40431HAA59
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-2       DD          24 day          December 2036         $25,000            $1             40431H AB 3       US40431HAB33
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-3       DD           0 day          December 2036         $25,000            $1             40431H AC 1       US40431HAC16
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-4       DD           0 day          December 2036         $25,000            $1             40431H AD 9       US40431HAD98
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-5       DD          24 day          December 2036         $25,000            $1             40431H AE 7       US40431HAE71
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-6       DD          24 day          December 2036         $25,000            $1             40431H AF 4       US40431HAF47
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-7       DD           0 day          December 2036         $25,000            $1             40431H AG 2       US40431HAG20
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-8       DD           0 day          December 2036         $25,000            $1             40431H AH 0       US40431HAH03
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-9       DD           0 day          December 2036         $25,000            $1             40431H AJ 6       US40431HAJ68
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-10      DD           0 day          December 2036         $25,000            $1             40431H AK 3       US40431HAK32
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-11      DD           0 day          December 2036         $25,000            $1             40431H AL 1       US40431HAL15
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-A-12      DD           0 day          December 2036         $25,000            $1             40431H AM 9       US40431HAM97
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-IO        DD          24 day          December 2036         $25,000            $1             40431H AN 7       US40431HAN70
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class I-PO        DD            N/A           December 2036         $25,000            $1             40431H AP 2       US40431HAP29
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class II-A-1      DD          24 day          December 2021         $25,000            $1             40431H AQ 0       US40431HAQ02
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class II-IO       DD          24 day          December 2021         $25,000            $1             40431H AR 8       US40431HAR84
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class II-PO       DD            N/A           December 2021         $25,000            $1             40431H AS 6       US40431HAS67
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class B-1         DD          24 day          December 2036         $25,000            $1             40431H AT 4       US40431HAT41
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class B-2         DD          24 day          December 2036         $25,000            $1             40431H AU 1       US40431HAU14
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class B-3         DD          24 day          December 2036         $25,000            $1             40431H AV 9       US40431HAV96
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------

-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Non-Offered
Certificates:
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class B-4         CM          24 day          December 2036         $25,000            $1             40431H AZ 0       US40431HAZ01
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class B-5         CM          24 day          December 2036         $25,000            $1             40431H BA 4       US40431HBA41
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
Class B-6         CM          24 day          December 2036         $25,000            $1             40431H BB 2       US40431HBB24
-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------

-------------  ---------  ----------------  -----------------  ----------------  ----------------  ------------------  -------------
</TABLE>

                                       -6-

<PAGE>

(1)  CM = For any distribution date, the last business day of the calendar month
     immediately  preceding the  distribution  date.  DD = For any  distribution
     date, the close of business on the business day  immediately  preceding the
     distribution date.

(2)  24 Day = For any distribution date, the interest accrual period will be the
     calendar  month  immediately  preceding  the  month  in which  the  related
     distribution  date occurs. 0 Day = For any distribution  date, the interest
     accrual period will be the period  beginning on the  immediately  preceding
     distribution  date  (or  the  closing  date,  in  the  case  of  the  first
     distribution  date) and ending on the calendar day  immediately  before the
     related distribution date.

(3)  Calculated  as the  distribution  date in the month  following the month in
     which the latest maturity date of any mortgage loan included in the related
     subgroup occurs.

(4)  With respect to the initial European investors,  the underwriters will only
     sell offered certificates in minimum total investment amounts of $100,000.

                                       -7-

<PAGE>

     The Mortgage  Loans have an aggregate  Stated  Principal  Balance as of the
Cut-off Date of $352,702,693.

     Set  forth  below  are  designations  of  Classes  of  Certificates  to the
categories used herein:

Adjustable Rate Certificates........... Floater Certificates and Inverse Floater
                                        Certificates.

Book-Entry Certificates................ All Classes of  Certificates  other than
                                        the Junior Subordinate Certificates, the
                                        Class  R   Certificates   and   Class  P
                                        Certificates.

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

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

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

Class IO Certificates.................. Class I-IO and Class II-IO Certificates

Class P Certificates................... The Class P Certificates.

Class PO Certificates.................. Class I-PO and Class II-PO Certificates

                                       -8-

<PAGE>

Class R Certificates................... Class R-I,  Class  R-II and Class  R-III
                                        Certificates

ERISA-Restricted Certificates.......... The  Junior  Subordinate   Certificates,
                                        Class    R    Certificates,    Class   P
                                        Certificates  and any Certificate with a
                                        rating  which  falls  below  the  lowest
                                        applicable  permitted  rating  under the
                                        Underwriters' Exemption.

Floater Certificates:.................. Class I-A-3,  Class I-A-7,  Class I-A-9,
                                        and Class I-A-11 Certificates

Group 1 Certificates................... Any one of 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-IO and the Class
                                        I-PO.

Group 2 Certificates................... Any one of the Class II-A-1, Class II-IO
                                        and the Class II-PO.

Interest Only Certificates:............ Class  IO   Certificates,   Class  I-A-4
                                        Certificates,  Class I-A-8 Certificates,
                                        Class  I-A-10   Certificates  and  Class
                                        I-A-12 Certificates.

Inverse Floater Certificates:.......... Class I-A-4,  Class I-A-8,  Class I-A-10
                                        and Class I-A-12 Certificates

Junior Subordinate Certificates........ Class  B-4,  Class  B-5  and  Class  B-6
                                        Certificates.

NAS Certificates....................... Any one of the Class  I-A-1 or the Class
                                        I-A-6 Certificates.

                                       -9-

<PAGE>

Offered Certificates................... All Classes of  Certificates  other than
                                        the Private Certificates.

Physical Certificates:................. Any  one  of  the  Class  P or  Class  R
                                        Certificates.

Private Certificate.................... Any  Junior   Subordinate   Certificate,
                                        Class   R   Certificate   or   Class   P
                                        Certificate.

Rating Agencies........................ Moody's and Standard & Poor's.

Regular Certificates................... All Classes of  Certificates  other than
                                        the Class R Certificates.

Residual Certificates.................. Class R Certificates.

Senior Certificate..................... Any one of the Group 1  Certificates  or
                                        the Group 2 Certificates.

Senior Subordinate Certificates........ Class  B-1,  Class  B-2  and  Class  B-3
                                        Certificates.

Senior Support Certificates............ The Class I-A-6 Certificates.

Subgroup I-1 Certificates.............. Any one of the Class I-A-1 Certificates,
                                        Class  I-A-2  Certificates,  Class I-A-3
                                        Certificates,  Class I-A-4 Certificates,
                                        Class  I-A-5  Certificates,  Class I-A-6
                                        Certificates    or   the   Class    I-PO
                                        Certificates.

                                       -10-

<PAGE>

Subgroup I-2 Certificates.............. Any one of the Class I-A-7  Certificates
                                        or the Class I-A-8 Certificates.

Subgroup I-3 Certificates.............. Any one of the Class I-A-9  Certificates
                                        or the Class I-A-10 Certificates.

Subgroup I-4 Certificates.............. Any    one   of   the    Class    I-A-11
                                        Certificates,    the    Class    I-A-12,
                                        Certificates    or   the   Class    I-IO
                                        Certificates.

Subgroup II-1 Certificates............. Any    one   of   the    Class    II-A-1
                                        Certificates,     the    Class     II-IO
                                        Certificates    or   the   Class   II-PO
                                        Certificates.

Subordinate Certificate................ Any  one  of  the   Senior   Subordinate
                                        Certificates   or   Junior   Subordinate
                                        Certificates.

Super Senior Certificates.............. The  Class  I-A-1  Certificates  or  the
                                        Class I-A-3 Certificates.

                                    ARTICLE I

                                   DEFINITIONS

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

     10-K Filing Deadline: As defined in Section 8.12(a)(ii).

     Accepted  Servicing  Practices:  With respect to any Mortgage  Loan and the
related Servicer,  the servicing and administration of such Mortgage Loan (i) in
the same manner in which, and with the same care, skill,  prudence and diligence
with which such Servicer  generally  services and administers  similar  mortgage
loans  with  similar  mortgagors  (A)  for  other  third  parties,   giving  due
consideration   to  customary  and  usual   standards  of  practice  of  prudent
institutional residential mortgage lenders servicing their own mortgage loans or
(B) held in such  Servicer's own portfolio,  whichever  standard is higher,  and
(ii) in accordance  with  applicable  local,  state and federal laws,  rules and
regulations.

                                       -11-

<PAGE>

     Account: Any of the Collection Accounts,  the Master Servicing Account, the
Reserve Fund, the Class P Reserve Fund, the Distribution  Account and any Escrow
Account. Each Account shall be an Eligible Account.

     Accrued Certificate  Interest:  With respect to each Distribution Date, (a)
in the case of each class of Offered  Certificates (other than the Interest Only
Certificates  and Class PO  Certificates)  interest  accrued  during the related
Interest Accrual Period on the Class  Certificate  Balance thereof,  immediately
prior to that Distribution Date at the related  Pass-Through Rate and (b) in the
case of the Interest  Only  Certificates,  interest  accrued  during the related
Interest Accrual Period on the related Notional Amount immediately prior to that
Distribution Date at the  then-applicable  Pass-Through Rate that Class for that
Distribution  Date.  In each case Accrued  Certificate  Interest on any Class of
Certificates will be reduced by the amount of:

          (i)  Prepayment  Interest  Shortfalls  on the  Mortgage  Loans  in the
     related Loan Group (to the extent not offset by the related Servicer with a
     payment of  Compensating  Interest as  provided  in the  related  Servicing
     Agreement);

          (ii) the  interest  portions  of  Realized  Losses,  including  Excess
     Special Hazard Losses,  Excess Fraud Losses,  Excess  Bankruptcy Losses and
     Extraordinary  Losses on the  Mortgage  Loans  included in the related Loan
     Group not allocated  solely to one or more specific Classes of Certificates
     pursuant to Section 4.04;

          (iii) the  interest  portion of any P&I  Advances  that were made with
     respect to delinquencies on the Mortgage Loans included in the related Loan
     Group that were ultimately  determined under the terms of this Agreement to
     be, and reported to the Master  Servicer and the  Securities  Administrator
     under the terms of this Agreement as, Excess Special Hazard Losses,  Excess
     Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses; and

          (iv) any other interest shortfalls not allocated solely to one or more
     Specific  Classes  of  Certificates  pursuant  to Section  4.04,  including
     interest that is not collectible from the Mortgagor  pursuant to the Relief
     Act.

     The related Loan Group Senior  Percentage of these  reductions with respect
to the related Loan Group,  will be  allocated  among the Holders of the related
Senior  Certificates,  in  proportion  to the  amounts  of  Accrued  Certificate
Interest that would have been payable to those Certificates on that Distribution
Date absent such reductions. The remainder of these reductions will be allocated
among  the  Holders  of  the  Subordinate  Certificates,  in  proportion  to the
respective amounts of Accrued Certificate  Interest that would have been payable
to those  Certificates  on that  Distribution  Date absent such  reductions.  In
addition to that portion of the reductions  described in the preceding sentences
that are allocated to any Class of Subordinate Certificates, Accrued Certificate
Interest  on such  Class of  Subordinate  Certificates  will be  reduced  by the
interest  portion of Realized Losses that are allocated  solely to such Class of
Subordinate Certificates pursuant to Section 4.04.

     Additional Disclosure Notification: The form of notice set forth on Exhibit
Y.

     Additional Form 10-D Disclosure: As defined in Section 8.12(a)(i).

                                      -12-

<PAGE>

     Additional Form 10-K Disclosure: As defined in Section 8.12(a)(ii).

     Advance: Any P&I Advance or Servicing Advance.

     Affiliate:  With  respect  to any  Person,  any other  Person  controlling,
controlled by or under common  control with such first Person.  For the purposes
of this  definition,  "control"  means the power to direct  the  management  and
policies of such Person,  directly or indirectly,  whether through the ownership
of voting securities,  by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

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

     Amounts  Held  for  Future  Distribution:  As to  the  Certificates  on any
Distribution  Date, the aggregate amount held in the Collection  Accounts of the
Servicers at the close of business on the related  Determination Date on account
of  (i)  Principal  Prepayments,   Insurance  Proceeds,  Condemnation  Proceeds,
Liquidation  Proceeds and  Subsequent  Recoveries on the Mortgage Loans received
after the end of the related  Prepayment Period and (ii) all Scheduled  Payments
on the Mortgage Loans due after the end of the related Due Period.

     Assignment of Mortgage:  An assignment of the Mortgage,  notice of transfer
or equivalent  instrument in recordable form (other than the assignee's name and
recording  information not yet returned from the recording  office),  reflecting
the sale of the Mortgage to the Trustee.

     Available Funds: With respect to any Distribution Date and each Loan Group,
to the extent  received by the Securities  Administrator  (x) the sum of (i) all
scheduled  installments  of interest  (net of the related  Expense  Fees and any
Lender paid Primary Mortgage Insurance Policy premiums) and principal due on the
Due Date on the related Mortgage Loans in the related Due Period and received by
the Servicers on or prior to the related  Determination  Date, together with any
P&I  Advances in respect  thereof;  (ii) all  Condemnation  Proceeds,  Insurance
Proceeds,  Liquidation  Proceeds  and  Subsequent  Recoveries  received  by  the
Servicers  during  the  related   Prepayment   Period  (in  each  case,  net  of
unreimbursed  expenses  incurred in connection with a liquidation or foreclosure
and  unreimbursed  Advances,  if  any);  (iii)  all  curtailments  or  Principal
Prepayments  in Full on the related  Mortgage  Loans  received by the  Servicers
during the related  Prepayment  Period together with all  Compensating  Interest
paid  by  the  Servicers  in  connection  therewith  (excluding  any  Prepayment
Charges);   (iv)  all  Substitution  Adjustment  Amounts  with  respect  to  the
substitutions of Mortgage Loans in such Loan Group that occur on or prior to the
related  Determination  Date;  (v) all  amounts  received  with  respect to such
Distribution  Date  as the  Repurchase  Price  in  respect  of a  Mortgage  Loan
repurchased  by a Mortgage Loan Seller or the Sponsor on or prior to the related
Determination Date; and (vi) the proceeds with respect to the termination of the
Trust Fund  pursuant to clause (a) of Section  12.01;  reduced by (y) amounts in
reimbursement for Advances previously made with respect to the Mortgage Loans in
such Loan Group and other amounts as to which the Servicers,  the Depositor, the
Master Servicer, the Securities  Administrator or the Trustee are entitled to be
paid or reimbursed pursuant to the Servicing Agreements or this Agreement.

                                      -13-

<PAGE>

     Available Funds Cap: with respect to any Distribution Date on or before the
Distribution  Date in August  2010 and the Class I-A-3  Certificates,  6.00% per
annum plus amounts,  if any, paid  pursuant to the Yield  Maintenance  Agreement
(which shall not be part of any REMIC  hereunder)  and on deposit in the Reserve
Fund (which shall not be part of any REMIC  hereunder)  up to an amount equal to
the Yield Supplement Amount for that Distribution Date, expressed as a per annum
rate.  With respect to any  Distribution  Dates after the  Distribution  Date in
August 2010, 6.00% per annum.

     Bankruptcy  Amount:  As of any date of  determination,  an amount  equal to
$100,000 as reduced by (i) the aggregate  amount of Bankruptcy  Losses allocated
solely to one or more  specific  Classes  of  Certificates  in  accordance  with
Section 4.04 and (ii) any  permissible  reductions in the  Bankruptcy  Amount as
evidenced by a letter of each Rating Agency to the Securities  Administrator and
the Master  Servicer to the effect that any such  reduction will not result in a
downgrading, qualification or withdrawal of the then current ratings assigned to
the Classes of Certificates rated by it.

     Bankruptcy  Losses:  Any Realized  Losses  attributable  to certain actions
which may be taken by a bankruptcy  court in  connection  with a Mortgage  Loan,
including a reduction by a bankruptcy court of the Stated  Principal  Balance of
or the Mortgage Rate on a Mortgage Loan or an extension of maturity.

     Back-up Certification: As defined in Section 3.05.

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

     Business  Day: Any day other than (i) Saturday or Sunday,  or (ii) a day on
which banking and savings and loan institutions,  in (a) the States of New York,
California,  Maryland or Minnesota,  (b) the Commonwealth of Pennsylvania or any
other State in which any Servicer's servicing operations are located, or (c) any
State in which  the  Corporate  Trust  Office  is  located,  are  authorized  or
obligated by law or executive order to be closed.

     Cash Liquidation:  As to any defaulted  Mortgage Loan other than a Mortgage
Loan as to which an REO Acquisition  occurred, a determination by the applicable
Servicer that it has received all Insurance Proceeds,  Liquidation  Proceeds and
other  payments or cash  recoveries  which such Servicer  reasonably and in good
faith expects to be finally recoverable with respect to such Mortgage Loan.

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

     Certificate  Group: As applicable,  each of the Subgroup I-1  Certificates,
the Subgroup I-2 Certificates,  the Subgroup I-3 Certificates,  the Subgroup I-4
Certificates or the Subgroup II-1 Certificates.

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

     Certificate Register: The register maintained pursuant to Section 5.02.

                                      -14-

<PAGE>

     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 any  Affiliate of the Depositor  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  100.00%  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 Securities Administrator 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 Parties: As defined in Section 3.05.

     Certifying Person: As defined in Section 3.05.

     Citibank: Citibank, N.A. or its successor in interest.

     CitiMortgage: CitiMortgage, Inc. or its successor in interest.

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

     Class I-A Certificates: As specified in the Preliminary Statement.

     Class I-A-1 Certificates: All Certificates bearing the Class designation of
"Class I-A-1".

     Class I-A-2 Certificates: All Certificates bearing the Class designation of
"Class I-A-2".

     Class I-A-3 Certificates: All Certificates bearing the Class designation of
"Class I-A-3".

     Class I-A-4 Certificates: All Certificates bearing the Class designation of
"Class I-A-4".

     Class I-A-5 Certificates: All Certificates bearing the Class designation of
"Class I-A-5".

     Class I-A-6 Certificates: All Certificates bearing the Class designation of
"Class I-A-6".

     Class I-A-7 Certificates: All Certificates bearing the Class designation of
"Class I-A-7".

                                      -15-

<PAGE>

     Class I-A-8 Certificates: All Certificates bearing the Class designation of
"Class I-A-8".

     Class I-A-9 Certificates: All Certificates bearing the Class designation of
"Class I-A-9".

     Class I-A-10  Certificates:  All Certificates bearing the Class designation
of "Class I-A-10".

     Class I-A-11  Certificates:  All Certificates bearing the Class designation
of "Class I-A-11".

     Class I-A-12  Certificates:  All Certificates bearing the Class designation
of "Class I-A-12".

     Class I-IO Notional Amount: Class I-IO Notional Amount on each Distribution
Date will be equal to the  aggregate  Stated  Principal  Balance of the Mortgage
Loans in Loan Group I having Net Mortgage  Rates  greater than or equal to 8.00%
per  annum  (the  "Loan  Group I Premium  Loans")  multiplied  by the  following
fraction:

                    weighted average Net Mortgage Rate of all
                     Loan Group I Premium Loans minus 8.00%
                           -------------------------
                                     6.00%.

     Class II-A Certificates: The Class II-A-1 Certificates.

     Class II-A-1  Certificates:  All Certificates bearing the Class designation
of "Class II-A-1".

     Class  II-IO  Notional   Amount:   Class  II-IO  Notional  Amount  on  each
Distribution Date will be equal to the aggregate Stated Principal Balance of the
Mortgage  Loans in Loan Group II having Net Mortgage Rates greater than or equal
to 5.50% per  annum  (the  "Loan  Group II  Premium  Loans")  multiplied  by the
following fraction:

                    weighted average Net Mortgage Rate of all
                     Loan Group II Premium Loans minus 5.50%
                            -------------------------
                                     5.50%.

     Class A Certificates: As specified in the Preliminary Statement.

     Class B-1 Certificates:  All Certificates  bearing the Class designation of
"Class B-1".

     Class B-2 Certificates:  All Certificates  bearing the Class designation of
"Class B-2".

                                      -16-

<PAGE>

     Class B-3 Certificates:  All Certificates  bearing the Class designation of
"Class B-3".

     Class B-4 Certificates:  All Certificates  bearing the Class designation of
"Class B-4".

     Class B-5 Certificates:  All Certificates  bearing the Class designation of
"Class B-5".

     Class B-6 Certificates:  All Certificates  bearing the Class designation of
"Class B-6".

     Class Certificate Balance:  With respect to any Offered Certificate,  other
than the Interest Only Certificates, as of any date of determination,  an amount
equal to the initial Class  Certificate  Balance of that Certificate  reduced by
the aggregate of (a) all amounts allocable to principal  previously  distributed
with respect to that Certificate and (b) any reductions in the Class Certificate
Balance  of  that  Certificate  deemed  to  have  occurred  in  connection  with
allocations  of  Realized  Losses in the  manner  described  in this  Agreement,
provided  that,  the Class  Certificate  Balance  of any  Class of  Certificates
outstanding  with the Highest  Priority to which  Realized  Losses  related to a
Mortgage Loan, other than Excess Bankruptcy Losses,  Excess Fraud Losses, Excess
Special Hazard Losses and  Extraordinary  Losses,  have been allocated  shall be
increased  by any  Subsequent  Recoveries  related  to that  Mortgage  Loan  not
previously  allocated as set forth in Section 4.02(h), and the Class Certificate
Balance of the Class of Certificates  with a Class  Certificate  Balance greater
than zero with the Lowest  Priority shall be further  reduced by an amount equal
to the percentage  interest  evidenced thereby multiplied by the excess, if any,
of  (i)  the  then-aggregate   Class  Certificate  Balance  of  all  Classes  of
Certificates  then  outstanding  over (ii) the  then-aggregate  Stated Principal
Balance of all of the Mortgage Loans.

     Class P Certificates:  All  certificates  bearing the designation of "Class
P".

     Class P Reserve Fund: The Eligible Account established  pursuant to Section
3.01(e).

     Class PO  Collection  Shortfall:  With  respect to each Loan Group and each
Cash  Liquidation or REO  Disposition  of a Discount  Mortgage Loan in such Loan
Group in connection with each Distribution Date or any prior  Distribution Date,
the extent that (1) the amount  included under clause (iii) of the definition of
Class PO Principal  Distribution  Amount for that Distribution Date is less than
(2) the amount described in (a) under clause (iii) of the definition of Class PO
Principal Distribution Amount.

     Class PO Principal  Distribution  Amount:  With respect to any Distribution
Date and each Loan Group, an amount equal to the aggregate of:

          (i) the  related  Discount  Fraction of the  principal  portion of the
     Scheduled  Payment on each Discount Mortgage Loan in the related Loan Group
     due during the related Due Period,  whether or not  received on or prior to
     the related  Determination  Date, less the related Discount Fraction of the
     principal portion of any related Debt Service

                                      -17-

<PAGE>

     Reductions which together with other Bankruptcy Losses are in excess of the
     Bankruptcy Amount;

          (ii) the related  Discount  Fraction of the  principal  portion of all
     unscheduled  collections on each Discount Mortgage Loan in the related Loan
     Group  received  during the preceding  calendar  month or, in the case of a
     Principal  Prepayment,  during the related  Prepayment  Period  (other than
     amounts  received in connection with a Cash  Liquidation or REO Disposition
     of a Discount  Mortgage Loan in the related Loan Group  described in clause
     (iii) below)  including  Principal  Prepayments and repurchases of Discount
     Mortgage  Loans (or, in the case of a  substitution  of a Deleted  Mortgage
     Loan that is a Discount  Mortgage Loan, the Discount Fraction of the amount
     of any Substitution  Adjustment Amount deposited in the Collection  Account
     in connection with such substitution);

          (iii) in connection with the Cash  Liquidation or REO Disposition of a
     Discount Mortgage Loan in the related Loan Group that did not result in any
     Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses
     or  Extraordinary  Losses,  an  amount  equal  to the  lesser  of  (a)  the
     applicable  Discount  Fraction  of the  Stated  Principal  Balance  of that
     Discount  Mortgage Loan immediately prior to that Distribution Date and (b)
     the aggregate  amount of collections on that Discount  Mortgage Loan to the
     extent applied as recoveries of principal;

          (iv) any amounts allocable to principal for the related Loan Group for
     any previous  Distribution Date calculated  pursuant to clauses (i) through
     (iii) above that remain undistributed; and

          (v)  an  amount  equal  to  the  aggregate  of the  related  Class  PO
     Collection  Shortfalls  for all  Distribution  Dates  on or  prior  to such
     Distribution  Date,  less any  amounts  paid under  this  clause on a prior
     Distribution Date, until paid in full;  provided,  that distributions under
     this clause (v) shall only be made to the extent of Eligible  Funds for the
     related Loan Group on any Distribution Date.

     Notwithstanding  the foregoing,  on or after the Credit  Support  Depletion
Date,  the  Class  PO  Principal   Distribution   Amount  with  respect  to  any
Distribution  Date and Loan  Group  will  equal  the  Discount  Fraction  of the
principal portion of Scheduled Payments and all collections other than Scheduled
Payments  received or advanced in respect of the Discount  Mortgage Loans in the
related Loan Group.

     Class R Certificates: As set forth in the Preliminary Statement.

     Closing Date: December 28, 2006.

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

     Collection Account:  With respect to each Servicer,  the account defined as
"Custodial Account" in the related Servicing Agreement.

                                      -18-

<PAGE>

     Commission: The United States Securities and Exchange Commission.

     Compensating  Interest:  For any  Distribution  Date, the lesser of (a) the
amount,  if any, by which the Prepayment  Interest  Shortfall  related to a Loan
Group,  if any,  for such  Distribution  Date,  with  respect  to all  voluntary
Principal  Prepayments  for such Loan Group  (excluding  any payments  made upon
liquidation of any Mortgage Loan) exceeds all Prepayment  Interest  Excesses for
such  Distribution Date and for such Loan Group, and (b) the aggregate amount of
the Servicing Fees actually  retained by or paid to the applicable  Servicer for
such Distribution Date and for such Loan Group.

     Condemnation  Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary,  partial or entire, by exercise of the
power of eminent domain or condemnation.

     Corporate Trust Office: With respect to the Securities  Administrator,  (i)
for transfer,  presentation or surrender of Certificates, the office at 111 Wall
Street, 15th Floor Window, New York, New York 10005, Attention:  Corporate Trust
Services - HALO 2006-2,  and (ii) for all other purposes,  388 Greenwich Street,
14th Floor, New York, New York 10013,  Attention:  Structured Finance Agency and
Trust - HALO 2006-2 or at such other address as the Securities Administrator may
designate from time to time by notice to the Certificateholders,  the Depositor,
the Master Servicer and the Trustee. With respect to the Trustee, the designated
office of the Trustee in the State of  California at which any  particular  time
its corporate  trust  business with respect to this  Agreement is  administered,
which office at the date of the  execution of this  Agreement is located at 1761
East St.  Andrew  Place,  Santa Ana,  California  92705 4934,  Attention:  Trust
Administration  - HB06L2,  facsimile  number (714)  247-6329,  and its telephone
number is (714)  247-6000 and which is also the address to which  notices to and
correspondence with the Trustee under this Agreement should be directed.

     Countrywide Servicing: Countrywide Home Loans Servicing LP.

     Credit Support  Depletion  Date: The first  Distribution  Date on which the
aggregate Class Certificate  Balances of the Subordinate  Certificates have been
reduced to zero.

     Curtailment:  Any Principal  Prepayment  made by a Mortgagor which is not a
Principal Prepayment in Full.

     Custodial File: The meaning assigned to such term in Section 2.01(b).

     Custodian:  Initially,  Wells Fargo, or any successor  custodian  appointed
hereunder.

     Cut-off Date: December 1, 2006.

     Cut-off  Date  Pool  Principal  Balance:  The  aggregate  Stated  Principal
Balances of all Mortgage Loans as of the Cut-off Date.

     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.

                                      -19-

<PAGE>

     Data  Tape  Information:  With  respect  to each  Mortgage  Loan,  the same
information  (provided  as of the  Cut-off  Date)  included  in the data  fields
specified  under the  definition of "Mortgage  Loan  Schedule" in the applicable
Transfer Agreement,  with such additions and modifications as agreed upon by the
applicable Mortgage Loan Seller and the Depositor.

     Debt Service Reduction: With respect to any Mortgage Loan, a reduction by a
court  of  competent  jurisdiction  in a  proceeding  under  the  United  States
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.

     Deficient Valuation:  With respect to any Mortgage Loan, a valuation of the
related  Mortgaged  Property by a court of competent  jurisdiction  in an amount
less than  then  outstanding  principal  balance  of the  Mortgage  Loan,  which
valuation results from a proceeding initiated under the United States 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 5.02(e).

     Deleted  Mortgage  Loan: A Mortgage  Loan  repurchased  by a Mortgage  Loan
Seller or the Sponsor and removed from the Trust Fund.

     Denomination: With respect to each Certificate, the amount set forth on the
face  thereof  as the  "Initial  Certificate  Balance of this  Certificate"  (or
initial notional balance,  in the case of the Interest Only Certificates) or the
Percentage Interest appearing on the face thereof.

     Depositor:  HSI Asset Securitization  Corporation,  a Delaware corporation,
and its successors 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  Institution:  Any  depository  institution  or  trust  company,
including the Trustee and the Securities Administrator, that (a) is incorporated
under the laws of the  United  States of America  or any State  thereof,  (b) is
subject to supervision and  examination by federal or state banking  authorities
and (c) has outstanding unsecured commercial paper or other short-term unsecured
debt obligations that are rated P-1 by Moody's, F1+ by Fitch and A-1 by Standard
& Poor's.

     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  Rates:  For Subgroup I-1,  6.0%,  for Subgroup I-2,  7.0%,  for
Subgroup I-3, 7.5%, for Subgroup I-4, 8.0% and for Subgroup II-1, 5.5%.

                                      -20-

<PAGE>

     Determination  Date:  For each  Remittance  Date (i) with  respect to Wells
Fargo Bank, as Servicer, and Countrywide Servicing, the Business Day immediately
preceding such Remittance  Date, (ii) with respect to Wachovia,  the 15th day of
the calendar month in which such Remittance Date occurs, or if that day is not a
Business Day, the immediately  succeeding business day and (iii) with respect to
HSBC Mortgage,  the 16th day of the calendar month in which such Remittance Date
occurs,  or if  that  day is not a  Business  Day,  the  immediately  succeeding
Business Day.

     Discount Fraction:  With respect to each Discount Mortgage Loan (a) in Loan
Group I, a fraction,  expressed as a percentage, the numerator of which is 6.00%
minus the Net Mortgage Rate for such Discount  Mortgage Loan in Loan Group I and
the  denominator  of which  is  6.00%  and (b) in Loan  Group  II,  a  fraction,
expressed  as a  percentage,  the  numerator  of which is  5.50%  minus  the Net
Mortgage  Rate  for  such  Discount  Mortgage  Loan  in  Loan  Group  II and the
denominator of which is 5.50%.

     Discount  Mortgage Loan: With respect to Loan Group I, any Mortgage Loan in
Loan  Group I with a Net  Mortgage  Rate less than  6.00%  per  annum,  and with
respect to Loan Group II, any Mortgage Loan in Loan Group II with a Net Mortgage
Rate less than 5.50% per annum.

     Disqualified  Non-U.S.  Person: With respect to a Class R Certificate,  any
Non-U.S. Person or agent thereof other than (i) a Non-U.S. Person that holds the
Class R Certificate in connection with the conduct of a trade or business within
the  United  States  and  has  furnished  the   transferor  and  the  Securities
Administrator  with an effective IRS Form W-8ECI or (ii) a Non-U.S.  Person that
has delivered to both the transferor and the Securities Administrator an opinion
of a  nationally  recognized  tax counsel to the effect  that the  transfer of a
Class R Certificate to it is in accordance with the requirements of the Code and
the  regulations  promulgated  thereunder  and that such  transfer  of a Class R
Certificate will not be disregarded for federal income tax purposes.

     Distribution  Account: The separate Eligible Account created and maintained
by the Securities  Administrator  pursuant to Section 3.01(c) in the name of the
Securities  Administrator as paying agent for the benefit of the Trustee and the
Certificateholders  and designated "Citibank,  N.A. as paying agent in trust for
registered   holders  of  HSI  Asset  Loan  Obligation   Trust  2006-2  Mortgage
Pass-Through  Certificates,  Series 2006-2".  Funds in the Distribution  Account
shall be held in trust for the  Certificateholders for the uses and purposes set
forth in this Agreement.

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

     Document Certification and Exception Report: The form of report attached to
Exhibit F hereto.

     Due Date: For a Mortgage  Loan, the date specified in the related  Mortgage
Note on which the  monthly  scheduled  payment of  interest  and  principal  (or
interest only during the  applicable  interest-only  period,  if any,  following
origination) is due.

                                      -21-

<PAGE>

     Due Period: With respect to any Distribution Date, the period commencing on
the  second  day of the  calendar  month  preceding  the  month  in  which  such
Distribution  Date occurs and ending on the first day of the  calendar  month in
which such Distribution Date occurs.

     EDGAR: The Commission's Electronic Data Gathering and Retrieval System.

     Eligible  Account:  Either  (i) an  account  maintained  with a federal  or
state-chartered  depository  institution or trust company that complies with the
definition  of  Eligible  Institution,  (ii)  an  account  maintained  with  the
corporate   trust   department   of  a   federal   depository   institution   or
state-chartered   depository   institution  subject  to  regulations   regarding
fiduciary  funds on  deposit  similar  to Title 12 of the U.S.  Code of  Federal
Regulation  Section  9.10(b),  which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) 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
Securities Administrator.

     Eligible Funds:  With respect to any Distribution Date and each Loan Group,
the portion,  if any, of the Available Funds for such Loan Group remaining after
reduction by the sum of the related  Senior  Principal  Distribution  Amount (in
each case determined  without regard to Section  4.02(a)(iii)(E)),  the Class PO
Principal  Distribution  Amount (determined  without regard to clause (v) of its
definition),  the Senior Interest  Distribution Amount, and the aggregate amount
of Accrued Certificate  Interest on the Senior Subordinate  Certificates,  Class
B-4 and Class B-5 Certificates.

     Eligible Institution:  A federal or state-chartered  depository institution
or trust company the commercial  paper,  short-term debt  obligations,  or other
short-term  deposits of which are rated at least  "A-1+" by Standard & Poor's if
the  amounts on deposit  are to be held in the account for no more than 365 days
(or at least  "A-2" if the  amounts on deposit are to be held in the account for
no more  than 30 days),  "P-1" by  Moody's  and "F1+" by Fitch (or a  comparable
rating if another  Rating Agency is specified by the Depositor by written notice
to  each  of the  Servicers  and  the  Securities  Administrator)  or  long-term
unsecured debt  obligations are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days.

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

     ERISA-Qualifying   Underwriting:   A  best   efforts  or  firm   commitment
underwriting  or private  placement  that meets the  requirements  of Prohibited
Transaction  Exemption  ("PTE") 96-84, 61 Fed. Reg. 58234 (1996),  as amended by
PTE 97-34, 62 Fed. Reg. 39021 (1997), PTE 2000-58, 65 Fed. Reg. 67765 (2000) and
PTE 2002-41,  67 Fed.  Reg.  54487  (2002) (or any  successor  thereto),  or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.

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

     Escrow Account: With respect to each Servicer, the meaning assigned to such
term in the related Servicing Agreement.

                                      -21-

<PAGE>

     Event of Default:  With respect to each Servicer,  the meaning  assigned to
such term in the related Servicing Agreement.

     Excess Bankruptcy Losses: Bankruptcy Losses on the Mortgage Loans in excess
of the Bankruptcy Amount.

     Excess Fraud  Losses:  Fraud Losses on the Mortgage  Loans in excess of the
Fraud Loss Amount.

     Excess Special  Hazard Losses:  Special Hazard Losses on the Mortgage Loans
in excess of the Special Hazard Amount.

     Excess Subordinate  Principal Amount: With respect to any Distribution Date
on which the Class Certificate  Balance of Class or Classes of Certificates then
outstanding  with the  Lowest  Priority  is to be  reduced  to zero and on which
Realized Losses on the Mortgage Loans are to be allocated to that Class or those
Classes,  the amount,  if any, by which (i) the amount of  principal  that would
otherwise be  distributable  on that Class or those Classes of  Certificates  on
that Distribution Date is greater than (ii) the excess, if any, of the aggregate
Class  Certificate  Balance  of that  Class or  those  Classes  of  Certificates
immediately  prior to that  Distribution  Date  over  the  aggregate  amount  of
Realized  Losses to be allocated to that Class or those Classes of  Certificates
on that  Distribution  Date,  as reduced by any amount  calculated  pursuant  to
clause (v) of the definition of "Class PO Distribution Amount."

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

     Expense  Fees:  As to each Mortgage  Loan and any  Distribution  Date,  the
Servicing Fees.

     Extraordinary  Loss: A Realized Loss  resulting  from damage to a Mortgaged
Property that was occasioned by war, civil  insurrection,  certain  governmental
actions, nuclear reaction and certain other risks.

     Fannie Mae: The Federal  National  Mortgage  Association,  or any successor
thereto.

     Final Recovery  Determination:  With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property purchased by the
Mortgage  Loan  Seller or the Sponsor as  contemplated  by this  Agreement,  any
Transfer Agreement or the Purchase  Agreement,  as applicable),  a determination
made  by any  Servicer  that  all  Insurance  Proceeds,  Condemnation  Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable  good faith  judgment,  expects to be finally  recoverable in respect
thereof have been so recovered.

     Fitch:  Fitch, Inc., or any successor thereto.  If Fitch is designated as a
Rating Agency in the  Preliminary  Statement,  for purposes of Section 12.05 the
address for notices to Fitch shall be Fitch,  Inc., One State Street Plaza,  New
York, New York 10004, Attention:

                                      -22-

<PAGE>

MBS Monitoring - HALO (HSI Asset Loan  Obligation  Trust 2006-2),  or such other
address as Fitch may  hereafter  furnish  to the  Depositor  and the  Securities
Administrator.

     Form 8-K Disclosure Information: As defined in Section 8.12(a)(iii).

     Fraud Loss Amount:  As of the Closing Date, an amount equal to 2.00% of the
Stated Principal  Balance of the Mortgage Loans as of the Cut-off Date,  subject
to reduction  from time to time, by the amount of Fraud Losses  allocated to the
Certificates in accordance with Section 4.04. In addition,  on each  anniversary
of the Cut-off  Date,  the Fraud Loss Amount will be reduced as follows:  (a) on
the first,  second,  third and fourth  anniversaries  of the Cut-off Date, to an
amount  equal  to the  lesser  of (i) 2% of the  then-current  Stated  Principal
Balance of the Mortgage Loans in the case of the first such  anniversary  and 1%
of the then-current  Stated Principal  Balance of the Mortgage Loans in the case
of the second,  third and fourth such  anniversaries  and (ii) the excess of the
Fraud Loss Amount as of the preceding  anniversary  of the Cut-off Date over the
cumulative  amount of Fraud Losses  allocated to the  Certificates in accordance
with  Section  4.04  since  such  preceding  anniversary;  and (b) on the  fifth
anniversary of the Cut-off Date, to zero.

     Fraud Losses:  A Realized Loss incurred on defaulted  Mortgage  Loans as to
which there was a fraud in the origination of such Mortgage Loan.

     Freddie  Mac:  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.

     Group 1 Certificates: As specified in the Preliminary Statement.

     Group I Mortgage Loans:  The Mortgage Loans identified on the Mortgage Loan
Schedule as Group I Mortgage Loans.

     Group 2 Certificates: As specified in the Preliminary Statement.

     Group II Mortgage Loans: The Mortgage Loans identified on the Mortgage Loan
Schedule as Group II Mortgage Loans.

     Group   Subordinate   Amount:   With  respect  to  each  Subgroup  and  any
Distribution  Date, the excess of the sum of the Subgroup Fraction of the Stated
Principal  Balance for all Mortgage Loans included in such Subgroup  (other than
the Discount  Fraction of any Discount  Mortgage Loan) immediately prior to such
Distribution  Date  over the  total  Class  Certificate  Balance  of the  Senior
Certificates  (other than any Class PO Certificates) of the related  Certificate
Group immediately prior to that Distribution Date.

     Highest  Priority:   As  of  any  date  of  determination,   the  Class  of
Certificates then outstanding with a Certificate Balance greater than zero, with
the earliest priority for payments pursuant to Section 4.02(a), in the following
order:  Senior  Certificates,  Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 and Class B-6 Certificates.

     HSBC Mortgage: HSBC Mortgage Corporation (USA).

                                      -23-

<PAGE>

     Independent:  When used with  respect to any  accountants,  a Person who is
"independent" within the meaning of Rule 2-01(B) of the Commission's  Regulation
S-X. Independent means, when used with respect to any other Person, a Person who
(A) is in fact independent of another specified Person and any Affiliate of such
other  Person,  (B) does not have any  material  direct  or  indirect  financial
interest in such other Person or any Affiliate of such other Person,  (C) is not
connected  with such other  Person or any  Affiliate  of such other Person as an
officer, employee, promoter,  underwriter,  trustee, partner, director or Person
performing  similar functions and (D) is not a member of the immediate family of
a Person defined in clause (B) or (C) above.

     Initial  Certificate  Balance:  With respect to each Class of Certificates,
the Certificate Balance of such Class of Certificates as of the Cut-off Date, in
the amount set forth in the Preliminary Statement.

     Initial Certification: As defined in Section 2.02.

     Initial  Subordinate  Class  Percentage:  With  respect  to each  Class  of
Subordinate  Certificates,  an amount  which is equal to the  initial  aggregate
Certificate  Balance of such Class of  Subordinate  Certificates  divided by the
aggregate Stated  Principal  Balance of all the Mortgage Loans as of the Cut-off
Date as follows:

<TABLE>
    <S>                          <C>              <C>
    ---------------------------  ---------------  ---------------------
    Class B-1:  2.35%                             Class B-4:  0.60%
    ---------------------------  ---------------  ---------------------
    Class B-2:  1.00%                             Class B-5:  0.50%
    ---------------------------  ---------------  ---------------------
    Class B-3:  0.60%                             Class B-6:  0.20%
    ---------------------------  ---------------  ---------------------
</TABLE>

     Insurance  Policy:  With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy,  including,  but not limited to, any standard hazard
insurance policy,  flood insurance policy,  earthquake  insurance policy,  title
insurance  policy or Primary Mortgage  Insurance Policy (if any),  including all
riders and endorsements  thereto in effect,  including any replacement policy or
policies.

     Insurance  Proceeds:  With  respect  to each  Mortgage  Loan,  proceeds  of
Insurance Policies insuring the Mortgage Loan or the related Mortgaged Property.

     Interest  Accrual Period:  For each Class of  Certificates  (other than the
Adjustable  Rate  Certificates)  and any  Distribution  Date, the calendar month
immediately  preceding the month in which the related  Distribution Date occurs,
assuming a 360-day year consisting of twelve 30-day months. The Interest Accrual
Period for the Adjustable  Rate  Certificates  will be the actual number of days
elapsed during the period commencing on the immediately  preceding  Distribution
Date (or, for the initial Distribution Date, the Closing Date) and ending on the
day immediately  preceding the current Distribution Date assuming a 360-day year
consisting of twelve 30-day months.

     Interest Only Certificates: As specified in the Preliminary Statement.

                                       -24-

<PAGE>

     Interest Transfer Amount: With respect to any Undercollateralized Group and
any Distribution Date, one month's interest on the applicable Principal Transfer
Amount at the Designated  Rate for the related  Subgroup,  plus any shortfall of
interest on the Senior Certificates of the applicable  Undercollateralized Group
from prior Distribution Dates.

     IRS: The Internal Revenue Service.

     Junior Subordinate Certificates: As specified in the Preliminary Statement.

     Late Collections: With respect to any Mortgage Loan and any Due Period, all
amounts received after the  Determination  Date  immediately  following such Due
Period, whether as late payments of Scheduled Payments or as Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds, Subsequent Recoveries or otherwise,
which  represent late payments or collections of principal  and/or  interest due
(without regard to any  acceleration of payments under the related  Mortgage and
Mortgage Note) but delinquent for such Due Period and not previously recovered.

     LIBOR:  With respect to any Interest Accrual Period for the Adjustable Rate
Certificates,  the per annum rate determined on the LIBOR  Determination Date in
the  following  manner  by the  Securities  Administrator  on the  basis  of the
"Interest  Settlement Rate" set by the British Bankers'  Association (the "BBA")
for  one-month  United  States  dollar  deposits,  as such  rates  appear on the
Telerate Page 3750, as of 11:00 a.m.  (London time) on such LIBOR  Determination
Date.

     If on such a LIBOR  Determination  Date, the BBA's Interest Settlement Rate
does not appear on the Telerate Page 3750 as of 11:00 a.m.  (London time), or if
the  Telerate  Page  3750  is  not  available  on  such  date,   the  Securities
Administrator  will obtain such rate from  Reuters'  "page LIBOR 01" or, if such
rate does not appear therein, the Securities Administrator will obtain such rate
from  Bloomberg's  page  "BBAM."  If such rate is not  published  for such LIBOR
Determination  Date,  LIBOR for such date  will be the most  recently  published
Interest  Settlement  Rate. In the event that the BBA no longer sets an Interest
Settlement  Rate,  the  Securities  Administrator  will designate an alternative
index  that has  performed,  or that the  Securities  Administrator  expects  to
perform,  in a manner  substantially  similar to the BBA's  Interest  Settlement
Rate.  The  Securities  Administrator  will  select  a  particular  index as the
alternative index only if it receives an Opinion of Counsel, which opinion shall
be an expense reimbursed from the Distribution Account pursuant to Section 4.01,
that the  selection of such index will not cause any of the REMICs to lose their
classification as REMICs for federal income tax purposes.

     LIBOR  Determination  Date: With respect to any Interest Accrual Period for
the Adjustable Rate  Certificates,  the second London Business Day preceding the
commencement of such Interest Accrual Period.

     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
applicable  Servicer has certified to the Securities  Administrator  that it has
received all amounts it expects to receive in

                                      -25-

<PAGE>

connection  with the  liquidation  of such  Mortgage  Loan  including  the final
disposition of an REO Property.

     Liquidation Proceeds: Cash received in connection with the liquidation of a
Liquidated Mortgage Loan, whether through a trustee's sale,  foreclosure sale or
otherwise.

     Loan Group:  The Group I Mortgage Loans or the Group II Mortgage  Loans, as
applicable.

     Loan Group I: The group of Mortgage Loans comprised of the Group I Mortgage
Loans.

     Loan  Group  II:  The group of  Mortgage  Loans  comprised  of the Group II
Mortgage Loans.

     London Business Day: Any day on which dealings in deposits of United States
dollars are transacted in the London interbank market.

     Lower  Priority:  As  of  any  date  of  determination  and  any  Class  of
Certificates,   any  other  Class  of  Certificates   then  outstanding  with  a
Certificate Balance greater than zero, with later priority for payments pursuant
to Section 4.02(a).

     Lowest Priority: As of any date of determination, the Class of Certificates
then  outstanding  with the latest  priority  for  payments  pursuant to Section
4.02(a),  in the following  order:  Senior  Certificates,  Class B-6, Class B-5,
Class B-4, Class B-3, Class B-2 and Class B-1 Certificates.

     Master Servicer:  CitiMortgage, Inc., and any successor in interest, and if
a successor master servicer is appointed hereunder, such successor.

     Master Servicer Event of Default: As defined in Section 9.06.

     Master Servicer Float Period:  With respect to each  Distribution  Date and
the related amounts in the Master Servicing  Account,  the period  commencing on
the applicable Remittance Date immediately preceding the related Master Servicer
Remittance Date and ending on such Master Servicer Remittance Date.

     Master Servicer  Remittance Date: As to any  Distribution  Date, 12:00 noon
New  York  City  time on the  first  Business  Day  immediately  preceding  such
Distribution Date.

     Master  Servicing  Account:  The  separate  Eligible  Account  created  and
maintained by the Master Servicer pursuant to Section 3.01(c) in the name of the
Master  Servicer for the benefit of the Trustee and the  Certificateholders  and
designated  "CitiMortgage,  Inc., in trust for  registered  holders of HSI Asset
Loan Obligation Trust 2006-2 Mortgage Pass-Through Certificates, Series 2006-2".
Funds  in  the  Master  Servicing  Account  shall  be  held  in  trust  for  the
Certificateholders for the uses and purposes set forth in this Agreement.

                                      -26-

<PAGE>

     Master Servicing  Officer:  Any officer of the Master Servicer involved in,
or  responsible  for, the  administration  and master  servicing of the Mortgage
Loans.

     MERS:  Mortgage   Electronic   Registration   Systems,   Inc.,  a  Delaware
corporation, and its successors in interest.

     MERS  Designated  Mortgage  Loan: Any Mortgage Loan as to which the related
Mortgage, or an Assignment of Mortgage, has been or will be recorded in the name
of MERS, as nominee for the holder from time to time of the Mortgage Note.

     MERS Procedure  Manual:  The MERS Procedures  Manual, as it may be amended,
supplemented or otherwise modified from time to time.

     MERS(R)  System:   MERS  mortgage   electronic  registry  system,  as  more
particularly described in the MERS Procedures Manual.

     MIN: The Mortgage  Identification  Number of Mortgage Loans registered with
MERS on the MERS(R) System.

     Monthly Statement:  The statement made available to the  Certificateholders
by the Securities Administrator through its website pursuant to Section 4.03.

     Moody's:  Moody's  Investors  Service,  Inc. If Moody's is  designated as a
Rating Agency in the Preliminary Statement, for purposes of Section 13.05(c) the
address for notices to Moody's  shall be Moody's  Investors  Service,  Inc.,  99
Church  Street,  New  York,  New York  10007,  Attention:  Residential  Mortgage
Pass-Through  Group,  HALO (HSI Asset Loan Obligation  Trust Series 2006-2),  or
such other  address as Moody's may  hereafter  furnish to the  Depositor and the
Securities Administrator.

     Mortgage: The mortgage, deed of trust or other instrument identified on the
Mortgage Loan Schedule as securing a Mortgage Note.

     Mortgage File: The items pertaining to a particular Mortgage Loan contained
in either the Servicing File or Custodial File.

     Mortgage  Loan:  An  individual  Mortgage  Loan that is the subject of this
Agreement,  each Mortgage  Loan  originally  sold and subject to this  Agreement
being  identified on the Mortgage Loan  Schedule,  which Mortgage Loan includes,
without  limitation,  the  Mortgage  File,  the  Scheduled  Payments,  Principal
Prepayments, Liquidation Proceeds, Subsequent Recoveries, Condemnation Proceeds,
Insurance Proceeds,  REO Disposition,  Prepayment Charges, and all other rights,
benefits,  proceeds  and  obligations  arising from or in  connection  with such
Mortgage Loan, excluding replaced or repurchased Mortgage Loans.

     Mortgage  Loan  Schedule:  A schedule  of  Mortgage  Loans  prepared by the
Depositor,  delivered  to the  Trustee on the  Closing  Date and  referred to on
Schedule I, such schedule  setting forth the Data Tape  Information with respect
to each Mortgage Loan.

                                      -27-

<PAGE>

     Mortgage Loan Sellers:  The entities  which sold the Mortgage  Loans to the
Sponsor pursuant to the Transfer Agreements.

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

     Mortgage  Rate:  With  respect to any  Mortgage  Loan,  the annual  rate of
interest borne by the related Mortgage Note from time to time, as of the related
Due Date.

     Mortgaged  Property:  With respect to each Mortgage Loan, the real property
(or leasehold estate, if applicable) identified on the Mortgage Loan Schedule as
securing repayment of the debt evidenced by the related Mortgage Note.

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

     NAS Prepayment Percentage:  With respect to any Distribution Date occurring
prior to the Distribution  Date in January 2012, 0%. For any  Distribution  Date
occurring on or after January 2012, a percentage determined as follows:

     (i)  for any  Distribution  Date on or  after  January  2012  and  prior to
          January 2013, 30%;

     (ii) for any  Distribution  Date on or  after  January  2013  and  prior to
          January 2014, 40%;

     (iii) for any  Distribution  Date on or after  January  2014  and  prior to
          January 2015, 60%;

     (iv) for any  Distribution  Date on or  after  January  2015  and  prior to
          January 2016, 80%;

          and

     (v)  for any Distribution Date after January 2016, 100%.

     Net Mortgage Rate: As to any Mortgage Loan and any  Distribution  Date, the
excess of the Mortgage  Rate over the sum of the  applicable  Servicing Fee Rate
and the rate at which any lender paid Primary Mortgage Insurance Policy premiums
are paid, if applicable.

     Non-Discount  Mortgage  Loan  means the  Mortgage  Loans in each Loan Group
other than the Discount Mortgage Loans included in that Loan Group.

     Non-Permitted Transferee: A Person other than a Permitted Transferee.

     Non-U.S. Person: A person that is not a U.S. Person.

     Nonrecoverable P&I Advance:  Any P&I Advance previously made or proposed to
be made in respect of a Mortgage  Loan or REO Property  that,  in the good faith
business  judgment  (taking into account  Accepted  Servicing  Practices) of the
applicable Servicer, the

                                      -28-

<PAGE>

Master  Servicer,  as  successor  servicer,  or any  successor  master  servicer
including the Trustee, as applicable, will not or, in the case of a proposed P&I
Advance,  would not be ultimately  recoverable  from related Late Collections on
such Mortgage Loan or REO Property as provided herein.

     Nonrecoverable Servicing Advance: Any Servicing Advances previously made or
proposed to be made in respect of a Mortgage  Loan or REO  Property,  which,  in
accordance  with  Accepted  Servicing  Practices,  will not or, in the case of a
proposed  Servicing  Advance,  would not be ultimately  recoverable from related
Late Collections.

     Notice of Final  Distribution:  The notice to be provided by the Securities
Administrator pursuant to Section 12.02 to the effect that final distribution on
any of the  Certificates  shall be made only  upon  presentation  and  surrender
thereof.

     Notional  Amount:  As of any  date of  determination  for the  Class  I-A-4
Certificates,  the Notional Amount is equal to the Class Certificate  Balance of
the Class I-A-3 Certificates.  For Class I-A-8 Certificates, the Notional Amount
is equal to the Class Certificate Balance of the Class I-A-7  Certificates.  For
the  Class  I-A-10  Certificates,  the  Notional  Amount  is equal to the  Class
Certificate  Balance  of the Class  I-A-9  Certificates.  For the  Class  I-A-12
Certificates,  the Notional Amount is equal to the Class Certificate  Balance of
the  Class  I-A-11  Certificates.   The  Notional  Amount  for  the  Class  I-IO
Certificates  and Class II-IO  Certificates  will equal the Class I-IO  Notional
Amount and the Class II-IO Notional Amount, respectively.

     Offered Certificates: As specified in the Preliminary Statement.

     Offering Documents: Collectively, the Prospectus, Prospectus Supplement and
the Private Placement Memorandum.

     Officer's Certificate: As defined in the applicable Servicing Agreement.

     Opinion of Counsel: A written opinion of counsel,  which may be in-house or
outside  counsel to the  Depositor,  the  Sponsor,  the Master  Servicer  or the
Trustee,  acceptable  to  the  Trustee  or  the  Securities  Administrator,   as
applicable, except that any opinion of counsel relating to (a) the qualification
of any  REMIC  created  hereunder  as a REMIC or (b)  compliance  with the REMIC
Provisions must be an opinion of Independent counsel.

     Option to Purchase:  On the initial or any subsequent Optional  Termination
Date, the Master Servicer,  at its own option may purchase,  or upon instruction
by the  Depositor,  shall  purchase  the Mortgage  Loans.  In the event that the
Depositor  wishes to instruct the Master Servicer to purchase the Mortgage Loans
on any Optional  Termination  Date, the Depositor shall provide  instructions to
the Master Servicer to exercise such option no later than 5 p.m. on the Business
Day  immediately  preceding  the Optional  Termination  Date, in which event the
exercise by the Master  Servicer of its option to purchase  the  Mortgage  Loans
shall be deemed to have been at the Depositor's instruction.

     Optional  Termination  Date: Any  Distribution  Date on which the aggregate
Stated  Principal  Balance  of the  Mortgage  Loans,  as of the  last day of the
related  Due Period,  is less than or equal to 10.00% of the  Cut-off  Date Pool
Principal Balance.

                                      -29-

<PAGE>

     OTS: Office of Thrift Supervision, and any successor thereto.

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

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

          (ii)  Certificates  in  exchange  for which or in lieu of which  other
     Certificates   have  been   executed  and   delivered  by  the   Securities
     Administrator 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.

     Overcollateralized  Group:  On any  Distribution  Date,  when  there  is an
Undercollateralized  Group, any Certificate Group on such Distribution Date that
is not itself an Undercollateralized Group.

     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.

     P&I Advance: As to any Mortgage Loan or REO Property, any advance made by a
Servicer in respect of any  Remittance  Date  representing  the aggregate of all
payments of principal and interest,  net of the applicable Servicing Fee and any
lender paid Primary Mortgage Insurance Policy premiums, that were due during the
related Due Period on the Mortgage Loans and that were delinquent on the related
Determination  Date,  plus certain  amounts  representing  assumed  payments not
covered  by any  current  net income on the  Mortgaged  Properties  acquired  by
foreclosure or deed in lieu of foreclosure as determined pursuant to the related
Servicing Agreement.

     Pass-Through Rate: means:

     With  respect  to  the   Certificates   (other  than  the  Adjustable  Rate
Certificates, the Subordinate Certificates, the Class PO Certificates, the Class
P Certificates and the Class R Certificates), and any Distribution Date, the per
annum rates set forth in the Preliminary  Statement  hereto.  For the Adjustable
Rate Certificates and the Subordinate Certificates and any Distribution Date:

     (i)  With  respect  to the Class  I-A-3  Certificates  with  respect to the
          initial  Interest  Accrual  Period is 5.95% per  annum,  and as to any
          Interest Accrual Period thereafter,  will be a per annum rate equal to
          LIBOR plus  0.60%,  with a maximum  rate of the  applicable  Available
          Funds Cap and a minimum rate of 0.60% per annum;

                                      -30-

<PAGE>

     (ii) With  respect  to the Class  I-A-4  Certificates  with  respect to the
          initial  Interest  Accrual  Period is 0.05% per  annum,  and as to any
          Interest Accrual Period thereafter,  will be a per annum rate equal to
          5.40%  minus  LIBOR,  with a  maximum  rate of 5.40%  per  annum and a
          minimum rate of 0.00% per annum;

    (iii) With  respect to the  Class  I-A-7  Certificates  with  respect to the
          initial  Interest  Accrual  Period is 5.72% per  annum,  and as to any
          Interest Accrual Period thereafter,  will be a per annum rate equal to
          LIBOR plus 0.37%,  with a maximum rate of the 7.00% and a minimum rate
          of 0.37% per annum;

     (iv) With  respect  to the Class  I-A-8  Certificates  with  respect to the
          initial  Interest  Accrual  Period is 1.28% per  annum,  and as to any
          Interest Accrual Period thereafter,  will be a per annum rate equal to
          6.63%  minus  LIBOR,  with a  maximum  rate of 6.63%  per  annum and a
          minimum rate of 0.00% per annum;

     (v)  With  respect  to the Class  I-A-9  Certificates  with  respect to the
          initial  Interest  Accrual  Period is 5.65% per  annum,  and as to any
          Interest Accrual Period thereafter,  will be a per annum rate equal to
          LIBOR plus 0.30%,  with a maximum  rate of 7.50% and a minimum rate of
          0.30% per annum;

     (vi) With  respect to the Class  I-A-10  Certificates  with  respect to the
          initial  Interest  Accrual  Period is 1.85% per  annum,  and as to any
          Interest Accrual Period thereafter,  will be a per annum rate equal to
          7.20%  minus  LIBOR,  with a  maximum  rate of 7.20%  per  annum and a
          minimum rate of 0.00% per annum;

    (vii) With  respect to the Class  I-A-11  Certificates  with respect to  the
          initial  Interest  Accrual  Period is 5.55% per  annum,  and as to any
          Interest Accrual Period thereafter,  will be a per annum rate equal to
          LIBOR plus 0.20%,  with a maximum  rate of 8.00% and a minimum rate of
          0.20% per annum;

   (viii) With  respect to the Class I-A-12  Certificates  with  respect  to the
          initial  Interest  Accrual  Period is 2.45% per  annum,  and as to any
          Interest Accrual Period thereafter,  will be a per annum rate equal to
          7.80%  minus  LIBOR,  with a  maximum  rate of 7.80%  per  annum and a
          minimum rate of 0.00% per annum;

     (ix) With  respect  to the Class  B-1  Certificate  and as to any  Interest
          Accrual  Period,  will be a per annum rate equal to the  Subgroup  WAC
          Rate for such Distribution Date minus 0.57687234%;

     (x)  With  respect  to the Class  B-2  Certificate  and as to any  Interest
          Accrual  Period,  will be a per annum rate equal to the  Subgroup  WAC
          Rate for such Distribution Date minus 0.32687234%;

                                      -31-

<PAGE>

     (xi) With  respect  to the Class  B-3  Certificate  and as to any  Interest
          Accrual  Period,  will be a per annum rate equal to the  Subgroup  WAC
          Rate for such Distribution Date;

    (xii) With  respect  to the Class B-4  Certificate  and as  to any  Interest
          Accrual  Period,  will be a per annum rate equal to the  Subgroup  WAC
          Rate for such Distribution Date;

   (xiii) With  respect to the Class B-5  Certificate  and  as to  any  Interest
          Accrual  Period,  will be a per annum rate equal to the  Subgroup  WAC
          Rate for such Distribution Date; and

    (xiv) With  respect  to the Class B-6  Certificate  and  as to any  Interest
          Accrual  Period,  will be a per annum rate equal to the  Subgroup  WAC
          Rate for such Distribution Date plus (((0.57687234%  multiplied by the
          Class  Certificate  Balance of the Class B-1 Certificates  immediately
          prior to such Distribution  Date) plus (0.32687234%  multiplied by the
          Class  Certificate  Balance of the Class B-2 Certificates  immediately
          prior to such  Distribution  Date))  divided by the Class  Certificate
          Balance  of the  Class  B-6  Certificates  immediately  prior  to such
          Distribution Date);

The Class PO Certificates, the Class P Certificates and the Class R Certificates
have no Pass-Through Rates and are not entitled to Accrued Certificate Interest.

     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.

     Permitted  Investments:  Any one or more of the  following  obligations  or
securities  acquired at a purchase price of not greater than par,  regardless of
whether  issued by the  Securities  Administrator,  the  Trustee or any of their
respective Affiliates:

          (i) direct  obligations  of, or  obligations  fully  guaranteed  as to
     timely  payment of  principal  and  interest  by, the United  States or any
     agency or instrumentality thereof,  provided such obligations are backed by
     the full faith and credit of the United States;

          (ii)  demand and time  deposits  in,  certificates  of deposit  of, or
     bankers'  acceptances  (which  shall each have an original  maturity of not
     more than 90 days and,  in the case of  bankers'  acceptances,  shall in no
     event  have an  original  maturity  of more  than 365  days or a  remaining
     maturity of more than 30 days)  denominated  in United  States  dollars and
     issued  by,  any  Depository  Institution  and rated F1+ by Fitch,  A-1+ by
     Standard & Poor's and P-1 by Moody's;

          (iii) repurchase obligations with respect to any security described in
     clause (i) above  entered  into with a  Depository  Institution  (acting as
     principal);

                                       -32-

<PAGE>

          (iv) securities bearing interest or sold at a discount that are issued
     by any  corporation  incorporated  under the laws of the  United  States of
     America  or any state  thereof  and that are rated by  Fitch,  Moody's  and
     Standard & Poor's  (in each case,  to the  extent  they are  designated  as
     Rating  Agencies in the  Preliminary  Statement),  and by each other Rating
     Agency  that rates such  securities,  in its  highest  long-term  unsecured
     rating categories at the time of such investment or contractual  commitment
     providing for such investment;

          (v) commercial  paper  (including both  non-interest-bearing  discount
     obligations  and  interest-bearing  obligations  payable  on demand or on a
     specified date not more than 30 days after the date of acquisition thereof)
     that is rated by Fitch, Moody's and Standard & Poor's (in each case, to the
     extent  they  are  designated  as  Rating   Agencies  in  the   Preliminary
     Statement),  and by each other Rating Agency that rates such securities, in
     its highest short-term  unsecured debt rating available at the time of such
     investment;

          (vi) units of money market funds, including money market funds managed
     by the Trustee, the Securities  Administrator or an Affiliate thereof, that
     have been rated "Aaa" by Moody's,  "AAA" by Standard & Poor's and, if rated
     by Fitch, "AAA" by Fitch; and

          (vii)  if   previously   confirmed   in  writing  to  the   Securities
     Administrator, any other demand, money market or time deposit, or any other
     obligation,  security or  investment,  as may be  acceptable to each of the
     Rating  Agencies as a permitted  investment of funds backing "Aaa" or "AAA"
     rated securities; provided, however, that no instrument described hereunder
     shall  evidence  either the right to receive (a) only interest with respect
     to the  obligations  underlying  such  instrument or (b) both principal and
     interest  payments derived from obligations  underlying such instrument and
     the interest and principal payments with respect to such instrument provide
     a yield to maturity at par greater than 120.00% of the yield to maturity at
     par of the underlying obligations.

     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)(1) 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) a  Person  that  is a
Disqualified Non-U.S. Person or a U.S. Person with respect to whom income from a
Residual  Certificate is attributable to a foreign  permanent  establishment  or
fixed base,  within the  meaning of an  applicable  income tax  treaty,  of such
Person or any other U.S. Person, (vi) an "electing large partnership" within the
meaning of Section 775 of the Code 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  formed
hereby  to fail to  qualify  as a REMIC at any time  that the  Certificates  are
outstanding. The terms "United States", "State" and "international organization"
shall have the

                                      -33-

<PAGE>

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 Freddie Mac, a majority
of its board of directors is not selected by such government unit.

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

     Prepayment  Assumption:  With respect to the Mortgage  Loans,  a prepayment
assumption  of 24% CPR,  used for  determining  the  accrual of  original  issue
discount and market discount and premium on the  Certificates for federal income
tax purposes.

     Prepayment Charge: Any prepayment premium, penalty or charge collected by a
Servicer with respect to a Mortgage Loan from a Mortgagor in connection with any
Principal Prepayment pursuant to the terms of the related Mortgage Note.

     Prepayment Distribution  Percentage:  With respect to any Distribution Date
and each  Class of  Subordinate  Certificates  for each  Loan  Group,  under the
applicable  circumstances set forth below, the respective  percentages set forth
below:

          (i)  For any  Distribution  Date  prior  to the  Distribution  Date in
     January  2012  (unless  the  Certificate  Balances  of the  related  Senior
     Certificates  other  than the Class PO  Certificates  have been  reduced to
     zero), 0%.

          (ii) For any  Distribution  Date for which  clause  (i) above does not
     apply,  and on which any Class of Subordinate  Certificates  is outstanding
     with a Certificate Balance greater than zero:

               (a) in the case of the  Class of  Subordinate  Certificates  then
          outstanding  with  the  Highest  Priority  and  each  other  Class  of
          Subordinate Certificates for which the related Prepayment Distribution
          Trigger has been satisfied, a fraction, expressed as a percentage, the
          numerator  of  which  is the  Certificate  Balance  of such  Class  of
          Subordinate  Certificates  then  outstanding with the Highest Priority
          immediately prior to such date and the denominator of which is the sum
          of the Certificate  Balances immediately prior to such date of (1) the
          Class of Subordinate  Certificates  then  outstanding with the Highest
          Priority and (2) all other  Classes of  Subordinate  Certificates  for
          which  the  respective  Prepayment  Distribution  Triggers  have  been
          satisfied; and

               (b) in the case of each other Class of  Subordinate  Certificates
          for  which  the  Prepayment   Distribution   Triggers  have  not  been
          satisfied, 0%.

          (iii)  Notwithstanding  the  foregoing,  if  the  application  of  the
     foregoing  percentages on any Distribution Date (determined  without regard
     to the proviso to the  definition of  "Subordinate  Principal  Distribution
     Amount")  would  result in a  distribution  as provided in Section  4.02 in
     respect of principal of any Class or Classes of Subordinate Certificates in
     an amount greater than the remaining Certificate Balance thereof (any such

                                      -34-

<PAGE>

     class,  a  "Maturing  Class"),   then:  (a)  the  Prepayment   Distribution
     Percentage  of each Maturing  Class shall be reduced to a level that,  when
     applied as described above, would exactly reduce the Certificate Balance of
     such Class to zero;  (b) the  Prepayment  Distribution  Percentage  of each
     other Class of Subordinate  Certificates  (any such Class, a  "Non-Maturing
     Class")  shall  be  recalculated  in  accordance  with  the  provisions  in
     paragraph (ii) above, as if the Certificate  Balance of each Maturing Class
     had  been  reduced  to  zero  (such   percentage   as   recalculated,   the
     "Recalculated  Percentage");  (c) the total amount of the reductions in the
     Prepayment  Distribution  Percentages  of the  Maturing  Class  or  Classes
     pursuant  to  clause  (a)  of  this  sentence,  expressed  as an  aggregate
     percentage, shall be allocated among the Non-Maturing Classes in proportion
     to their respective Recalculated Percentages (the portion of such aggregate
     reduction  so  allocated  to  any   Non-Maturing   Class,  the  "Adjustment
     Percentage");   and  (d)  for  purposes  of  such  Distribution  Date,  the
     Prepayment  Distribution  Percentage  of each  Non-Maturing  Class shall be
     equal to the sum of (1) the  Prepayment  Distribution  Percentage  thereof,
     calculated in accordance  with the provisions in paragraph (ii) above as if
     the  Certificate  Balance of each  Maturing  Class had not been  reduced to
     zero, plus (2) the related Adjustment Percentage.

     Prepayment  Distribution Trigger: With respect to any Distribution Date and
any Class of Subordinate Certificates (other than the Class B-1 Certificates), a
test that shall be satisfied if the fraction  (expressed as a percentage)  equal
to the  sum of the  Certificate  Balances  of  such  Class  and  each  Class  of
Subordinate Certificates with a Lower Priority than such Class immediately prior
to such  Distribution  Date divided by the aggregate Stated Principal Balance of
all of the Mortgage Loans (or related REO Properties)  immediately prior to such
Distribution  Date is greater  than or equal to the sum of the  related  Initial
Subordinate Class Percentages of such Classes of Subordinate Certificates.

     Prepayment  Interest  Excess:  With respect to any  Distribution  Date, any
interest  collected by Wells Fargo with respect to any related  Mortgage Loan as
to which a  Principal  Payment  in Full  occurs  from  the 1st day of the  month
through the 13th day of the month in which the Distribution Date occurs and that
represents  interest  that accrues from the 1st day of such month to the date of
such Principal Prepayment in Full.

     Prepayment Interest Shortfall:  With respect to each Servicer,  the meaning
assigned to such term in the related Servicing Agreement for each Loan Group.

     Prepayment Period:  With respect to each Servicer,  the meaning assigned to
such term (or to the term  "Principal  Prepayment  Period" with respect to Wells
Fargo) in the related Servicing Agreement.

     Primary Mortgage Insurance Policy: Any mortgage guaranty insurance, if any,
on an individual Mortgage Loan as evidenced by a policy or certificate,  whether
such policy is obtained by the related  Mortgage Loan Seller,  the lender or the
borrower.

     Principal  Prepayment:  Any full or partial  payment or other  recovery  of
principal on a Mortgage Loan  (including  upon  liquidation  of a Mortgage Loan)
that is received in advance of its scheduled Due Date,  excluding any Prepayment
Charge thereon, and that is not

                                      -35-

<PAGE>

accompanied by an amount of interest representing  scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.

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

     Principal  Transfer Amount:  With respect to any Distribution  Date and any
Undercollateralized Group, the excess of the aggregate Class Principal Amount of
the Senior Certificates  (other than the Class PO Certificates)  related to that
Subgroup over the Subgroup Fraction of the aggregate Stated Principal Balance of
the  Mortgage  Loans  related  to  that  Undercollateralized   Group  (less  the
applicable Discount Fraction of any Discount Mortgage Loan in that Subgroup).

     Private Certificate: As specified in the Preliminary Statement.

     Private  Placement  Memorandum:  The Private  Placement  Memorandum,  dated
December  28,  2006   relating  to  the  offering  of  the  Junior   Subordinate
Certificates.

     Prospectus: The Prospectus, dated December 27, 2006, as supplemented by the
Prospectus Supplement.

     Prospectus Supplement:  The Prospectus Supplement,  dated December 27, 2006
relating to the Offered Certificates.

     PTCE: As defined in Section 5.02(b).

     Purchase  Agreement:  The Mortgage  Loan  Purchase  Agreement,  dated as of
December 1, 2006, between the Depositor and the Sponsor.

     Rating Agency:  Each of the Rating  Agencies  specified in the  Preliminary
Statement.  If 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  and the  Securities
Administrator.  References  herein to a given  rating or  rating  category  of a
Rating  Agency  shall mean such rating  category  without  giving  effect to any
modifiers.  For purposes of Section  13.05,  the  addresses  for notices to each
Rating  Agency  shall  be the  address  specified  therefor  in  the  definition
corresponding to the name of such Rating Agency, or such other address as either
such Rating  Agency may hereafter  furnish to the  Depositor and the  Securities
Administrator.

     Realized  Losses:  With  respect  to any  date  of  determination  and  any
Liquidated  Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such  Liquidated  Mortgage  Loan  together  with  accrued  and unpaid
interest  thereon exceeds (b) the Liquidation  Proceeds with respect thereto net
of the  expenses  incurred by the  applicable  Servicer in  connection  with the
liquidation  of  such  Liquidated  Mortgage  Loan  and  net  of  the  amount  of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.

                                      -36-

<PAGE>

     Record Date: means, with respect to the Offered Certificates,  the Business
Day  immediately  preceding the related  Distribution  Date,  unless the Offered
Certificates  are issued in definitive  form, in which case the Record Date will
be the  last  Business  Day of  the  month  immediately  preceding  the  related
Distribution Date.

     Regulation AB: Subpart 229.1100 - Asset Backed Securities  (Regulation AB),
17 C.F.R. ss.ss.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
Commission in the adopting  release  (Asset-Backed  Securities,  Securities  Act
Release No. 33-8518,  70 Fed. Reg. 1,506,  1,531 (Jan. 7, 2005)) or by the staff
of the  Commission,  or as may be provided by the  Commission  or its staff from
time to time.

     Regular Certificates: As specified in the Preliminary Statement.

     Relevant  Servicing  Criteria:  The  Servicing  Criteria  applicable to the
parties  having  reporting  obligations  hereunder,  as set  forth on  Exhibit S
attached  hereto.  For  clarification   purposes,   multiple  parties  can  have
responsibility  for the same Relevant  Servicing  Criteria.  With respect to any
Servicing Function  Participant  engaged by the Master Servicer,  the Securities
Administrator,  the  Custodian or any  Servicer,  the term  "Relevant  Servicing
Criteria" may refer to a portion of the Relevant Servicing  Criteria  applicable
to such parties.

     Relief Act: The  Servicemembers  Civil  Relief Act, as amended,  or similar
legislation or regulations as in effect from time to time.

     Relief Act Interest  Shortfall:  With respect to any Distribution  Date and
any Mortgage Loan,  any reduction in the amount of interest  collectible on such
Mortgage  Loan  for the most  recently  ended  Due  Period  as a  result  of the
application of the  Servicemembers  Civil Relief Act or any  applicable  similar
state statutes.

     REMIC: A "real estate  mortgage  investment  conduit" within the meaning of
Section 860D of the Code.  As used herein,  the term "the REMIC" or "the REMICs"
shall mean one or more of the REMICs created under this Agreement.

     REMIC 1: The  segregated  pool of  assets,  with  respect  to which a REMIC
election is made pursuant to this Agreement, consisting of:

     (a)  the  Mortgage  Loans and the  related  Mortgage  Files and  collateral
          securing such Mortgage Loans,

     (b)  all payments on and  collections  in respect of the Mortgage Loans due
          after  the Cut off  Date as  shall  be on  deposit  in any  Collection
          Account or in the Distribution  Account and identified as belonging to
          the Trust Fund,

     (c)  property  that secured a Mortgage  Loan and that has been acquired for
          the benefit of the  Certificateholders  by foreclosure or deed in lieu
          of foreclosure,

     (d)  the hazard insurance policies and Primary Insurance Policies,  if any,
          and

                                      -37-

<PAGE>

     (e)  all funds on deposit in the Class P Reserve Fund;

     (f)  all proceeds of clauses (a) through (e) above.

     REMIC 1  Interest:  The  REMIC  1  Regular  Interests  and  the  Class  R-I
Certificates.

     REMIC 1  Subordinated  Balance  Ratio:  The ratio among the  Uncertificated
Balances of each of the REMIC 1 Regular  Interests  ending with the  designation
"A,"  equal to the  ratio  among,  with  respect  to each  such  REMIC 1 Regular
Interest,  the  excess of (x) the  aggregate  Stated  Principal  Balance  of the
Mortgage Loans in the related Subgroup (other than the Discount  Fraction of the
Stated  Principal  Balance  of any  such  Mortgage  Loan)  over  (y)  the  Class
Certificate  Balance  of the  Senior  Certificates  (other  than  the  Class  PO
Certificates) in the related Subgroup.

     REMIC 2: The  segregated  pool of assets  consisting  of all of the REMIC 1
Regular  Interests,  with  respect to which a separate  REMIC  election is to be
made.

     REMIC 2 Certificate: Any Certificate, other than a Class R-I Certificate.

     REMIC 2 Regular  Certificate:  Any REMIC 2 Certificate,  other than a Class
R-2 Certificate.

     REMIC 3: The  segregated  pool of assets  consisting  of all of the REMIC 2
Regular  Interests,  with  respect to which a separate  REMIC  election is to be
made.

     REMIC 3 Certificate: Any Certificate, other than a Class R-2 Certificate.

     REMIC 3 Regular  Certificate:  Any REMIC 3 Certificate,  other than a Class
R-3 Certificate.

     REMIC 1 Regular  Interest:  Any of the  fifteen  separate  non-certificated
beneficial  ownership  interests in REMIC 1 issued hereunder and designated as a
"regular  interest"  in REMIC 1. Each  REMIC 1  Regular  Interest  shall  accrue
interest at the related REMIC 1 Remittance Rate in effect from time to time, and
shall be  entitled  to  distributions  of  principal,  subject  to the terms and
conditions  hereof,  in an aggregate amount equal to its initial  Uncertificated
Balance as set forth in the Preliminary  Statement hereto.  The designations for
the  respective  REMIC 1  Regular  Interests  are set  forth in the  Preliminary
Statement hereto.

     REMIC 1 Remittance Rate: As set forth in the Preliminary Statement.

     REMIC 2 Remittance Rate: As set forth in the Preliminary Statement.

     REMIC  2  Regular  Interest:  Any of  the  twenty  certificated  beneficial
ownership  interests in REMIC 2 issued hereunder,  and, hereby,  designated as a
"regular  interest"  in REMIC 2, as follows:  Class I-A-1,  Class  I-A-2,  Class
I-A-3, Class I-A-5,  Class I-A-6, Class I-A-7, Class I-A-9, Class I-A-11,  Class
I-IO, Class I-PO, Class II-A-1,  Class P, Class II-IO,  Class II-PO,  Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.

                                      -38-

<PAGE>

     REMIC 3 Regular Interest:  Any of the twenty-four  certificated  beneficial
ownership  interests in REMIC 3 issued hereunder,  and, hereby,  designated as a
"regular  interest"  in REMIC 3, as follows:  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-IO, Class I-PO, Class
II-A-1,  Class II-IO,  Class II-PO,  Class P, Class B-1,  Class B-2,  Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates.

     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.

     Remittance Date: With respect to each Servicer, the 18th day of each month.

     REO  Acquisition:  The acquisition by the applicable  Servicer on behalf of
the Trustee for the benefit of the Certificateholders of any REO Property.

     REO  Disposition:  The final  sale by the  applicable  Servicer  of any REO
Property.

     REO  Proceeds:  Proceeds,  net of expenses,  received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged  Property)  which  proceeds  are  required  to be  deposited  into the
applicable Collection Account upon the related REO Disposition.

     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: As defined in Section 8.12(a)(iii).

     Reporting Servicer: As defined in Section 8.12(a)(ii).

     Repurchase Price: With respect to any Mortgage Loan, an amount equal to the
sum of (i) the unpaid principal  balance of such Mortgage Loan as of the date of
repurchase, (ii) interest on such unpaid principal balance of such Mortgage Loan
at the Mortgage Rate from the last date through which  interest has been paid to
the date of repurchase,  (iii) all  unreimbursed  Servicing  Advances,  (iv) the
amount of any costs and  damages  incurred  by the Trust Fund as a result of any
violation   of  any   applicable   federal,   state  or  local   predatory-   or
abusive-lending  law arising from or in connection  with the origination of such
Mortgage  Loan  and  (v) all  expenses  incurred  by the  Master  Servicer,  the
Securities  Administrator,  the related  Servicer or Trustee  arising out of the
Master  Servicer's,  the related  Servicer's  or  Trustee's  enforcement  of the
applicable Mortgage Loan Seller's or Sponsor's repurchase obligation hereunder.

     Request for Release: The Request for Release submitted by a Servicer to the
Trustee, substantially in the form of Exhibit J.

     Residual Certificates: As specified in the Preliminary Statement.

                                      -39-

<PAGE>

     Reserve Fund:  The fund  established  by the  Securities  Administrator  on
behalf of the  Holders  of the Class  I-A-3  Certificates  pursuant  to  Section
3.01(a).

     Responsible Officer:  When used with respect to the Trustee, the Securities
Administrator  or the Master  Servicer,  any vice president,  any assistant vice
president,  any assistant secretary,  any assistant treasurer, any associate, or
any other officer of the Trustee,  the  Securities  Administrator  or the Master
Servicer  customarily  performing functions similar to those performed by any of
the above  designated  officers who at such time shall be officers 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 and who, in
each case,  shall have  direct  responsibility  for the  administration  of this
Agreement.

     Rule 144A Investment Letter: As defined in Section 5.02(b).

     Sarbanes-Oxley  Act:  The  Sarbanes-Oxley  Act of 2002  and the  rules  and
regulations   of  the   Commission   promulgated   thereunder   (including   any
interpretations thereof by the Commission's staff).

     Sarbanes-Oxley Certification:  A written certification signed by an officer
of the Master Servicer that complies with (i) the  Sarbanes-Oxley  Act, and (ii)
Exchange  Act Rules  13a-14(d)  and  15d-14(d),  as in effect from time to time;
provided that if, after the Closing Date (a) the  Sarbanes-Oxley Act is amended,
(b) the Rules  referred to in clause  (ii) are  modified  or  superseded  by any
subsequent statement, rule or regulation of the Commission or any statement of a
division  thereof,  or (c)  any  future  releases,  rules  and  regulations  are
published by the  Commission  from time to time  pursuant to the  Sarbanes-Oxley
Act,  which in any such  case  affects  the form or  substance  of the  required
certification and results in the required certification being, in the reasonable
judgment of the Master  Servicer,  materially more onerous that then form of the
required certification as of the Closing Date, the Sarbanes-Oxley  Certification
shall be as agreed to by the Master  Servicer,  and the  Depositor  following  a
negotiation in good faith to determine how to comply with any such requirements.

     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.

     Securities  Act: The  Securities  Act of 1933, as amended and the rules and
regulations thereunder.

     Securities  Administrator:  Citibank,  N.A. and any successors in interest,
and  if a  successor  securities  administrator  is  appointed  hereunder,  such
successor.

     Securities  Administrator  Float Period:  With respect to the  Distribution
Date and the related amounts in the Distribution  Account, the period commencing
on the Remittance Date immediately  preceding such  Distribution Date and ending
on such Distribution Date.

                                      -40-

<PAGE>

     Senior Accelerated  Distribution Percentage means for each Subgroup and any
Distribution  Date  occurring  prior to the 60th  Distribution  Date  100%.  The
related Senior  Accelerated  Distribution  Percentage for any Distribution  Date
thereafter will be as follows:

          (i) for any Distribution  Date after the 60th Distribution Date but on
     or prior to the 72nd  Distribution  Date, the related Senior Percentage for
     such  Subgroup  for  such   Distribution  Date  plus  70%  of  the  related
     Subordinate Percentage for that Subgroup for such Distribution Date;

          (ii) for any Distribution Date after the 72nd Distribution Date but on
     or prior to the 84th  Distribution  Date, the related Senior Percentage for
     such  Subgroup  for  such   Distribution  Date  plus  60%  of  the  related
     Subordinate Percentage for that Subgroup for such Distribution Date;

          (iii) for any Distribution  Date after the 84th  Distribution Date but
     on or prior to the 96th  Distribution  Date, the related Senior  Percentage
     for  such  Subgroup  for such  Distribution  Date  plus 40% of the  related
     Subordinate Percentage for that Subgroup for such Distribution Date;

          (iv) for any Distribution Date after the 96th Distribution Date but on
     or prior to the 108th  Distribution Date, the related Senior Percentage for
     such  Subgroup  for  such   Distribution  Date  plus  20%  of  the  related
     Subordinate Percentage for that Subgroup for such Distribution Date; and

          (v) for any Distribution  Date thereafter,  the Senior  Percentage for
     such Subgroup for such Distribution Date.

     If on any Distribution Date the Senior Percentages for any Subgroup exceeds
the initial Senior  Percentage for that  Subgroup,  then the Senior  Accelerated
Distribution  Percentages for each Subgroup for that Distribution Date will once
again equal 100%.

     Any scheduled reduction to such Senior Accelerated  Distribution Percentage
shall not be made as of any Distribution Date unless:

     (a) the Stated  Principal  Balance of the Mortgage Loans delinquent 60 days
or more as set forth in the  Monthly  Statements  (including  Mortgage  Loans in
bankruptcy,  foreclosure  and REO)  averaged  over the  last  six  months,  as a
percentage of the aggregate Group Subordinate Amounts, is less than 50% and

     (b)  Realized  Losses on the Mortgage  Loans to date for that  Distribution
Date as set forth in the  Monthly  Statements,  if  occurring  during the sixth,
seventh, eighth, ninth or tenth year, or any year thereafter,  after the closing
date, are less than 30%, 35%, 40%, 45% or 50%,  respectively,  of the sum of the
initial aggregate Group Subordinate Amounts;

     Notwithstanding  the  foregoing,  upon  reduction of the Class  Certificate
Balances  of the  Senior  Certificates  related  to a  Subgroup,  other than the
related Class PO  Certificates,  to zero,  the Senior  Accelerated  Distribution
Percentage, as the case may be, will equal 0%.

                                      -41-

<PAGE>

     Senior  Certificates:  As specified in the  Preliminary  Statement,  as the
context requires.

     Senior Interest  Distribution Amount: With respect to any Distribution Date
and each Loan Group, the aggregate amount of Accrued Certificate  Interest to be
distributed  to  the  holders  of  the  related  Senior  Certificates  for  that
Distribution Date pursuant to Section 4.02(a)(i).

     Senior Percentage: means, as the context requires:

          (i) for  each  Distribution  Date and each  Subgroup,  the  percentage
     equivalent of a fraction,  the  numerator of which is the  aggregate  Class
     Certificate  Balance of the Senior  Certificates of the related Certificate
     Group  (other  than the Class PO  Certificates)  immediately  prior to such
     Distribution Date, and the denominator of which is the Subgroup Fraction of
     the aggregate Stated Principal Balance of all Mortgage Loans in the related
     Subgroup immediately prior to such Distribution Date (without giving effect
     to any principal  collections on such Mortgage Loan received or advanced to
     be distributed  on such  Distribution  Date) (less the applicable  Discount
     Fraction of each Discount Mortgage Loan in such Subgroup).

          (ii) for each  Distribution  Date and each Loan Group,  the percentage
     equivalent of a fraction,  the  numerator of which is the  aggregate  Class
     Certificate Balance of the Senior  Certificates  related to such Loan Group
     (other  than  any  Class  PO  Certificates)   immediately   prior  to  such
     Distribution  Date (without  giving effect to any principal  collections on
     such  Mortgage  Loan  received  or  advanced  to  be  distributed  on  such
     Distribution  Date),  and the denominator of which is the aggregate  Stated
     Principal Balance of all Mortgage Loans in the related Loan Group (less the
     applicable  Discount  Fraction of each Discount  Mortgage Loan in such Loan
     Group).

          (iii)  for  each   Distribution  Date  and  all  Mortgage  Loans,  the
     percentage  equivalent  of a  fraction,  the  numerator  of  which  is  the
     aggregate Class Certificate  Balance of the Senior Certificates (other than
     the Class PO Certificates) immediately prior to such Distribution Date, and
     the denominator of which is the aggregate Stated  Principal  Balance of all
     Mortgage Loans  immediately prior to such Distribution Date (without giving
     effect to any  principal  collections  on such  Mortgage  Loan  received or
     advanced to be  distributed on such  Distribution  Date) (less the Discount
     Fraction of any applicable Discount Mortgage Loan).

     Senior Principal Distribution Amount: With respect to each Subgroup and any
Distribution  Date,  the  amount  of  related  Available  Funds,  if any,  to be
distributed  to  the  related  Senior  Certificateholders  pursuant  to  Section
4.02(a)(iii).

     Senior Subordinate Certificates: As specified in the Preliminary Statement.

     Servicer: Countrywide Servicing, HSBC Mortgage, Wachovia or Wells Fargo, as
applicable,  and if a successor  Servicer to any is  appointed  hereunder,  such
successor. When the term "Servicer" is used in this Agreement in connection with
the  administration of servicing  obligations with respect to any Mortgage Loan,
Mortgaged Property, REO Property or Mortgage

                                      -42-

<PAGE>

File,  "Servicer"  shall  mean the Person  identified  as the  Servicer  of such
Mortgage Loan on the Mortgage Loan Schedule.

     Service(s)(ing): In accordance with Regulation AB, the act of servicing and
administering  the  Mortgage  Loans or any other  assets of the Trust Fund by an
entity  that  meets  the  definition  of  "servicer'  set  forth in Item 1101 of
Regulation AB and is subject to the  disclosure  requirements  set forth in Item
1108 of Regulation AB. For clarification purposes, any uncapitalized  occurrence
of this term in this  Agreement  shall have the meaning  commonly  understood by
participants in the residential mortgage-backed securitization market.

     Servicing Agreement:  Each reconstituted servicing agreement or assignment,
assumption and recognition  agreement set forth on Exhibit M hereto and relating
to a Servicer and the servicing of the related  Mortgage Loans by such Servicer,
as the same may be amended from time to time.

     Servicing  Advances:  With respect to the Servicers and the Master Servicer
(including  the  Trustee in its  capacity as  successor  master  servicer),  all
customary  and  reasonable  "out  of  pocket"  costs  and  expenses   (including
reasonable  attorneys'  fees and  expenses)  incurred  by the  Servicers  in the
performance of its servicing  obligations under the related Servicing  Agreement
or by the Master  Servicer  (including  the Trustee in its capacity as successor
master servicer) in the performance of its obligations hereunder, including, but
not limited to, the cost of (i) the  preservation,  restoration,  inspection and
protection  of  the  Mortgaged  Property,   (ii)  any  enforcement  or  judicial
proceedings, including foreclosures, (iii) the management and liquidation of the
REO Property and (iv) any other expenses permitted to be reimbursed as Servicing
Advances under the related Servicing Agreement, as applicable.

     Servicing Criteria: The criteria set forth in paragraph (d) of Item 1122 of
Regulation AB, as such may be amended from time to time.

     Servicing Fee: With respect to each Servicer,  the meaning assigned to such
term in the related Servicing Agreement.

     Servicing Fee Rate: one-twelfth of 0.250%, in the case of Wells Fargo, HSBC
Mortgage,  and  Wachovia,  and  equal to  one-twelfth  of  0.175% in the case of
Countrywide Servicing, of the aggregate Stated Principal Balance of the Mortgage
Loans  serviced  by such  Servicer  as of the  prior  Distribution  Date (or the
Cut-off Date in the case of the first Distribution Date).

     Servicing File: With respect to each Servicer, the meaning assigned to such
term in the related Servicing Agreement.

     Servicing  Function  Participant:  Any Subservicer or  Subcontractor of any
Servicer,  the Master Servicer,  the Custodian or the Securities  Administrator,
respectively.

     Servicing  Modification:  Any  reduction  of the  interest  rate  on or the
outstanding  principal  balance of a Mortgage  Loan,  any extension of the final
maturity date of a Mortgage Loan, and any increase to the outstanding  principal
balance of a  Mortgage  Loan by adding to the Stated  Principal  Balance  unpaid
principal and interest and other amounts owing under the

                                      -43-

<PAGE>

Mortgage Loan, in each case pursuant to a  modification  of a Mortgage Loan that
is in default, or for which, in the judgment of the applicable Servicer, default
is reasonably foreseeable.

     Servicing Officer: As defined in the applicable Servicing Agreement.

     Similar Law: As defined in Section 5.02(b).

     Special  Hazard  Amount:  With  respect  to the  first  Distribution  Date,
$4,991,152.90.   With  respect  to  any   Distribution   Date  after  the  first
Distribution  Date, the lesser of (a) the greatest of (i) 1% of the aggregate of
the Stated  Principal  Balances  of the  Mortgage  Loans,  (ii) twice the Stated
Principal  Balance of the largest  Mortgage  Loan and (iii) the aggregate of the
Stated Principal Balances of all Mortgage Loans secured by Mortgaged  Properties
located  in the  single  California  postal  zip code area  having  the  highest
aggregate Stated Principal Balance of any such zip code area and (b) the Special
Hazard  Amounts of the Closing Date less the amount,  if any, of Special  Hazard
Losses  allocated  to the  Certificates  since  the  Closing  Date.  All  Stated
Principal  Balances for the purpose of this  definition will be calculated as of
the first day of the calendar  month  preceding  the month of such  Distribution
Date after giving effect to Scheduled  Payments on the Mortgage  Loans then due,
whether or not paid.

     Special Hazard Loss: A Realized Loss incurred,  to the extent that the loss
was attributable to (i) direct physical damage to a mortgage property other than
any loss of a type  covered by a hazard  insurance  policy or a flood  insurance
policy, if applicable,  and (ii) any shortfall in insurance proceeds for partial
damage due to the  application  of the  co-insurance  clauses  contained  in the
hazard insurance  policies.  The amount of Special Hazard Loss is limited to the
lesser of the cost of repair or replacement of the Mortgaged  Property.  Special
Hazard Losses do not include losses incurred by war, civil insurrection, certain
governmental  actions,  terrorism,  errors  in  design,  faulty  workmanship  or
materials, nuclear reaction, chemical contamination or waste by the mortgagor.

     Sponsor:   HSBC  Bank  USA,  National   Association,   a  national  banking
association, and its successors in interest.

     Standard & Poor's:  Standard & Poor's Ratings  Services,  a division of The
McGraw-Hill  Companies,  Inc.  If  Standard & Poor's is  designated  as a Rating
Agency in the  Preliminary  Statement,  for  purposes  of Section  13.05(c)  the
address for notices to  Standard & Poor's  shall be Standard & Poor's,  55 Water
Street, New York, New York 10041,  Attention:  Residential Mortgage Surveillance
Group - (HSI Asset Loan Obligation Trust),  Series 2006-2, or such other address
as Standard & Poor's may hereafter  furnish to the Depositor and the  Securities
Administrator.

     Startup Day: The Closing Date.

     Stated  Principal  Balance:  As to each Mortgage Loan and as of any date of
determination,  (a) the  principal  balance of the Mortgage  Loan at the Cut-off
Date after  giving  effect to payments of  principal  due on or before such date
(whether  or not  received),  minus  (b) the sum of (i) all  amounts  previously
remitted to the Securities  Administrator  with respect to the related  Mortgage
Loan representing payments or recoveries of principal including advances

                                      -44-

<PAGE>

in respect  of  scheduled  payments  of  principal  and (ii) any  Realized  Loss
allocated  to  Certificateholders  with  respect to such  Mortgage  Loan for any
previous  Distribution  Date. For purposes of any Distribution  Date, the Stated
Principal  Balance  of any  Mortgage  Loan  will give  effect  to any  scheduled
payments  of  principal  received  by the  related  Servicer  on or prior to the
related  Determination  Date or  advanced  by related  Servicer  for the related
Remittance Date and any  unscheduled  principal  payments and other  unscheduled
principal  collections  received during the related  Prepayment  Period, and the
Stated  Principal  Balance of any Mortgage  Loan that has prepaid in full or has
become a Liquidated  Mortgage Loan during the related Prepayment Period shall be
zero.

     Subcontractor:  Any  vendor,  subcontractor  or  other  Person  that is not
responsible for the overall  servicing of the Mortgage Loans but performs one or
more discrete functions identified in Item 1122(d) of Regulation AB with respect
to  Mortgage  Loans under the  direction  or  authority  of any  Servicer  (or a
Subservicer  of  any  Servicer),  the  Master  Servicer,  the  Custodian  or the
Securities Administrator.

     Subgroup:  Any of Subgroup I-1, Subgroup I-2, Subgroup I-3, Subgroup I-4 or
Subgroup II-1.

     Subgroup Fraction: As applicable,  the Subgroup I-1 Fraction,  Subgroup I-2
Fraction,  Subgroup  I-3  Fraction,  Subgroup  I-4  Fraction  or  Subgroup  II-1
Fraction.

     Subgroup I-1: the Mortgage  Loans  identified on the Mortgage Loan Schedule
as Subgroup I-1 Loans.

     Subgroup I-1  Fraction:  The  percentage  of each Mortgage Loan assigned to
Subgroup I-1 as determined by the following:

     (a) 100% of the Stated Principal Balance of each Group I Mortgage Loan with
a Net Mortgage Rate equal to or less than 6.00% per annum,

     (b) a  portion  of each  Group I  Mortgage  Loan with a Net  Mortgage  Rate
greater than 6.00% per annum and less than 7.00% per annum, equal to:

The Stated Principal Balance of               (Net Mortgage
such Mortgage Loan                             Rate - 6.00%)
                                      X 1 - ------------------
                                               1.00%

     and (c) 0% of the Stated  Principal  Balance of any other  Group I Mortgage
Loan or any Loan Group II Mortgage Loan.

     Subgroup I-1 Priority  Amount:  With respect to any  Distribution  Date, an
amount equal to the sum of the following:

     (a) the  product  of (i) the  Subgroup  I-1  Priority  Percentage  for that
Distribution  Date,  and (ii) the  aggregate  collections  described  in clauses
(b)(i), (b)(ii) and (b)(vi), to the extent clause

                                      -45-

<PAGE>

(b)(vi) relates to clause (b)(i) or (b)(ii), of Section  4.02(a)(iii)(A) of this
Agreement for Subgroup I-1, without applying the related Senior Percentage plus

     (b) the  product  of (i) the  Subgroup  I-1  Priority  Percentage  for that
Distribution Date, and (ii) the NAS Prepayment  Percentage for that Distribution
Date,  and (iii) the  aggregate  collections  described in clauses  (b)(iii) and
(b)(vi),  to the extent clause (b)(vi)  relates to clause  (b)(iii),  of Section
4.02(a)(ii)(A)  of this Agreement for Subgroup I-1, without applying the related
Senior Accelerated Distribution Percentage.

     Subgroup I-1 Priority  Percentage:  With respect to any  Distribution  Date
prior to the  Distribution  Date in January  2012,  0% and with  respect to such
Distribution Date and any Distribution Date thereafter, a fraction, expressed as
a  percentage,  (i) the numerator of which is the  aggregate  Class  Certificate
balance of the Class I-A-1 and Class I-A-6 Certificates and (ii) the denominator
of which is the aggregate  Subgroup I-1 Fraction of the Stated Principal Balance
of the Mortgage  Loan in Subgroup  I-1 (other than the Discount  Fraction of any
Discount Mortgage Loans).

     Subgroup I-2: The Mortgage  Loans  identified on the Mortgage Loan Schedule
as Subgroup I-2 Loans.

     Subgroup I-2  Fraction:  The  percentage  of each Mortgage Loan assigned to
Subgroup I-2 as determined by the following:

     (a) a  portion  of each  Group I  Mortgage  Loan with a Net  Mortgage  Rate
greater  than 6.00% per annum and equal to or less than  7.00% per annum,  equal
to:

The Stated Principal Balance of             (Net Mortgage
such Mortgage Loan                          Rate - 6.00%)
                                      X   ------------------
                                               1.00%

     (b) a  portion  of each  Group I  Mortgage  Loan with a Net  Mortgage  Rate
greater than 7.00% per annum and less than 7.50% per annum, equal to:

The Stated Principal Balance of               (Net Mortgage
such Mortgage Loan                            Rate - 7.00%)
                                      X 1 - ------------------
                                                 0.50%

     and (c) 0% of the  Principal  Balance of any other Group I Mortgage Loan or
any Group II Mortgage Loan.

     Subgroup I-3:  Mortgage  Loans  identified on the Mortgage Loan Schedule as
Subgroup I-3 Loans.

     Subgroup I-3  Fraction:  The  percentage  of each Mortgage Loan assigned to
Subgroup I-3 as determined by the following:

                                      -46-

<PAGE>

     (a) a  portion  of each  Group I  Mortgage  Loan with a Net  Mortgage  Rate
greater  than 7.00% per annum and equal to or less than  7.50% per annum,  equal
to:

The Stated Principal Balance of             (Net Mortgage
such Mortgage Loan                          Rate - 7.00%)
                                      X   ------------------
                                                0.50%

     (b) a  portion  of each  Group I  Mortgage  Loan with a Net  Mortgage  Rate
greater than 7.50% per annum and less than 8.00% per annum, equal to:

The Stated Principal Balance of               (Net Mortgage
such Mortgage Loan                            Rate - 7.50%)
                                      X 1 - ------------------
                                                 0.50%

     and (c) 0% of the Stated  Principal  Balance of any other  Group I Mortgage
Loan or any Loan Group II Mortgage Loan.

     Subgroup I-4:  Mortgage  Loans  identified on the Mortgage Loan Schedule as
Subgroup I-4 Loans.

     Subgroup I-4  Fraction:  The  percentage  of each Mortgage Loan assigned to
Subgroup I-4 as determined by the following:

     (a) a  portion  of each  Group I  Mortgage  Loan with a Net  Mortgage  Rate
greater  than 7.50% per annum and equal to or less than  8.00% per annum,  equal
to:

The Stated Principal Balance of             (Net Mortgage
such Mortgage Loan                          Rate - 7.50%)
                                      X   ------------------
                                                0.50%

     (b) 100% of the Stated Principal Balance of each Loan Group I Mortgage Loan
with a Net Mortgage Rate greater than 8.00% per annum

     and (c) 0% of the  Stated  Principal  Balance  of any  other  Loan  Group I
Mortgage Loan or any Loan Group II Mortgage Loan.

     Subgroup II-1:  Mortgage Loans  identified on the Mortgage Loan Schedule as
Subgroup II-I Loans.

                                      -47-

<PAGE>

     Subgroup II-1  Fraction:  The  percentage of each Mortgage Loan assigned to
Subgroup II-I as  determined  by the following (a) 100% of the Stated  Principal
Balance of each Loan Group II Mortgage  Loan and (b) 0% of the Stated  Principal
Balance of any Loan Group I Mortgage Loan.

     Subgroup WAC Rate: With respect to any  Distribution  Date (and the related
Interest Accrual Period),  a per annum rate equal to the weighted average of the
Designated  Rates of the related  Subgroups,  weighted on the basis of the Group
Subordinate  Amount for each  Subgroup  immediately  prior to such  Distribution
Date.

     Subordinate Certificate: As specified in the Preliminary Statement.

     Subordinate Percentage:

          (i) as of any  Determination  Date and with respect to each Subgroup a
     percentage  equal to 100% minus the related  Senior  Percentage  as of that
     date for that Subgroup.

          (ii) as of any Determination Date and with respect to each Loan Group,
     a percentage  equal to 100% minus the related Senior  Percentage as of that
     date for that Loan Group.

          (iii) as of any  Determination  Date and with  respect to all Mortgage
     Loans, a percentage equal to 100% minus the related Senior Percentage as of
     that date for all Mortgage Loans.

     Subordinate Principal Distribution Amount: With respect to any Distribution
Date and each Class of Subordinate Certificates, (a) the sum of (i) such Class's
pro  rata  share,  based  on the  Class  Certificate  Balance  of each  Class of
Subordinate  Certificates  then  outstanding  of the  aggregate  of the  amounts
calculated for such  Distribution Date under clauses (1), (2) and (3) of Section
4.02(a)(iii)(A)  (without giving effect to the Senior  Percentage) to the extent
not payable to the Senior Certificates;  (ii) such Class's pro rata share, based
on the Class Certificate Balance of each Class of Subordinate  Certificates then
outstanding,    of   the    principal    collections    described   in   Section
4.02(a)(iii)(B)(b) (without giving effect to the Senior Accelerated Distribution
Percentage) to the extent such collections are not otherwise  distributed to the
Senior   Certificates;   (iii)  the  product  of  (x)  the  related   Prepayment
Distribution  Percentage  and (y) the  aggregate  of all  Principal  Prepayments
received  in the related  Prepayment  Period  (other  than the related  Discount
Fraction of such Principal Prepayments with respect to a Discount Mortgage Loan)
to the extent not payable to the Senior Certificates;  (iv) if such Class is the
Class  of  Subordinate  Certificates  with  the  Highest  Priority,  any  Excess
Subordinate  Principal  Amount  for such  Distribution  Date to the  extent  not
payable to the Senior  Certificates;  and (v) any amounts  described  in clauses
(i),  (ii) and (iii) as  determined  for any previous  Distribution  Date,  that
remain  undistributed  to the extent that such amounts are not  attributable  to
Realized Losses which have been allocated to a Class of Subordinate Certificates
with a Lower  Priority  minus  (b) with  respect  to the  Class  of  Subordinate
Certificates with the Lowest Priority,  any Excess Subordinate  Principal Amount
for such Distribution Date; provided,  however,  that the Subordinate  Principal
Distribution Amount for any Class of Subordinate Certificates on any

                                      -48-

<PAGE>

Distribution  Date shall in no event exceed the  outstanding  Class  Certificate
Balance of such Class of Certificates immediately prior to such date.

     Subsequent Recoveries: As of any Distribution Date, amounts received by the
Servicers (net of any related  expenses  permitted to be reimbursed  pursuant to
the related  Servicing  Agreement)  or surplus  amounts held by the Servicers to
cover estimated expenses  (including,  but not limited to, recoveries in respect
of the representations and warranties made by a Mortgage Loan Seller pursuant to
Section 2.03) specifically  related to a Mortgage Loan that was the subject of a
Cash Liquidation or an REO Disposition  prior to the related  Prepayment  Period
that resulted in a Realized Loss.

     Subservicer:  Any  Person  that  services  Mortgage  Loans on  behalf  of a
Servicer,  and is responsible for the performance  (whether  directly or through
subservicers or Subcontractors) of servicing  functions required to be performed
under this  Agreement,  any related  Servicing  Agreement  or any  sub-servicing
agreement that are identified in Item 1122(d) of Regulation AB.

     Substitute  Mortgage  Loan: A Mortgage Loan  substituted by a Mortgage Loan
Seller or the Sponsor for a Deleted  Mortgage  Loan which must, in the case of a
Mortgage Loan substituted by the Sponsor,  on the date of such substitution,  as
confirmed in a Request for Release,  substantially in the form of Exhibit J, (i)
have a Stated Principal  Balance,  after deduction of all Scheduled Payments due
in the month of substitution,  not in excess of the Stated Principal  Balance of
the Deleted  Mortgage Loan;  (ii) be accruing  interest at a rate not lower than
and not more than 1.00%  higher than that of the Deleted  Mortgage  Loan;  (iii)
have a remaining  term to maturity  not greater than (and not more than one year
less than) that of the Deleted  Mortgage  Loan;  (iv) be of the same type as the
Deleted  Mortgage  Loan;  and (v) conforms to each  representation  and warranty
applicable to the Deleted Mortgage Loan made in the Purchase Agreement.

     Substitution  Adjustment  Amount:  As  provided  in  the  related  Transfer
Agreement  with respect to each  Mortgage  Loan  Seller,  the amount (if any) by
which the aggregate unpaid principal balance of all Substitute Mortgage Loans as
of the date of substitution is less than the aggregate unpaid principal  balance
of all  Deleted  Mortgage  Loans,  increased  by  the  aggregate  amount  of any
unreimbursed  Advances with respect to such Deleted Mortgage Loans.  Such amount
to be remitted by the  applicable  Mortgage Loan Seller in  accordance  with its
respective Transfer Agreement.

     Tax Returns: The federal income tax return on Internal Revenue Service Form
1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,  including
Schedule Q  thereto,  Quarterly  Notice to  Residual  Interest  Holders of REMIC
Taxable Income or Net Loss  Allocation,  or any successor  forms, to be filed on
behalf  of any  REMIC  due to its  classification  as a REMIC  under  the  REMIC
Provisions, together with any and all other information, reports or returns that
may be  required to be  furnished  to the  Certificateholders  or filed with the
Internal  Revenue Service or any other  governmental  taxing authority under any
applicable provisions of federal, state or local tax laws.

                                      -49-

<PAGE>

     Telerate Page 3750:  The display page currently so designated on the Bridge
Telerate  Service (or such other page as may replace  that page on that  service
for displaying comparable rates or prices).

     Termination Price: As defined in Section 12.01.

     Total Transfer Amount:  An amount equal to the sum of the Interest Transfer
Amount and the Principal Transfer Amount for the Undercollaterized Group.

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

     Transfer Affidavit: As defined in Section 5.02(c).

     Transfer  Agreement:  The various agreements by which the Sponsor purchased
the Mortgage Loans from the Mortgage Loan Sellers.

     Transfer Payments: collectively, the Interest Transfer Amount and Principal
Transfer Amount.

     Transferor Certificate: As defined in Section 5.02(b).

     Trust: The express trust created hereunder in Section 2.01(c).

     Trust Fund: The corpus of the trust created hereunder consisting of (i) the
Mortgage Loans and all interest and principal with respect  thereto  received on
or after the related Cut-off Date (other than such amounts which were due on the
Mortgage  Loans on or prior to the related  Cut-off Date and  payments  received
under the Yield  Maintenance  Agreement  and  amounts on deposit in the  Reserve
Fund);  (ii) the  Accounts  (other  than the  Reserve  Account)  and all amounts
deposited therein pursuant to the applicable provisions of this Agreement; (iii)
property  that  secured a Mortgage  Loan and has been  acquired by  foreclosure,
deed-in-lieu of foreclosure or otherwise;  (iv) the Depositor's rights under the
Purchase Agreement,  each Transfer Agreement and each Servicing  Agreement;  (v)
the Insurance  Policies;  and (vi) all proceeds of the conversion,  voluntary or
involuntary, of any of the foregoing.

     Trustee:   Deutsche  Bank  National  Trust  Company,   a  national  banking
association,  and its  successors  in interest  and,  if a successor  trustee is
appointed hereunder, such successor.

     Uncertificated  Interest:  With respect to any REMIC 1 Regular Interest for
any  Distribution  Date,  one  month's  interest at the  Uncertificated  REMIC 1
Pass-through  Rate  applicable  to  such  REMIC  1  Regular  Interest  for  such
Distribution Date, accrued on the Uncertificated  Principal Balance (or Notional
Balance) thereof  immediately  prior to such Distribution  Date.  Uncertificated
Interest in respect of any REMIC 1 Regular Interest shall accrue on the basis of
a 360-day year consisting of twelve 30-day months.  Uncertificated Interest with
respect to each Distribution Date, as to any REMIC 1 Regular Interest,  shall be
reduced  by  any  interest  shortfalls  allocated  to  the  Related  Classes  of
Certificates on such  Distribution  Date. In addition,  Uncertificated  Interest
with respect to each Distribution Date, as to any REMIC 1 Regular Interest shall
be reduced by interest portion of Realized Losses

                                      -50-

<PAGE>

(including Excess Special Hazard Losses,  Excess Fraud Losses, Excess Bankruptcy
Losses  and   Extraordinary   Losses)   allocated  to  the  Related  Classes  of
Certificates on such Distribution Date.

     Uncertificated  Principal  Balance:  The  amount  of any  REMIC  1  Regular
Interest  outstanding as of any date of  determination.  As of the Closing Date,
the  Uncertificated  Principal  Balance of each REMIC 1 Regular  Interest  shall
equal the amount set forth in the  Preliminary  Statement  hereto as its Initial
Uncertificated  Principal  Balance (or Notional  Amount).  On each  Distribution
Date,  the  Uncertificated  Principal  Balance of each REMIC 1 Regular  Interest
shall be  reduced,  first,  by the  portion  of  Realized  Losses  allocated  in
reduction of the principal  balances of the related  Classes of  Certificates on
such  Distribution  Date and, second,  by all  distributions of principal deemed
made on such REMIC 1 Regular Interest, as applicable,  on such Distribution Date
pursuant to Section 11.04.  The  Uncertificated  Principal  Balance (or Notional
Amount) of each Uncertificated REMIC 1 Regular Interest shall never be less than
zero.

     Undercollateralized   Amount:   With  respect  any  Certificate  Group  and
Distribution Date, the excess of (i) the aggregate  Certificate  Balance of such
Certificate  Group  over (ii) the  aggregate  Stated  Principal  Balance  of the
Mortgage  Loans in the  related  Loan  Group,  in each case  calculated  on such
Distribution Date after giving effect to distributions to be made thereon (other
than amounts to be distributed  pursuant to Section 4.02(d) on such Distribution
Date).

     Undercollateralized  Group:  Any  Certificate  Group in which the aggregate
Class Certificate Balance of the related class or classes of Senior Certificates
(other than any Class PO Certificates) is greater than the Subgroup  Fraction of
the  aggregate  Stated  Principal  Balance  of  the  Mortgage  Loans  (less  the
applicable  Discount Fraction of any Discount Mortgage Loan in such Subgroup) of
the related Subgroup.

     Underwriters'  Exemption:  Any  exemption  listed under  footnote 1 of, and
amended by, Prohibited  Transaction  Exemption 96-84, 61 Fed. Reg. 58234 (1996),
as amended by PTE 97-34,  62 Fed. Reg. 39021 (1997),  PTE 2000-58,  65 Fed. Reg.
67765  (2000) and PTE 2002-41,  67 Fed.  Reg.  54487  (2002),  or any  successor
exemption.

     U.S.  Person:  (i) A citizen  or  resident  of the  United  States;  (ii) a
corporation  (or entity  treated as a corporation  for tax purposes)  created or
organized in the United  States or under the laws of the United States or of any
State thereof,  including,  for this purpose, the District of Columbia;  (iii) a
partnership (or entity treated as a partnership  for tax purposes)  organized in
the  United  States  or under  the laws of the  United  States  or of any  State
thereof,  including, for this purpose, the District of Columbia (unless provided
otherwise  by  future  Treasury  regulations);  (iv) an estate  whose  income is
includible in gross income for United  States income tax purposes  regardless of
its  source;  or (v) 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 U.S. Persons have authority to control substantial  decisions of the trust.
Notwithstanding  the  last  clause  of the  preceding  sentence,  to the  extent
provided in Treasury  regulations,  certain  trusts in  existence  on August 20,
1996,  and treated as U.S.  Persons prior to such date, may elect to continue to
be U.S. Persons.

                                      -51-

<PAGE>

     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,  (i)
0.33333%  of all Voting  Rights  shall be  allocated  pro rata to the Class R-1,
Class R-2 and Class R-3  Certificates;  (ii) 1.00% of all Voting Rights shall be
allocated to the Class I-IO Certificates; (iii) 1.00% of all Voting Rights shall
be allocated to the Class II-IO  Certificates;  (iv) 1.00% of all Voting  Rights
shall be  allocated  to the Class  I-PO  Certificates;  (v) 1.00% of all  Voting
Rights  shall be allocated  to the Class II-PO  Certificates;  (vi) 1.00% of all
Voting  Rights  shall be allocated  to the Class P  Certificates;  and (vii) the
remaining  Voting  Rights  shall be  allocated  among  Holders of the  remaining
Classes of  Certificates  in  proportion  to the  Certificate  Balances of their
respective  Certificates  on such date (such Voting Rights to be allocated among
the  holders  of  Certificates  of each  such  Class in  accordance  with  their
respective Percentage Interests).

     Wachovia: Wachovia Mortgage Corporation.

     Wells Fargo:  Wells Fargo Bank, N.A., a national banking  association,  and
its successors in interest.

     Yield   Maintenance   Agreement:   The  agreement  between  the  Securities
Administrator,   not  in  its  individual  capacity  but  solely  as  Securities
Administrator for the Trust, and the Yield Maintenance  Agreement  Provider,  as
described in Section 4.05.

     Yield Maintenance Agreement Provider: Bear Stearns Financial Products Inc.

     Yield Maintenance Agreement Termination Payment: Upon the designation of an
"Early Termination Date" as defined in the related Yield Maintenance  Agreement,
the  payment  to be made by the  Yield  Maintenance  Agreement  Provider  to the
Securities  Administrator  for payment to the Reserve Fund pursuant to the terms
of the Yield Maintenance Agreement.

     Yield Maintenance  Payment: For any Distribution Date, the payment, if any,
to be  paid  by  the  Yield  Maintenance  Agreement  Provider  under  the  Yield
Maintenance  Agreement in respect of such Distribution Date. With respect to any
Distribution  Date and the  Class  I-A-3  Certificates,  the  Yield  Maintenance
Payment  shall be the amount equal to the product of (I) the excess,  if any, of
(a) the lesser of (x) LIBOR or (y) 8.90%, over (b) 5.40% per annum, and (II) the
amount  set  forth  for  that  Distribution  Date  in  Schedule  I of the  Yield
Maintenance  Agreement,  and (III) a fraction,  the numerator of which is 30 and
the denominator of which is 360.

     Yield  Supplement  Amount:  With respect to any  Distribution  Date and the
Class  I-A-3  Certificates,  an  amount  equal to the  product  of (a) the Class
Certificate  Balance of the Class I-A-3  Certificates  immediately  prior to the
Distribution  Date,  (b) the excess of (i) the lesser of (x) LIBOR and (y) 8.90%
per annum, over (ii) 5.40% per annum, and (c) a fraction, the numerator of which
is 30 and the denominator of which is 360.

                                      -52-

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

     Section 2.01 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 including all interest and principal received
on or with  respect to the  Mortgage  Loans on or after the Cut-off  Date (other
than  Scheduled  Payments  due on the  Mortgage  Loans on or before the  Cut-off
Date).

     Concurrently  with  the  execution  and  delivery  of this  Agreement,  the
Depositor does hereby assign to the Trustee all of its rights and interest under
(i) the  Purchase  Agreement,  including  the  right to  enforce  the  Sponsor's
obligation to repurchase or substitute  defective Mortgage Loans under Section 4
of the Purchase  Agreement and (ii) each  Servicing  Agreement and each Transfer
Agreement,  to the extent  assigned  under the Purchase  Agreement.  The Trustee
hereby  accepts such  assignment,  and as set forth  herein in Section  2.03(d),
shall be entitled to exercise all the rights of the Depositor under the Purchase
Agreement as if, for such purpose, it were the Depositor.

     (b) In connection  with the transfer and  assignment of each Mortgage Loan,
the  Depositor  has delivered or caused to be delivered to the Custodian for the
benefit of the  Certificateholders  the following  documents or instruments with
respect to each Mortgage Loan so assigned:

          (i) the original  Mortgage Note bearing all  intervening  endorsements
     necessary to show a complete chain of endorsements from the original payee,
     endorsed in blank, "Pay to the order of _____________,  without  recourse",
     and, if previously  endorsed,  signed in the name of the last endorsee by a
     duly qualified officer of the last endorsee;

          (ii) the original  Assignment of Mortgage for each  Mortgage  Loan, in
     form  and  substance  acceptable  for  recording.  The  Mortgage  shall  be
     assigned, with assignee's name left blank;

          (iii) the original of each guarantee  executed in connection  with the
     Mortgage Note, if any;

          (iv) the  original  recorded  Mortgage,  with  evidence  of  recording
     thereon.  If in connection  with any Mortgage Loan,  the original  Mortgage
     cannot be delivered  with evidence of recording  thereon on or prior to the
     Closing Date because of a delay caused by the public recording office where
     such Mortgage has been  delivered for  recordation or because such Mortgage
     has been lost or because such public  recording office retains the original
     recorded Mortgage,  the Depositor shall deliver or cause to be delivered to
     the  Custodian,  (A) in the case of a delay caused by the public  recording
     office, a copy of such Mortgage  certified by the applicable  Mortgage Loan
     Seller, escrow agent, title

                                      -53-

<PAGE>

     insurer or closing  attorney to be a true and complete copy of the original
     recorded  Mortgage  and (B) 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,  a copy  of such
     Mortgage  certified  by  such  public  recording  office  to be a true  and
     complete copy of the original recorded Mortgage;

          (v) originals or a certified copy of each modification  agreement,  if
     any;

          (vi) the  originals of all  intervening  assignments  of Mortgage with
     evidence of recording thereon evidencing a complete chain of ownership from
     the  originator of the Mortgage Loan to the last  assignee,  or if any such
     intervening   assignment  of  Mortgage  has  not  been  returned  from  the
     applicable  public  recording  office  or has been  lost or if such  public
     recording office retains the original recorded  intervening  assignments of
     Mortgage, a photocopy of such intervening assignment of Mortgage,  together
     with (A) in the case of a delay caused by the public recording  office,  an
     officer's certificate of the applicable Mortgage Loan Seller, escrow agent,
     closing  attorney or the title insurer  insuring the Mortgage  stating that
     such  intervening   assignment  of  Mortgage  has  been  delivered  to  the
     appropriate  public recording office for recordation and that such original
     recorded  intervening  assignment of Mortgage or a copy of such intervening
     assignment of Mortgage certified by the appropriate public recording office
     to be a true  and  complete  copy  of  the  original  recorded  intervening
     assignment  of Mortgage will be promptly  delivered to the  Custodian  upon
     receipt thereof by the party delivering the officer's certificate or by the
     applicable  Mortgage  Loan  Seller;  or (B) in the  case of an  intervening
     assignment of mortgage where a public recording office retains the original
     recorded  intervening  assignment  of  Mortgage  or in the  case  where  an
     intervening  assignment of Mortgage is lost after  recordation  in a public
     recording  office, a copy of such  intervening  assignment of Mortgage with
     recording  information thereon certified by such public recording office to
     be a true and complete copy of the original recorded intervening assignment
     of Mortgage;

          (vii) if the Mortgage Note,  the Mortgage,  any Assignment of Mortgage
     or any other related  document has been signed by a Person on behalf of the
     Mortgagor,  the copy of the  power of  attorney  or other  instrument  that
     authorized and empowered such Person to sign;

          (viii) the original lender's title insurance policy (or a marked title
     insurance  commitment,  in  the  event  that  an  original  lender's  title
     insurance  policy has not yet been issued) in the form of an ALTA  mortgage
     title insurance policy,  containing all required  endorsements and insuring
     the Trustee and its successors and assigns as to the first priority lien of
     the Mortgage in the original principal amount of the Mortgage Loan;

          (ix) if  applicable,  the original of any Primary  Mortgage  Insurance
     Policy or  certificate  or, an  electronic  certification,  evidencing  the
     existence  of the Primary  Mortgage  Insurance  Policy or  certificate,  if
     private mortgage guaranty insurance is required; and

                                      -54-

<PAGE>

          (x) original of any security agreement, chattel mortgage or equivalent
     document executed in connection with the Mortgage, if any.

     From time to time,  the applicable  Mortgage Loan Seller,  the Depositor or
the  applicable  Servicer,  as  applicable,   shall  forward  to  the  Custodian
additional original documents,  additional  documents  evidencing an assumption,
modification,  consolidation or extension of a Mortgage Loan, in accordance with
the  terms  of  this  Agreement,  the  Transfer  Agreements  and  the  Servicing
Agreements upon receipt of such documents.  All such mortgage  documents held by
the Custodian as to each Mortgage Loan shall constitute the "Custodial File".

     Assignments of Mortgage shall not be required to be completed and submitted
for  recording  with respect to any Mortgage Loan if the Trustee and each Rating
Agency have received an Opinion of Counsel from the Depositor,  satisfactory  in
form and  substance to the Trustee and each Rating Agency to the effect that the
recordation of such Assignments of Mortgage in any specific  jurisdiction is not
necessary to protect the Trust Fund's interest in the related  Mortgage Note. If
the Assignment of Mortgage is to be recorded,  the Mortgage shall be assigned by
the Mortgage Loan Seller to "Deutsche Bank National  Trust  Company,  as trustee
under the Pooling and Servicing  Agreement dated as of December 1, 2006, for HSI
Asset Loan Obligation Trust 2006-2".

     (c) The Depositor does hereby establish, pursuant to the further provisions
of this  Agreement  and the laws of the State of New York, an express trust (the
"Trust")  to be known,  for  convenience,  as "HSI Asset Loan  Obligation  Trust
2006-2 and Deutsche Bank National  Trust Company is hereby  appointed as Trustee
and Citibank N.A. is appointed as Securities  Administrator  in accordance  with
the provisions of this Agreement.  The parties hereto acknowledge and agree that
it is the  policy and  intention  of the Trust to acquire  only  Mortgage  Loans
meeting  the  requirements  set  forth  in  this  Agreement,  including  without
limitation,  the  representations  and  warranties  set  forth in the  Schedules
hereto.

     (d) The Trust shall have the capacity, power and authority, and the Trustee
on  behalf  of the Trust is hereby  authorized,  to accept  the sale,  transfer,
assignment,  set over and  conveyance  by the  Depositor to the Trust of all the
right,  title and interest of the Depositor in and to the Trust Fund (including,
without limitation, the Mortgage Loans) pursuant to Section 2.01(a).

     Section  2.02  Acceptance  by the  Custodian  of the  Mortgage  Loans.  The
Custodian shall  acknowledge,  on the Closing Date,  receipt by the Custodian of
the documents identified in the Initial Certification in the form annexed hereto
as Exhibit E ("Initial Certification"), and declares that it holds and will hold
such documents and the other documents delivered to it pursuant to Section 2.01,
and that it 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  Custodian  shall  maintain  possession  of the related
Mortgage Notes in the States of Minnesota, California, and Utah unless otherwise
permitted by the Rating Agencies.

     In  connection  with the Closing Date,  the Custodian  shall be required to
deliver via  facsimile  (with  original to follow the next  Business Day) to the
Depositor, the Securities Administrator and the Trustee an Initial Certification
prior to the Closing Date, or, as the

                                      -55-

<PAGE>

Depositor agrees on the Closing Date,  certifying receipt of a Mortgage Note and
Assignment  of Mortgage  for each  Mortgage  Loan.  The  Custodian  shall not be
responsible  to verify the validity,  sufficiency or genuineness of any document
in any Custodian File.

     Within 90 days of the Closing Date, the Custodian  shall ascertain that all
documents  identified in the Document  Certification and Exception Report in the
form attached  hereto as Exhibit F are in its  possession,  and shall deliver to
the Depositor,  the  Securities  Administrator,  the Trustee,  the Mortgage Loan
Seller and the Servicers,  a Document Certification and Exception Report, in the
form annexed  hereto as Exhibit F, to the effect that,  as to each Mortgage Loan
listed in the Mortgage Loan Schedule  (other than any Mortgage Loan paid in full
or any  Mortgage  Loan  specifically  identified  in  such  certification  as an
exception and not covered by such  certification):  (i) all documents identified
in the Document  Certification  and Exception Report and required to be reviewed
by it are in its  possession;  (ii) such  documents have been reviewed by it and
appear  regular on their face and relate to such Mortgage  Loan;  (iii) based on
its  examination  and only as to the foregoing  documents,  the  information set
forth in items (1), (2), (3), (15),  (18) and (22) of the Data Tape  Information
respecting  such Mortgage Loan is correct;  and (iv) each Mortgage Note has been
endorsed as provided in Section 2.01 of this Agreement.  Neither the Trustee nor
the  Custodian  shall be  responsible  to verify the  validity,  sufficiency  or
genuineness of any document in any Custodial File.

     The Custodian shall retain possession and custody of each Custodial File in
accordance with and subject to the terms and conditions set forth herein.

     Section 2.03 Remedies for Breaches of  Representations  and Warranties with
Respect to the Mortgage Loans.

     (a) Upon the removal of a Deleted  Mortgage Loan and the  substitution of a
Substitute  Mortgage Loan and the deposit to the related  Collection  Account of
the  amount   required  to  be  deposited   therein  in  connection   with  such
substitution, the Custodian shall release the Mortgage File held for the benefit
of  the  Certificateholders  relating  to  such  Deleted  Mortgage  Loan  to the
applicable  Mortgage Loan Seller and the Trustee,  upon receipt of a Request for
Release  certifying that all amounts required to be deposited in accordance with
this Section  2.03(a) have been  deposited  in the related  Collection  Account,
shall execute and deliver at the  applicable  Mortgage  Loan Seller's  direction
such instruments of transfer or assignment  prepared by the applicable  Mortgage
Loan Seller in each case without  recourse,  as shall be necessary to vest title
in the applicable  Mortgage Loan Seller of the Trustee's interest in any Deleted
Mortgage Loan substituted for pursuant to this Section 2.03.

     (b) In addition to the repurchase or substitution  obligations  referred to
in Section 2.03(d) below, the Sponsor shall indemnify the Depositor,  any of its
Affiliates,  the Master Servicer,  each Servicer, the Securities  Administrator,
the Trustee  and the Trust and hold such  parties  harmless  against any losses,
damages, penalties, fines, forfeitures,  reasonable and necessary legal fees and
related  costs,  judgments  and other  costs and  expenses  (including,  without
limitation,  any taxes  payable by the  Trust)  resulting  from any third  party
claim,  demand,  defense or assertion  based on or grounded  upon,  or resulting
from, a breach by the Sponsor of any of its  representations  and  warranties or
obligations contained in this Agreement.

                                      -56-

<PAGE>

     (c) Upon  receipt of a Request  for  Release  substantially  in the form of
Exhibit J hereto,  the Custodian  shall release the related  Custodial File held
for the benefit of the Certificateholders to the related Mortgage Loan Seller or
the Sponsor,  as  applicable,  as directed by the applicable  Servicer,  and the
Trustee shall 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.  In  accordance  with
Section 13.05(a),  if a Responsible Officer of the Securities  Administrator has
actual  knowledge of a purchase of a Mortgage Loan pursuant to this Section 2.03
or pursuant to a Transfer Agreement, the Securities Administrator shall promptly
notify each Rating Agency of such purchase.

     (d) The Trustee  acknowledges  that, except as provided in Section 5 of the
Purchase Agreement,  the Sponsor shall not have any obligation or liability with
respect to any breach of a representation or warranty made by it with respect to
a Mortgage Loan sold by it,  provided that such  representation  or warranty was
also made by a Mortgage Loan Seller with respect to the related  Mortgage  Loan.
It is  understood  and agreed that the  representations  and  warranties  of the
Sponsor set forth in Section 4 of the  Purchase  Agreement  and  assigned to the
Trustee by the  Depositor  hereunder  shall survive the transfer of the Mortgage
Loans by the  Depositor to the Trustee on the Closing  Date,  and shall inure to
the  benefit  of the  Trustee  and the  Certificateholders  notwithstanding  any
restrictive  or qualified  endorsement  on any Mortgage  Note or  Assignment  of
Mortgage and shall  continue  throughout  the term of this  Agreement.  Upon the
discovery by any of the Sponsor,  the Depositor,  the Securities  Administrator,
the  Trustee,  the Master  Servicer  or any  Servicer  of a breach of any of the
Sponsor's  representations and warranties set forth in Section 4 of the Purchase
Agreement,  the party discovering the breach shall give prompt written notice to
the others.  Within 30 days of the earlier of either  discovery  by or notice to
the Sponsor of any breach of any of the foregoing  representations or warranties
that  materially  and  adversely  affects the value of any Mortgage  Loan or the
interest of the Trustee or the Certificateholders therein, the Sponsor shall use
its best  efforts to cure such  breach in all  material  respects  and,  if such
defect or breach  cannot be  remedied,  the Sponsor  shall,  at the  Depositor's
instructions  as  specified  in writing  and  provided  to the  Sponsor  and the
Trustee,  (i) if such 30 day period  expires prior to the second  anniversary of
the Closing Date,  remove such Mortgage Loan from the Trust Fund and  substitute
in its place a Substitute  Mortgage  Loan, in the same manner and subject to the
same  conditions set forth in this Section 2.03 or (ii) repurchase such Mortgage
Loan at the Repurchase  Price;  provided,  however,  that any such  substitution
pursuant to clause (i) above shall not be effected  prior to the delivery to the
Custodian of a Request for Release  substantially  in the form of Exhibit J, and
the  delivery of the  Mortgage  File to the  Custodian  for any such  Substitute
Mortgage Loan. It is understood  and agreed that the  obligations of the Sponsor
under this  Agreement to cure,  repurchase or substitute any Mortgage Loan as to
which a breach of a representation  and warranty has occurred and is continuing,
together with any related  indemnification  obligations of the Sponsor set forth
in Section  2.03(b),  shall  constitute  the sole  remedies  against the Sponsor
available to the Certificateholders, the Depositor and any of its affiliates, or
the Trustee on their behalf.

     The  provisions  of  this  Section  2.03  shall  survive  delivery  of  the
respective   Custodial   Files  to  the   Custodian   for  the  benefit  of  the
Certificateholders.

     Section  2.04   Execution  and  Delivery  of   Certificates.   The  Trustee
acknowledges  the  transfer  and  assignment  to  it  of  the  Trust  Fund  and,
concurrently with such transfer and

                                      -57-

<PAGE>

assignment,  the Securities Administrator 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.

     Section 2.05 [Reserved]

     Section 2.06 [Reserved]

     Section 2.07 Representations and Warranties of the Depositor. The Depositor
hereby represents, warrants and covenants to the other parties to this agreement
that as of the date of this Agreement or as of such date  specifically  provided
herein:

     (a) The Depositor is a corporation duly organized,  validly existing and in
good standing under the laws of the State of Delaware;

     (b) The Depositor has the power and authority to convey the Mortgage  Loans
and  to  execute,  deliver  and  perform,  and  to  enter  into  and  consummate
transactions contemplated by, this Agreement;

     (c) This  Agreement  has been duly and  validly  authorized,  executed  and
delivered by the Depositor, all requisite company action having been taken, and,
assuming  the due  authorization,  execution  and  delivery  hereof by the other
parties  hereto,  constitutes or will  constitute  the legal,  valid and binding
agreement of the Depositor, enforceable against the Depositor in accordance with
its terms, except as such enforcement may be limited by bankruptcy,  insolvency,
reorganization,  moratorium  or other  similar laws relating to or affecting the
rights of creditors generally,  and by general equity principles  (regardless of
whether such enforcement is considered in a proceeding in equity or at law);

     (d) No consent,  approval,  authorization  or order of, or  registration or
filing with, or notice to, any  governmental  authority or court is required for
the execution,  delivery and  performance of or compliance by the Depositor with
this Agreement or the  consummation by the Depositor of any of the  transactions
contemplated hereby, except as have been received or obtained on or prior to the
Closing Date;

     (e) None of the execution and delivery of this Agreement,  the consummation
of the  transactions  contemplated  hereby or thereby,  or the fulfillment of or
compliance  with the terms and  conditions of this  Agreement,  (i) conflicts or
will conflict with or results or will result in a breach of, or  constitutes  or
will constitute a default or results or will result in an acceleration under (A)
the  charter  or  bylaws of the  Depositor,  or (B) of any  term,  condition  or
provision of any material indenture,  deed of trust, contract or other agreement
or instrument to which the Depositor or any of its subsidiaries is a party or by
which it or any of its  subsidiaries is bound;  (ii) results or will result in a
violation of any law, rule, regulation,  order, judgment or decree applicable to
the Depositor of any court or governmental  authority having  jurisdiction  over
the  Depositor  or  its  subsidiaries;  or  (iii)  results  in the  creation  or
imposition  of any lien,  charge or  encumbrance  which  would  have a  material
adverse  effect  upon  the  Mortgage  Loans  or  any  documents  or  instruments
evidencing or securing the Mortgage Loans;

                                      -58-

<PAGE>

     (f)  There are no  actions,  suits or  proceedings  before  or  against  or
investigations of, the Depositor pending,  or to the knowledge of the Depositor,
threatened,  before any court,  administrative agency or other tribunal,  and no
notice of any such action, which, in the Depositor's reasonable judgment,  might
materially  and  adversely  affect  the  performance  by  the  Depositor  of its
obligations  under this  Agreement,  or the validity or  enforceability  of this
Agreement;

     (g) The  Depositor is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or
governmental  agency that would  materially and adversely affect its performance
hereunder; and

     (h)  Immediately  prior to the transfer and  assignment by the Depositor to
the Trustee on the Closing  Date,  the  Depositor had good title to, and was the
sole owner of each Mortgage Loan, free of any interest of any other Person,  and
the Depositor  has  transferred  all right,  title and interest in each Mortgage
Loan to the Trustee.  The transfer of the Mortgage  Note and the Mortgage as and
in the manner  contemplated by this Agreement is sufficient  either (i) fully to
transfer to the Trustee, for the benefit of the  Certificateholders,  all right,
title,  and interest of the  Depositor  thereto as note holder and  mortgagee or
(ii) to grant to the  Trustee,  for the benefit of the  Certificateholders,  the
security interest referred to in Section 13.04.

     It is  understood  and  agreed  that the  representations,  warranties  and
covenants  set  forth  in  this  Section  2.07  shall  survive  delivery  of the
respective Mortgage Files to the Custodian and shall inure to the benefit of the
Trustee.

                                  ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

     Section 3.01 Establishment of Certain Accounts.

     (a) On or before the  Closing  Date,  the  Securities  Administrator  shall
establish  a  Reserve  Fund  on  behalf  of  the  Holders  of  the  Class  I-A-3
Certificates.  The Reserve  Fund must be an Eligible  Account.  The Reserve Fund
shall be entitled  "Reserve  Fund,  Deutsche Bank  National  Trust  Company,  as
Trustee  for the  benefit of holders  of HSI Asset  Securitization  Corporation,
Mortgage Pass-Through Certificates, Series 2006-2 Class I-A-3 Certificates". The
Securities  Administrator shall demand payment of all money payable by the Yield
Maintenance  Agreement  Provider  under the  Yield  Maintenance  Agreement.  The
Securities Administrator shall deposit in the Reserve Fund all payments received
by it from the  Yield  Maintenance  Agreement  Provider  pursuant  to the  Yield
Maintenance Agreement.  On each Distribution Date, the Securities  Administrator
shall remit amounts received by it from the Yield Maintenance Agreement Provider
to the Holders of the Class I-A-3  Certificates,  as  applicable,  in the manner
provided in Section 4.02(g) of this Agreement.

     (b) The Reserve  Fund is an "outside  reserve  fund"  within the meaning of
Treasury  Regulation  ss.1.860G-2(h) and shall be an asset of the Trust Fund but
not an asset of any REMIC.  The Trust shall be the nominal  owner of the Reserve
Fund. HSBC Securities (USA)

                                      -59-

<PAGE>

Inc.  shall be the beneficial  owner of the Reserve Fund,  including for federal
income tax purposes,  subject to the power of the  Securities  Administrator  to
distribute amounts under Sections 4.02(g) and 4.05 of this Agreement. Amounts in
the Reserve  Fund shall be held  uninvested  with no  liability  for interest or
other compensation thereon.

     (c) The Master Servicer shall  establish and maintain the Master  Servicing
Account on behalf of the Certificateholders. The Master Servicer shall, promptly
upon receipt,  deposit in the Master  Servicing  Account and retain  therein the
following:

          (i) the  aggregate  amount  remitted  by the  Servicers  to the Master
     Servicer pursuant to the Servicing Agreements;

          (ii) any amount  deposited by the Servicers  pursuant to the Servicing
     Agreements in connection with any losses on Permitted Investments; and

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

     In the event that a Servicer  shall  remit any  amount not  required  to be
remitted,  it may at any time direct the Master  Servicer in writing to withdraw
such amount  from the Master  Servicing  Account,  any  provision  herein to the
contrary  notwithstanding.  Such  direction  may be  accomplished  by delivering
notice to the Master Servicer which describes the amounts  deposited in error in
the Master  Servicing  Account.  All funds  deposited  in the  Master  Servicing
Account shall be held by the Master Servicer in trust for the Certificateholders
until  disbursed in  accordance  with this  Agreement.  On each Master  Servicer
Remittance  Date, the entire amount on deposit in the Master  Servicing  Account
(subject to permitted  withdrawals  as set forth above) shall be remitted to the
Securities  Administrator  for  deposit  into the  Distribution  Account by wire
transfer in immediately available funds.

     (d)  The  Securities   Administrator   shall  establish  and  maintain  the
Distribution  Account  on  behalf  of  the  Certificateholders.  The  Securities
Administrator shall, promptly upon receipt,  deposit in the Distribution Account
and retain therein the following:

          (i) the aggregate  amount  remitted by the Servicers to the Securities
     Administrator pursuant to the Servicing Agreements;

          (ii) any amount  deposited by the Servicers  pursuant to the Servicing
     Agreements in connection with any losses on Permitted Investments;

          (iii) any  amount  remitted  by the  Master  Servicer  from the Master
     Servicing Account pursuant to this Agreement; and

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

     In the event that a Servicer or the Master  Servicer shall remit any amount
not  required  to be  remitted,  it  may  at  any  time  direct  the  Securities
Administrator in writing to withdraw such amount from the Distribution  Account,
any provision herein to the contrary

                                      -60-

<PAGE>

notwithstanding.  Such direction may be accomplished by delivering notice to the
Securities  Administrator  which describes the amounts deposited in error in the
Distribution  Account.  All funds deposited in the Distribution Account shall be
held by the Securities  Administrator in trust for the Certificateholders  until
disbursed in  accordance  with this  Agreement or withdrawn in  accordance  with
Section 4.02.

     (e) On the Closing Date, the Securities  Administrator  shall  establish an
account (the "Class P Reserve Fund"),  which shall be an Eligible  Account.  The
Class P Reserve  Fund shall be entitled  "Class P Reserve  Fund,  Deutsche  Bank
National  Trust  Company,  as Trustee for the benefit of the holders of the HALO
2006-2 Class P  Certificates."  On the Closing Date the  Depositor  will deposit
$100  into  the  Class P  Reserve  Fund,  which  shall  be  uninvested.  On each
Distribution Date, the Securities  Administrator  shall distribute the aggregate
of all  Prepayment  Charges  for the  Mortgage  Loans  collected  or paid by the
Servicers  and  received by the  Securities  Administrator  with  respect to the
preceding  Prepayment  Period to the Class P Certificates.  On the  Distribution
Date in  December  2036,  the  Class P  Certificates  shall be  entitled  to its
outstanding  Class  Principal  Amount  from  amounts  on  deposit in the Class P
Reserve Fund under Section 4.02(j).

     Section 3.02 Investment of Funds in the Distribution Account and the Master
Servicing Account. (a) During the Securities  Administrator's  Float Period, the
Securities  Administrator  shall  hold  the  funds in the  Distribution  Account
uninvested,  and shall  have the  benefit of the use of such  funds.  During the
Master Servicer's Float Period,  the Master Servicer shall hold the funds in the
Master Servicing  Account  uninvested,  and shall have the benefit of the use of
such funds.

     (b) The Securities Administrator or its Affiliates are permitted to receive
compensation  that  could  be  deemed  to be in the  Securities  Administrator's
economic  self-interest  for (i) serving as investment  adviser,  administrator,
shareholder, servicing agent, custodian or sub-custodian with respect to certain
of the Permitted  Investments,  (ii) using Affiliates to effect  transactions in
certain  Permitted  Investments  and (iii)  effecting  transactions  in  certain
Permitted  Investments.  The Master  Servicer or its Affiliates are permitted to
receive  compensation  that  could  be  deemed  to be in the  Master  Servicer's
economic  self-interest  for (i) serving as investment  adviser,  administrator,
shareholder, servicing agent, custodian or sub-custodian with respect to certain
of the Permitted  Investments,  (ii) using Affiliates to effect  transactions in
certain  Permitted  Investments  and (iii)  effecting  transactions  in  certain
Permitted Investments.  Such compensation shall not be considered an amount that
is reimbursable for payable pursuant to this Agreement.

     Section 3.03 Report on  Assessment of  Compliance  with Relevant  Servicing
Criteria.  On or  before  March  15th of each  calendar  year for so long as the
Depositor  is  required  to file  reports  with  respect to the Trust  under the
Exchange Act,  commencing in March 2007,  the Master  Servicer,  the  Securities
Administrator  and the  Custodian,  each at its own  expense,  shall  furnish or
otherwise make available, and each such party shall cause any Servicing Function
Participant engaged by it to furnish, each at its own expense, to the Securities
Administrator  and the Depositor,  a report on an assessment of compliance  with
the  Relevant  Servicing  Criteria  set forth in Exhibit S that  contains  (A) a
statement by such party of its responsibility for assessing  compliance with the
Relevant Servicing Criteria, (B) a statement that such party used the

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<PAGE>

Relevant Servicing  Criteria,  (B) a statement that such party used the Relevant
Servicing  Criteria to assess compliance with the Relevant  Servicing  Criteria,
(C) such party's  assessment of compliance with the Relevant  Servicing Criteria
as of and for the  fiscal  year  covered by the Form 10-K  required  to be filed
pursuant to Section 8.12, including,  if there has been any material instance of
noncompliance  with the Relevant Servicing  Criteria,  a discussion of each such
failure and the nature and status thereof, and (D) a statement that a registered
public  accounting  firm  has  issued  an  attestation  report  on such  party's
assessment of compliance with the Relevant Servicing Criteria as of and for such
period.

     Promptly  after  receipt of each such report on assessment of compliance as
well as the reports on assessment of compliance  provided to the Depositor under
the Servicing  Agreements,  (i) the Depositor shall review each such report and,
if applicable,  consult with the Master Servicer, the Securities  Administrator,
any Servicer and any Servicing Function Participant engaged by any such party as
to the  nature of any  material  instance  of  noncompliance  with the  Relevant
Servicing  Criteria  by each such  party,  and (ii) the  Master  Servicer  shall
confirm that the  assessments,  taken as a whole,  address all of the  Servicing
Criteria and taken individually address the Relevant Servicing Criteria for each
party as set  forth on  Exhibit S or as set  forth in the  applicable  Servicing
Agreement.

     The Master  Servicer shall enforce any obligation of each Servicer to cause
to be  delivered  to the  Master  Servicer  an annual  report on  assessment  of
compliance within the time frames set forth in the related Servicing Agreements,
and in such form and substance as required by the related Servicing  Agreements.
The Master  Servicer  will  promptly  forward any  assessment  of  compliance it
receives from any Servicer to the Securities Administrator.

     In the  event  the  Master  Servicer,  the  Securities  Administrator,  the
Custodian or any  Servicing  Function  Participant  engaged by any such party is
terminated,  assigns its rights and obligations  under, or resigns  pursuant to,
the terms of this Agreement,  or any other applicable agreement, as the case may
be, such party shall provide a report on  assessment  of compliance  pursuant to
this Section 3.03, or to such other applicable agreement, for the period of time
in such reporting period prior to such  termination,  assignment or resignation,
notwithstanding any such termination, assignment or resignation.

     Section 3.04 Report on  Attestation of Compliance  with Relevant  Servicing
Criteria.  On or  before  March  15th of each  calendar  year for so long as the
Depositor  is  required  to file  reports  with  respect to the Trust  under the
Exchange Act,  commencing in March 2007,  the Master  Servicer,  the  Securities
Administrator and the Custodian,  each at its own expense, shall cause, and each
such party  shall  cause any  Servicing  Function  Participant  engaged by it to
cause,  each at its own expense,  a registered public accounting firm (which may
also render other services to the Master Servicer, the Securities Administrator,
the Custodian or such other Servicing Function Participants, as the case may be)
that is a member of the American  Institute of Certified  Public  Accountants to
furnish an attestation report to the Securities Administrator and the Depositor,
to the  effect  that (i) it has  obtained  a  representation  regarding  certain
matters from the management of such party, which includes an assertion that such
party has complied with the Relevant Servicing  Criteria,  and (ii) on the basis
of an  examination  conducted  by such firm in  accordance  with  standards  for
attestation  engagements  issued or  adopted by the  Public  Company  Accounting
Oversight  Board,  it is  expressing  an  opinion  as to  whether  such  party's
compliance  with the  Relevant  Servicing  Criteria  was  fairly  stated  in all
material respects, or it

                                      -62-

<PAGE>

cannot  express  an  overall  opinion  regarding  such  party's   assessment  of
compliance with the Relevant  Servicing  Criteria.  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.

     Prior to executing any Form 10-K,  the Master  Servicer  shall confirm that
each assessment  submitted pursuant to Section 3.03 and the Servicing Agreements
is coupled  with an  attestation  meeting the  requirements  of this Section and
notify the Depositor of any exceptions.

     The Master  Servicer shall enforce any obligation of each Servicer to cause
to be delivered to the Master Servicer an attestation within the time frames set
forth in the related Servicing Agreements, and in such form and substance as may
be  required by the  related  Servicing  Agreements.  The Master  Servicer  will
promptly  forward any  attestation  it receives on behalf of any Servicer to the
Securities Administrator.

     In the  event  the  Master  Servicer,  the  Securities  Administrator,  the
Custodian or any Servicing  Function  Participant  engaged by any such party, is
terminated,  assigns  its rights and duties  under,  or resigns  pursuant to the
terms of, this Agreement or any other applicable agreement,  as the case may be,
such  party  shall  cause a  registered  public  accounting  firm to  provide an
attestation  pursuant  to  this  Section  3.04,  or  to  such  other  applicable
agreement, notwithstanding any such termination, assignment or resignation.

     Section 3.05 Annual Officer's  Certificates.  (a) Each Form 10-K filed with
the Commission shall include a Sarbanes-Oxley Certification exactly as set forth
in Exhibit L attached hereto,  required to be included therewith pursuant to the
Sarbanes-Oxley  Act. The Securities  Administrator  and the Custodian shall, and
shall cause any Servicing  Function  Participant  engaged by them to, provide to
the Person who signs the Sarbanes-Oxley Certification (the "Certifying Person"),
by March  10th of each  year in which  the  Trust is  subject  to the  reporting
requirements  of the Exchange Act and  otherwise  within a reasonable  period of
time upon request,  a certification  (each, a "Back-Up  Certification"),  in the
form attached hereto as Exhibit L, upon which the Certifying  Person, the entity
for which the Certifying Person acts as an officer,  and such entity's officers,
directors   and   Affiliates   (collectively   with   the   Certifying   Person,
"Certification  Parties") can reasonably  rely. The senior officer of the Master
Servicer  in  charge  of  the  master  servicing  function  shall  serve  as the
Certifying  Person on behalf of the Trust. Such officer of the Certifying Person
can be contacted by  facsimile at  469-220-1572.  In the event any such party or
any Servicing  Function  Participant  engaged by any such party is terminated or
resigns pursuant to the terms of this Agreement, or any applicable sub servicing
agreement,  as the case may be, such party shall provide a Back-Up Certification
to the  Certifying  Person  pursuant to this  Section  3.05 with  respect to the
period of time it was subject to this  Agreement or any applicable sub servicing
agreement, as the case may be. Notwithstanding the foregoing, (i) the Securities
Administrator  shall not be required to deliver a Back-Up  Certification  to the
Master  Servicer  if both are the same  Person  and the Master  Servicer  is the
Certifying  Person and (ii) the Master  Servicer  shall not be obligated to sign
the  Sarbanes-Oxley  Certification  in the event  that it does not  receive  any
Back-Up Certification required to be furnished to it pursuant to this section or
any Servicing Agreement.

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<PAGE>

     (b) On or  before  March  15th of each  calendar  year,  for so long as the
Depositor  is  required  to file  reports  with  respect to the Trust  under the
Exchange Act,  commencing in March 2007,  the Master  Servicer shall deliver (or
otherwise  make  available)  (and the Master  Servicer shall cause any Servicing
Function  Participant  engaged  by it to  deliver)  to  the  Depositor  and  the
Securities Administrator,  an Officer's Certificate substantially in the form of
Exhibit U stating,  as to the signer thereof,  that (A) a review of such party's
activities  during the preceding  calendar  year or portion  thereof and of such
party's performance under this Agreement,  or such other applicable agreement in
the case of a Servicing Function Participant, has been made under such officer's
supervision  and (B) to the  best of such  officer's  knowledge,  based  on such
review,  such party has fulfilled all its obligations  under this Agreement,  or
such other applicable agreement in the case of a Servicing Function Participant,
in all material respects  throughout such year or 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.

     In the event the Master  Servicer  or any  Servicing  Function  Participant
engaged by any such party is terminated or resigns pursuant to the terms of this
Agreement,  or any  applicable  agreement  in the case of a  Servicing  Function
Participant,  as the  case  may  be,  such  party  shall  provide  an  Officer's
Certificate  covering  the portion of the  reporting  period for which it served
pursuant to this Section 3.05 or to such applicable  agreement,  as the case may
be, notwithstanding any such termination, assignment or resignation.

     The Master  Servicer shall enforce any obligation of each Servicer to cause
to be delivered to the Master  Servicer such annual  Officer's  Certificate  (in
respect of Item 1123 of  Regulation  AB) within the time frames set forth in the
related Servicing Agreements,  and in such form and substance as required by the
related Servicing Agreements. The Master Servicer will promptly forward any such
Officer's   Certificate   it  receives  from  any  Servicer  to  the  Securities
Administrator.

     Section  3.06  Indemnification.  (a)  Each  of the  Depositor,  the  Master
Servicer,  the  Securities  Administrator,  the  Custodian,  and  any  Servicing
Function Participant (each, an "Indemnifying  Party") engaged by any such party,
shall indemnify and hold harmless the Trustee and each other Indemnifying Party,
and each of its directors,  officers, employees, agents, and affiliates from and
against any and all claims,  losses,  damages,  penalties,  fines,  forfeitures,
reasonable legal fees and related costs,  judgments and other costs and expenses
arising  out of or  based  upon  (a)  any  breach  by such  party  of any if its
obligations  hereunder,  including  particularly  its obligations to provide any
annual statement of compliance,  annual  assessment of compliance with Servicing
Criteria or attestation report or any information, data or materials required to
be included  in any  Exchange  Act  report,  (b) any  material  misstatement  or
omission in any information,  data or materials provided by such party including
any material  misstatement or material  omission in (i) any annual  statement of
compliance or annual assessment of compliance with Servicing  Criteria delivered
by it, or by any Servicing Function  Participant engaged by it, pursuant to this
Agreement,  or (ii) any Additional  Form 10-D  Disclosure,  Additional Form 10-K
Disclosure  or  Form  8-K  Disclosure  Information  provided  by it,  or (c) the
negligence,  bad  faith or  willful  misconduct  of such  indemnifying  party in
connection with its performance hereunder.  If the indemnification  provided for
herein is unavailable or insufficient to hold harmless the Master Servicer,  the
Securities  Administrator,  the Trustee, the Custodian or the Depositor,  as the
case

                                      -64-

<PAGE>

may be, then each  Indemnifying  Party  agrees that it shall  contribute  to the
amount paid or payable by the Master Servicer, the Securities Administrator, the
Trustee,  the  Custodian or the  Depositor,  as  applicable,  as a result of any
claims, losses, damages or liabilities incurred by such party in such proportion
as is appropriate to reflect the relative fault of the indemnified  party on the
one hand and the indemnifying  party on the other.  This  indemnification  shall
survive the  termination  of this  Agreement or the  termination of any party to
this Agreement.

     (b) The  Depositor,  the  Securities  Administrator,  the Custodian and the
Trustee  shall  immediately  notify the Master  Servicer if a claim is made by a
third party with respect to this  Agreement  or the  Mortgage  Loans which would
entitle the Depositor, the Securities Administrator,  the Custodian, the Trustee
or the Trust to indemnification  from the Master Servicer,  whereupon the Master
Servicer  shall  assume the  defense of any such claim and pay all  expenses  in
connection  therewith,  including counsel fees, and promptly pay,  discharge and
satisfy  any  judgment  or decree  which may be  entered  against  it or them in
respect of such claim.  If the Master  Servicer and any such  indemnified  party
have a conflict of interest  with  respect to any such  claim,  the  indemnified
party shall have the right to retain separate counsel.

     Section 3.07 Advances.  (a) To the extent provided in the related Servicing
Agreement,  the  amount  of P&I  Advances  to be made by each  Servicer  for any
Remittance  Date shall  equal,  subject to Section  3.07(c),  the sum of (i) the
aggregate  amount of Scheduled  Payments (with each interest portion thereof net
of the related Servicing Fee), due during the Due Period  immediately  preceding
such Remittance Date in respect of the Mortgage Loans,  which Scheduled Payments
were not received as of the close of business on the related Determination Date,
plus (ii) with  respect to each REO  Property,  which REO  Property was acquired
during  or prior  to the  related  Prepayment  Period  and as to which  such REO
Property an REO Disposition did not occur during the related  Prepayment Period,
an amount  equal to the excess,  if any, of the  Scheduled  Payments  (with each
interest portion thereof net of the related  Servicing Fee) that would have been
due on the related Due Date in respect of the related  Mortgage Loans,  over the
net income from such REO  Property  transferred  to the  Collection  Account for
distribution on such Remittance Date.

     (b) To the extent  provided in the  related  Servicing  Agreement,  on each
Remittance Date, each Servicer shall remit in immediately available funds to the
Master Servicer or Securities  Administrator,  as applicable, an amount equal to
the  aggregate  amount of P&I  Advances,  if any,  to be made in  respect of the
Mortgage  Loans and REO Properties  for the related  Remittance  Date either (i)
from its own funds or (ii) from the Collection  Account,  to the extent of funds
held therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of the Collection Account that Amounts Held for
Future  Distribution have been, as permitted by this Section 3.07, used by it in
discharge  of any such P&I Advance) or (iii) in the form of any  combination  of
(i) and (ii)  aggregating  the total  amount of P&I  Advances  to be made by the
applicable  Servicer with respect to the Mortgage Loans and REO  Properties.  To
the extent  provided in the related  Servicing  Agreement,  any Amounts Held for
Future  Distribution  and  so  used  shall  be  appropriately  reflected  in the
applicable  Servicer's  records and replaced by such  Servicer by deposit in the
Collection  Account  on or  before  any  future  Remittance  Date to the  extent
required.

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<PAGE>

     (c)  To the  extent  provided  in  the  related  Servicing  Agreement,  the
obligation   of  each   Servicer  to  make  such  P&I  Advances  is   mandatory,
notwithstanding  any other provision of this Agreement but subject to (d) below,
and, with respect to any Mortgage Loan or REO Property,  shall  continue until a
Final Recovery Determination in connection therewith or the removal thereof from
coverage under this Agreement, except as otherwise provided in this Section.

     (d)  To  the  extent   provided   in  the  related   Servicing   Agreement,
notwithstanding  anything  herein to the  contrary,  no P&I Advance or Servicing
Advance  shall be  required  to be made  hereunder  by any  Servicer if such P&I
Advance or Servicing  Advance would, if made,  constitute a  Nonrecoverable  P&I
Advance or  Nonrecoverable  Servicing  Advance.  To the extent  provided  in the
related Servicing Agreement,  the determination by any Servicer that it has made
a Nonrecoverable  P&I Advance or a Nonrecoverable  Servicing Advance or that any
proposed  P&I  Advance  or  Servicing  Advance,  if  made,  would  constitute  a
Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance,  respectively,
shall be  evidenced  by a  Servicing  Officer's  certificate  of the  applicable
Servicer delivered to the Master Servicer.  In addition,  to the extent provided
in the  related  Servicing  Agreement,  the  Servicer  shall not be  required to
advance any Relief Act Interest Shortfalls.

     (e) To the extent provided in the related  Servicing  Agreement,  except as
otherwise  provided  herein,  the  Servicer  shall be entitled to  reimbursement
pursuant the applicable section of its related Servicing Agreement for Servicing
Advances  from  recoveries  from the related  Mortgagor or from all  Liquidation
Proceeds  and  other  payments  or  recoveries  (including  Insurance  Proceeds,
Condemnation  Proceeds and  Subsequent  Recoveries)  with respect to the related
Mortgage Loan.

                                    ARTICLE IV

                                  DISTRIBUTIONS

     Section  4.01  The  Distribution  Account.  On each  Remittance  Date,  the
Securities  Administrator  shall deposit in the  Distribution  Account all funds
remitted to it by the Servicers pursuant to the Servicing Agreements and on each
Master Servicer  Remittance Date, the Securities  Administrator shall deposit in
the  Distribution  Account  all  Funds  remitted  to it by the  Master  Servicer
pursuant to this Agreement.  The Securities Administrator may retain or withdraw
from the Distribution  Account, (i) amounts necessary to reimburse the Servicers
pursuant to the Servicing  Agreements,  (ii) amounts  necessary to reimburse the
Master  Servicer for any previously  unreimbursed  Advances and any Advances the
Master  Servicer  deems to be  nonrecoverable  from the  related  Mortgage  Loan
proceeds,  (iii) an amount to indemnify the Master Servicer or the Servicers for
amounts due in accordance  with this  Agreement,  (iv) all amounts  representing
Prepayment Charges (payable to the Class P Certificateholders in accordance with
Section  4.02(j)),   (v)  to  reimburse  the  Master  Servicer,  the  Securities
Administrator,  any  Servicer or the  Trustee,  as the case may be, for expenses
reasonably  incurred  in  respect  of any  breach or defect  giving  rise to the
repurchase  obligation of a Mortgage  Loan Seller under a Transfer  Agreement or
the Sponsor under this Agreement  that were included in the Repurchase  Price of
the Mortgage Loan,  including any expenses arising out of the enforcement of the
repurchase  obligation,  to the extent not otherwise  paid pursuant to the terms
hereof and (vi) any other amounts that each of the  Depositor,  Trustee,  Master
Servicer and the

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<PAGE>

Securities  Administrator  is entitled to receive  hereunder for  reimbursement,
indemnification or otherwise.

     Section 4.02 Priorities of Distribution. (a) On each Distribution Date, the
Securities Administrator shall make the disbursements and transfers from amounts
then on deposit in the Distribution  Account,  and shall distribute such amounts
in the  following  order of priority and to the extent of the related  Available
Funds:

          (i) to the  related  Senior  Certificates  (other  than  the  Class PO
     Certificates),  on a pro rata basis based on Accrued  Certificate  Interest
     payable  on such  Certificates  with  respect  to such  Distribution  Date,
     Accrued  Certificate  Interest  on such  Classes of  Certificates  for such
     Distribution Date, plus any Accrued Certificate  Interest thereon remaining
     unpaid from any previous  Distribution  Date except as provided in the last
     paragraph of this Section  4.02(a),  in each case in respect of interest on
     such Class;

          (ii) to the Class I-PO  Certificates from the Available Funds for Loan
     Group I and to the Class II-PO  Certificates  from the Available  Funds for
     Loan Group II, the Class PO Principal  Distribution  Amount for the related
     Loan Group,  until the Class  Certificate  Balance of the related  Class PO
     Certificates has been reduced to zero; and

          (iii) to the Subgroup I-1 Certificates, the Subgroup I-2 Certificates,
     the Subgroup I-3 Certificates and the Subgroup I-4 Certificates (other than
     the Class I-PO  Certificates  or any Interest Only  Certificates)  from the
     Available  Funds for Loan Group I, and to the  Subgroup  II-1  Certificates
     (other than Class II-PO Certificates or Class II-IO  Certificates) from the
     Available  Funds for Loan  Group II,  in each  case in the  priorities  and
     amounts set forth in Section 4.02 (b), the sum of the following amounts for
     each  Subgroup  (applied  to reduce the Class  Certificate  Balance of such
     Certificates):

               (A) the Senior Percentage for that Subgroup for such Distribution
          Date times the sum of the following:

                         1.  the  Subgroup  Fraction  for that  Subgroup  of the
                    principal  portion of each  Monthly  Payment  due during the
                    related Due Period on each Outstanding  Mortgage Loan (other
                    than the related Discount  Fraction of the principal portion
                    of such payment with respect to a Discount  Mortgage  Loan),
                    whether  or  not   received  on  or  prior  to  the  related
                    Determination  Date,  minus the  Subgroup  Fraction for that
                    Subgroup  of  the  principal  portion  of any  Debt  Service
                    Reductions other than the related  Discount  Fraction of the
                    principal portion of the Debt Service Reductions (other than
                    the related  Discount  Fraction of the principal  portion of
                    such Debt Service  Reductions  with respect to each Discount
                    Mortgage  Loan) with respect to a Discount  Mortgage Loan in
                    the related loan group, which together with other Bankruptcy
                    Losses exceeds the Bankruptcy Amount;

                         2.  the  Subgroup  Fraction  for that  Subgroup  of the
                    Stated  Principal  Balance of any Mortgage Loan  repurchased
                    during the preceding  calendar month (or deemed to have been
                    so repurchased in accordance

                                      -67-

<PAGE>

                    with  Section  3.07(b))  pursuant  to  Section  2.03  or the
                    Subgroup  Fraction  for that  Subgroup  of the amount of any
                    Substitution  Adjustment  Amount  deposited  in the  related
                    Collection  Account in connection with the substitution of a
                    Deleted  Mortgage  Loan  pursuant to Section 2.03 during the
                    preceding  calendar  month (other than the related  Discount
                    Fraction of such Stated  Principal  Balance or  Substitution
                    Adjustment  Amount with  respect to each  Discount  Mortgage
                    Loan); and

                         3.  the  Subgroup  Fraction  for that  Subgroup  of the
                    principal  portion  of all  other  collections  (other  than
                    Scheduled   Payments,   Principal   Prepayments   in   Full,
                    Curtailments  and amounts received in connection with a Cash
                    Liquidation or REO  Disposition of a Mortgage Loan described
                    in Section  4.02(a)(iii)(B),  including  without  limitation
                    Insurance Proceeds,  Liquidation  Proceeds and REO Proceeds)
                    including   Subsequent   Recoveries   received   during  the
                    preceding  calendar  month  to  the  extent  applied  by the
                    Servicer as recoveries of principal of the related  Mortgage
                    Loan pursuant to the related Servicing Agreement (other than
                    the   related   Discount   Fraction   of  such   unscheduled
                    collections with respect to each Discount Mortgage Loan);

                    (B) with  respect  to each  Mortgage  Loan for  which a Cash
               Liquidation or a REO  Disposition  occurred  during the preceding
               calendar  month and did not result in any Excess  Special  Hazard
               Losses,   Excess  Fraud  Losses,   Excess  Bankruptcy  Losses  or
               Extraordinary  Losses,  an amount  equal to the lesser of (a) the
               related  Senior  Percentage  of the  Subgroup  Fraction  for that
               Subgroup for such  Distribution  Date times the Stated  Principal
               Balance of such  Mortgage  Loan (other than the related  Discount
               Fraction of the Stated  Principal  Balance  with  respect to each
               Discount  Mortgage Loan) and (b) the related  Senior  Accelerated
               Distribution   Percentage  of  the  Subgroup  Fraction  for  that
               Subgroup for such Distribution Date times the related unscheduled
               collections  (including  without limitation  Insurance  Proceeds,
               Liquidation  Proceeds and REO Proceeds) to the extent  applied by
               the Servicer as recoveries  of principal of the related  Mortgage
               Loan  pursuant to the related  Servicing  Agreement (in each case
               other than the  portion  of such  unscheduled  collections,  with
               respect to a Discount Mortgage Loan,  included in clause (iii) of
               the definition of Class PO Principal Distribution Amount);

                    (C) the related Senior Accelerated  Distribution  Percentage
               of the Subgroup  Fraction for that Subgroup for such Distribution
               Date times the aggregate of all Principal Prepayments received in
               the related  Prepayment  Period (other than the related  Discount
               Fraction  of such  Principal  Prepayments  with  respect  to each
               Discount Mortgage Loan);

                    (D) any related Excess Subordinate Principal Amount for such
               Distribution Date related to Realized Losses on Mortgage Loans in
               that Subgroup;

                                      -68-

<PAGE>

                    (E) any amounts described in subsection (iii),  clauses (A),
               (B)  and (C) of  this  Section  4.02(a),  as  determined  for any
               previous Distribution Date, which remain unpaid after application
               of amounts previously  distributed pursuant to this clause (E) to
               the extent  that such  amounts are not  attributable  to Realized
               Losses which have been allocated to the Subordinate Certificates;

               (iv) to the  Holders of the Class B-1  Certificates,  the Accrued
          Certificate  Interest  thereon for such  Distribution  Date,  plus any
          Accrued  Certificate   Interest  thereon  remaining  unpaid  from  any
          previous Distribution Date, except as provided below;

               (v) to the Holders of the Class B-1 Certificates, an amount equal
          to (x) the Subordinate Principal Distribution Amount for such Class of
          Certificates for such  Distribution  Date, minus (y) the amount of any
          Class PO Collection Shortfalls for such Distribution Date or remaining
          unpaid for all previous  Distribution Dates, to the extent the amounts
          available pursuant to clause (x) of Sections 4.02(a)(vii), (ix), (xi),
          (xiii), (xiv) and (xv) are insufficient therefor, applied in reduction
          of the Class Certificate Balance of the Class B-1 Certificates;

               (vi) to the  Holders of the Class B-2  Certificates,  the Accrued
          Certificate  Interest  thereon for such  Distribution  Date,  plus any
          Accrued  Certificate   Interest  thereon  remaining  unpaid  from  any
          previous Distribution Date, except as provided below;

               (vii) to the  Holders  of the Class B-2  Certificates,  an amount
          equal to (x) the Subordinate  Principal  Distribution  Amount for such
          Class of Certificates for such Distribution Date, minus (y) the amount
          of any Class PO Collection  Shortfalls for such  Distribution  Date or
          remaining  unpaid for all previous  Distribution  Dates, to the extent
          the amounts available pursuant to clause (x) of Sections  4.02(a)(ix),
          (xi),  (xiii),  (xiv) and (xv) are insufficient  therefor,  applied in
          reduction  of  the  Class   Certificate   Balance  of  the  Class  B-2
          Certificates;

               (viii) to the Holders of the Class B-3 Certificates,  the Accrued
          Certificate  Interest  thereon for such  Distribution  Date,  plus any
          Accrued  Certificate   Interest  thereon  remaining  unpaid  from  any
          previous Distribution Date, except as provided below;

                  (ix)  to the Holders of the Class B-3  Certificates, an amount
         equal to (x) the  Subordinate  Principal  Distribution  Amount for such
         Class  of Certificates for such Distribution  Date minus (y) the amount
         of any Class PO Collection  Shortfalls for  such  Distribution  Date or
         remaining unpaid for all previous  Distribution  Dates, to  the  extent
         the amounts available pursuant to clause (x)  of  Sections 4.02(a)(xi),
         (xiii), (xiv) and (xv) are insufficient therefor,  applied in reduction
         of the Class Certificate Balance of the Class B-3 Certificates;

               (x) to the  Holders of the Class B-4  Certificates,  the  Accrued
          Certificate  Interest  thereon for such  Distribution  Date,  plus any
          Accrued  Certificate   Interest  thereon  remaining  unpaid  from  any
          previous Distribution Date, except as provided below;

               (xi) to the  Holders  of the  Class B-4  Certificates,  an amount
          equal to (x) the Subordinate  Principal  Distribution  Amount for such
          Class of Certificates for such

                                      -69-

<PAGE>

          Distribution  Date  minus (y) the  amount  of any Class PO  Collection
          Shortfalls  for such  Distribution  Date or  remaining  unpaid for all
          previous  Distribution  Dates,  to the  extent the  amounts  available
          pursuant to clause (x) of Sections  4.02(a)(xiii),  (xiv) and (xv) are
          insufficient  therefor,  applied in reduction of the Class Certificate
          Balance of the Class B-4 Certificates;

               (xii) to the Holders of the Class B-5  Certificates,  the Accrued
          Certificate  Interest  thereon for such  Distribution  Date,  plus any
          Accrued  Certificate   Interest  thereon  remaining  unpaid  from  any
          previous Distribution Date, except as provided below;

               (xiii) to the  Holders of the Class B-5  Certificates,  an amount
          equal to (x) the Subordinate  Principal  Distribution  Amount for such
          Class of Certificates for such  Distribution Date minus (y) the amount
          of any Class PO Collection  Shortfalls for such  Distribution  Date or
          remaining  unpaid for all previous  Distribution  Dates, to the extent
          the amounts available pursuant to clause (x) of Sections 4.02(a) (xiv)
          and (xv) are insufficient therefor,  applied in reduction of the Class
          Certificate Balance of the Class B-5 Certificates;

               (xiv) to the  Holders  of the Class B-6  Certificates,  an amount
          equal  to (x)  the  Accrued  Certificate  Interest  thereon  for  such
          Distribution  Date,  plus any  Accrued  Certificate  Interest  thereon
          remaining  unpaid  from any  previous  Distribution  Date,  except  as
          provided  below,  minus  (y) the  amount  of any  Class PO  Collection
          Shortfalls  for such  Distribution  Date or  remaining  unpaid for all
          previous  Distribution  Dates,  to the  extent the  amounts  available
          pursuant  to  clause  (x)  of  Section  4.02(a)(xv)  are  insufficient
          therefor;

               (xv) to the  Holders  of the  Class B-6  Certificates,  an amount
          equal to (x) the Subordinate  Principal  Distribution  Amount for such
          Class of Certificates for such  Distribution Date minus (y) the amount
          of any Class PO Collection  Shortfalls for such  Distribution  Date or
          remaining  unpaid  for all  previous  Distribution  Dates  applied  in
          reduction  of  the  Class   Certificate   Balance  of  the  Class  B-6
          Certificates;

               (xvi) to the Senior  Certificates  related to any Loan Group,  in
          the priority set forth in Section 4.02(b), the portion, if any, of the
          related  Available Funds remaining after the foregoing  distributions,
          applied  to  reduce  the Class  Certificate  Balances  of such  Senior
          Certificates,  but  in  no  event  more  than  the  aggregate  of  the
          outstanding  Class  Certificate  Balances of each such Class of Senior
          Certificates,   and   thereafter,   to  each   Class  of   Subordinate
          Certificates  then  outstanding  beginning  with such  Class  with the
          Highest Priority, any portion of the related Available Funds remaining
          after the related Senior  Certificates  have been retired,  applied to
          reduce the Class Certificate Balance of each such Class of Subordinate
          Certificates,  but  in  no  event  more  than  the  outstanding  Class
          Certificate Balance of each such Class of Subordinate Certificates;

               (xvii) to the Class R-I Certificates, the balance, if any, of the
          Available Funds for either Loan Group.

                                      -70-

<PAGE>

     Notwithstanding  the foregoing,  on any Distribution  Date, with respect to
the Class of Subordinate Certificates outstanding on such Distribution Date with
the Lowest Priority, or in the event the Subordinate  Certificates are no longer
outstanding,  the Senior  Certificates,  Accrued  Certificate  Interest  thereon
remaining unpaid from any previous Distribution Date shall be distributable only
to the extent  that (1) a  shortfall  in the  amounts  available  to pay Accrued
Certificate  Interest  in any  Class of  related  certificates  results  from an
interest  rate  reduction  in  connection  with a  Servicing  Modification  on a
Mortgage Loan in the related Loan Group, or (2) such unpaid Accrued  Certificate
Interest was attributable to interest  shortfalls relating to the failure of the
related  Servicer to the Master  Servicer to make any required  Advance,  or the
determination  by the Servicer or the Master Servicer that any proposed  Advance
would be a Nonrecoverable  P&I Advance with respect to the related Mortgage Loan
where such Mortgage Loan has not yet been the subject of a Cash  Liquidation  or
REO Disposition.

     (b) Distributions of principal on the Senior  Certificates  (other than the
Class PO Certificates and Interest Only  Certificates) on each Distribution Date
occurring prior to the Credit Support Depletion Date shall be made as follows:

               (i)  The   Available   Funds  for  Loan  Group  I  available  for
          distribution  pursuant to Section  4.02(a)(iii)  shall be distributed,
          pro rata, to Sections 4.02(b)(i)(A), 4.02(b)(i)(B), 4.02(b)(i)(C), and
          4.02(b)(i)(D) below based on the Senior Principal  Distribution Amount
          for  Subgroup  I-1,  the  Senior  Principal  Distribution  Amount  for
          Subgroup I-2, the Senior  Principal  Distribution  Amount for Subgroup
          I-3 and the Senior Principal  Distribution Amount for Subgroup I-4, as
          applicable:

                    (A) to the Subgroup I-1 Certificates, in an aggregate amount
               up to the Senior Principal  Distribution Amount for Subgroup I-1,
               the Senior Principal  Distribution  Amount in the following order
               of priority:

                         1.   first,   to  the  Class   I-A-1  and  Class  1-A-6
                    Certificates,  pro rata, in accordance with their respective
                    Class Certificate Balances, an amount up to the Subgroup I-1
                    Priority Amount for that Distribution  Date, until the Class
                    Certificate Balances thereof have been reduced to zero;

                         2.  second,  to the to the Class  I-A-2 and Class I-A-3
                    Certificates,   concurrently,   up  to   $628,948   on  each
                    Distribution Date concurrently as follows:

                              1.  97.00000%  of the amount  described in Section
                         4.02(b)(i)(A)(2) to the Class I-A-2 Certificates, until
                         the Class Certificate  Balance thereof has been reduced
                         to zero;

                              2.  3.00000%  of the amount  described  in Section
                         4.02(b)(i)(A)(2) to the Class I-A-3 Certificates, until
                         the Class Certificate  Balance thereof has been reduced
                         to zero;

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

                                      -71-

<PAGE>

                              4. fourth, to the Class I-A-2 Certificates,  until
                         the Class Certificate  Balance thereof has been reduced
                         to zero;

                              5. fifth, to the Class I-A-5  Certificates,  until
                         the Class Certificate  Balance thereof has been reduced
                         to zero;

                              6.  sixth,  to the Class  I-A-1  and  Class  I-A-6
                         Certificates,   pro  rata,  in  accordance  with  their
                         respective Class Certificate  Balances,  without regard
                         to the Subgroup I-1  Priority  Amount,  until the Class
                         Certificate Balances thereof have been reduced to zero.

                    (B) to the Subgroup I-2 Certificates, in an aggregate amount
               up to the Senior Principal  Distribution  Amount for Subgroup I-2
               in the following order of priority:

                         1. to the  Class  I-A-7  Certificates,  until the Class
                    Certificate Balance thereof has been reduced to zero.

                    (C) to the Subgroup I-3 Certificates, in an aggregate amount
               up to the Senior Principal  Distribution  Amount for Subgroup I-3
               in the following order of priority:

                         1. to the  Class  I-A-9  Certificates,  until the Class
                    Certificate Balance thereof has been reduced to zero.

                    (D) to the Subgroup I-4 Certificates, in an aggregate amount
               up to the Senior Principal  Distribution  Amount for Subgroup I-4
               in the following order of priority:

                         1. to the Class  I-A-11  Certificates,  until the Class
                    Certificate Balance thereof has been reduced to zero.

               (ii) to the Subgroup II-1 Certificates, in an aggregate amount up
          to the Senior Principal  Distribution  Amount for Subgroup II-1 in the
          following order of priority:

                    (A)  to the  Class  II-A-1  Certificates,  until  the  Class
               Certificate Balance thereof has been reduced to zero.

     (c) Prior to the occurrence of the Credit Support  Depletion Date but after
the  reduction  of the Class  Certificate  Balances  of the Senior  Certificates
(other  than any Class PO  Certificates)  related to any  Subgroup  to zero,  if
either (i) the  Subordinate  Percentage  for such  Subgroup on that date is less
than  200% of the  Subordinate  Percentage  as of the  Closing  Date or (ii) the
Subgroup  Fraction of the Stated Principal  Balance of the Mortgage Loans in any
Subgroup delinquent 60 days or more (including, for this purpose, Mortgage Loans
in REO,  foreclosure or bankruptcy status) averaged over the six months prior to
the  Determination  Date, as a percentage of such Subgroup's  Group  Subordinate
Amount,  is  greater  than or  equal  to 50%,  100% of all  Scheduled  Payments,
Principal  Prepayments  or any other  payment of principal  received or advanced
with respect to the Mortgage Loans in the Subgroup relating to the Senior

                                      -72-

<PAGE>

Certificates of which the aggregate Class  Certificate  Balance has been paid in
full,  will be applied on the related  Distribution  Date as a  distribution  of
principal to the remaining Senior  Certificates (other than the related Class PO
Certificates and Interest Only  Certificates) of such other Certificate  Groups,
pro rata, on the basis of the aggregate Class Certificate  Balance of the Senior
Certificates  of such  Certificate  Groups  rather  than  applied as a principal
distribution to the Subordinate Certificates. Such principal will be distributed
on  the  related  Distribution  Date  in  the  same  priority  as  those  Senior
Certificates would receive other distributions of principal;

     (d) If on any Distribution  Date prior to the Credit Support Depletion Date
any Subgroup is an Undercollateralized  Certificate Group and any other Subgroup
is  an   Overcollateralized   Group,   in  each  case  after  giving  effect  to
distributions  to be made on such  Distribution  Date, the  applicable  Subgroup
Fraction  of the  principal  portion  of  Monthly  Payments  on  Mortgage  Loans
allocable to the related  Overcollateralized Group will be paid in the following
priority:  (1) first,  such  amount,  up to the Total  Transfer  Amount for that
Undercollateralized  Group will be distributed first to the Senior  Certificates
(other than the Class PO Certificates) related to the Undercollateralized  Group
in payment of accrued  but unpaid  interest,  if any,  and then to those  Senior
Certificates   (other  than  the  Class  PO   Certificates   and  Interest  Only
Certificates)  as principal  (in  accordance  with the  priorities  set forth in
Section 4.02(b)) and (2) second, any remaining amount will be distributed to the
Subordinate Certificates (in accordance with the priorities set forth in Section
4.02(b); provided, that if more than one Undercollateralized Group exists on any
Distribution  Date, the related Transfer  Payments shall be allocated among such
Undercollateralized  Groups,  pro rata,  on the basis of the amount by which the
aggregate Class Certificate  Balance of the related Senior  Certificates  (other
than the Class PO Certificates)  immediately  prior to such Distribution Date is
greater than the applicable  Subgroup Fraction of the aggregate Stated Principal
Balance of the  Mortgage  Loans  (less the  Discount  Fraction  of any  Discount
Mortgage Loans) in the related Subgroup;  provided,  further,  that if more than
one  Overcollateralized  Group  exists  on any  Distribution  Date  the  related
Transfer Payments shall be allocated among such  Overcollateralized  Groups, pro
rata,  on the basis of the  Class  Certificate  Balance  of the  related  Senior
Certificates (other than the Class PO Certificates).

     (e) On and after the occurrence of the Credit Support  Depletion  Date, all
priorities relating to distributions of the related Available Funds shall remain
as set forth in Section 4.02(b),  except the priority of distributions set forth
in  Section   4.02(b)(i)(A)   relating  to  principal  among  the  Subgroup  I-1
Certificates  will be  disregarded,  and the amount  available for  distribution
under clause Section 4.02(b)(i)(A) will be distributed to the remaining Subgroup
I-1  Certificates,  pro rata, in accordance  with their  respective  outstanding
Class Certificate Balances.

     (f) After the  reduction  of the Class  Certificate  Balances of the Senior
Certificates of any Certificate  Group (other than the Class PO Certificates) to
zero but prior to the Credit Support  Depletion  Date,  the Senior  Certificates
(other than the related Class PO  Certificates)  shall be entitled to no further
distributions  of principal  thereon,  and the related  Available Funds shall be
distributed  solely  to the  holders  of the  related  Class PO,  Class IO,  and
Subordinate Certificates, in each case as described herein.

     (g) On each  Distribution  Date,  the Securities  Administrator  will first
transfer  to the  Distribution  Account and then  distribute  to the Class I-A-3
Certificates to the extent of any

                                      -73-

<PAGE>

amounts  on deposit in the Reserve Fund an  amount  up  to  the Yield Supplement
Amount for such Distribution Date.

     (h) In  addition  to  the  foregoing  distributions,  with  respect  to any
Subsequent  Recoveries,  the related  Servicer shall deposit such funds into the
related  Collection  Account.  If, after  taking into  account  such  Subsequent
Recoveries,  the amount of a Realized  Loss with respect to any Mortgage Loan is
reduced,  the amount of such  Subsequent  Recoveries will be applied to increase
the Class Certificate Balance of the Class of related  Subordinate  Certificates
with the Highest Priority to which Realized Losses for such Mortgage Loan, other
than any related Excess Bankruptcy Losses,  Excess Fraud Losses,  Excess Special
Hazard Losses and  Extraordinary  Losses,  have been allocated,  but not by more
than the amount of Realized Losses with respect to such Mortgage Loan previously
allocated to that Class of Certificates  pursuant to Section 4.04. The amount of
any remaining  Subsequent  Recoveries from such Mortgage Loan will be applied to
increase the Class  Certificate  Balance of the Class of  Certificates  with the
next  Lower  Priority,  up to the  amount  of such  Realized  Losses  previously
allocated to that Class of Certificates  pursuant to Section 4.04. Any remaining
Subsequent  Recoveries from the related Mortgage Loan will in turn be applied to
increase the Class  Certificate  Balance of the Class of  Certificates  with the
next  Lower  Priority  up to the  amount  of  such  Realized  Losses  previously
allocated to that Class of  Certificates  pursuant to Section  4.04,  and so on.
Holders of such  Certificates  will not be entitled to any payment in respect of
Accrued  Certificate  Interest on the amount of such  increases for any Interest
Accrual Period  preceding the  Distribution  Date on which such increase occurs.
Any application of Subsequent Recoveries to the Senior Certificates will be made
in  proportion  to the  allocation  of the original  Realized Loss to the Senior
Certificates of the related  Subgroup or Subgroups.  Any such increases shall be
applied to the Class  Certificate  Balance of each  Certificate of such Class in
accordance with its respective Percentage Interest.

     (i) Each  distribution  with respect to a Book-Entry  Certificate  shall be
paid to the Depository,  as Holder thereof,  and the Depository  shall be solely
responsible for crediting 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 indirect  participating
brokerage firm (a "brokerage firm" or "indirect  participating  firm") for which
it acts as agent.  Each brokerage firm shall be responsible for disbursing funds
to  the  Certificate  Owners  that  it  represents.  None  of the  Trustee,  the
Securities  Administrator,  the Sponsor,  the  Depositor or the Master  Servicer
shall have any  responsibility  therefor  except as  otherwise  provided by this
Agreement or applicable law.

     (j) On each Distribution Date, the Securities  Administrator shall withdraw
from the Distribution  Account all amounts  representing  Prepayment  Charges in
respect of the Mortgage Loans received during the related  Prepayment Period and
will distribute these amounts to the holders of the Class P Certificates. On the
first  Distribution  Date  immediately  following  the  expiration of the latest
prepayment penalty term on the Mortgage Loans, the Securities Administrator will
distribute  all amounts on deposit in the Class P Reserve Fund  established  for
the  benefit of the Class P  Certificates  pursuant  to  Section  3.01(e) to the
holders of the Class P Certificates, up to its Class Certificate Balance.

                                      -74-

<PAGE>

     (k) On each  Distribution  Date  following  the  date on  which  the  Class
Certificate  Balance of the Class B-6 Certificates has been reduced to zero, the
Securities  Administrator  shall  distribute to the Class B-6  Certificates  any
Additional  Interest Amount (as defined below) for such date. Such amounts shall
be distributed from the Available Funds for each Loan Group in the same order of
priority that Accrued  Certificate  Interest otherwise would be distributable to
such Class.

     (l) For purposes hereof, the "Additional Interest Amount" for the Class B-6
Certificates on each Distribution Date shall equal the sum of (1) the product of
0.57687234% per annum multiplied by the Class  Certificate  Balance of the Class
B-1  Certificates  on such date;  and (2) the product of  0.32687234%  per annum
multiplied by the Class  Certificate  Balance of the Class B-2  Certificates  on
such date;  Calculations  of  Additional  Interest  Amounts shall be made on the
basis of a 360-day year consisting of twelve 30-day months.

     Section 4.03 Monthly Statements to  Certificateholders.  (a) Not later than
each  Distribution  Date, the Securities  Administrator  shall make available to
each Certificateholder,  the Master Servicer, each Servicer, the Depositor,  the
Trustee and each Rating  Agency a  statement,  based on  information  and to the
extent  provided by the  Servicers,  setting  forth with  respect to the related
distribution:

          (i) the amount thereof allocable to principal (other than with respect
     to the Interest Only  Certificates),  separately  identifying the aggregate
     amount of any Principal  Prepayments,  Liquidation  Proceeds and Subsequent
     Recoveries;

          (ii) the amount  thereof  allocable to interest for such  Distribution
     Date;

          (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 Stated Principal  Balance for the following  Distribution
     Date;

          (vi) the amount of the Expense Fees (in the aggregate  and  separately
     stated)  paid to or  retained by the  Servicers  and any  Subservicer  with
     respect to such Distribution Date;

          (vii) the  Interest  Rate for each such Class of  Certificates  (other
     than the Class PO Certificates) with respect to such Distribution Date;

          (viii) by Loan Group, Subgroup and in the aggregate, the amount of P&I
     Advances  included in the  distribution on such  Distribution  Date and the
     aggregate amount of P&I Advances outstanding as of the close of business on
     the Determination Date immediately preceding such Distribution Date;

                                      -75-

<PAGE>

          (ix) by Loan  Group,  Subgroup  and in the  aggregate,  the number and
     aggregate  outstanding  principal  balances of Mortgage Loans (except those
     Mortgage Loans that are liquidated as of the end of the related  Prepayment
     Period) (1) as to which the Scheduled  Payment is delinquent 31 to 60 days,
     61 to 90 days and 91 or more days,  (2) that have become REO Property,  (3)
     that are in foreclosure and (4) that are in bankruptcy,  in each case as of
     the close of business on the last Business Day of the immediately preceding
     month;

          (x) by Loan Group,  Subgroup  and in the  aggregate,  with  respect to
     Mortgage  Loans that became REO  Properties  during the preceding  calendar
     month,  the  number  and the  aggregate  Stated  Principal  Balance of such
     Mortgage  Loans  as of the  close of  business  on the  Determination  Date
     preceding such Distribution Date and the date of acquisition thereof;

          (xi) by Loan Group,  Subgroup and in the  aggregate,  the total number
     and aggregate  principal  balance of any REO  Properties as of the close of
     business on the Determination Date preceding such Distribution Date;

          (xii)  in the  aggregate  and for  each  Class  of  Certificates,  the
     aggregate amount of Realized Losses incurred during the preceding  calendar
     month and aggregate Realized Losses through such Distribution Date; and

          (xiii) the amount of any  Bankruptcy  Losses,  Fraud  Losses,  Special
     Hazard Losses or Extraordinary  Losses sustained  through such Distribution
     Date.

          (xiv) Prepayment Charges collected by the Servicers.

     (b) For purposes of preparing the Monthly Statement, delinquencies shall be
determined  and reported by the Master  Servicer  based on the  so-called  "OTS"
methodology irrespective of the method for determining delinquencies utilized by
the applicable  Servicer on mortgage loans similar to the Mortgage Loans. By way
of example,  a Mortgage  Loan would be  delinquent  with  respect to a Scheduled
Payment due on a Due Date if such Scheduled  Payment is not made by the close of
business on the Mortgage  Loan's next  succeeding  Due Date, and a Mortgage Loan
would be more than 30-days  Delinquent with respect to such Scheduled Payment if
such  Scheduled  Payment  were not made by the close of business on the Mortgage
Loan's second succeeding Due Date.

     (c) The Securities Administrator's  responsibility for making available the
above  statement  to the  Certificateholders,  each  Rating  Agency,  the Master
Servicer,  each  Servicer,  the  Trustee  and the  Depositor  is  limited to the
availability, timeliness and accuracy of the information derived from the Master
Servicer and the Servicers.  The Securities Administrator will provide the above
statement via the Securities  Administrator's  internet website.  The Securities
Administrator's      website      will      initially      be     located     at
https://www.sf.citidirect.com  and  assistance  in  using  the  website  can  be
obtained by calling the  Securities  Administrator's  customer  service  desk at
(1-800) 422-2066.  Parties that are unable to use the above distribution  method
are  entitled  to have a paper  copy  mailed  to them via  first  Class  mail by
notifying the Securities  Administrator at Citibank, N.A., 388 Greenwich Street,
14th

                                      -76-

<PAGE>

Floor, New York, New York 10013, Attention:  Structured Finance Agency and Trust
- HALO 2006-2. The Securities  Administrator  shall have the right to change the
manner  in which  the  above  statement  is  distributed  in order to make  such
distribution  more  convenient  and/or  more  accessible,   and  the  Securities
Administrator   shall   provide   timely  and  adequate   notification   to  the
Certificateholders  and the parties hereto  regarding any such changes.  A paper
copy of the statement will also be made available upon written request.

     (d) Within a reasonable period of time after the end of each calendar year,
the Securities  Administrator shall, upon written request, 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)(vi) of this Section 4.03  aggregated  for such  calendar  year or applicable
portion  thereof  during  which  such  Person  was  a  Certificateholder.   Such
obligation  of the  Securities  Administrator  shall  be  deemed  to  have  been
satisfied to the extent that  substantially  comparable  information  shall have
previously  been  provided  by  the  Securities  Administrator  pursuant  to any
requirements of the Code as from time to time in effect.

     Section 4.04  Allocation  of Realized  Losses.  Prior to each  Distribution
Date, the Master Servicer shall  determine the total amount of Realized  Losses,
based  solely  upon the  information  provided by the  Servicers  (to the extent
provided by them),  if any, that resulted from any Cash  Liquidation,  Servicing
Modification,  Debt Service  Reduction,  Deficient  Valuation or REO Disposition
that  occurred  during  the  related  Prepayment  Period  or,  in the  case of a
Servicing  Modification  that  constitutes a reduction of the interest rate on a
Mortgage  Loan,  the  amount of the  reduction  in the  interest  portion of the
Scheduled Payment due during the related Due Period. The amount of each Realized
Loss shall be based solely on and evidenced by an Officers' Certificate provided
by the Servicers.  With respect to all Realized Losses (i) the principal portion
of Realized  Losses,  other than Excess  Special  Hazard  Losses,  Extraordinary
Losses,  Excess Bankruptcy Losses or Excess Fraud Losses,  shall be allocated by
the Securities  Administrator  as follows:  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, thereafter,  if
any such Realized  Losses are on a Discount  Mortgage Loan, to the related Class
PO  Certificates  in an amount equal to the Discount  Fraction of the  principal
portion of such  Discount  Mortgage  Loan,  and the  remainder of such  Realized
Losses on that  Discount  Mortgage  Loan will be allocated  among all  remaining
classes of Senior  Certificates  (other than the Interest Only  Certificates and
Class PO  Certificates)  related to the Subgroup  that  includes  that  Discount
Mortgage  Loan and the Subgroup  Fraction of the amount of any Realized  Loss on
any  Non-Discount  Mortgage Loans included in a Subgroup will be allocated among
all the remaining classes of Senior  Certificates  (other than the Interest Only
Certificates and Class PO  Certificates)  related to that Subgroup on a pro rata
basis and (ii) the interest  portion of Realized  Losses,  other than any Excess
Special Hazard Losses,  Extraordinary Losses, Excess Bankruptcy Losses or Excess
Fraud Losses,  shall be allocated by the  Securities  Administrator  as follows:
first,  to the  Subordinate  Certificates  in  reverse  order of  seniority,  in
reduction of the Accrued  Certificate  Interest  thereon  payable on the related
Distribution Date and then in reduction of the Class

                                      -77-

<PAGE>

Certificate  Balance  of  such  Subordinate  Certificate,  and,  second,  to the
remaining classes of Senior  Certificates (other than the Class PO Certificates)
related  to such  Subgroup  on a pro rata  basis  until  the  Class  Certificate
Balances  thereof have been reduced to zero;  provided,  however,  that (A) such
Realized  Losses  otherwise  allocable  to  the  Class  I-A-1  and  Class  I-A-3
Certificates will be allocated to the Class I-A-6  Certificates  until the Class
Certificate  Balance of the Class I-A-6  Certificates  has been reduced to zero,
provided,  that, the principal  portion of any such Realized Losses allocable to
the Class I-A-6  Certificates will be limited to a maximum of (i) in the case of
the  principal  portion of such  Realized  Losses  allocable  to the Class I-A-1
Certificates,  $910,324 less any portion of the Class I-A-1  Certificates' share
of  Realized  Losses  allocated  to  the  Class  I-A-6   Certificates  on  prior
Distribution  Dates,  and  (ii) in the  case of the  principal  portion  of such
Realized Losses allocated to the Class I-A-3  Certificates,  $2,135,280 less any
portion of the Class I-A-3  Certificates'  share of Realized Losses allocated to
the  Class  I-A-6  Certificates  on prior  Distribution  Dates,  until the Class
Certificate Balance of the Class I-A-6 Certificates has been reduced to zero.

     The  principal  portion  of  any  Excess  Special  Hazard  Losses,   Excess
Bankruptcy Losses,  Excess Fraud Losses and Extraordinary Losses on any Discount
Mortgage  Loan shall be allocated  to the related  Class PO  Certificates  in an
amount equal to the Discount Fraction thereof and the applicable Subgroup Senior
Percentage  of the Subgroup  Fraction of the  remainder of such Realized Loss on
such Discount Mortgage Loan and the applicable Subgroup Senior Percentage of the
Subgroup Fraction of the entire amount of such Realized Loss on any Non-Discount
Mortgage Loan, will be allocated among the Senior  Certificates  (other than the
Class PO Certificates and Interest Only  Certificates)  related to each Subgroup
that  includes  all or portion  of such  Mortgage  Loan.  The  remainder  of the
principal   portion  of  such  losses  will  be  allocated  to  the  Subordinate
Certificates.  The  interest  portion of such losses will be allocated to all of
the Certificates  related to the Loan Group that includes such Mortgage Loan, on
a pro rata basis, based on the Accrued Certificate Interest thereon payable from
the related Loan Group in respect to the related  Distribution  Date,  provided,
however,  that (A) such Realized Losses  otherwise  allocable to the Class I-A-1
and Class I-A-3  Certificates will be allocated to the Class I-A-6  Certificates
until the Class  Certificate  Balance of the Class I-A-6  Certificates  has been
reduced to zero,  provided,  that,  the  principal  portion of any such Realized
Losses allocable to the Class I-A-6 Certificates will be limited to a maximum of
(i) in the case of the principal  portion of such Realized  Losses  allocable to
the Class  I-A-1  Certificates,  $910,324  less any  portion of the Class  I-A-1
Certificates' share of Realized Losses allocated to the Class I-A-6 Certificates
on prior  Distribution  Dates, and (ii) in the case of the principal  portion of
such Realized Losses allocated to the Class I-A-3 Certificates,  $2,135,280 less
any portion of the Class I-A-3  Certificates' share of Realized Losses allocated
to the Class I-A-6  Certificates on prior  Distribution  Dates,  until the Class
Certificate Balance of the Class I-A-6 Certificates has been reduced to zero.

     On  any  Distribution  Date,  Realized  Losses  will  be  allocated  by the
Securities Administrator as set forth herein after distributions of principal on
the Certificates as set forth herein.

     As used  herein,  an  allocation  of a Realized  Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata  basis,  among the  various  Classes  so  specified,  to each such Class of
Certificates on the basis of their then

                                      -78-

<PAGE>

outstanding  Certificate  Balances prior to giving effect to distributions to be
made on  such  Distribution  Date in the  case  of the  principal  portion  of a
Realized Loss or based on the Accrued  Certificate  Interest  thereon payable on
such  Distribution  Date (without regard to any  Compensating  Interest for such
Distribution Date) in the case of an interest portion of a Realized Loss. Except
as provided in the following  sentence,  any allocation of the principal portion
of Realized  Losses to a Class of  Certificates  shall be made by  reducing  the
Certificate  Balance thereof by the amount so allocated,  which allocation shall
be deemed to have  occurred on such  Distribution  Date;  provided  that no such
reduction  shall reduce the aggregate  Certificate  Balance of the  Certificates
below the aggregate Stated Principal Balance of the Mortgage Loans.

     Section 4.05 The Yield Maintenance Agreement.

     (a) On the Closing Date, the Securities Administrator is hereby directed to
enter into, on behalf of the Trust Fund, the Yield Maintenance Agreement for the
benefit of the Class I-A-3  Certificates  with the Yield  Maintenance  Agreement
Provider. The Seller, the Master Servicer, the Depositor,  the Servicers and the
Certificateholders  (by their acceptance of such  Certificates)  acknowledge and
agree that the  Securities  Administrator  is executing and delivering the Yield
Maintenance  Agreement  solely in its capacity as  Securities  Administrator  on
behalf of the Trust and not in its  individual  capacity.  The Depositor  hereby
authorizes  and directs  the  Securities  Administrator  to enter into the Yield
Maintenance  Agreement and  authorizes it to represent in the Yield  Maintenance
Agreement  that  it is not  required  by  any  applicable  law  of any  relevant
jurisdiction  to make any deduction or withholding  for or on account of any Tax
(as defined in the Yield  Maintenance  Agreement) from any payment to be made by
it  to  the  Yield  Maintenance  Provider.  Furthermore,  the  Depositor  hereby
authorizes  the  Securities   Administrator,   in  its  capacity  as  Securities
Administrator  on behalf of the Trust to perform all of the  obligations  of the
Trust under the Yield Maintenance Agreement.  The Securities Administrator shall
have no duty or  responsibility  to  enter  into  any  other  Yield  Maintenance
Agreement upon the expiration or termination of the Yield Maintenance  Agreement
unless directed to do so by the Sponsor under Section 4.05(d).

     (b) The Securities Administrator shall deposit or cause to be deposited any
amount received under the Yield  Maintenance  Agreement into the Reserve Fund on
the date such amount is received from the Yield Maintenance  Agreement  Provider
under the Yield Maintenance  Agreement  (including Yield  Maintenance  Agreement
Termination Payments, if any). All Yield Maintenance Payments received under the
Yield Maintenance  Agreement and amounts on deposit in the Reserve Fund shall be
transferred to the Distribution Account and then to the Class I-A-3 Certificates
in an  amount up to the  Yield  Supplement  Amount  for such  Distribution  Date
pursuant to Section 4.02(g) hereof. All Yield Maintenance  Agreement Termination
Payments  received under the Yield  Maintenance  Agreements shall be used as set
forth in Section  4.05(d) hereof.  Any amounts  remaining in the Reserve Fund on
any Distribution  Date following the  distribution  described in Section 4.02(g)
shall  remain on deposit in the Reserve Fund and will be available on any future
Distribution Date to cover any shortfall between the Yield Supplement Amount and
Yield Maintenance Payment, if any, for such Distribution Date. None of the Yield
Maintenance   Agreement,   Yield  Maintenance   Payments  (including  any  Yield
Maintenance  Termination Payments) nor the Reserve Fund constitute a part of any
REMIC created hereunder.

                                      -79-

<PAGE>

     (c) Any amounts on deposit in the  Reserve  Fund on the  Distribution  Date
immediately  following the earlier of (i) the  Distribution  Date in August 2010
and (ii) the date on which  the Class  Certificate  Balance  of the Class  I-A-3
Certificates is reduced to zero,  will be distributed to HSBC Securities  (USA),
Inc.  and will not be  available  for  payment to any holder of the Class  I-A-3
Certificates.

     (d) In the event that the Yield Maintenance  Agreement,  or any replacement
thereof,  terminates prior to the Distribution  Date in August 2010, the Sponsor
shall direct the  Securities  Administrator  in writing,  to the extent that the
termination value under such Yield Maintenance  Agreement is sufficient therefor
and only to the extent of the Yield Maintenance  Agreement  Termination  Payment
received from the Yield Maintenance Agreement Provider, to (i) cause a new yield
maintenance  provider  to  assume  the  obligations  of  such  terminated  yield
maintenance  agreement provider or (ii) cause a new yield maintenance  agreement
provider to enter into a new interest rate yield maintenance  agreement with the
Trust  Fund  having  substantially  similar  terms  as those  set  forth in such
terminated  Yield  Maintenance   Agreement.   Any  Yield  Maintenance  Agreement
Termination Payment having a termination value which is not sufficient to comply
with clauses (i) and (ii) of this Section  4.05(d)  shall be deposited  into the
Reserve  Fund and may be  distributed  pursuant  to Section  4.02(g) and Section
4.05(c) herein.

     Section 4.06 Certain Matters Relating to the Determination of LIBOR.  LIBOR
shall be  calculated by the  Securities  Administrator  in  accordance  with the
definition  of  LIBOR.  The  Interest  Rate for each  Class of  Adjustable  Rate
Certificates  for  each  Interest  Accrual  Period  shall be  determined  by the
Securities  Administrator on each Adjustable Rate  Determination Date so long as
the Adjustable Rate  Certificates  are outstanding on the basis of LIBOR and the
respective Pass-Through Rate relating to the Certificates.  The establishment of
LIBOR  by  the  Securities  Administrator  and  the  Securities  Administrator's
subsequent  calculation of the  Pass-Through  Rate  applicable to the Adjustable
Rate  Certificates for the relevant  Interest Accrual Period,  in the absence of
manifest error, will be final and binding.

                                     ARTICLE V

                                THE CERTIFICATES

     Section 5.01 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)  and  aggregate  denominations  per Class  set forth in the  Preliminary
Statement. The Depositor hereby directs the Securities Administrator to register
the  Class P  Certificates  in the name of HSBC  Securities  (USA)  Inc.  or its
designee.

     Subject  to  Section  12.02  respecting  the  final   distribution  on  the
Certificates,  on each Distribution Date the Securities Administrator 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
such Holder has so notified the Securities  Administrator at least five Business
Days prior to the applicable  Distribution  Date or (y) by check mailed by first
Class mail to such  Certificateholder at the address of such holder appearing in
the Certificate Register;

                                      -80-

<PAGE>

provided, however, so long as such Certificate is a Book-Entry Certificate,  all
distributions  on such  Certificate  will be made through the  Depository or the
Depository Participant.

     The  Certificates  shall be executed by manual or  facsimile  signature  on
behalf of the Securities  Administrator by an authorized  officer.  Certificates
bearing the manual or facsimile  signatures of individuals who were, at the time
such  signatures  were affixed,  authorized to sign on behalf of the  Securities
Administrator shall bind the Securities Administrator, notwithstanding that such
individuals  or any  of  them  have  ceased  to be so  authorized  prior  to the
authentication  and  delivery  of any 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 authenticated
by the Securities  Administrator by manual  signature,  and such  authentication
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  authentication.  On the  Closing
Date, the Securities  Administrator  shall  authenticate  the Certificates to be
issued at the direction of the Depositor, or any affiliate thereof.

     Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates.  (a) The Securities  Administrator shall maintain,  or cause to be
maintained  in  accordance  with the  provisions  of Section 5.06, 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
Securities  Administrator 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 Securities  Administrator
shall  execute  and  deliver,  in the  name  of  the  designated  transferee  or
transferees,  one or more new  Certificates  of the  same  Class  and  aggregate
Percentage Interest.

     At the option of a  Certificateholder,  Certificates  may be exchanged  for
other Certificates of the same Class in authorized  denominations and evidencing
the same aggregate  Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator.  Whenever any
Certificates are so surrendered for exchange, the Securities Administrator 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  Securities
Administrator  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  Securities  Administrator  in
accordance with the Securities Administrator's customary procedures.

                                      -81-

<PAGE>

     (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  determining
whether  a  transfer  is  being  made  pursuant  to  an  effective  registration
statement,  the Securities Administrator shall be entitled to rely solely upon a
written notice to such effect from the  Depositor.  In the event that a transfer
of a  Private  Certificate  which  is a  Physical  Certificate  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 shall certify to the  Securities  Administrator
in writing the facts  surrounding  the  transfer in  substantially  the form set
forth in Exhibit H (the "Transferor  Certificate")  and there shall be delivered
to the Securities  Administrator a letter in substantially the form of Exhibit I
(the "Rule 144A  Investment  Letter")  or (ii) there shall be  delivered  to the
Securities  Administrator at the expense of the transferor an Opinion of Counsel
stating that such transfer may be made without registration under the Securities
Act. In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate  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 will be deemed to
have made as of the transfer  date each of the  certifications  set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Investment Letter, in respect of such Certificate, in each case
as if such Certificate were evidenced by a Physical Certificate.  As directed by
the  Depositor,  the Securities  Administrator  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 Depositor, the Master Servicer
and the Trustee shall cooperate with the Securities  Administrator  in providing
the Rule  144A  information  referenced  in the  preceding  sentence,  including
providing  to  the  Securities  Administrator  such  information  regarding  the
Certificates,  the Mortgage Loans and other matters  regarding the Trust Fund as
the Securities  Administrator shall reasonably  determine to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate,  desiring to
effect such transfer shall,  and does hereby agree to,  indemnify the Securities
Administrator, the Trustee, each Servicer, the Master Servicer 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 an  ERISA-Restricted  Certificate  shall be made unless the
Securities  Administrator  shall have received either (i) a representation  from
the  transferee  of such  Certificate  acceptable  to and in form and  substance
satisfactory to the Securities Administrator (in the event such Certificate is a
Private  Certificate or a Residual  Certificate,  such  requirement is satisfied
only by the Securities  Administrator's  receipt of a representation letter from
the transferee  substantially in the form of Exhibit I), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section 406
of ERISA,  a plan  subject to Section  4975 of the Code or a plan subject to any
Federal,  state or local law ("Similar Law") materially similar to the foregoing
provisions of ERISA or 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,  or (ii) in the case of an  ERISA-Restricted  Certificate  (other
than a Residual

                                       -80-

<PAGE>

Certificate  or the  Class P  Certificate)  that  has  been  the  subject  of an
ERISA-Qualifying  Underwriting,  and the  purchaser is an insurance  company,  a
representation  that the  purchaser is an insurance  company that 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 ("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 other than a Residual Certificate or the Class
P Certificate presented for registration in the name of an employee benefit plan
subject to Title I of ERISA,  a plan or  arrangement  subject to Section 4975 of
the Code (or  comparable  provisions of any  subsequent  enactments),  or a plan
subject to Similar Law, 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  Securities  Administrator,
which Opinion of Counsel shall not be an expense of the Depositor,  the Trustee,
the Master Servicer,  the Servicers,  the Securities  Administrator or the Trust
Fund, addressed to the Securities Administrator, to the effect that the purchase
or holding of such ERISA-Restricted Certificate will not constitute or result in
a non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Trustee, the Depositor, the
Securities Administrator,  the Master Servicer or any Servicer to any obligation
in addition to those expressly undertaken in this Agreement or to any liability.
For purposes of the  preceding  sentence,  with  respect to an  ERISA-Restricted
Certificate that is not a Physical Certificate or a Residual Certificate, in the
event the  representation  letter  referred to in the preceding  sentence is not
furnished,  such  representation  shall  be  deemed  to  have  been  made to the
Securities  Administrator by the transferee's  (including an initial acquirer's)
acceptance of the ERISA-Restricted  Certificates.  Notwithstanding anything else
to the  contrary  herein,  (a) any  purported  transfer  of an  ERISA-Restricted
Certificate that is a Physical  Certificate or Residual Certificate or the Class
P Certificate, to or on behalf of an employee benefit plan subject to ERISA, the
Code or Similar Law without the delivery to the  Securities  Administrator  of a
representation  letter or an Opinion of Counsel  satisfactory  to the Securities
Administrator  as  described  above  shall be void and of no effect  and (b) any
purported  transfer of a Residual  Certificate  or the Class P Certificate  to a
transferee  that does not make the  representation  in clause (i) above shall be
void and of no effect.

     None of the  Class R or Class P  Certificates  may be sold to any  employee
benefit  plan  subject to Title I of ERISA,  any plan subject to Section 4975 of
the Code,  or any plan  subject to any  Similar Law or any person  investing  on
behalf or with plan assets of such plan.

     To the extent  permitted under  applicable law (including,  but not limited
to,  ERISA),  the  Securities  Administrator  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  5.02(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, in the
case of a Physical  Certificate,  the transfer was  registered by the Securities
Administrator in accordance with the foregoing requirements.

     (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

                                      -81-

<PAGE>

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 Securities  Administrator  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  Securities
     Administrator  shall not register the Transfer of any Residual  Certificate
     unless,  in addition to the  certificates  required to be  delivered to the
     Securities  Administrator  under  subparagraph  (b) above,  the  Securities
     Administrator  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 G;

          (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 a  Non-Permitted
     Transferee;

          (iv) Any attempted or purported  Transfer of any Ownership Interest in
     a Residual  Certificate  in  violation  of the  provisions  of this Section
     5.02(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
     5.02(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 Securities  Administrator 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 5.02(a) and
     this Section 5.02(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 the Rule 144A Letter. The Securities Administrator shall be
     entitled  but not  obligated  to  recover  from any  Holder  of a  Residual
     Certificate  that  was in fact a  Non-Permitted  Transferee  at the time it
     became a Holder or, at such  subsequent  time as it became a  Non-Permitted
     Transferee,  all payments  made on such Residual  Certificate  at and after
     either  such  time.  Any  such  payments  so  recovered  by the  Securities
     Administrator  shall be paid and delivered by the Securities  Administrator
     to the last preceding Permitted Transferee of such Certificate; and

          (v) The Depositor shall use its best efforts to make  available,  upon
     receipt  of  written  request  from  the  Securities   Administrator,   all
     information  necessary to compute any tax imposed under Section  860E(e) of
     the Code as a result of a Transfer of an

                                      -82-

<PAGE>

     Ownership  Interest  in a  Residual  Certificate  to  any  Holder  who is a
     Non-Permitted Transferee.

     The  restrictions on Transfers of a Residual  Certificate set forth in this
Section 5.02(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 Securities  Administrator of an Opinion of Counsel,  which
Opinion of Counsel shall not be an expense of the Trust Fund,  the Trustee,  the
Securities  Administrator or any 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 Securities  Administrator,  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 a  Non-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
a Non-Permitted Transferee to a Holder that is a Permitted Transferee.

     (d) The preparation and delivery of all certificates and opinions  referred
to  above in this  Section  5.02 in  connection  with  transfer  shall be at the
expense of the parties to such transfers.

     (e) Except as provided  below,  the  Book-Entry  Certificates  shall at all
times remain  registered in the name of the Depository or its nominee and at all
times:  (i)  registration  of the  Certificates  may not be  transferred  by the
Securities Administrator 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  Securities
Administrator  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 Securities  Administrator
may rely and shall be fully protected in relying upon  information  furnished by
the Depository with respect to its Depository  Participants and furnished by the
Depository Participants with respect to indirect participating firms and persons
shown on the books of such  indirect  participating  firms as direct or indirect
Certificate Owners.

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

                                      -83-

<PAGE>

     If  (x)  (i)  the  Depository  or  the  Depositor  advises  the  Securities
Administrator  in writing that the  Depository  is no longer  willing or able to
properly discharge its  responsibilities as Depository,  and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or (y)
the  Depositor  notifies  the  Depository  (and  the  Securities   Administrator
consents)  of  its  intent  to  terminate  the  book-entry  system  through  the
Depository and, upon receipt of notice of such intent from the  Depository,  the
Depository   Participants   holding  beneficial   interests  in  the  Book-Entry
Certificates  agree in writing to  initiate  such  termination,  the  Securities
Administrator  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  Securities  Administrator  of the
related Class of Certificates by the Depository, accompanied by the instructions
from the Depository for registration,  the Securities  Administrator shall issue
the  Definitive  Certificates.  None  of the  Servicers,  the  Depositor  or the
Securities  Administrator  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 Depositor shall provide the Securities Administrator
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  Securities  Administrator,  to the extent  applicable  with respect to such
Definitive  Certificates  and the Securities  Administrator  shall recognize the
Holders  of  the  Definitive   Certificates  as  Certificateholders   hereunder;
provided,  that  the  Securities  Administrator  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.

     (f) Each Private  Certificate  presented or surrendered for registration of
transfer or exchange shall be  accompanied  by a written  instrument of transfer
and  accompanied  by IRS  Form  W-8ECI,  W-8BEN,  W-8IMY  (and  all  appropriate
attachments) or W-9 in form satisfactory to the Securities  Administrator,  duly
executed by the  Certificateholder  or his attorney duly  authorized in writing.
Each  Certificate  presented  or  surrendered  for  registration  of transfer or
exchange  shall be  canceled  and  subsequently  disposed  of by the  Securities
Administrator in accordance with its customary practice. No service charge shall
be made for any  registration  of transfer or exchange of Private  Certificates,
but the  Securities  Administrator  may require  payment of a sum  sufficient to
cover any tax or governmental  charge that may be imposed in connection with any
transfer or exchange of Private Certificates.

     Section 5.03 Mutilated,  Destroyed, Lost or Stolen Certificates. If (a) any
mutilated  Certificate is surrendered  to the Securities  Administrator,  or the
Securities   Administrator   receives   evidence  to  its  satisfaction  of  the
destruction,  loss or theft of any Certificate and (b) there is delivered to the
Depositor,  the  Securities  Administrator  and the  Trustee  such  security  or
indemnity as may be required by them to hold each of them harmless, then, in the
absence of notice to a Responsible Officer of the Securities  Administrator that
such  Certificate  has been acquired by a bona fide  purchaser,  the  Securities
Administrator  shall execute,  authenticate  and deliver,  in exchange for or in
lieu of any  such  mutilated,  destroyed,  lost  or  stolen  Certificate,  a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance  of any  new  Certificate  under  this  Section  5.03,  the  Securities
Administrator  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

                                      -84-

<PAGE>

the Securities  Administrator)  connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 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  5.04  Persons  Deemed  Owners.  The Trustee,  the  Depositor,  the
Securities  Administrator  and any agent of the  Trustee,  the  Depositor or the
Securities  Administrator  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 Trustee, the Depositor, the Securities Administrator
nor any agent of the  Trustee,  the  Depositor or the  Securities  Administrator
shall be affected by any notice to the contrary.

     Section 5.05 Access to List of Certificateholders'  Names and Addresses. If
three or more  Certificateholders  (a) request such  information in writing from
the Securities  Administrator,  (b) state that such Certificateholders 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  propose to  transmit,  or if the
Depositor or any Servicer  shall  request such  information  in writing from the
Securities  Administrator,  then the Securities  Administrator shall, within ten
Business  Days after the receipt of such  request,  provide the  Depositor,  the
applicable Servicer or such  Certificateholders  at such recipients' expense the
most  recent  list of the  Certificateholders  of such  Trust  Fund  held by the
Securities Administrator, if any. The Depositor and every Certificateholder,  by
receiving and holding a  Certificate,  agree that the  Securities  Administrator
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 5.06 Maintenance of Office or Agency. The Securities  Administrator
will  maintain or cause to be  maintained at its expense an office or offices or
agency or agencies where  Certificates  may be surrendered  for  registration of
transfer or exchange.  The  Securities  Administrator  initially  designates its
offices located at 111 Wall Street, 15th Floor Window, New York, New York 10005,
Attention:  Corporate Trust Services HALO 2006-2.  The Securities  Administrator
shall give prompt written notice to the Certificateholders of any change in such
location of any such office or agency.

                                   ARTICLE VI

                                  THE DEPOSITOR

     Section 6.01 Liabilities of the Depositor. The Depositor shall be liable in
accordance  herewith  only to the  extent of the  obligations  specifically  and
respectively imposed upon and undertaken by it herein.

     Section 6.02 Merger or  Consolidation  of the Depositor.  (a) The Depositor
will 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

                                      -85-

<PAGE>

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.

     (b) Any Person into which the Depositor may be merged or  consolidated,  or
any Person  resulting  from any merger or  consolidation  to which the Depositor
shall be a party,  or any person  succeeding  to the business of the  Depositor,
shall be the  successor of the  Depositor,  hereunder,  without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

     Section 6.03  Limitation on Liability of the Depositor and Others.  Neither
the  Depositor,  nor any of its  respective  directors,  officers,  employees or
agents,  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, or any such Person against any breach
of representations or warranties made by it herein or protect the Depositor,  or
any such Person from any liability  which would  otherwise be imposed by reasons
of willful misfeasance, bad faith or negligence (or gross negligence in the case
of the  Depositor)  in the  performance  of  duties  or by  reason  of  reckless
disregard of obligations and duties  hereunder.  The Depositor,  its Affiliates,
and any of their respective directors, officers, employees or agents 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,
its Affiliates,  and any of their respective directors,  officers,  employees or
agents  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.  The  Depositor  shall not 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 the Depositor may in its discretion undertake
any such action (or direct the Trustee to  undertake  such  actions  pursuant to
Section  2.03  for the  benefit  of the  Certificateholders)  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 shall be entitled to be reimbursed therefor out of
the Distribution Account.

                                   ARTICLE VII

                                     DEFAULT

     Section 7.01 Master  Servicer to Act;  Appointment  of  Successor.  (a) The
Master Servicer or the Trustee (as successor  master  servicer),  as applicable,
shall be entitled to terminate the rights and  obligations of any Servicer under
the applicable  Servicing  Agreement in accordance with the terms and conditions
of such Servicing Agreement and without any

                                       -86-

<PAGE>

limitation by virtue of this Agreement. Upon termination of a Servicer under the
applicable Servicing Agreement, the Master Servicer or the Trustee (as successor
master  servicer),  as  applicable,  shall,  subject to the rights of the Master
Servicer  or the Trustee (as  successor  master  servicer),  as  applicable,  to
appoint a successor  servicer pursuant to this Section 7.01, be the successor to
such  Servicer  in its  capacity  as  servicer  under the  applicable  Servicing
Agreement,  provided,  however,  that the Master  Servicer  or the  Trustee  (as
successor master servicer), as applicable, shall not be (i) liable for losses of
the predecessor Servicer with respect to such predecessor's  investment of funds
in  its  Collection  Account;  (ii)  obligated  to  effectuate   repurchases  or
substitutions  of  Mortgage  Loans  hereunder,  including  but  not  limited  to
repurchases or  substitutions  pursuant to Section 2.03,  (iii)  responsible for
expenses of the predecessor  servicer  related to any repurchase or substitution
of  Mortgage  Loans  hereunder,  including  but not  limited to  repurchases  or
substitutions  pursuant  to Section  2.03,  (iv)  deemed to have made any of the
representations  and warranties of the terminated  Servicer under the applicable
Servicing  Agreement  or (v)  liable  for  any  obligations  of the  predecessor
Servicer incurred prior to its termination.

     (b) It is understood and acknowledged by the parties hereto that there will
be a period of transition before the transfer of servicing  obligations is fully
effective. Notwithstanding the foregoing, the Master Servicer or the Trustee (as
successor master servicer), as applicable,  will have a period (not to exceed 90
days) to complete the transfer of all  servicing  data and correct or manipulate
such servicing data as may be required by the Master Servicer or the Trustee (as
successor   master   servicer),   as  applicable,   to  correct  any  errors  or
insufficiencies in the servicing data or otherwise enable the Master Servicer or
the  Trustee (as  successor  master  servicer),  as  applicable,  to service the
Mortgage Loans in accordance with the applicable Servicing Agreement.  Except as
provided  in Section  7.01(e)  below,  the Master  Servicer  or the  Trustee (as
successor master  servicer),  as applicable,  shall be entitled to be reimbursed
from each  Servicer (or by the Trust Fund, if such Servicer is unable to fulfill
such  obligation)  for all costs  associated with the transfer of servicing from
the predecessor  servicer,  including without limitation,  any costs or expenses
associated with the complete  transfer of all servicing data and the completion,
correction or  manipulation  of such  servicing  data, as may be required by the
Master Servicer or the Trustee (as successor master servicer), as applicable, to
correct any errors or  insufficiencies  in the  servicing  data or  otherwise to
enable the Master  Servicer or the Trustee (as successor  master  servicer),  as
applicable,  to  service  the  Mortgage  Loans  properly  and  effectively.   As
compensation  in its role as  successor  servicer,  the Master  Servicer  or the
Trustee (as successor master servicer), as applicable,  shall be entitled to the
applicable  Servicing Fee and any income on  investments  or gain related to the
related  Collection  Account.  Notwithstanding  the  foregoing,  if  the  Master
Servicer or the Trustee (as  successor  master  servicer),  as  applicable,  has
become the successor to a Servicer  pursuant to an Event of Default,  the Master
Servicer or the Trustee (as successor master servicer),  as applicable,  may, if
it shall be unwilling to so act, or shall, if it is prohibited by applicable law
from making P&I  Advances  and  Servicing  Advances  pursuant to the  applicable
Servicing  Agreement,  if it is  otherwise  unable to so act,  or at the written
request of  Certificateholders  entitled  to at least a  majority  of the Voting
Rights,  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  Servicer  under  the  applicable  Servicing
Agreement in the assumption of all or any part of the  responsibilities,  duties
or liabilities of such Servicer thereunder.

                                      -87-

<PAGE>

     (c) Any successor to a Servicer shall be an institution which is willing to
service the Mortgage Loans, having a net worth of not less than $25,000,000, and
which  executes  and  delivers to the  Depositor,  the Master  Servicer  and the
Trustee (as successor  master  servicer) an agreement  accepting such delegation
and assignment,  containing an assumption by such Person of the rights,  powers,
duties, responsibilities, obligations and liabilities of the applicable Servicer
(other  than  liabilities  of the  predecessor  servicer  incurred  prior to its
termination),  with  like  effect  as if  originally  named  as a party  to such
Servicing  Agreement;  provided,  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. Pending appointment of a successor to a Servicer under any Servicing
Agreement, the Master Servicer or the Trustee (as successor master servicer), as
applicable,  unless such party is prohibited by law from so acting, shall act in
such capacity as hereinabove  provided.  In connection with such appointment and
assumption,  the Master Servicer or the Trustee (as successor master  servicer),
as applicable, may make such arrangements for the compensation of such successor
out of  payments  on  Mortgage  Loans as it and such  successor  shall  agree in
accordance with the applicable Servicing Agreement;  provided,  however, that no
such  compensation  shall be in excess of the  applicable  Servicing Fee and any
income on investments  or gain related to the related  Collection  Account.  The
Master Servicer or the Trustee (as successor  master  servicer),  as applicable,
and such  successor  servicer  shall  take  such  action,  consistent  with this
Agreement  and the  applicable  Servicing  Agreement,  as shall be  necessary to
effectuate any such succession.  Neither the Master Servicer nor the Trustee (as
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
any Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.

     (d) Notwithstanding the foregoing, the parties hereto agree that the Master
Servicer or the Trustee (as successor master  servicer),  as applicable,  in its
capacity as successor servicer,  immediately shall assume all of the obligations
of such  terminated  Servicer to make  Advances  and the Master  Servicer or the
Trustee (as successor  master  servicer),  as applicable,  will assume the other
duties of such  Servicer as soon as  practicable,  but in no event later than 90
days after the Master Servicer or the Trustee (as successor master servicer), as
applicable,  becomes successor servicer pursuant to the preceding paragraph.  If
the  Master  Servicer  or  the  Trustee  (as  successor  master  servicer),   as
applicable,  acts as a successor servicer, it will have no obligation to make an
Advance  if it  determines  in its  reasonable  judgment  that such  Advance  is
non-recoverable.  To the extent  that the Master  Servicer  or the  Trustee  (as
successor  master  servicer)  is unable  to find a  successor  servicer  that is
willing to service  the  Mortgage  Loans for the  Servicing  Fee  because of the
obligation of the  applicable  Servicer to make  Advances  regardless of whether
such Advance is recoverable,  the applicable  Servicing Agreement may be amended
to provide  that the  successor  servicer  shall have no  obligation  to make an
Advance  if it  determines  in its  reasonable  judgment  that such  Advance  is
non-recoverable  and  provides an  Officer's  Certificate  to such effect to the
Master  Servicer  and the Trustee.  Notwithstanding  the  foregoing,  the Master
Servicer or the Trustee (as successor master  servicer),  as applicable,  in its
capacity  as  successor  servicer,  shall  not be  responsible  for the  lack of
information and/or documents that it cannot obtain through  reasonable  efforts;
provided,  however,  that any failure to perform any duties or  responsibilities
caused by such Servicer's failure to provide information

                                      -88-

<PAGE>

required by this Agreement  shall not be considered a default by the Trustee (as
successor  master  servicer)  hereunder.  In  the  Trustee's  capacity  as  such
successor,  the  Trustee  (as  successor  master  servicer)  shall have the same
limitations  on liability  granted to the Servicer  under this Agreement and the
related Servicing Agreement.

     (e) In the event that the Master  Servicer  or the  Trustee  (as  successor
master servicer), as applicable,  is the terminated Servicer (except in the case
where the Master Servicer in its role as successor  servicer is being terminated
pursuant  to an Event of Default  caused  solely by the Master  Servicer  as the
successor servicer and not by the predecessor  Servicer's actions or omissions),
such  costs  shall  be paid by such  prior  terminated  Servicer  promptly  upon
presentation of reasonable documentation of such costs.

     Section 7.02 Notification to  Certificateholders.  (a) Upon any termination
of or appointment of a successor to any Servicer,  the Securities  Administrator
shall give prompt written notice thereof to  Certificateholders  and each Rating
Agency.

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

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

     Section 8.01 Duties of the Trustee. The Trustee, before the occurrence of a
Master  Servicer  Event of Default  and after the curing of all Master  Servicer
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 a
Master Servicer Event of Default 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.  The  Trustee  shall  not be  responsible  for the
accuracy or content of any resolution,  certificate, statement, opinion, report,
document, order, or other instrument.

     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.

     Unless  an Event  of  Default  known to the  Trustee  has  occurred  and is
continuing:

     (a) 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

                                      -89-

<PAGE>

of the duties  and  obligations  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 believes in good faith to be genuine and
to have been duly  executed  by the proper  authorities  respecting  any matters
arising hereunder;

     (b) 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
is finally proven that the Trustee was negligent in  ascertaining  the pertinent
facts; and

     (c) 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 the Holders of Certificates  evidencing not less than 25.00% 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.

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

     (a) the  Trustee  may  rely  upon and  shall  be  protected  in  acting  or
refraining from acting upon any resolution,  Officer's Certificate,  certificate
of auditors or any other certificate,  statement,  instrument,  opinion, report,
notice,  request,  consent,  order,  appraisal,  bond or other paper or document
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;

     (b) 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 advice or Opinion of Counsel;

     (c) 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;

     (d) 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 to do so by the Holders of Certificates
evidencing not less than 25.00% of the Voting Rights  allocated to each Class of
Certificates;

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

                                      -90-

<PAGE>

     (f) 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  indemnity
satisfactory to it against such risk or liability is not assured to it;

     (g) the Trustee shall not be liable for any loss on any investment of funds
pursuant to this Agreement;

     (h) unless a Responsible Officer of the Trustee has actual knowledge of the
occurrence  of a Master  Servicer  Event of Default or an Event of Default,  the
Trustee  shall not be deemed to have  knowledge  of a Master  Servicer  Event of
Default or an Event of Default until a Responsible  Officer of the Trustee shall
have received written notice thereof;

     (i) 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 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; and

     (j) if the Trustee,  in its role as successor  master  servicer  under this
Agreement,  assumes the servicing or master servicing with respect to any of the
Mortgage  Loans,  it shall not  assume  liability  for the  representations  and
warranties of any Servicer or the Master  Servicer,  as  applicable,  or for any
errors or omissions of any Servicer or the Master Servicer, as applicable.

     (k) In order to comply with laws,  rules,  regulations and executive orders
in effect from time to time applicable to banking institutions,  including those
relating  to  the  funding  of  terrorist   activities   and  money   laundering
("Applicable Law"), the Trustee is required to obtain, verify and record certain
information  relating to  individuals  and  entities  which  maintain a business
relationship  with the  Trustee.  Accordingly,  each of the  parties  agrees  to
provide  to the  Trustee  upon its  request  from time to time such  identifying
information  and  documentation  as may be  available  to such party in order to
enable the Trustee to comply with Applicable Law.

     Section 8.03 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,  the  Yield  Maintenance  Agreement  or of the
Certificates or of any Mortgage Loan or related document.  The Trustee shall not
be accountable for the use or application by the Depositor, the Master Servicer,
any Servicer,  the Securities  Administrator or the Yield Maintenance  Agreement
Provider of any funds paid to the Depositor,  the Master Servicer, such Servicer
or the Securities Administrator in respect of the Mortgage Loans or deposited in
or withdrawn from any Collection  Account,  the Master  Servicing  Account,  the
Distribution  Account  or  any  other  fund  or  account  with  respect  to  the
Certificates  by  the  Depositor,   the  Master  Servicer,  the  Servicers,  the
Securities Administrator or the Yield Maintenance Agreement Provider.

                                      -91-

<PAGE>

     The  Trustee  shall  have no  responsibility  for filing or  recording  any
financing  or  continuation  statement  in any  public  office at any time or to
otherwise  perfect or maintain the  perfection of any security  interest or lien
granted to it hereunder.

     Section 8.04 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  8.05  Trustee's  Fees   Indemnification   and  Expenses.   (a)  As
compensation for its activities under this Agreement,  the Trustee shall be paid
its fee by the  Sponsor  from the  Sponsor's  own funds  pursuant  to a separate
agreement.  The Trustee  shall have no lien on the Trust Fund for the payment of
such fees.

     (b) The Trustee shall be entitled to be  reimbursed,  from funds on deposit
in the Distribution  Account,  amounts sufficient to indemnify and hold harmless
the Trustee and any director, officer, employee, or agent of the Trustee against
any loss, liability,  or expense (including reasonable attorneys' fees) incurred
in connection with any claim or legal action relating to:

          (i) this Agreement or any Servicing Agreement,

          (ii) the Certificates, or

          (iii)  the  performance  of any of the  Trustee's  duties  under  this
     Agreement or any Servicing Agreement,

other than any loss,  liability,  or expense (i) resulting  from any breach of a
Servicer's obligations in connection with its respective Servicing Agreement for
which such Servicer has performed its obligation to indemnify the Trustee,  (ii)
resulting from any breach of a Mortgage Loan Seller's  obligations in connection
with its respective  Transfer  Agreement for which such Mortgage Loan Seller has
performed  its  obligation to indemnify the Trustee,  (iii)  resulting  from any
breach of the  Master  Servicer's  obligation  hereunder  for  which the  Master
Servicer has performed its obligation to indemnify the Trustee  pursuant to this
Agreement  or (iv)  incurred  because  of  willful  misconduct,  bad  faith,  or
negligence  in  the  performance  of  any of the  Trustee's  duties  under  this
Agreement or any Servicing Agreement.  Without limiting the foregoing, except as
otherwise  agreed upon in writing by the Depositor  and the Trustee,  and except
for any expense, disbursement, or advance arising from the Trustee's negligence,
bad faith,  or willful  misconduct,  the Trust Fund shall pay or  reimburse  the
Trustee for all reasonable  expenses,  disbursements,  and advances  incurred or
made by the Trustee in accordance with this Agreement with respect to:

               (A) the reasonable  compensation,  expenses, and disbursements of
          its counsel  not  associated  with the closing of the  issuance of the
          Certificates, and

               (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 them to
          perform services under this Agreement.

                                      -92-

<PAGE>

     The  Trustee's  right to  indemnity  and  reimbursement  under this Section
8.05(b) shall survive the  termination of this Agreement and the  resignation or
removal of the Trustee under this Agreement.

     Except  as  otherwise  provided  in this  Agreement  or a  separate  letter
agreement  between  the  Trustee and the  Depositor,  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  under this
Agreement or for any other routine expenses  incurred by the Trustee;  provided,
further,  that  no  expense  shall  be  reimbursed  hereunder  if it  would  not
constitute an  "unanticipated  expense incurred by the REMIC" within the meaning
of the REMIC Provisions.

     The  Trustee  shall  not be (a)  liable  for any acts or  omissions  of any
Servicer  (other than where the Trustee (as successor  master  servicer) is such
Servicer),  (b) obligated to make any Advance if it is prohibited  from doing so
under  applicable  law, (c) responsible for expenses of any Servicer (other than
where the Trustee (as successor master  servicer) is such Servicer)  pursuant to
the terms a Servicing  Agreement,  (d) liable for any amount necessary to induce
any successor servicer to act as successor servicer under a Servicing  Agreement
and enter into the transactions set forth or provided for therein.

     Section  8.06  Eligibility   Requirements  for  the  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 any 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)  as  evidenced  in writing by each  Rating
Agency.  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 8.06
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 this  Section  8.06,  the Trustee  shall resign
immediately  in the manner and with the effect  specified in Section  8.07.  The
entity serving as Trustee may have normal banking and trust  relationships  with
the  Depositor  and  its  affiliates,   the  Master  Servicer,   the  Securities
Administrator  or the  Servicers  and  their  respective  affiliates;  provided,
however,  that such entity cannot be an affiliate of the Depositor or a Servicer
other than the Trustee in its role as successor to the Master Servicer.

     Section 8.07 Resignation and Removal of the 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,  the Master  Servicer,  the Securities
Administrator  and each  Rating  Agency  not less than 60 days  before  the date
specified in such notice,  when, subject to Section 8.08, such resignation is to
take effect and  acceptance by a successor  trustee in  accordance  with Section
8.08  meeting the  qualifications  set forth in Section  8.06.  If no  successor
trustee  meeting  such  qualifications  shall  have been so  appointed  and have
accepted appointment

                                      -93-

<PAGE>

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.

     If at any time the Trustee  shall cease to be eligible in  accordance  with
Section  8.06 and shall  fail to resign  after  written  request  thereto by the
Depositor,  or if at any time 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, or a tax is imposed with respect to
the Trust  Fund by any state in which the  Trustee  or the Trust Fund is located
and the  imposition  of such  tax  would  be  avoided  by the  appointment  of a
different trustee, then the Depositor may remove the Trustee and, subject to the
approval  of the  Rating  Agencies,  appoint  a  successor  trustee  by  written
instrument,  one copy of which shall be delivered  to the  Trustee,  one copy of
which  shall be  delivered  to the Master  Servicer,  one copy of which shall be
delivered  to each  Servicer  and one copy of which  shall be  delivered  to the
successor trustee.

     The Holders of  Certificates  entitled to at least a majority of the Voting
Rights may at any time remove the Trustee  and,  subject to the  approval of the
Rating  Agencies,   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 shall be delivered by the successor
Trustee to each  Servicer,  one  complete  set to the Trustee so removed and one
complete set to the successor so appointed.  The successor  trustee shall notify
each Rating Agency of any removal of the Trustee.

     Any  resignation  or removal of the Trustee and  appointment of a successor
trustee  pursuant to this Section 8.07 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 8.08.

     Section 8.08 Successor Trustee. Any successor trustee appointed as provided
in Section 8.07 shall execute,  acknowledge  and deliver to the Depositor and to
its  predecessor  trustee  and  each  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 like
effect  as if  originally  named  as  trustee  herein.  The  Depositor  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
8.08 unless at the time of its  acceptance,  the  successor  trustee is eligible
under  Section  8.06 and its  appointment  does not  adversely  affect  then the
current rating of the Certificates.

     Upon  acceptance of appointment by a successor  trustee as provided in this
Section 8.08, 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

                                      -94-

<PAGE>

of appointment by the successor trustee,  the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.

     Section 8.09 Merger or Consolidation  of the 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 Section 8.06
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.

     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 Trustee
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  Trustee  may  consider  appropriate.  No  co-trustee  or separate
trustee  hereunder  shall be  required  to meet the  terms of  eligibility  as a
successor trustee under Section 8.06 and no notice to  Certificateholders of the
appointment  of any  co-trustee  or separate  trustee  shall be  required  under
Section 8.08.

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

     (a) 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, except for the obligation of the Trustee (as successor master servicer)
under this Agreement to advance funds on behalf of the Master Servicer, 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;

     (b) No trustee hereunder shall be held personally liable because 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;

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

                                      -95-

<PAGE>

     (d) The Trust Fund, 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  and indemnity 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 [Reserved]

     Section 8.12 Commission Reporting.  (a) The Securities Administrator shall,
in accordance  with  industry  standards,  prepare (for  execution by the Master
Servicer) and file with the  Commission,  via EDGAR,  the  following  reports in
respect of the Trust as and to the extent required under the Exchange Act:

          (i) (A)  Within 15 days  after  each  Distribution  Date  (subject  to
     permitted extensions under the Exchange Act), the Securities  Administrator
     shall prepare and file on behalf of the Trust any Form 10-D required by the
     Exchange  Act, in form and  substance as required by the Exchange  Act. The
     Securities  Administrator  shall  file  each  Form  10-D with a copy of the
     related Monthly Statement  attached thereto.  Any disclosure in addition to
     the  Monthly  Statement  that is  required  to be  included  on  Form  10-D
     ("Additional  Form 10-D  Disclosure")  shall be reported by the parties set
     forth on Exhibit V to the Depositor and the  Securities  Administrator  and
     directed and approved by the Depositor pursuant to the following  paragraph
     and the  Securities  Administrator  will have no duty or liability  for the
     inaccuracy of any  Additional  10 D Disclosure  provided by any party other
     than  the  Securities  Administrator,  or  for  any  failure  hereunder  to
     determine or prepare any  Additional  Form 10-D  Disclosure,  except to the
     extent of its obligations set forth in the next paragraph.

               (B) As set  forth on  Exhibit V hereto,  within 5  calendar  days
          after the related  Distribution  Date,  (i) the parties  specified  in
          Exhibit V hereto,  shall be  required  to  provide  to the  Securities
          Administrator   and  to  the  Depositor,   to  the  extent  known,  in
          EDGAR-compatible format, or in such other format as agreed

                                      -96-

<PAGE>

          upon by the  Securities  Administrator  and such  party,  the form and
          substance  of any  Additional  Form 10-D  Disclosure,  if  applicable,
          together  with an  Additional  Disclosure  Notification,  and (ii) the
          Depositor will approve,  as to form and substance,  or disapprove,  as
          the case may be, the inclusion of the Additional  Form 10-D Disclosure
          on Form  10-D.  The  Securities  Administrator  has no duty under this
          Agreement to monitor or enforce the  performance by the parties listed
          on Exhibit V of their  duties  under  this  paragraph  or  proactively
          solicit  or  procure  from  such  parties  any  Additional  Form  10-D
          Disclosure  information.  The Depositor  shall be responsible  for any
          reasonable  fees and expenses  assessed or incurred by the  Securities
          Administrator  in connection  with including any Additional  Form 10-D
          Disclosure on Form 10-D pursuant to this paragraph.

               (C) After  preparing the Form 10-D, the Securities  Administrator
          shall, upon request, forward electronically a copy of the Form 10-D to
          the Depositor  (provided  that such Form 10-D includes any  Additional
          Form 10-D Disclosure).  Within two Business Days after receipt of such
          copy,  but no later than the 12th calendar day after the  Distribution
          Date,  the  Depositor  shall notify the  Securities  Administrator  in
          writing (which may be furnished  electronically)  of any changes to or
          approval  of such Form 10-D.  In the absence of receipt of any written
          changes or approval,  or if the Depositor does not request a copy of a
          Form 10-D,  the Securities  Administrator  shall be entitled to assume
          that such Form 10-D is in final form and the Securities  Administrator
          may  proceed  with the process  for  execution  and filing of the Form
          10-D. A duly  authorized  representative  of the Master Servicer shall
          sign each Form  10-D.  If a Form 10-D  cannot be filed on time or if a
          previously  filed  Form  10-D  needs  to be  amended,  the  Securities
          Administrator will follow the procedures set forth in paragraph (d) of
          this Section 8.12. Each party to this Agreement  acknowledges that the
          performance  by  each  of  the  Master  Servicer  and  the  Securities
          Administrator of its duties under this Section  8.12(a)(i)  related to
          the  timely  preparation,   execution  and  filing  of  Form  10-D  is
          contingent  upon  such  parties  strictly   observing  all  applicable
          deadlines  in the  performance  of their  duties  under  this  Section
          8.12(a)(i). The Depositor acknowledges that the performance by each of
          the Master  Servicer and the  Securities  Administrator  of its duties
          under  this  Section  8.12(i)  related  to  the  timely   preparation,
          execution  and  filing  of  Form  10-D  is also  contingent  upon  any
          Servicing Function  Participant  strictly observing deadlines no later
          than  those set forth in this  paragraph  that are  applicable  to the
          parties  to  this   Agreement  in  the  delivery  to  the   Securities
          Administrator  of  any  necessary   Additional  Form  10-D  Disclosure
          pursuant to any applicable agreement.  Neither the Master Servicer nor
          the  Securities  Administrator  shall have any liability for any loss,
          expense,  damage,  claim arising out of or with respect to any failure
          to properly prepare,  execute and/or timely file such Form 10-D, where
          such failure results from the Securities  Administrator's inability or
          failure to receive,  on a timely basis, any information from any other
          party hereto or any Servicing Function  Participant needed to prepare,
          arrange for execution or file such Form 10-D,  not resulting  from its
          own negligence, bad faith or willful misconduct.

                                      -97-

<PAGE>

               (D) Form 10-D  requires the  registrant  to indicate (by checking
          "yes" or "no") that it "(1) has filed all reports required to be filed
          by Section 13 or 15(d) of the  Exchange  Act during the  preceding  12
          months (or for such shorter period that the registrant was required to
          file  such  reports),   and  (2)  has  been  subject  to  such  filing
          requirements for the past 90 days." The Depositor hereby instructs the
          Administrator to check "Yes" for each item, unless the Depositor shall
          notify the  Securities  Administrator  in  writing,  no later than the
          fifth calendar day after the related Distribution Date with respect to
          the  filing of a report on Form 10-D,  that the answer to either  item
          should be "no." The  Depositor  has filed all  reports  required to be
          filed by Section 13 or 15(d) of the Exchange Act during the  preceding
          12 months (or for such shorter  period that the Depositor was required
          to  file  such  reports)  and it  has  been  subject  to  such  filing
          requirement for the past 90 days." The Securities  Administrator shall
          be entitled to rely on such  representations  in preparing,  executing
          and/or filing any such Form 10-D.

          (ii) (A) On or prior to the 90th day after the end of each fiscal year
     of the Trust or such  earlier  date as may be required by the  Exchange Act
     (the "10-K Filing  Deadline") (it being understood that the fiscal year for
     the Trust ends on December 31st of each year), for so long as the Depositor
     is required to file  reports  with  respect to the Trust under the Exchange
     Act,  commencing in March 2007, the Securities  Administrator shall prepare
     (for  execution by the Master  Servicer)  and file on behalf of the Trust a
     Form 10-K, in form and substance as required by the Exchange Act. Each such
     Form 10-K shall  include the  following  items,  in each case to the extent
     they  have  been  delivered  to the  Securities  Administrator  within  the
     applicable  time  frames  set  forth  in this  Agreement  or the  Servicing
     Agreements,  (i) an annual  compliance  statement for each Servicer and the
     Master Servicer and any Servicing Function  Participant engaged by any such
     party (together with the Custodian and the Securities Administrator, each a
     "Reporting  Servicer")  as described  under  Section  3.05(b),  (ii)(A) the
     annual reports on assessment of compliance with Servicing Criteria for each
     Reporting  Servicer,  as  described  under  Section  3.03,  and  (B) if any
     Reporting  Servicer's  report on assessment of  compliance  with  Servicing
     Criteria  described under Section 3.03 identifies any material  instance of
     noncompliance, disclosure identifying such instance of noncompliance, or if
     any Reporting  Servicer's report on assessment of compliance with Servicing
     Criteria described under Section 3.03 is not included as an exhibit to such
     Form 10-K,  disclosure  that such report is not included and an explanation
     why such report is not included,  provided,  however,  that the  Securities
     Administrator,  at  its  discretion,  may  omit  from  the  Form  10-K  any
     assessment of compliance or  attestation  report  described in clause (iii)
     below  that is not  required  to be filed with such Form 10-K  pursuant  to
     Regulation AB; (iii)(A) the registered  public  accounting firm attestation
     report for each Reporting  Servicer,  as described  under Section 3.04, and
     (B) if any registered public  accounting firm attestation  report described
     under  Section  3.04  identifies  any material  instance of  noncompliance,
     disclosure  identifying  such  instance  of  noncompliance,  or if any such
     registered public accounting firm attestation  report is not included as an
     exhibit to such Form 10-K,  disclosure that such report is not included and
     an explanation why such report is not included,  and (iv) a  Sarbanes-Oxley
     Certification  as described in Section 3.05.  Any disclosure or information
     in addition  to (i)  through  (iv) above that is required to be included on
     Form 10-K ("Additional Form 10-K Disclosure") shall be reported by

                                      -98-

<PAGE>

     the  parties  set forth on Exhibit W to the  Depositor  and the  Securities
     Administrator  and directed and approved by the  Depositor  pursuant to the
     following  paragraph and the Securities  Administrator will have no duty or
     liability for any failure  hereunder to determine or prepare any Additional
     Form 10-K Disclosure,  except to the extent of its obligations set forth in
     the next paragraph.

               (B) As set  forth on  Exhibit W hereto,  no later  than  March 10
          (with a 5 calendar day cure  period,  but in no event later than March
          15) of each  year  that  the  Trust is  subject  to the  Exchange  Act
          reporting requirements,  commencing in 2007, (i) the parties specified
          on  Exhibit  W  shall  be  required  to  provide  to  the   Securities
          Administrator   and  to  the  Depositor,   to  the  extent  known,  in
          EDGAR-compatible format, or in such other format as agreed upon by the
          Securities Administrator and such party, the form and substance of any
          Additional  Form 10-K  Disclosure,  if  applicable,  together  with an
          Additional  Disclosure  Notification,  and  (ii)  the  Depositor  will
          approve, as to form and substance, or disapprove,  as the case may be,
          the inclusion of the Additional Form 10-K Disclosure on Form 10-K. The
          Securities  Administrator  has no duty under this Agreement to monitor
          or enforce the performance by the parties listed on Exhibit W of their
          duties  under this  paragraph or  proactively  solicit or procure from
          such parties any  Additional  Form 10-K  Disclosure  information.  The
          Depositor  will be responsible  for any  reasonable  fees and expenses
          assessed or incurred by the  Securities  Administrator  in  connection
          with  including  any  Additional  Form  10-K  Disclosure  on Form 10-K
          pursuant to this Section 8.12(a)(ii)(B).

               (C) After  preparing the Form 10-K, the Securities  Administrator
          shall, upon request, forward electronically a copy of the Form 10-K to
          the Depositor.  Within three Business Days after receipt of such copy,
          but  no  later  than  March  25th,  the  Depositor  shall  notify  the
          Securities   Administrator   in  writing   (which  may  be   furnished
          electronically)  of any changes to or  approval of such Form 10-K.  In
          the absence of receipt of any written  changes or approval,  or if the
          Depositor  does not  request  a copy of a Form  10-K,  the  Securities
          Administrator  shall be  entitled  to assume that such Form 10-K is in
          final  form and the  Securities  Administrator  may  proceed  with the
          process for execution and filing of the Form 10-K. A senior officer of
          the Master Servicer in charge of the master  servicing  function shall
          sign the Form  10-K.  If a Form  10-K  cannot be filed on time or if a
          previously  filed  Form  10-K  needs  to be  amended,  the  Securities
          Administrator will follow the procedures set forth in paragraph (d) of
          this Section 8.12. Promptly (but no later than one Business Day) after
          filing with the  Commission,  the Securities  Administrator  will make
          available on its internet  website a final  executed copy of each Form
          10-K prepared and filed by the Securities  Administrator.  The parties
          to this Agreement  acknowledge  that the performance by the Securities
          Administrator of its duties under this Section  8.12(a)(ii) related to
          the  timely  preparation,   execution  and  filing  of  Form  10-K  is
          contingent  upon  such  parties  strictly   observing  all  applicable
          deadlines  in the  performance  of their  duties  under  this  Section
          8.12(a)(ii)   and  Sections   3.03,   3.04  and  3.05.  The  Depositor
          acknowledges  that the  performance  by the  Master  Servicer  and the
          Securities  Administrator  of its duties under this  Section  8.12(ii)
          related to the

                                       -99-

<PAGE>

          timely  preparation,  execution  and  filing  of  Form  10-K  is  also
          contingent upon any Servicing Function  Participant strictly observing
          deadlines  no later  than those set forth in this  paragraph  that are
          applicable  to the parties to this  Agreement  in the  delivery to the
          Securities   Administrator  of  any  necessary  Additional  Form  10-K
          Disclosure,  any annual  statement of compliance and any assessment of
          compliance  and  attestation  pursuant  to any  applicable  agreement.
          Neither the Master  Servicer nor the  Securities  Administrator  shall
          have any liability for any loss, expense, damage, claim arising out of
          or with  respect to any failure to properly  prepare,  execute  and/or
          timely  file such Form  10-K,  where  such  failure  results  from the
          Securities  Administrator's inability or failure to obtain or receive,
          on a timely basis,  any information from any other party hereto or any
          Servicing  Function   Participant  needed  to  prepare,   arrange  for
          execution  or  file  such  Form  10-K,  not  resulting  from  its  own
          negligence, bad faith or willful misconduct.

               (D) Form 10-K  requires the  registrant  to indicate (by checking
          "yes" or "no") that it "(1) has filed all reports required to be filed
          by Section 13 or 15(d) of the  Exchange  Act during the  preceding  12
          months (or for such shorter period that the registrant was required to
          file  such  reports),   and  (2)  has  been  subject  to  such  filing
          requirement for the past 90 days." The Depositor  hereby instructs the
          Securities  Administrator  to check  "Yes" for each  item,  unless the
          Depositor  shall notify the Securities  Administrator  in writing,  no
          later  than the 15th  calendar  day of March in any year in which  the
          Trust is subject to the  reporting  requirements  of the Exchange Act,
          that the answer to either item should be "no." The Depositor has filed
          all  reports  required  to be  filed  by  Section  13 or  15(d) of the
          Exchange  Act during  the  preceding  12 months  (or for such  shorter
          period that the  Depositor  was required to file such  reports) and it
          has been subject to such filing requirement for the past 90 days." The
          Securities   Administrator   shall  be   entitled   to  rely  on  such
          representations  in preparing,  executing  and/or filing any such Form
          10-K.

          (iii) (A) Within four (4)  Business  Days after the  occurrence  of an
     event  requiring  disclosure  on Form 8-K (each such event,  a  "Reportable
     Event"), if directed by the Depositor,  the Securities  Administrator shall
     prepare  and file on behalf of the Trust Fund any Form 8-K,  as required by
     the Exchange Act,  provided that the Depositor  shall file the initial Form
     8-K in connection with the issuance of the Certificates.  Any disclosure or
     information  related to a Reportable Event or that is otherwise required to
     be  included  on Form 8-K  ("Form  8-K  Disclosure  Information")  shall be
     reported  by the parties  set forth on Exhibit X to the  Depositor  and the
     Securities  Administrator  and  directed  and  approved  by  the  Depositor
     pursuant to the following  paragraph and the Securities  Administrator will
     have no duty or liability for any failure hereunder to determine or prepare
     any Form 8-K Disclosure  Information or any Form 8-K,  except to the extent
     of its obligations set forth in the next paragraph.

               (B) As set forth on Exhibit X hereto, for so long as the Trust is
          subject to the Exchange Act reporting requirements,  no later than the
          close of business New York City time on the 2nd Business Day after the
          occurrence  of a  Reportable  Event (i) the  parties  hereto  shall be
          required to provide to the Securities

                                      -100-

<PAGE>

          Administrator   and  the   Depositor,   to  the   extent   known,   in
          EDGAR-compatible format, or in such other format as agreed upon by the
          Securities Administrator and such party, the form and substance of any
          Form 8-K  Disclosure  Information,  if  applicable,  together  with an
          Additional  Disclosure  Notification,  and  (ii)  the  Depositor  will
          approve, as to form and substance, or disapprove,  as the case may be,
          the inclusion of the Form 8-K  Disclosure  Information.  The Depositor
          will be responsible for any reasonable  fees and expenses  assessed or
          incurred by the Securities  Administrator in connection with including
          any Form 8-K  Disclosure  Information  on Form  8-K  pursuant  to this
          paragraph.

               (C) After  preparing the Form 8-K, the  Securities  Administrator
          shall, upon request,  forward electronically a copy of the Form 8-K to
          the  Depositor.  Promptly,  but no later than the close of business on
          the third Business Day after the Reportable Event, the Depositor shall
          notify the Securities Administrator in writing (which may be furnished
          electronically) of any changes to or approval of such Form 8-K. In the
          absence of  receipt of any  written  changes  or  approval,  or if the
          Depositor  does  not  request  a copy of a Form  8-K,  the  Securities
          Administrator  shall be  entitled  to assume  that such Form 8-K is in
          final  form and the  Securities  Administrator  may  proceed  with the
          process for  execution  and filing of the Form 8-K. A duly  authorized
          representative  of the Master  Servicer shall sign each Form 8-K. If a
          Form 8-K  cannot be filed on time or if a  previously  filed  Form 8-K
          needs to be  amended,  the  Securities  Administrator  will follow the
          procedures  set  forth in  paragraph  (d) of this  Section  8.12.  The
          parties to this  Agreement  acknowledge  that the  performance  by the
          Securities Administrator of its duties under this Section 8.12(d)(iii)
          related to the timely preparation, execution and filing of Form 8-K is
          contingent  upon  such  parties  strictly   observing  all  applicable
          deadlines  in the  performance  of their  duties  under  this  Section
          8.12(D)(iii).  The Depositor  acknowledges that the performance by the
          Master Servicer and the Securities  Administrator  of its duties under
          this Section 8.12(D)(iii) related to the timely preparation, execution
          and filing of Form 8-K is also contingent upon any Servicing  Function
          Participant strictly observing deadlines no later than those set forth
          in this paragraph that are applicable to the parties to this Agreement
          in the delivery to the Securities  Administrator of any necessary Form
          8-K  Disclosure  Information  pursuant to the  related any  applicable
          agreement.  The Securities  Administrator  shall have no liability for
          any loss, expense, damage, claim arising out of or with respect to any
          failure to properly  prepare  and/or timely file such Form 8-K,  where
          such failure results from the Securities  Administrator's inability or
          failure to obtain or receive,  on a timely basis, any information from
          any other party hereto or any Servicing Function Participant needed to
          prepare,  arrange for  execution or file such Form 8-K, not  resulting
          from its own negligence, bad faith or willful misconduct.

     (b) The Depositor acknowledges and agrees that the Securities Administrator
may include in any  Exchange  Act report all  relevant  information,  data,  and
exhibits as the  Securities  Administrator  may receive in connection  with such
report  irrespective  of any  provision  or  Regulation  AB that may  permit the
exclusion of such material. By the way of example, the Securities  Administrator
may file all assessments of compliance, attestation reports

                                      -101-

<PAGE>

and compliance  statements timely received from any Item 1122 Servicing Function
Participant  irrespective  of  any  applicable  minimum  pool  asset  percentage
requirement for disclosure related to such Servicing Function Participant.

     (c)  The   Depositor   agrees  to  furnish   promptly  to  the   Securities
Administrator,  from time to time upon  request,  such  additional  information,
data,  reports,  documents,  and  financial  statements  within the  Depositor's
possession or control as the  Securities  Administrator  reasonably  requests as
necessary  or  appropriate  to  prepare  and file  the  foregoing  reports.  The
Securities  Administrator  shall make  available to the Depositor  copies of all
Exchange Act reports filed hereunder.

     (d) (i) On or before  January 30 of the first year in which the  Securities
Administrator   is  able  to  do  so  under   applicable   law,  the  Securities
Administrator  shall  prepare  and  file a Form  15  relating  to the  automatic
suspension of reporting in respect of the Trust under the Exchange Act.

          (ii) In the  event  that the  Securities  Administrator  is  unable to
     timely file with the  Commission  all or any  required  portion of any Form
     8-K, 10-D or 10-K required to be filed by this Agreement  because  required
     disclosure  information  was either not  delivered to it or delivered to it
     after the delivery  deadlines set forth in this  Agreement or for any other
     reason, the Securities  Administrator  will promptly notify  electronically
     the  Depositor.  In the case of Form 10-D and  10-K,  the  parties  to this
     Agreement  will cooperate to prepare and file a Form 12b-25 and a 10-DA and
     10-KA as  applicable,  pursuant to Rule 12b-25 of the Exchange  Act. In the
     case of Form 8-K, the Securities  Administrator  will,  upon receipt of all
     required  Form  8-K  Disclosure  Information  and  upon  the  approval  and
     direction of the Depositor, include such disclosure information on the next
     Form 10-D.  In the event that any  previously  filed Form 8-K, 10-D or 10-K
     needs to be amended in connection  with any Additional Form 10-D Disclosure
     (other than,  in the case of Form 10-D,  for the purpose of  restating  any
     Monthly Statement),  Additional Form 10-K Disclosure or Form 8-K Disclosure
     Information,  the Securities  Administrator will notify  electronically the
     Depositor and such other parties to this  Agreement as are affected by this
     Amendment and such parties will  cooperate to prepare any  necessary  8-KA,
     10-DA or 10-KA. Any Form 15, Form 12b-25 or any amendment to Form 8-K, 10-D
     or 10-K  shall be  signed  by a duly  authorized  representative  or senior
     officer  in  charge of  master  servicing,  as  applicable,  of the  Master
     Servicer. The parties to this Agreement acknowledge that the performance by
     each of the Master Servicer and the Securities  Administrator of its duties
     under this Section 8.12(d) related to the timely preparation, execution and
     filing of Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K
     is  contingent  upon each such  party  performing  its  duties  under  this
     Section. Neither the Master Servicer nor the Securities Administrator shall
     have any liability for any loss, expense,  damage,  claim arising out of or
     with respect to any failure to properly prepare, execute and/or timely file
     any such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K,
     where such failure results from the Securities Administrator's inability or
     failure to obtain or receive,  on a timely basis,  any information from any
     other party hereto or any Servicing Function Participant needed to prepare,
     arrange for  execution or file such Form 15, Form 12b-25 or any  amendments
     to Forms 8-K, 10-D or 10-K,  not  resulting  from its own  negligence,  bad
     faith or willful

                                      -102-

<PAGE>

     misconduct.  The Depositor  shall be responsible for all costs and expenses
     of the Securities  Administrator  related to the  preparation and filing of
     any such amendment.  Notwithstanding the foregoing,  if any Form 10-D needs
     to be amended  solely to change the  information  contained  in the Monthly
     Statement, the Securities Administrator shall not be required to notify the
     Depositor of such amendment.

     (e) Other than the Exchange Act reports  specified  above,  the  Securities
Administrator shall have no responsibility to file any items or reports with the
Commission  under  the  Exchange  Act  or  otherwise;   provided,  however,  the
Securities  Administrator  and Master Servicer will cooperate with the Depositor
in  connection  with any  additional  filings  with  respect to the Trust as the
Depositor deems necessary under the Exchange Act.

     (f) The  Depositor  shall  pay all  costs and  expenses  of the  Securities
Administrator  related to the  preparation  and filing of any current  report on
Form 8-K, any periodic  report on Form 10-D (other than the costs and expense of
the Securities  Administrator  associated with the preparation and filing of the
Monthly  Statement),  or any  amendment to any  Exchange  Act report.  Except as
otherwise provided herein, all expenses incurred by the Securities Administrator
in connection with its preparation and filing of Exchange Act reports  hereunder
shall not be reimbursable from the Trust.

     (g) Any notice  required  under this Section 8.12 may be given by facsimile
or by electronic mail.

                                   ARTICLE IX

                      ADMINISTRATION OF THE MORTGAGE LOANS
                             BY THE MASTER SERVICER

     Section 9.01 Duties of the Master Servicer;  Enforcement of each Servicer's
Obligations.  (a) The Master Servicer,  on behalf of the Trustee, the Securities
Administrator,  the  Depositor  and the  Certificateholders,  shall  monitor the
performance of the obligations of each Servicer under their respective Servicing
Agreements,  and (except as set forth below) shall use its reasonable good faith
efforts to cause each  Servicer  to duly and  punctually  perform its duties and
obligations under its respective Servicing Agreement.  Upon the occurrence of an
Event of Default of which a  Responsible  Officer of the Master  Servicer or, if
the  Master  Servicer  and the  applicable  Servicer  are the same  entity,  the
Trustee,  has  actual  knowledge,   the  Master  Servicer  or  the  Trustee,  as
applicable,  shall promptly notify the Securities Administrator and the Trustee,
as applicable,  and shall specify in such notice the action,  if any, the Master
Servicer  or the  Trustee,  as  applicable,  plans  to take in  respect  of such
default.  So long as an Event of  Default  shall  occur and be  continuing,  the
Master Servicer or the Trustee, as applicable,  shall take the actions specified
in Article VII.

     If (i) a Servicer  reports a delinquency  on a monthly report and (ii) such
Servicer,  by 11 a.m. (New York Time) on the related  Remittance  Date,  neither
makes an Advance nor provides the Securities Administrator,  the Master Servicer
and the Trustee with an Officer's  Certificate  certifying  that such an Advance
would be a Nonrecoverable P&I Advance or Nonrecoverable  Servicing Advance, then
the Master Servicer or, if the Master Servicer and such

                                      -103-

<PAGE>

Servicer are the same entity,  the Trustee,  shall  deposit in the  Distribution
Account  not later than the  Business  Day  immediately  preceding  the  related
Distribution  Date an Advance in an amount equal to the  difference  between (x)
with respect to each Monthly  Payment due on a Mortgage  Loan that is delinquent
(other than Relief Act Interest  Shortfalls) and for which the related  Servicer
was required to make an Advance pursuant to the related Servicing  Agreement and
(y) amounts deposited in the related  Collection Account to be used for Advances
with respect to such Mortgage Loan,  except to the extent the Master Servicer or
the Trustee,  as applicable,  determines any such Advance to be a Nonrecoverable
P&I Advance or Nonrecoverable  Servicing  Advance.  Subject to the foregoing and
Section 7.01, the Master Servicer or the Trustee, as applicable,  shall continue
to make such Advances for so long as the  applicable  Servicer is required to do
so under its respective Servicing Agreement. If applicable,  on the Business Day
immediately  preceding the Distribution  Date, the Master Servicer shall deliver
an Officer's  Certificate to the Trustee stating that the Master Servicer elects
not to make an Advance in a stated  amount and  detailing the reason(s) it deems
the  Advance to be a  Nonrecoverable  P&I  Advance or  Nonrecoverable  Servicing
Advance.  Any  amounts  deposited  by the Master  Servicer  or the  Trustee,  as
applicable,  pursuant to this Section 9.01 shall be net of the Servicing Fee for
the related Mortgage Loans.

     (b) The Master Servicer or the Trustee (as successor master  servicer),  as
applicable,  shall pay the costs of monitoring  the Servicers  (including  costs
associated  with (i)  termination  of any Servicer,  (ii) the  appointment  of a
successor  servicer or (iii) the transfer to and  assumption of the servicing by
the Master  Servicer or the Trustee,  as  applicable)  and shall,  to the extent
permitted under the related Servicing  Agreement,  seek  reimbursement  therefor
initially from the terminated  Servicer.  In the event the full costs associated
with the transition of servicing  responsibilities to the Master Servicer or the
Trustee (as successor master servicer),  as applicable,  are not paid for by the
predecessor or successor  servicer  (provided such successor servicer is not the
Master  Servicer or the  Trustee (as  successor  master  servicer)),  the Master
Servicer or the Trustee, as applicable,  may be reimbursed therefor by the Trust
for all costs  incurred by the Master  Servicer  or the  Trustee  (as  successor
master servicer), as applicable,  associated with any such transfer of servicing
duties from the applicable  Servicer to the Master  Servicer or the Trustee,  as
applicable, or any other successor servicer.

     (c) If the Master Servicer or the Trustee (as successor  master  servicer),
as applicable,  assumes the servicing with respect to any of the Mortgage Loans,
it will not assume  liability  for the  representations  and  warranties  of the
applicable Servicer it replaces or for any errors or omissions of such Servicer.

     (d) Neither the Depositor nor the Securities Administrator shall consent to
the assignment by any Servicer of such Servicer's  rights and obligations  under
that  Servicer's  Servicing  Agreement  without the prior written consent of the
Master  Servicer  and the  Trustee,  which  consent  shall  not be  unreasonably
withheld.

     Section  9.02  Provision  to the  Securities  Administrator  of  Loan-Level
Information.  Not later than two Business Days preceding each Distribution Date,
the Master  Servicer  shall  deliver to  Securities  Administrator,  in a format
mutually agreed upon by the Master Servicer and Securities Administrator,  "loan
level' information with respect to the

                                      -104-

<PAGE>

Mortgage  Loans as of the related  Determination  date,  to the extent that such
information has been provided to the Master Servicer by the Servicers.

     Section 9.03 [Reserved].

     Section  9.04  Maintenance  of  Fidelity  Bond  and  Errors  and  Omissions
Insurance.  The Master  Servicer,  at its  expense,  shall  maintain in effect a
blanket fidelity bond and an errors and omissions  insurance  policy,  affording
coverage with respect to all directors, officers, directors, employees and other
Persons  acting on such  Master  Servicer's  behalf,  and  covering  errors  and
omissions in the performance of the Master Servicer's obligations hereunder. The
errors and  omissions  insurance  policy and the fidelity  bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.

     Section 9.05 Representations and Warranties of the Master Servicer. (a) The
Master Servicer hereby represents and warrants to the Depositor,  the Securities
Administrator and the Trustee, for the benefit of the Certificateholders,  as of
the Closing Date that:

          (i) it is a New York corporation,  duly organized existing and in good
     standing under the laws of the State of New York,  with corporate power and
     authority  to conduct its  business as  presently  conducted  by it, and to
     enter into,  execute and deliver and to perform its  obligations  as Master
     Servicer under this Agreement;

          (ii) the  execution  and  delivery  of this  Agreement  by the  Master
     Servicer  and  its  performance  and  compliance  with  the  terms  of this
     Agreement will not (A) violate the Master Servicer's charter or bylaws, (B)
     violate  any law or  regulation  or any  administrative  decree or order to
     which it is subject or (C)  constitute a default (or an event  which,  with
     notice or lapse of time, or both,  would  constitute a default)  under,  or
     result  in the  breach  of,  any  material  contract,  agreement  or  other
     instrument to which the Master  Servicer is a party or by which it is bound
     or to which any of its  assets are  subject,  which  violation,  default or
     breach would materially and adversely affect the Master Servicer's  ability
     to perform its obligations under this Agreement;

          (iii)  this  Agreement   constitutes,   assuming  due   authorization,
     execution and delivery hereof by the other  respective  parties  hereto,  a
     legal,  valid and binding  obligation of the Master  Servicer,  enforceable
     against it in accordance with the terms hereof,  except as such enforcement
     may be limited by bankruptcy,  insolvency,  reorganization,  moratorium and
     other laws affecting the enforcement of creditors'  rights in general,  and
     by general equity  principles  (regardless  of whether such  enforcement is
     considered in a proceeding in equity or at law);

          (iv) the Master  Servicer is not in default  with respect to any order
     or decree of any court or any order or  regulation  of any federal,  state,
     municipal or governmental  agency to the extent that any such default would
     materially and adversely affect its performance hereunder;

          (v) the Master Servicer is not a party to or bound by any agreement or
     instrument  or  subject  to any  charter  provision,  bylaw  or  any  other
     corporate restriction or any judgment, order, writ, injunction, decree, law
     or regulation that may materially and

                                      -105-

<PAGE>

     adversely  affect its ability as Master Servicer to perform its obligations
     under this  Agreement  or that  requires the consent of any third person to
     the execution of this Agreement or the  performance by the Master  Servicer
     of its obligations under this Agreement;

          (vi) no litigation is pending or, to the best of the Master Servicer's
     knowledge,  threatened against the Master Servicer which would prohibit its
     entering  into this  Agreement or  performing  its  obligations  under this
     Agreement;

          (vii) no  consent,  approval,  authorization  or order of any court or
     governmental  agency or body is required  for the  execution,  delivery and
     performance by the Master  Servicer of or compliance by the Master Servicer
     with this Agreement or the consummation of the transactions contemplated by
     this Agreement,  except for such consents,  approvals,  authorizations  and
     orders (if any) as have been obtained; and

          (viii)  the  consummation  of the  transactions  contemplated  by this
     Agreement are in the ordinary course of business of the Master Servicer.

     (b) It is understood and agreed that the representations and warranties set
forth  in  this  Section  shall  survive  the  execution  and  delivery  of this
Agreement.  The Master  Servicer shall  indemnify the Depositor,  the Securities
Administrator,  the  Trustee  and the Trust and hold them  harmless  against any
loss, damages, penalties, fines, forfeitures,  reasonable legal fees and related
costs,  judgments,  and other reasonable  costs and expenses  resulting from any
claim,  demand,  defense or assertion  based on or grounded  upon,  or resulting
from, a material breach of the Master Servicer's  representations and warranties
contained  in Section  9.05(a)  above.  It is  understood  and  agreed  that the
enforcement of the  obligation of the Master  Servicer set forth in this Section
9.05 to indemnify the Depositor,  Securities Administrator,  the Trustee and the
Trust constitutes the sole remedy of the Depositor and the Trustee, respecting a
breach of the foregoing  representations  and warranties.  Such  indemnification
shall  survive  any  termination  of the  Master  Servicer  as  Master  Servicer
hereunder,  any  termination of this Agreement and resignation or removal of the
Trustee.

     Any cause of action against the Master Servicer  relating to or arising out
of the breach of any  representations  and warranties  made in this Section 9.05
shall accrue upon discovery of such breach by either the  Depositor,  the Master
Servicer,  the Securities  Administrator or the Trustee or notice thereof by any
one of such parties to the other parties.

     Section 9.06 Master Servicer Events of Default. Each of the following shall
constitute a "Master Servicer Event of Default":

     (a) any failure by the Master Servicer to make any P&I Advance  required to
be made by the Master Servicer under the terms of this Agreement which continues
unremedied  for a period of two (2)  Business  Days  after  the date upon  which
written  notice of such failure,  requiring the same to be remedied,  shall have
been given to the Master Servicer by any other party hereto;

     (b)  failure by the Master  Servicer  to duly  observe or  perform,  in any
material respect,  any other covenants,  obligations or agreements of the Master
Servicer as set forth in this

                                      -106-

<PAGE>

Agreement  which failure  continues  unremedied for a period of thirty (30) days
after the date on which written notice of such failure, requiring the same to be
remedied,  shall have been given to the Master Servicer by the Trustee or to the
Master Servicer and Trustee by the holders of  Certificates  evidencing at least
25.00% of the Voting Rights;

     (c) a decree or order of a court or agency or supervisory  authority having
jurisdiction  for the  appointment of a conservator or receiver or liquidator in
any  insolvency,  bankruptcy,  readjustment  of debt,  marshaling  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
sixty (60) days;

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

     (e) the Master  Servicer  shall admit in writing its  inability  to pay its
debts as they become due,  file a petition to take  advantage of any  applicable
insolvency or reorganization  statute, make an assignment for the benefit of its
creditors,  or  voluntarily  suspend  payment of its  obligations  for three (3)
Business Days;

     (f) Except as otherwise set forth herein,  the Master Servicer  attempts to
assign this  Agreement  or its  responsibilities  hereunder  or to delegate  its
duties  hereunder (or any portion thereof) without the consent of the Securities
Administrator and the Depositor;

     (g) the  indictment of the Master  Servicer for the taking of any action by
the Master  Servicer,  any  Affiliate or any  director or employee  thereof that
constitutes  fraud or criminal  activity in the  performance of its  obligations
under  this  Agreement,  in each  case,  where such  indictment  materially  and
adversely  affects the ability of the Master Servicer to perform its obligations
under this  Agreement  (subject to the  condition  that such  indictment  is not
dismissed within ninety (90) days);

     (h) After receipt of notice from the Securities Administrator,  any failure
of the Master  Servicer  to remit to the  Securities  Administrator  any payment
required  to be  made  to  the  Securities  Administrator  for  the  benefit  of
Certificateholders under the terms of this Agreement,  including any Advance, on
any Master Servicer Remittance Date which such failure continues  unremedied for
a period of one  Business  Day after the date upon which notice o f such failure
shall have been given to the Master Servicer by the Securities Administrator; or

     (i) failure of the Master Servicer to timely provide the Depositor with the
assessment, attestation and annual statement of compliance required by Item 1122
of Regulation AB in accordance with Sections 3.03, 3.04 and 3.05.

     In each and every such case, so long as a Master  Servicer Event of Default
shall not have been  remedied,  in addition  to whatever  rights the Trustee may
have at law or equity or to damages,  including  injunctive  relief and specific
performance,  the Trustee, by notice in writing to the Master Servicer, may, and
upon the request of the Holders of Certificates

                                      -107-

<PAGE>

representing  at least 51.00% of the Voting Rights shall,  terminate  with cause
all the rights and obligations of the Master Servicer under this Agreement.

     Upon receipt by the Master Servicer of such written  notice,  all authority
and power of the  Master  Servicer  under this  Agreement,  shall pass to and be
vested in any successor master servicer  appointed  hereunder which accepts such
appointments. Upon written request from the Trustee or the Depositor, the Master
Servicer shall prepare,  execute and deliver to the successor entity  designated
by the  Trustee  any and all  documents  and other  instruments  related  to the
performance  of its duties  hereunder as the Master  Servicer and, place in such
successor's  possession all such documents with respect to the master  servicing
of the  Mortgage  Loans  and do or  cause to be done all  other  acts or  things
necessary or appropriate  to effect the purposes of such notice of  termination,
at the Master Servicer's sole expense.  The Master Servicer shall cooperate with
the Trustee and such successor  master  servicer in effecting the termination of
the Master Servicer's  responsibilities and rights hereunder,  including without
limitation, the transfer to such successor master servicer for administration by
it of all  cash  amounts  which  shall  at the time be  credited  to the  Master
Servicing Account or are thereafter received with respect to the Mortgage Loans.

     Section 9.07 Waiver of Default. By a written notice, the Trustee may at the
direction of Holders of  Certificates  evidencing  at least 51.00% of the Voting
Rights  waive any  default  by the Master  Servicer  in the  performance  of its
obligations  hereunder and its consequences.  Upon any waiver of a past default,
such  default  shall cease to exist,  and any Master  Servicer  Event of Default
arising  therefrom  shall be deemed to have been  remedied for every  purpose of
this  Agreement.  No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.

     Section 9.08  Successor to the Master  Servicer.  Upon  termination  of the
Master  Servicer's   responsibilities  and  duties  under  this  Agreement,  the
Depositor  shall use its  reasonable  good faith efforts to appoint a successor,
which shall succeed to all rights and assume all of the responsibilities, duties
and  liabilities  of the  Master  Servicer  under  this  Agreement  prior to the
termination  of the Master  Servicer.  Any  successor  shall be a Fannie Mae and
Freddie Mac approved  servicer in good standing and  acceptable to the Depositor
and the Rating Agencies. In connection with such appointment and assumption, the
Depositor may make such  arrangements  for the compensation of such successor as
it and such successor shall agree; provided, however, that in no event shall the
master  servicing fee paid to such successor master servicer be in excess of the
prevailing  market  rate at the  time  that the  successor  master  servicer  is
appointed. In the event that the Master Servicer's duties,  responsibilities and
liabilities  under this  Agreement are  terminated,  the Master  Servicer  shall
continue  to  discharge  its duties  and  responsibilities  hereunder  until the
effective  date of such  termination  with  the same  degree  of  diligence  and
prudence  which it is obligated to exercise  under this Agreement and shall take
no action whatsoever that might impair or prejudice the rights of its successor.
The  termination  of the  Master  Servicer  shall not become  effective  until a
successor  shall be appointed  pursuant hereto and shall in no event (i) relieve
the Master Servicer of  responsibility  for the  representations  and warranties
made  pursuant  to Section  9.05(a)  hereof and the  remedies  available  to the
Trustee under Section  9.05(b) hereof,  it being  understood and agreed that the
provisions  of Section 9.05 hereof shall be  applicable  to the Master  Servicer
notwithstanding  any such sale,  assignment,  resignation  or termination of the
Master Servicer or the termination of this Agreement; or

                                      -108-

<PAGE>

(ii)  affect  the  right  of the  Master  Servicer  to  receive  payment  and/or
reimbursement  of any  amounts  accruing  to it  hereunder  prior to the date of
termination  (or  during  any  transition  period in which the  Master  Servicer
continues to perform its duties hereunder prior to the date the successor master
servicer fully assumes its duties).

     If no successor master servicer has accepted its appointment within 90 days
of the time the Trustee  receives the  resignation of the Master  Servicer,  the
Trustee  shall be the  successor  master  servicer  in all  respects  under this
Agreement  and shall  have all the  rights  and powers and be subject to all the
responsibilities,   duties  and  liabilities  relating  thereto,  including  the
obligation to make Advances;  provided, however, that any failure to perform any
duties or  responsibilities  caused by the Master Servicer's  failure to provide
information  required by this Agreement shall not be considered a default by the
Trustee  hereunder.  In the Trustee's  capacity as such  successor,  the Trustee
shall  have the same  limitations  on  liability  herein  granted  to the Master
Servicer.  Notwithstanding  anything herein to the contrary,  the Trustee in its
role as  successor  master  servicer  shall  have no  obligation  to  monitor or
supervise  any Servicer,  shall only have the  obligation to make Advances if it
terminates  the  Servicer  pursuant  to an  Event  of  Default  (in its  role as
successor  master  servicer),  and shall make such  Advances  only  pursuant  to
Section 7.01. As compensation therefor, the Trustee shall be entitled to receive
the compensation,  reimbursement and indemnities otherwise payable to the Master
Servicer.

     Any successor master servicer appointed as provided herein,  shall execute,
acknowledge and deliver to the Master Servicer, the Depositor and to the Trustee
an instrument  accepting such appointment,  wherein the successor shall make the
representations  and warranties set forth in Section 9.05 hereof,  and whereupon
such successor shall become fully vested with all of the rights, powers, duties,
responsibilities,  obligations and liabilities of the Master Servicer, with like
effect as if originally  named as a party to this Agreement.  Any termination or
resignation of the Master  Servicer or  termination of this Agreement  shall not
affect any claims that the Trustee may have against the Master Servicer  arising
out of the  Master  Servicer's  actions  or  failure  to act  prior  to any such
termination  or resignation  or in connection  with the Trustee's  assumption of
such obligations, duties and responsibilities.

     Upon a successor's  acceptance of appointment as such, the successor master
servicer shall notify by mail the Trustee, the Securities  Administrator and the
Depositor of its appointment.

     Section 9.09 [Reserved].

     Section  9.10  Merger or  Consolidation.  Any Person  into which the Master
Servicer may be merged or consolidated, or any Person resulting from any merger,
conversion,  other change in form or  consolidation to which the Master Servicer
shall be a  party,  or any  Person  succeeding  to the  business  of the  Master
Servicer,  shall be the successor to the Master Servicer 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 resulting Person to the Master Servicer shall (i)
be a Person (or have an  Affiliate)  that is  qualified  and approved to service
mortgage loans for Fannie Mae and Freddie Mac (provided further that a successor
master servicer that satisfies subclause (i) through an

                                      -109-

<PAGE>

Affiliate agrees to service the Mortgage Loans in accordance with all applicable
Fannie Mae and  Freddie  Mac  guidelines)  and (ii) have a net worth of not less
than $25,000,000.

     Section  9.11  Resignation  of the  Master  Servicer.  Except as  otherwise
provided in Sections 9.08 and 9.10 hereof,  the Master Servicer shall not resign
from  the  obligations  and  duties  hereby  imposed  on it  unless  the  Master
Servicer's  duties hereunder are no longer  permissible  under applicable law or
are in material  conflict by reason of applicable law with any other  activities
carried  on by it and cannot be cured.  Any such  determination  permitting  the
resignation  of the Master  Servicer shall be evidenced by an Opinion of Counsel
that shall be  independent  to such effect  delivered  to the  Trustee.  No such
resignation  shall become  effective until the Trustee shall have assumed,  or a
successor  master  servicer  satisfactory to the Trustee and the Depositor shall
have assumed, the Master Servicer's  responsibilities and obligations under this
Agreement.  Notice of such  resignation  shall be given  promptly  by the Master
Servicer and the Depositor to the Trustee.

     If at any  time,  CitiMortgage,  as Master  Servicer,  resigns  under  this
Section 9.11, or is removed as Master Servicer pursuant to Section 9.06, then at
such time  Citibank  shall  also  resign  (and shall be  entitled  to resign) as
Securities Administrator under this Agreement.

     Section 9.12  Assignment or  Delegation  of Duties by the Master  Servicer.
Except as expressly  provided  herein,  the Master  Servicer shall not assign or
transfer  any of its  rights,  benefits  or  privileges  hereunder  to any other
Person,  or delegate to or  subcontract  with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Master Servicer;  provided, however, that the Master Servicer shall have the
right  with the prior  written  consent  of the  Depositor  (which  shall not be
unreasonably withheld, denied, or delayed), and upon delivery to the Trustee and
the Depositor of a letter from each Rating Agency to the effect that such action
shall  not  result  in a  downgrade  of  the  ratings  assigned  to  any  of the
Certificates,  to  delegate or assign to or  subcontract  with or  authorize  or
appoint any qualified  Person to perform and carry out any duties,  covenants or
obligations  to be performed and carried out by the Master  Servicer  hereunder.
Notice  of such  permitted  assignment  shall be given  promptly  by the  Master
Servicer to the Depositor and the Trustee. If, pursuant to any provision hereof,
the  duties  of the  Master  Servicer  are  transferred  to a  successor  master
servicer, the entire compensation payable to the Master Servicer pursuant hereto
shall  thereafter be payable to such successor  master  servicer but in no event
shall the fee payable to the successor  master  servicer  exceed that payable to
the predecessor master servicer.

     Section 9.13  Limitation on Liability of the Master  Servicer.  Neither the
Master Servicer nor any of the directors,  officers,  employees or agents of the
Master   Servicer   shall  be  under  any   liability  to  the  Trustee  or  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 Master Servicer or
any such person against any liability that would  otherwise be imposed by reason
of willful malfeasance, bad faith or negligence in the performance of its duties
or by reason of reckless  disregard  for its  obligations  and duties under this
Agreement. The Master Servicer and any director,  officer,  employee or agent of
the Master  Servicer may rely in good faith on any document prima facie properly
executed and submitted by any Person  respecting any matters arising  hereunder.
The Master  Servicer  shall be under no  obligation  to appear in,  prosecute or
defend any legal action

                                      -110-

<PAGE>

that is not  incidental  to its duties as Master  Servicer  with  respect to the
Mortgage  Loans under this  Agreement  and that in its opinion may involve it in
any expenses or liability;  provided,  however,  that the Master Servicer may in
its sole  discretion  undertake  any such action that it may deem  necessary  or
desirable in respect to this  Agreement and the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability  resulting  therefrom,
shall be liabilities of the Trust,  and the Master Servicer shall be entitled to
be reimbursed  therefor out of the  Distribution  Account in accordance with the
provisions of Section 9.14.

     The Master  Servicer  shall not be liable under this Agreement for any acts
or omissions of the Servicers  except to the extent that damages or expenses are
incurred as a result of such acts or  omissions  and such  damages and  expenses
would not have been incurred but for the negligence,  willful  malfeasance,  bad
faith or  recklessness  of the Master  Servicer in  supervising,  monitoring and
overseeing the performance of the obligations of the Servicers as required under
this Agreement.

     Section  9.14  Indemnification;  Third Party  Claims.  The Master  Servicer
agrees to indemnify and hold harmless the Trustee as successor  master  servicer
from and against  any and all claims,  losses,  penalties,  fines,  forfeitures,
legal fees and related costs, judgments, and any other costs, liabilities,  fees
and expenses  (including,  but not limited to, reasonable  attorneys' fees) that
the Trustee  may sustain as a result of such  liability  or  obligations  of the
Master Servicer and in connection  with the Trustee's  assumption (not including
the Trustee's  performance,  except to the extent that costs or liability of the
Trustee are created or increased  as a result of  negligent or wrongful  acts or
omissions of the Master Servicer prior to its replacement as Master Servicer) of
the  Master  Servicer's  obligations,  duties  or  responsibilities  under  such
agreement.

     The Trust will indemnify the Master  Servicer and hold it harmless  against
any and all  claims,  losses,  penalties,  fines,  forfeitures,  legal  fees and
related costs, judgments,  and any other costs,  liabilities,  fees and expenses
(including,  but not limited  to,  reasonable  attorneys'  fees) that the Master
Servicer may incur or sustain in connection  with,  arising out of or related to
this  Agreement  or the  Certificates,  except to the extent that any such loss,
liability  or  expense  is  related  to (i) a  material  breach  of  the  Master
Servicer's  representations  and warranties in this  Agreement,  (ii) the Master
Servicer's  willful  malfeasance,  bad faith or  negligence  or by reason of its
reckless  disregard of its duties and obligations  under this Agreement or (iii)
failure  to  provide  the  assessment,   attestation  and  annual  statement  of
compliance in accordance  with Sections 3.03,  3.04 and 3.05;  provided that any
such loss,  liability or expense constitutes an "unanticipated  expense incurred
by  the   REMIC"   within   the   meaning  of   Treasury   Regulations   Section
1.860G-1(b)(3)(ii).  The Master Servicer shall be entitled to reimbursement  for
any such indemnified amount from funds on deposit in the Distribution Account.

                                      -111-

<PAGE>

                                    ARTICLE X

                     CONCERNING THE SECURITIES ADMINISTRATOR

     Section  10.01  Duties  of   Securities   Administrator.   The   Securities
Administrator shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement.

     The   Securities   Administrator,   upon   receipt   of  all   resolutions,
certificates,   statements,   opinions,  reports,  documents,  orders  or  other
instruments  furnished to the  Securities  Administrator  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 Securities  Administrator 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   Securities   Administrator   shall   notify   the
Certificateholders of such non-conforming instrument in the event the Securities
Administrator,  after so requesting, does not receive a satisfactorily corrected
instrument.

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

          (i) the duties and obligations of the Securities  Administrator  shall
     be  determined  solely by the express  provisions  of this  Agreement,  the
     Securities  Administrator 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  Securities   Administrator   and  the  Securities
     Administrator 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 Securities  Administrator  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 Securities Administrator shall not be liable for any error of
     judgment  made  in good  faith  by a  Responsible  Officer  or  Responsible
     Officers of the Securities  Administrator,  unless it shall be conclusively
     determined by a court of competent  jurisdiction,  such  determination  not
     subject to appeal,  that the  Securities  Administrator  was  negligent  in
     ascertaining the pertinent facts;

          (iii) the Securities Administrator shall not be liable with respect to
     any action or inaction 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  25.00%  of the  Voting  Rights  of  Certificates
     relating to the time, method and place of conducting any proceeding for any
     remedy available to the Securities Administrator, or exercising or omitting
     to exercise any trust or power conferred upon the Securities  Administrator
     under this Agreement; and

                                      -112-

<PAGE>

          (iv) the Securities Administrator shall not be accountable, shall have
     no  liability  and  makes no  representation  as to any  acts or  omissions
     hereunder of the Master Servicer or the Trustee.

     Section  10.02 Certain  Matters  Affecting  the  Securities  Administrator.
Except as otherwise provided in Section 10.01:

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

          (ii) the Securities Administrator may consult with counsel,  financial
     advisers  or  accountants  and the  advice of any such  counsel,  financial
     advisers or accountants  and any advice or 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 advice or Opinion of Counsel;

          (iii) the Securities  Administrator shall not be liable for any action
     or inaction 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  Securities  Administrator  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
     25.00%  of the  Voting  Rights  allocated  to each  Class of  Certificates;
     provided,  however,  that if the payment  within a  reasonable  time to the
     Securities Administrator of the costs, expenses or liabilities likely to be
     incurred  by it in the making of such  investigation  is, in the opinion of
     the  Securities  Administrator,  not  reasonably  assured to the Securities
     Administrator  by  the  security  afforded  to  it by  the  terms  of  this
     Agreement,  the Securities  Administrator may require reasonable  indemnity
     against such expense or liability as a condition to so proceeding.  Nothing
     in this clause (iv) shall  derogate from the  obligation of the  Securities
     Administrator  to observe any  applicable  law  prohibiting  disclosure  of
     information   regarding  the  Mortgagors,   provided  that  the  Securities
     Administrator  shall have no  liability  for  disclosure  required  by this
     Agreement;

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

                                      -113-

<PAGE>

          (vi) the  Securities  Administrator  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, and none of the  provisions  contained  in
     this Agreement shall in any event require the Securities  Administrator  to
     perform,  or be responsible  for the manner of  performance  of, any of the
     obligations of the Master Servicer or the Trustee under this Agreement;

          (vii) the  Securities  Administrator  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  Securities  Administrator
     reasonable   security  or   indemnity   satisfactory   to  the   Securities
     Administrator  against the costs,  expenses  and  liabilities  which may be
     incurred therein or thereby;

          (viii) the Securities Administrator shall have no obligation to appear
     in,  prosecute  or defend any legal  action that is not  incidental  to its
     duties  hereunder and which in its opinion may involve it in any expense or
     liability;  provided,  however, that in the event of a breach or default by
     the Yield  Maintenance  Agreement  Provider  under  the  Yield  Maintenance
     Agreement,  the  Securities  Administrator  shall pursue all legal remedies
     available against the Yield Maintenance  Agreement Provider under the Yield
     Maintenance  Agreement  in  consultation  with  the  Depositor;   provided,
     further, that the Securities  Administrator 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 the interests
     of the Trustee,  the Securities  Administrator  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 Securities Administrator shall be entitled to be
     reimbursed therefor out of the Collection Account.

          (ix) the Securities Administrator shall not be required to take notice
     or be deemed to have notice or knowledge of any default or Event of Default
     unless a Responsible  Officer of the  Securities  Administrator  shall have
     received  written  notice or  obtained  actual  knowledge  thereof.  In the
     absence of  receipt  of such  notice or actual  knowledge,  the  Securities
     Administrator may conclusively  assume that there is no default or Event of
     Default;

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

          (xi) the  Securities  Administrator  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; and

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<PAGE>

          (xii) the  Securities  Administrator  may execute any of the trusts or
     powers  hereunder or perform any duties  hereunder either directly or by or
     through agents,  attorneys or custodians,  and the Securities Administrator
     shall not be  responsible  for any  misconduct or negligence on the part of
     any  such  agent,   attorney  or  custodian  appointed  by  the  Securities
     Administrator with due care.

     The Securities  Administrator shall have no duty (A) to undertake or ensure
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 depositing or to any rerecording,  refiling or redepositing  thereof,  (B) to
procure  or  maintain  any  insurance  or  (C)  to pay  or  discharge  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.

     Section  10.03  Securities  Administrator  Not Liable for  Certificates  or
Mortgage Loans. The recitals  contained herein and in the Certificates  shall be
taken as the statements of the Depositor or the transferor,  as the case may be,
and  the  Securities   Administrator   assumes  no   responsibility   for  their
correctness.  The Securities  Administrator  makes no  representations as to the
validity or sufficiency of this Agreement, the Yield Maintenance Agreement or of
the  Certificates  or of any Mortgage Loan or related  document  other than with
respect to the Securities  Administrator's  execution and  authentication of the
Certificates.  The Securities Administrator shall not be accountable for the use
or application by the Depositor,  the Trustee,  the Master  Servicer,  the Yield
Maintenance Agreement Provider of any funds paid to the Depositor,  the Trustee,
any Servicer, the Yield Maintenance Agreement Provider or the Master Servicer in
respect of the Mortgage  Loans or deposited in or withdrawn  from any Collection
Account or any other fund or account  with  respect to the  Certificates  by the
Depositor,  the Trustee, any Servicer,  the Yield Maintenance Agreement Provider
or the Master Servicer.

     The Securities  Administrator  executes and  authenticates the Certificates
not in its  individual  capacity but solely as Securities  Administrator  of the
Trust  Fund  created  by this  Agreement,  in the  exercise  of the  powers  and
authority conferred and vested in it by this Agreement. Each of the undertakings
and agreements made on the part of the Securities Administrator on behalf of the
Trust  Fund  in  the  Certificates  is  made  and  intended  not  as a  personal
undertaking  or  agreement  by the  Securities  Administrator  but is  made  and
intended for the purpose of binding only the Trust Fund.

     Section 10.04 Securities Administrator May Own Certificates. The Securities
Administrator  in its  individual or any other  capacity may become the owner or
pledgee of  Certificates  and may transact  business with the parties hereto and
their  Affiliates  with the  same  rights  as it  would  have if it were not the
Securities Administrator.

     Section 10.05 Securities  Administrator's Fees and Expenses. The Securities
Administrator  shall be entitled to the  investment  income  and/or  earnings on
and/or  use of funds of the  amounts  in the  Distribution  Account  during  the
Securities  Administrator  Float Period.  The Securities  Administrator  and any
director, officer, employee, agent or "control person" within the meaning of the
Securities Act of 1933, as amended, and the Securities Exchange Act

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<PAGE>

of 1934, as amended ("Control Person"), of the Securities Administrator shall be
indemnified  by the Trust and held  harmless  against  any  loss,  liability  or
expense  (including but not limited to reasonable  attorney's fees) (i) incurred
in connection with any claim or legal action relating to (a) this Agreement, (b)
the Mortgage Loans or (c) the  Certificates,  other than any loss,  liability or
expense  incurred by reason of willful  misfeasance,  bad faith or negligence in
the performance of any of the Securities  Administrator's duties hereunder, (ii)
incurred  in  connection   with  the   performance  of  any  of  the  Securities
Administrator'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 Securities  Administrator's  duties hereunder or (iii)
incurred by reason of any action of the  Securities  Administrator  taken at the
direction of the  Certificateholders  to the extent of indemnity provided by the
Certificateholders,   provided   that  any  such  loss,   liability  or  expense
constitutes an "unanticipated  expense incurred by the REMIC" within the meaning
of Treasury Regulations Section 1.860G 1(b)(3)(ii). Such indemnity shall survive
the  termination  of  this  Agreement  or  the  resignation  or  removal  of the
Securities Administrator  hereunder.  Without limiting the foregoing, and except
for any such expense,  disbursement  or advance as may arise from the Securities
Administrator's  negligence, bad faith or willful misconduct, or which would not
be an  "unanticipated  expense"  within  the  meaning  of the  second  preceding
sentence, the Securities  Administrator shall be reimbursed by the Trust for all
reasonable  expenses,  disbursements  and  advances  incurred  or  made  by  the
Securities  Administrator  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,  appraiser  or  other  agent  that is not  regularly
employed by the  Securities  Administrator,  to the extent  that the  Securities
Administrator must engage such Persons to perform acts or services hereunder and
(C) printing and engraving  expenses in connection with preparing any Definitive
Certificates.  The Trust shall fulfill its obligations under this paragraph from
amounts on deposit from time to time in the Distribution Account.

     The Securities Administrator shall be required to pay all expenses incurred
by it in connection  with its activities  hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.

     Section 10.06 Eligibility  Requirements for Securities  Administrator.  The
Securities  Administrator  hereunder  shall  at all  times be a  corporation  or
association  organized  and doing  business  under the laws the United States of
America or any state thereof,  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 of at least  investment  grade. 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  10.06  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  Securities  Administrator  shall  cease to be  eligible in
accordance   with  the  provisions  of  this  Section   10.06,   the  Securities
Administrator  shall  resign  immediately  in the  manner  and with  the  effect
specified  in  Section   10.07   hereof.   The  entity   serving  as  Securities
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.

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<PAGE>

     Any  successor  securities  administrator  (i) may not be a  Mortgage  Loan
Seller,  the Master Servicer,  a Servicer,  the Depositor or an affiliate of the
Depositor  unless  such  successor  securities   administrator's  functions  are
operated   through  an   institutional   trust   department  of  the  Securities
Administrator,  (ii) must be authorized to exercise corporate trust powers under
the laws of its jurisdiction of  organization,  and (iii) must be rated at least
"A/F1"  by Fitch,  if Fitch is a Rating  Agency  and if rated by  Fitch,  or the
equivalent  rating by Standard & Poor's or Moody's.  If no successor  securities
administrator  shall have been  appointed  and shall have  accepted  appointment
within 60 days after the  Securities  Administrator  ceases to be the Securities
Administrator  pursuant to Section 10.07, then the Trustee may (but shall not be
obligated to) become the successor securities administrator. The Depositor shall
appoint a successor to the Securities  Administrator  in accordance with Section
10.07.  The Trustee shall notify the Rating Agencies of any change of Securities
Administrator.

     Section  10.07  Resignation  and Removal of Securities  Administrator.  The
Securities  Administrator  may at any time  resign by giving  written  notice of
resignation  to the  Depositor  and the Trustee and each Rating  Agency not less
than 60 days before the date  specified in such notice when,  subject to Section
10.08,  such  resignation  is to take  effect,  and  acceptance  by a  successor
securities   administrator   in  accordance   with  Section  10.08  meeting  the
qualifications   set  forth  in  Section  10.06.  If  no  successor   securities
administrator  meeting such  qualifications  shall have been so appointed by the
Depositor and have accepted  appointment within 30 days after the giving of such
notice of resignation,  the resigning Securities  Administrator may petition any
court of competent  jurisdiction  for the appointment of a successor  securities
administrator.

     If at any time the Securities  Administrator  shall cease to be eligible in
accordance  with the provisions of Section 10.06 hereof and shall fail to resign
after written request thereto by the Depositor, or if at any time the Securities
Administrator shall become incapable of acting, or shall be adjudged as bankrupt
or insolvent,  or a receiver of the Securities  Administrator or of its property
shall be  appointed,  or any public  officer shall take charge or control of the
Securities  Administrator  or of its  property  or  affairs  for the  purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Securities  Administrator  or the Trust
Fund is  located  and the  imposition  of  such  tax  would  be  avoided  by the
appointment  of a different  securities  administrator,  then the  Depositor may
remove  the  Securities   Administrator  and  appoint  a  successor   securities
administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities Administrator so removed, one copy of which
shall  be  delivered  to the  Master  Servicer  and one  copy  to the  successor
securities administrator.

     The  Holders  of  Certificates  entitled  to at least  51.00% of the Voting
Rights  may at any time  remove  the  Securities  Administrator  and  appoint  a
successor  securities  administrator  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
securities  administrator  to the Trustee,  one  complete set to the  Securities
Administrator  so removed and one  complete set to the  successor so  appointed.
Notice of any  removal  of the  Securities  Administrator  shall be given to the
Yield  Maintenance  Agreement  Provider and each Rating  Agency by the successor
securities administrator.

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<PAGE>

     Any resignation or removal of the Securities  Administrator and appointment
of a successor  securities  administrator  pursuant to any of the  provisions of
this Section  10.07 shall become  effective  upon  acceptance  by the  successor
securities administrator of appointment as provided in Section 10.08 hereof.

     If at any time, Citibank, as Securities  Administrator,  resigns under this
Section  10.07,  or is  removed as  Securities  Administrator  pursuant  to this
Section 10.07,  then at such time  CitiMortgage  shall also resign (and shall be
entitled to resign) as Master Servicer under this Agreement.

     Section 10.08 Successor Securities Administrator.  Any successor securities
administrator  (which may be the Trustee) appointed as provided in Section 10.07
hereof  shall  execute,  acknowledge  and  deliver to the  Depositor  and to its
predecessor  Securities  Administrator  and the Trustee an instrument  accepting
such  appointment  hereunder  and thereupon  the  resignation  or removal of the
predecessor  Securities  Administrator shall become effective and such successor
securities  administrator,  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 Securities
Administrator  herein. The Depositor,  the Trustee,  the Master Servicer and the
predecessor Securities  Administrator 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  securities  administrator all
such rights, powers, duties, and obligations.

     No successor securities  administrator shall accept appointment as provided
in this  Section  10.08  unless at the time of such  acceptance  such  successor
securities administrator shall be eligible under the provisions of Section 10.06
hereof and its appointment shall not adversely affect then current rating of the
Certificates, as confirmed in writing by each Rating Agency.

     Upon acceptance by a successor  securities  administrator of appointment as
provided  in  this  Section  10.08,  the  Depositor  shall  mail  notice  of the
succession  of  such  Securities  Administrator  hereunder  to  all  Holders  of
Certificates  and the Yield  Maintenance  Agreement  Provider.  If the Depositor
fails to mail such  notice  within 10 days  after  acceptance  by the  successor
securities administrator of appointment,  the successor securities administrator
shall cause such notice to be mailed at the expense of the Depositor.

     Section  10.09 Merger or  Consolidation  of Securities  Administrator.  Any
corporation  or other  entity  into which the  Securities  Administrator  may be
merged or converted or with which it may be  consolidated  or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Securities  Administrator  shall be a party,  or any corporation or other entity
succeeding  to  the  business  of the  Securities  Administrator,  shall  be the
successor  of  the  Securities  Administrator  hereunder,   provided  that  such
corporation  or other entity shall be eligible  under the  provisions of Section
10.06 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.

     Section  10.10  Assignment  or  Delegation  of  Duties  by  the  Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign

                                      -118-

<PAGE>

or transfer  any of its rights,  benefits or  privileges  hereunder to any other
Person,  or delegate to or  subcontract  with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the   Securities   Administrator;   provided,   however,   that  the  Securities
Administrator  shall  have the  right  with the  prior  written  consent  of the
Depositor  (which  shall not be  unreasonably  withheld  or  delayed),  and upon
delivery to the Trustee and the Yield  Maintenance  Agreement  Provider  and the
Depositor  of a letter  from each  Rating  Agency to the effect that such action
shall  not  result  in a  downgrade  of  the  ratings  assigned  to  any  of the
Certificates,  to  delegate or assign to or  subcontract  with or  authorize  or
appoint any qualified  Person to perform and carry out any duties,  covenants or
obligations  to be  performed  and carried out by the  Securities  Administrator
hereunder.  Notice of such permitted  assignment  shall be given promptly by the
Securities  Administrator to the Depositor and the Trustee.  If, pursuant to any
provision hereof, the duties of the Securities  Administrator are transferred to
a successor  securities  administrator,  the entire compensation  payable to the
Securities  Administrator  pursuant  hereto shall  thereafter be payable to such
successor securities  administrator but in no event shall the fee payable to the
successor  securities  administrator  exceed  that  payable  to the  predecessor
securities administrator.

                                   ARTICLE XI

                                REMIC PROVISIONS

     Section 11.01 REMIC Administration.

     (a) The  Securities  Administrator  shall make an election to treat certain
segregated  assets comprising the Trust Fund, as defined herein, as three REMICs
under the Code and, if necessary, under applicable state law. The assets of each
REMIC are set forth in this Agreement.  Such election shall be made on Form 1066
or other appropriate  federal tax or information return (including Form 8811) or
any appropriate  state return for the taxable year ending on the last day of the
calendar  year in which the  Certificates  are issued.  For the  purposes of the
REMIC elections in respect of the Trust Fund,  Certificates  and interests to be
designated as the "regular interests" and the sole class of "residual interests"
in each REMIC shall be set forth in Section 11.03. The Securities  Administrator
and the Trustee  shall not permit the  creation of any  "interests"  (within the
meaning  of  Section  860G of the Code) in any REMIC  elected  in respect of the
Trust  Fund other than the  "regular  interests"  and  "residual  interests"  so
designated.

     (b) The Closing Date is hereby designated as the "startup day" of the Trust
Fund within the meaning of Section 860G(a)(9) of the Code.

     (c)  The  Holder  of  the  largest  Percentage  Interest  of  the  Class  R
Certificates  shall act as tax matters person for each REMIC created  hereunder,
within  the  meaning  of  Treasure  Regulations  Section  1.860F  4(d),  and the
Securities Administrator is hereby designated as agent of such Certificateholder
for such purpose (or if the Securities  Administrator is not so permitted,  such
Holder shall be the tax matters person in accordance with the REMIC Provisions).
The Securities Administrator,  as tax matters person, shall (i) act on behalf of
each REMIC in relation to any tax matter or controversy involving the Trust Fund
and (ii) represent the Trust Fund in any  administrative or judicial  proceeding
relating to an examination or audit by any  governmental  taxing  authority with
respect thereto. The legal expenses, including without

                                      -119-

<PAGE>

limitation attorneys' or accountants' fees, and costs of any such proceeding and
any liability  resulting  therefrom  shall be expenses of the Trust Fund and the
Securities  Administrator shall be paid with amounts otherwise to be distributed
to the  Certificateholders,  as  provided in Section  4.02(a)  unless such legal
expenses  and costs are  incurred  by reason of the  Securities  Administrator's
willful misfeasance, bad faith or gross negligence.

     (d) The Securities  Administrator shall prepare or cause to be prepared all
of the Tax Returns that it  determines  are required  with respect to each REMIC
created hereunder and deliver such Tax Returns in a timely manner to the Trustee
and the  Trustee  shall sign and file such Tax Returns in a timely  manner.  The
expenses  of  preparing   such  returns   shall  be  borne  by  the   Securities
Administrator without any right of reimbursement  therefor.  The Master Servicer
shall promptly provide the Securities Administrator with such information as the
Securities  Administrator  may from  time to time  request  for the  purpose  of
enabling the Securities Administrator to prepare Tax Returns.

     (e) The Securities  Administrator  shall provide (i) to any Transferor of a
Class R Certificate  such information as is necessary for the application of any
tax relating to the transfer of a Class R Certificate to any Person who is not a
Permitted  Transferee,  (ii)  to the  Certificateholders,  such  information  or
reports as are required by the Code or the REMIC  Provisions  including  reports
relating to interest,  original  issue  discount and market  discount or premium
(using the Prepayment  Assumption) and (iii) to the Internal Revenue Service the
name,  title,  address and telephone  number of the person who will serve as the
representative of each REMIC.

     (f) The Master  Servicer and the Securities  Administrator  shall take such
actions and shall cause each REMIC created hereunder to take such actions as are
reasonably  within  the  Master  Servicer's  or the  Securities  Administrator's
control and the scope of its duties more  specifically set forth herein as shall
be  necessary or desirable to maintain the status of each REMIC as a REMIC under
the REMIC  Provisions  (and the Trustee shall assist the Master Servicer and the
Securities  Administrator,  to the  extent  reasonably  requested  by the Master
Servicer  and  the  Securities  Administrator  to do  so).  None  of the  Master
Servicer,  the  Securities  Administrator  or the  Trustee  shall (i) permit the
creation of any  interests  in any REMIC  other than the  regular  and  residual
interests  set forth in the  Preliminary  Statement,  (ii)  receive  any  amount
representing  a fee or other  compensation  for  services  (except as  otherwise
permitted by this  Agreement or the related  Mortgage  Loan  documents) or (iii)
otherwise  knowingly or intentionally  take any action,  cause the Trust Fund to
take any  action  or fail to take (or fail to  cause  to be  taken)  any  action
reasonably  within its  control and the scope of duties  more  specifically  set
forth herein,  that, under the REMIC  Provisions,  if taken or not taken, as the
case may be,  could  (i)  endanger  the  status  of any REMIC as a REMIC or (ii)
result in the  imposition  of a tax upon any REMIC or the Trust Fund  (including
but not limited to the tax on  "prohibited  transactions"  as defined in Section
860F(a)(2)  of the Code and the tax on  contributions  to a REMIC  set  forth in
Section  860G(d)  of the  Code,  or the  tax on  "net  income  from  foreclosure
property")  unless the Securities  Administrator  receives an Opinion of Counsel
(at the expense of the party seeking to take such action or, if such party fails
to pay such expense,  and the Securities  Administrator  determines  that taking
such   action   is  in  the   best   interest   of  the   Trust   Fund  and  the
Certificateholders,  at the  expense of the Trust  Fund,  but in no event at the
expense of the  Securities  Administrator)  to the effect that the  contemplated
action will not, with respect to the

                                      -120-

<PAGE>

Trust Fund or any REMIC created hereunder, endanger such status or result in the
imposition of such a tax an "Adverse REMIC Event").  The Master  Servicer or the
Securities Administrator,  as applicable,  may consult with counsel to make such
written advice, and the cost of same shall be borne by the party seeking to take
the action not  expressly  permitted by this  Agreement,  but in no event at the
expense of the Master Servicer or the Securities Administrator.  At all times as
may be required by the Code, the Master  Servicer shall to the extent within its
control and the scope of its duties more specifically set forth herein, maintain
substantially  all of the assets of each REMIC  created  hereunder as "qualified
mortgages"  as  defined  in  Section  860G(a)(3)  of  the  Code  and  "permitted
investments" as defined in Section 860G(a)(5) of the Code.

     (g) In the event that any tax is imposed on  "prohibited  transactions"  of
any REMIC  created  hereunder as defined in Section  860F(a)(2)  of the Code, on
"net income from  foreclosure  property" of any such REMIC as defined in Section
860G(c) of the Code,  on any  contributions  to any such REMIC after the Startup
Day  therefor  pursuant  to  Section  860G(d)  of the Code,  or any other tax is
imposed  by the Code or any  applicable  provisions  of state or local tax laws,
such  tax  shall  be  paid by (i)  the  Master  Servicer,  the  Trustee,  or the
Securities  Administrator,  as applicable,  if such tax arises out of or results
from  negligence  of  the  Master  Servicer,   the  Trustee  or  the  Securities
Administrator, as applicable, in the performance of any of its obligations under
this Agreement,  (ii) the Sponsor, if such tax arises out of or results from the
Sponsor's  obligation to repurchase a Mortgage Loan pursuant to Section 2.03(d),
or (iii) in all other  cases,  or if the  Master  Servicer,  the  Trustee or the
Securities  Administrator  fails to honor its  obligations  under the  preceding
clause  (i) or (ii),  any such tax will be paid  with  amounts  otherwise  to be
distributed to the Certificateholders, as provided in Section 4.02(a)..

     (h) The Securities  Administrator  shall,  for federal income tax purposes,
maintain  books and records  with respect to each REMIC  created  hereunder on a
calendar  year and on an accrual  basis or as  otherwise  may be required by the
REMIC Provisions.

     (i) Following the Startup Day, none of the Master Servicer,  The Securities
Administrator  or the Trustee  shall accept any  contributions  of assets to any
REMIC  created  hereunder  unless  (subject  to  Section  11.01(f))  the  Master
Servicer,  the Securities  Administrator  and the Trustee shall have received an
Opinion  of  Counsel  (at  the  expense  of  the  party  seeking  to  make  such
contribution) to the effect that the inclusion of such assets in such REMIC will
not  cause  any  REMIC  to fail to  qualify  as a REMIC  at any  time  that  any
Certificates  are  outstanding  or  subject  any such REMIC to any tax under the
REMIC Provisions or other applicable provisions of federal,  state and local law
or ordinances.

     (j)  None of the  Master  Servicer,  the  Securities  Administrator  or the
Trustee shall (subject to Section  11.01(f)) enter into any arrangement by which
any  REMIC  created  hereunder  will  receive  a fee or other  compensation  for
services  nor permit  either  REMIC to receive any income from assets other than
"qualified  mortgages"  as  defined  in  Section  860G(a)  (3)  of the  Code  or
"permitted investments" as defined in Section 860G(a)(5) of the Code.

     (k) Solely for the purposes of Section 1.860G-1(a)(4) (iii) of the Treasury
Regulations,  the "latest possible  maturity date" for each REMIC 1, REMIC 2 and
REMIC 3

                                      -121-

<PAGE>

Regular  Interest  shall be its latest  possible  maturity  date as set forth or
described in the Preliminary Statement.

     (l) Within 30 days after the Closing  Date,  the  Securities  Administrator
shall prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real  Estate  Mortgage  Investment  Conduits  (REMIC)  and Issuers of
Collateralized Debt Obligations" for each REMIC created hereunder.

     (m)  None  of the  Trustee,  the  Securities  Administrator  or the  Master
Servicer  shall sell,  dispose of or  substitute  for any of the Mortgage  Loans
(except in connection with (i) the default, imminent default or foreclosure of a
Mortgage  Loan,  including  but not  limited  to, the  acquisition  or sale of a
Mortgaged Property acquired by deed in lieu of foreclosure,  (ii) the bankruptcy
of any REMIC created  hereunder,  (iii) the termination of the applicable  REMIC
pursuant to Article XII of this  Agreement or (iv) a purchase of Mortgage  Loans
pursuant to Article II or III of this  Agreement) nor acquire any assets for any
such REMIC, nor sell or dispose of any investments in the applicable  Collection
Account or the Distribution Account for gain nor accept any contributions to any
such REMIC after the Closing  Date unless it has  received an Opinion of Counsel
that such sale,  disposition,  substitution  or acquisition  will not (a) affect
adversely the status of such REMIC as a REMIC or (b) unless the Master  Servicer
has  determined in its sole  discretion to indemnify the Trust Fund against such
tax,  cause such REMIC to be subject to a tax on  "prohibited  transactions"  or
"contributions" pursuant to the REMIC Provisions.

     (n) The Securities Administrator shall apply for an employer identification
number from the Internal  Revenue Service on a Form SS-4 or any other acceptable
method for all tax entities.

     Section 11.02 [Reserved]

     Section 11.03 Designation of REMIC(s).

     The  Securities  Administrator  shall make an  election to treat the entire
segregated pool of assets described in the definition of REMIC 1, and subject to
this  Agreement  (including  the Mortgage  Loans) as a REMIC ("REMIC 1 "), shall
make an election  to treat the pool of assets  comprised  of the  uncertificated
REMIC 1  Regular  Interests  as a REMIC  ("REMIC  2 ") for  federal  income  tax
purposes and shall make an election to treat the pool of assets comprised of the
uncertificated  REMIC 2 Regular  Interests  as a REMIC  ("REMIC 3 ") for federal
income tax purposes.

     The REMIC 1 Regular  Interests  will be "regular  interests" in REMIC 1 and
the Class R-I  Certificates  will be the sole class of "residual  interests"  in
REMIC 1 for  purposes  of the REMIC  Provisions  (as defined  herein)  under the
federal income tax law.

     The REMIC 2 Regular  Interests will be "regular  interests" in REMIC 2, and
the Class  R-II  Certificates  will be the sole  class of  "residual  interests"
therein for purposes of the REMIC  Provisions (as defined  herein) under federal
income tax law.

                                      -122-

<PAGE>

     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 P, Class I-IO, Class I-PO, Class II-A-1, Class II-IO, Class II-PO,
Class B-1, Class B-2, Class B-3 Class B-4, Class B-5 and Class B-5 Certificates,
will be "regular interests" in REMIC 3, and the Class R-III Certificates will be
the sole  class of  "residual  interests"  therein  for  purposes  of the  REMIC
Provisions (as defined herein) under federal income tax law.

     Section 11.04  Distributions on Uncertificated  REMIC 1 Regular  Interests,
REMIC  2  Regular  Interests,  and  REMIC  3  Regular  Interests.  (a)  On  each
Distribution  Date,  the  Trustee,  on  behalf  of REMIC 1,  shall be  deemed to
distribute to REMIC 2 in respect of the REMIC 1 Regular Interests, the following
amounts in the following  order of priority to the extent of the Available Funds
reduced by distributions made to the Class R-I Certificates  pursuant to Section
4.02(a):

          (i) Uncertificated  Interest on the REMIC 1 Regular Interests for such
     Distribution  Date,  plus any  Uncertificated  Interest  thereon  remaining
     unpaid from any previous Distribution Date; and

          (ii)  Distributions  of  principal  shall be  deemed to be made to the
     REMIC 1 Regular Interests,  in each case from the related Subgroup,  first,
     to each REMIC 1 Regular  Interest ending with the designation  "A," so that
     the  Uncertificated  Balance of each such REMIC 1 Regular Interest is equal
     to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the
     Mortgage Loans in the related Subgroup (other than the Discount Fraction of
     the Stated Principal  Balance of any such Mortgage Loan) over (y) the Class
     Certificate  Balance of the Senior  Certificates  (other  than the Class PO
     Certificates)  in such Subgroup (except that if any such excess is a larger
     number  than on the  preceding  Distribution  Date,  the  least  amount  of
     principal shall be distributed to such REMIC 1 Regular  Interests such that
     the REMIC 1  Subordinated  Balance Ratio is maintained as close as possible
     to the related Subordinate Percentages for each Subgroup);  and second, any
     remaining  principal  in each  Subgroup  to the  related  REMIC  1  Regular
     Interest  ending with the  designation  ZZZ (provided that a portion of the
     remaining   principal   equal  to  the  Class  PO   Certificate   Principal
     Distribution  Amount  attributable  to the Discount  Mortgage Loans will be
     distributed to REMIC 1 Regular Interest PO).

     (b)  The  amount  described  in  Section   11.04(a)(ii)   shall  be  deemed
distributed  by REMIC 1 to REMIC 2 in respect  of the REMIC 1 Regular  Interests
held  by  the  Trustee,  on  behalf  of  REMIC  2  (other  than  the  Class  R-1
Certificates), until the Uncertificated Balance of each such interest is reduced
to zero.

     (c) On each Distribution Date, the Trustee,  on behalf of REMIC 2, shall be
deemed to distribute to REMIC 3 in respect of the REMIC 2 Regular Interests, the
following  amounts  in the  following  order of  priority  to the  extent of the
amounts  deemed  distributed to REMIC 2 pursuant to Section  11.04(a)  hereof on
such  Distribution  Date  reduced  by  distributions  made  to  the  Class  R-II
Certificates pursuant to Section 4.02(a):

                                      -123-

<PAGE>

          (i) Uncertificated  Interest on the REMIC 2 Regular Interests for such
     Distribution  Date,  plus any  Uncertificated  Interest  thereon  remaining
     unpaid from any previous Distribution Date; and

          (ii) In accordance with the priority set forth in Section 11.04(d), an
     amount   equal  to  the  sum  of  the  amounts  in  respect  of   principal
     distributable  on each Class of Certificates  (other than the Class R-I and
     Class R-II  Certificates)  under  Section  4.02(a),  as  allocated  thereto
     pursuant to Section 4.02(a)-(j).

     (d)  The  amount  described  in  Section   11.04(c)(ii)   shall  be  deemed
distributed  by REMIC 2 to REMIC 3 in respect  of the REMIC 2 Regular  Interests
held by the Trustee,  on behalf of REMIC 3, in  accordance  with the  respective
priority  assigned to each Related Class of  Certificates  or Related Classes of
Certificates  (other  than the  Class R-I and Class  R-II  Certificates),  under
Section 4.02(a)-(j),  until the Uncertificated  Balance of each such interest is
reduced to zero.

     (e) The  Uncertificated  Interest amounts described in Section  11.04(a)(i)
shall be deemed  distributed by REMIC 1 ratably to each REMIC 2 Regular Interest
in  accordance  with its  entitlement  to interest  and the  applicable  REMIC 1
Remittance Rate.

     (f) The  Uncertificated  Interest amounts described in Section  11.04(c)(i)
shall  be  deemed  distributed  by  REMIC 2 to  REMIC 3 in  accordance  with the
priority  assigned to Related  Classes of  Certificates  for the REMIC 2 Regular
Interests under Section 4.02(a).

     (g) In determining from time to time the amounts distributable on the REMIC
1 Regular  Interests,  Realized Losses from each Subgroup shall be applied after
all  distributions  have  been made on each  Distribution  Date,  first,  to the
related REMIC 1 Regular  Interest ending with the  designation  "A," so that the
Uncertificated  Balance of each such REMIC 1 Regular  Interest is equal to 0.01%
of the excess of (x) the aggregate  Scheduled  Principal Balance of the Mortgage
Loans in the related  Subgroup  (other than the Discount  Fraction of the Stated
Principal  Balance of any such  Mortgage  Loan)  over (y) the Class  Certificate
Balance of the Senior Certificates in the related Subgroup (other than the Class
PO Certificates)  (except that if any such excess is a larger number than in the
preceding  distribution  period,  the least  amount of Realized  Losses shall be
applied to such  REMIC 1 Regular  Interests  such that the REMIC 1  Subordinated
Balance  Ratio is  maintained  as close as possible  to the related  Subordinate
Percentages for each Subgroup);  and second,  any remaining Realized Losses from
each Subgroup shall be allocated to the related REMIC 1 Regular Interests ending
with the  designation  ZZZ (except that if a Realized  Loss is  recognized  with
respect to a Discount  Mortgage Loan,  the  applicable  portion of such Realized
Loss will be allocated to REMIC 1 Regular Interest PO). In determining from time
to time the amounts  distributable  on the REMIC 2 Regular  Interests,  Realized
Losses  allocated to the REMIC 3 Regular  Interests shall be deemed allocated to
the REMIC 2 Regular  Interests in accordance with the priority  assigned to each
Related  Class of  Certificates  (other  than in the case of the REMIC 2 Regular
Interests, the Class R-II Certificates) respectively under Section 4.04.

     (h) On each Distribution Date, the Trustee,  on behalf of REMIC 3, shall be
deemed to distribute the amounts deemed  received by 3 REMIC 3 in respect of the
REMIC 2

                                      -124-

<PAGE>

Regular Interests held by the Trustee, on behalf of REMIC 3, pursuant to Section
11.04(c)  on such  Distribution  Date,  in the  priority  set forth in  Sections
4.02(a), - (j) to the Holders of each Class of REMIC 3 Certificates, the amounts
distributable thereon on such Distribution Date.

     (i) Notwithstanding the deemed  distributions on the Uncertificated REMIC 1
Regular Interests and the Uncertificated  REMIC 2 Regular Interests described in
this Section 11.04, distributions of funds from the Certificate Account shall be
made only in accordance with Section 4.02.

     Section 11.05. Compliance with Withholding Requirements.

     Notwithstanding  any other  provision  of this  Agreement,  the  Securities
Administrator, shall comply with all federal withholding requirements respecting
payments to  Certificateholders,  including  interest or original issue discount
payments  or  advances  thereof  that the  Securities  Administrator  reasonably
believes are applicable under the Code. The consent of Certificateholders  shall
not be required for such withholding.  In the event the Securities Administrator
does withhold any amount from interest or original  issue  discount  payments or
advances  thereof  to any  Certificateholder  pursuant  to  federal  withholding
requirements, the Securities Administrator shall indicate the amount withheld to
such Certificateholder pursuant to the terms of such requirements.

                                   ARTICLE XII

                                   TERMINATION

     Section  12.01  Termination  upon  Liquidation  or Purchase of the Mortgage
Loans.  Subject to Section 12.03,  the obligations and  responsibilities  of the
Depositor,  the Master Servicer,  the Securities  Administrator  and the Trustee
created  hereby with respect to the Trust Fund shall  terminate upon the earlier
of (a)  the  exercise  of an  Option  to  Purchase,  on or  after  the  Optional
Termination Date, in the aggregate of all Mortgage Loans (and REO Properties) at
the price  (the  "Termination  Price")  equal to the sum of (i)  100.00%  of the
unpaid  principal  balance of each  Mortgage  Loan (other than in respect of REO
Property) plus accrued and unpaid  interest  thereon at the applicable  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 that Trust Fund and
(y) the  unpaid  principal  balance  of each  Mortgage  Loan  related to any REO
Property,  in  each  case  plus  accrued  and  unpaid  interest  thereon  at the
applicable  Mortgage  Rate,  (iii)  all  unreimbursed  P&I  Advances,  Servicing
Advances and  indemnification  payments  payable to the applicable  Servicer and
(iv) any  unreimbursed  indemnification  payments  payable to the  Trustee,  the
Securities  Administrator,  the  Master  Servicer  or the  Depositor  under this
Agreement  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
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.

                                      -125-

<PAGE>

     Section 12.02 Final Distribution on the Certificates.  If on any Remittance
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 any
Collection   Account,   the  Master   Servicer   shall  direct  the   Securities
Administrator   promptly  to  send  a  Notice  of  Final  Distribution  to  each
Certificateholder  and the Yield Maintenance  Agreement Provider.  If the Master
Servicer (upon instruction from the Depositor or voluntarily) elects to exercise
their option to purchase the  Mortgage  Loans  pursuant to clause (a) of Section
12.01, at least 20 days prior to the date the Notice of Final Distribution is to
be mailed to the affected  Certificateholders,  the Master Servicer shall notify
the  Depositor,  the Yield  Maintenance  Agreement  Provider and the  Securities
Administrator  of (a) the date on which the Master Servicer  intends to exercise
such purchase option and (b) the Termination Price.

     A Notice of Final  Distribution,  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  Securities
Administrator by letter to  Certificateholders  mailed not earlier than the 10th
day and not later than the 15th day of the month of such final distribution. Any
such Notice of Final  Distribution  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  Securities  Administrator  will  give  such  Notice  of  Final
Distribution to each Rating Agency at the time such Notice of Final Distribution
is given to Certificateholders.

     Upon the final  deposit  with  respect to the Trust Fund and the receipt by
the Custodian of a Request for Release  therefor,  the Custodian  shall promptly
release to each Servicer the applicable  Custodial  Files for the Mortgage Loans
serviced by such Servicer.

     Upon  presentation  and  surrender  of  the  Certificates,  the  Securities
Administrator  shall cause to be distributed to the  Certificateholders  of each
Class  (after  reimbursement  of all  amounts  due to the  Servicers  under  the
Servicing Agreements,  the Master Servicer,  the Securities  Administrator,  the
Depositor and the Trustee),  in each case on the final  Distribution Date and in
the  order  set  forth in  Section  4.02,  in  proportion  to  their  respective
Percentage  Interests,  with respect to Certificateholders of the same Class, up
to an  amount  equal  to (i) as to  each  Class  of  Regular  Certificates,  the
Certificate Balance thereof plus for each such Class accrued interest thereon in
the case of an interest-bearing  Certificate and all other amounts to which such
Classes  are  entitled  pursuant  to  Section  4.02 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.

     In the event  that any  affected  Certificateholders  shall  not  surrender
Certificates for cancellation  within six months after the date specified in the
Notice of Final Distribution,  the Securities  Administrator 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 such  second  notice all the  applicable
Certificates shall not have been

                                      -126-

<PAGE>

surrendered for cancellation,  the Securities Administrator 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 Class R Certificateholders
shall be  entitled  to all  unclaimed  funds and other  assets of the Trust Fund
which remain subject hereto.

     Section 12.03 Additional Termination  Requirements.  In the event an Option
to Purchase  is  exercised  with  respect to the  Mortgage  Loans as provided in
Section  12.01,  the Trust  Fund  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 party upon whose  instruction  causes
the exercise of an Option to Purchase,  to the effect that the failure to comply
with  the  requirements  of  this  Section  12.03  will  not (i)  result  in the
imposition of taxes on "prohibited  transactions"  on any REMIC formed hereby as
defined in Section  860F of the Code or (ii)  cause any REMIC  formed  hereby to
fail to qualify as a REMIC at any time that any Certificates are outstanding:

     (a) The Securities Administrator on behalf of the Trustee shall sell all of
the assets of the Trust  Fund to the party  exercising  the Option to  Purchase,
and, within 90 days of such sale, shall distribute to the Certificateholders the
proceeds of such sale in complete liquidation of each REMIC formed hereby; and

     (b) The  Securities  Administrator  shall  attach a statement  to the final
federal  income tax return for each REMIC formed hereby stating that pursuant to
Treasury  Regulations Section 1.860F-1,  the first day of the 90-day liquidation
period for each such REMIC was the date on which the Securities Administrator on
behalf of the Trustee sold the assets of the Trust Fund to the Master Servicer.

                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

     Section  13.01  Amendment.  (a) This  Agreement may be amended from time to
time by the Depositor, the Master Servicer, the Securities Administrator 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  Master
Servicer,  the Servicers,  the Securities  Administrator or the Trustee, (iv) to
add any other provisions with respect to matters or questions arising hereunder,
(v) to modify,  alter,  amend,  add to or rescind any of the terms or provisions
contained  in this  Agreement,  (vi) to  comply  with  the  requirements  of the
Internal  Revenue  Code or (vii)  to  conform  this  Agreement  to the  Offering
Documents  provided  to  investors  in  connection  with  the  offering  of  the
Certificates;  provided,  that any action  pursuant  to clause (iv) or (v) above
shall not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall
not  be  an  expense  of  the  Trustee,  the  Master  Servicer,  the  Securities
Administrator  or the Trust Fund),  adversely affect in any material respect the
interests  of any  Certificateholder;  provided,  further,  that any such action
pursuant to clause (iv) or (v) above shall not be deemed to adversely  affect in
any material respect the interests of the Certificateholders if

                                      -127-

<PAGE>

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,  the Master  Servicer and the Securities  Administrator
also may at any time and from time to time amend this Agreement, but 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 each REMIC  created  hereunder  under the Code,  (ii) avoid or
minimize the risk of the  imposition of any tax on any REMIC  created  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 and the Master Servicer have 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,  the Securities  Administrator  and the Trustee,  but with the
consent  of  the  Holders  of  Certificates   evidencing   Percentage  Interests
aggregating  not less  than  66(2)/3%  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 clause (i),  without the consent of the Holders of  Certificates
of such Class evidencing, as to such Class, Percentage Interests aggregating not
less than 66(2)/3% 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.

     Notwithstanding  any contrary provision of this Agreement,  the Trustee and
the Master Servicer shall not consent to any amendment to this Agreement  unless
(i) it shall have first received an Opinion of Counsel,  which opinion shall not
be an expense of the  Trustee,  the Master  Servicer or the Trust  Fund,  to the
effect that such amendment will not cause the imposition of any tax on any REMIC
created hereunder or the  Certificateholders  or cause any such REMIC to fail to
qualify as a REMIC or the grantor trust to fail to qualify as a grantor trust at
any time that any  Certificates  are outstanding and (ii) the party seeking such
amendment shall have provided written notice to the Rating Agencies (with a copy
of such  notice to the  Trustee  and the  Master  Servicer)  of such  amendment,
stating the provisions of the Agreement to be amended.

     Notwithstanding  the  foregoing  provisions  of this  Section  13.01,  with
respect to any amendment that significantly modifies the permitted activities of
the Trustee, any Certificate beneficially owned by the Depositor shall be deemed
not to be outstanding (and shall not be

                                       -128-

<PAGE>

considered when determining the percentage of  Certificateholders  consenting or
when  calculating  the total  number of  Certificates  entitled to consent)  for
purposes of determining if the requisite  consents of  Certificateholders  under
this Section 13.01 have been obtained.

     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 13.01 to approve the particular form of any proposed  amendment,  but it
shall be sufficient if such consent  shall  approve the substance  thereof.  The
manner of obtaining  such consents and of evidencing  the  authorization  of the
execution  thereof by  Certificateholders  shall be  subject to such  reasonable
regulations as the Trustee may prescribe.

     Nothing in this Agreement shall require the Trustee, the Master Servicer or
the Securities  Administrator  to enter into an amendment  without  receiving an
Opinion of Counsel  (which  opinion shall not be an expense of the Trustee,  the
Master Servicer, the Securities  Administrator or the Trust Fund),  satisfactory
to the  Trustee,  the  Master  Servicer  and the  Securities  Administrator,  as
applicable,  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 13.01.

                  (b)      No party hereto   shall agree to amend any  Servicing
Agreement  unless the party requesting such amendment,  at such party's expense,
has delivered to the   Trustee,   the  Securities  Administrator  and the Master
Servicer an Opinion of  Counsel that such  amendment (i) is permitted  under the
terms   of     the  applicable Servicing  Agreement and (ii) will not materially
adversely affect the interest of the Certificateholders in the Mortgage Loans.

     Section 13.02  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  Mortgaged  Properties  are  situated,  and in any other  appropriate
public  recording  office or elsewhere,  such  recordation to be effected by the
Securities Administrator at the direction and expense of the Depositor, but only
upon  receipt of an Opinion  of  Counsel  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  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  13.03   Governing  Law.  THIS  AGREEMENT  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

                                       -129-

<PAGE>

REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

     Section 13.04 Intention of Parties.  (a) It is intended that the conveyance
of the Depositor's right, title and interest in and to property constituting the
Trust Fund pursuant to this Agreement shall  constitute,  and shall be construed
as, a sale of such  property and not a grant of a security  interest to secure a
loan.  However,  if such  conveyance is deemed to be in respect of a loan, it is
intended  that:  (1)  the  rights  and  obligations  of  the  parties  shall  be
established  pursuant to the terms of this Agreement;  (2) the Depositor  hereby
grants to the Trustee for the benefit of the Holders of the Certificates a first
priority  security  interest to secure  repayment of an  obligation in an amount
equal to the aggregate Class Certificate  Balances of the Certificates in all of
the Depositor's right, title and interest in, to and under, whether now owned or
hereafter  acquired,  the Trust Fund Yield  Maintenance  Agreement and the Yield
Maintenance   Reserve   Account  and  all  proceeds  of  any  and  all  property
constituting the Trust Fund to secure payment of the Certificates;  and (3) this
Agreement shall  constitute a security  agreement under  applicable law. If such
conveyance  is deemed to be in respect  of a loan and the trust  created by this
Agreement  terminates  prior to the  satisfaction  of the  claims of any  Person
holding any Certificate,  the security interest created hereby shall continue in
full force and effect and the Trustee shall be deemed to be the collateral agent
for the benefit of such Person,  and all proceeds  shall be  distributed  by the
Securities Administrator as herein provided.

     (b) The Depositor shall, to the extent consistent with this Agreement, take
such  reasonable  actions as may be necessary to ensure that, if this  Agreement
were deemed to create a security  interest in the  Mortgage  Loans and the other
property  described  above,  such  security  interest  would be  deemed  to be a
perfected  security interest of first priority under applicable law and shall be
maintained as such throughout the term of this Agreement.  The Depositor  shall,
at its own  expense,  make all initial  filings on or about the Closing Date and
shall forward a copy of such filing or filings to the Trustee.  Without limiting
the  generality of the  foregoing,  the Depositor  shall prepare and forward for
filing,  or shall  cause to be  forwarded  for  filing,  at the  expense  of the
Depositor,  all filings  necessary to maintain the effectiveness of any original
filings  necessary  under the  relevant  UCC to perfect the  Trustee's  security
interest in or lien on the Mortgage  Loans,  including  without  limitation  (x)
continuation  statements,  and (y) such other statements as may be occasioned by
(1) any change of name of the Sponsor,  the  Depositor  or the Trustee,  (2) any
change of location of the  jurisdiction  of  organization  of the Sponsor or the
Depositor,  (3) any transfer of any interest of the Sponsor or the  Depositor in
any Mortgage  Loan or (4) any change under the relevant UCC or other  applicable
laws.  Neither the Sponsor nor the Depositor shall organize under the law of any
jurisdiction  other  than the State  under  which  each is  organized  as of the
Closing Date (whether  changing its  jurisdiction  of organization or organizing
under an additional jurisdiction) without giving 30 days prior written notice of
such action to its immediate and intermediate transferee, including the Trustee.
Before effecting such change,  the Sponsor or the Depositor  proposing to change
its  jurisdiction  of  organization  shall  prepare and file in the  appropriate
filing office any financing statements or other statements necessary to continue
the perfection of the interests of its immediate and  intermediate  transferees,
including  the  Trustee,   in  the  Mortgage   Loans.  In  connection  with  the
transactions  contemplated  by  this  Agreement,  each  of the  Sponsor  and the
Depositor  authorizes  its immediate or  intermediate  transferee to file in any
filing office any initial financing

                                      -130-

<PAGE>

statements, any amendments to financing statements, any continuation statements,
or any other  statements or filings described in this paragraph (b).

     Section 13.05 Notices. (a) The Securities  Administrator shall use its best
efforts to promptly provide notice to each Rating Agency with respect to each of
the following of which a Responsible Officer of the Securities Administrator has
actual knowledge:

                    1. Any amendment to this Agreement;

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

                    3. The resignation or termination of a Servicer,  the Master
               Servicer,  the  Securities  Administrator  or the Trustee and the
               appointment of any successor;

                    4. The repurchase or substitution of Mortgage Loans pursuant
               to Section 2.03 or pursuant to a Transfer Agreement;

                    5. The final payment to Certificateholders; and

               An Early  Termination Event with respect to the Yield Maintenance
          Agreement.

     (b) In addition, the Securities Administrator shall promptly make available
on its internet website to each Rating Agency copies of the following:

                    1. Each report to  Certificateholders  described  in Section
               4.03; and

                    2. Any notice of a purchase of a Mortgage  Loan  pursuant to
               Section 2.03.

     (c) All  directions,  demands,  consents and notices  hereunder shall be in
writing and shall be deemed to have been duly given when delivered to:

          (i)  in  the  case  of  the   Depositor,   HSI  Asset   Securitization
     Corporation,  452 Fifth  Avenue,  10th  Floor,  New York,  New York  10018,
     Attention:  Head MBS  Principal  Finance,  or such other  address as may be
     hereafter furnished to the other parties by the Depositor in writing;

          (ii) in the case of the  Master  Servicer,  CitiMortgage,  Inc.,  4000
     Regent Boulevard,  Irving, TX 75063, Attention:  Master Servicing Division,
     Compliance Manager - HALO 2006-2, or such other address as may be hereafter
     furnished to the to the other parties by CitiMortgage, Inc. in writing;

          (iii)  in the  case of the  Securities  Administrator,  388  Greenwich
     Street, 14th Floor, New York, New York 10013, Attention: Structured Finance
     Agency and Trust,

                                      -131-

<PAGE>

     HALO 2006-2,  or such other  address as may be  hereafter  furnished to the
     other parties by Citibank, N.A. in writing;

          (iv)  in  the  case  of  the  Trustee,   the  Corporate  Trust  Office
     (Attention:  Corporate  Trust Services - HB06L2),  or such other address as
     may be hereafter  furnished  to the to the other  parties by the Trustee in
     writing; and

          (v) in the case of each of the Rating Agencies,  the address specified
     therefor in the definition corresponding to the name of such Rating Agency.

     Section  13.06  Severability  of  Provisions.  If any  one or  more  of the
covenants,  agreements,  provisions or terms of this Agreement  shall be for any
reason whatsoever held invalid, then such covenants,  agreements,  provisions or
terms  shall be  deemed  severable  from the  remaining  covenants,  agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability  of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.

     Section 13.07 [Reserved.]

     Section  13.08  Limitation  on Rights of  Certificateholders.  The death or
incapacity  of  any  Certificateholder  shall  not  operate  to  terminate  this
Agreement or the trust  created  hereby,  nor entitle  such  Certificateholder's
legal  representative  or heirs to claim an  accounting or to take any action or
commence any  proceeding  in any court for a petition or winding up of the trust
created hereby,  or otherwise affect the rights,  obligations and liabilities of
the parties hereto or any of them.

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

     No  Certificateholder  shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit,  action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder  previously  shall have given to the Trustee a written notice of an Event
of Default and of the continuance  thereof,  as herein provided,  and unless the
Holders of  Certificates  evidencing  not less than 25.00% 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

                                      -132-

<PAGE>

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   13.08,   each  and  every
Certificateholder  and the  Trustee  shall be  entitled to such relief as can be
given either at law or in equity.

     Section  13.09  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
Securities  Administrator  pursuant to this  Agreement,  are and shall be deemed
fully paid.

     Section 13.10 Rule of  Construction.  Article and section  headings are for
the convenience of the reader and shall not be considered in  interpreting  this
Agreement or the intent of the parties hereto.

     Section  13.11  Waiver  of  Jury  Trial.   EACH  PARTY  HEREBY   KNOWINGLY,
VOLUNTARILY  AND  INTENTIONALLY,  WAIVES (TO THE EXTENT  PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY  DISPUTE  ARISING  UNDER OR
RELATING  TO THIS  AGREEMENT  AND AGREES  THAT ANY SUCH  DISPUTE  SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.

                            [SIGNATURE PAGE FOLLOWS]

                                      -133-

<PAGE>

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

                                          HSI ASSET SECURITIZATION
                                          CORPORATION, as Depositor

                                          By:___________________________________
                                             Name: Andrea Lenox
                                             Title: Vice President

                                          DEUTSCHE BANK NATIONAL TRUST
                                            COMPANY, solely as Trustee and
                                            not in its individual capacity

                                          By:___________________________________
                                             Name:
                                             Title:

                                          By:___________________________________
                                             Name:
                                             Title:

                                          CITIMORTGAGE, INC., as Master Servicer

                                          By:___________________________________
                                             Name:
                                             Title:

<PAGE>

                                          CITIBANK,    N.A.,     as   Securities
                                          Administrator

                                          By:___________________________________
                                             Name:
                                             Title:

                                          WELLS FARGO BANK, N.A., as Custodian

                                          By:___________________________________
                                             Name:
                                             Title:

<PAGE>

                                          ACKNOWLEDGED  BY HSBC  BANK  USA,
                                          NATIONAL ASSOCIATION,  as Sponsor,
                                          solely  for the  purposes of Section
                                          2.03(k).

                                          By:___________________________________
                                             Name:  Jon E. Voigtman
                                             Title:  Managing Director #14311

<PAGE>

                                   SCHEDULE I

                             Mortgage Loan Schedule

[To be retained in a separate closing binder entitled "[___] 2006-[__]  Mortgage
Loan Schedules" at the Chicago,  Illinois  offices of Mayer,  Brown,  Rowe & Maw
LLP]

                                  SCHEDULE I-1

<PAGE>

                                    EXHIBIT A

          FORM OF CLASS [ ]-A-[ ] AND CLASS B-1, CLASS B-2, CLASS B-3

                   CLASS [ ]-IO AND CLASS [ ]-PO CERTIFICATES

[THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES
[AND THE CLASS B-1] [AND CLASS B-2 CERTIFICATES]  DESCRIBED IN THE AGREEMENT (AS
DEFINED HEREIN). Include for the Class B-Certificates, as necessary]]

UNLESS THIS  CERTIFICATE  IS PRESENTED BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO 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  REPRESENTS AN
INTEREST IN 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"),  AND CERTAIN  OTHER
ASSETS.

                                  EXHIBIT A-1

<PAGE>

            Certificate No:                               1

             Cut-off Date:                         December 1, 2006

       First Distribution Date:                    January 25, 2007

 Initial Class Certificate Balance of                $[          ]
           this Certificate
           ("Denomination"):                   [Exclude for Class [ ] -
                                            IO Certificates, Class [ ]-A-
                                              [ ] Certificates

  [Initial Class Certificate Balances of       [Exclude for Class [ ] -
   all Certificates of this Class:]         IO Certificates, Class [ ]-A-
                                                  [ ] Certificates

     [* Notional Amount]                      [Include for Class [ ]-IO,
                                            Class [ ]-A-[ ] Certificates]

      [Interest Rate:]                 [Exclude for Class [ ] - PO Certificates]

         CUSIP:

                                  EXHIBIT A-1

<PAGE>

                      HSI ASSET SECURITIZATION CORPORATION

                   HSI Asset Loan Obligation Trust, 2006-[__]
             Mortgage Pass-Through Certificates, Series 2006- [___]
          Class[[ ]-A-[ ]][B-1] [B-2] [Class B-3] [[ ] - IO]][[ ] - PO]

             evidencing a percentage  interest in the distributions allocable to
             the Certificates of the above-referenced Class.

       [Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Class Certificate Balance at any time may be less
than the Class Certificate Balance as set forth herein.  Remove for the Class IO
Certificates  and the Inverse Floater  Certificates]  This  Certificate does not
evidence an  obligation  of, or an  interest  in, and is not  guaranteed  by the
Depositor,  the Trustee or any other party to the Agreement 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 CEDE & CO. is the registered  owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate [Notional Balance] by the aggregate of the denominations of all
Certificates  [Class  Notional  Balance] of the Class to which this  Certificate
belongs)  in certain  monthly  distributions  of  [principal]  [and]  [interest]
pursuant  to a Pooling and  Servicing  Agreement  dated as of the  Cut-off  Date
specified above (the "Agreement") among HSI Asset Securitization Corporation, as
depositor (the "Depositor"),  CitiMortgage, Inc. as master servicer (the "Master
Servicer"),   Citibank  N.A.,  as  securities   administrator  (the  "Securities
Administrator")  Wells Fargo Bank,  N.A., as custodian  (the  "Custodian"),  and
Deutsche Bank National Trust Company, as trustee (the "Trustee").  To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement.  This Certificate is issued under and is subject to the terms,
provisions  and conditions of the  Agreement,  to which  Agreement the Holder of
this  Certificate by virtue of the  acceptance  hereof assents and by which such
Holder is bound.

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

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

                                 *     *     *

                                  EXHIBIT A-4

<PAGE>

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

Dated:

                              CITIBANK, N.A.,
                              not in its individual capacity, but solely as
                              Securities Administrator
                              By:_______________________________________________

Authenticated:

By:____________________________________________
   Authorized Signatory of
   CITIBANK, N.A.,
   not in its individual capacity,
   but solely as Securities Administrator

                                  EXHIBIT A-5

<PAGE>

                      HSI ASSET SECURITIZATION CORPORATION

                    HSI Asset Loan Obligation Trust 2006-[__]
                       Mortgage Pass-Through Certificates

       This  Certificate  is one  of a duly  authorized  issue  of  Certificates
designated as HSI Asset Loan Obligation  Trust 2006-[__]  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 neither the Trustee nor the Securities  Administrator
is  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 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.  [Include for Class [ ] - IO Certificates and Inverse
Floater Certificates: The Notional Amount of the Class [ ] - IO] [Class I-A-[ ]]
Certificates as of any date of  determination  is equal to [the aggregate Stated
Principal Balance of the Mortgage Loans corresponding to the applicable Subgroup
represented by such Class [ ] - IO Certificates] [the Class Certificate  Balance
of the Class I-A-[ ] Certificates]. The Class [[ ] - IO] [I-A- [ ]] Certificates
have no Class Certificate Balance.]

       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  Securities  Administrator  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 offices  designated by the
Securities  Administrator for such purposes 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 parties to the Agreement with the

                                  EXHIBIT A-6

<PAGE>

       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.

       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 Securities  Administrator upon surrender of this Certificate for
registration   of  transfer  at  the  offices   designated  by  the   Securities
Administrator for such purposes, accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator 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  Securities  Administrator  may  require  payment  of a  sum
sufficient to cover any tax or other  governmental  charge payable in connection
therewith.

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

       The Master Servicer,  upon the instruction of the Depositor or at its own
discretion,   shall  purchase  the  Mortgage  Loans  and  therefore   cause  the
termination  of the  Trust  on  any  Optional  Termination  Date,  which  is any
Distribution  Date in  which  the  aggregate  Stated  Principal  Balance  of the
Mortgage  Loans as of the last day of the  related  Due  Period  is less than or
equal to 10% of the aggregate Stated Principal  Balance of the Mortgage Loans as
of the Cut-off Date.

       The  obligations   and  responsibilities  created  by the Agreement  will
terminate as provided in Section 12.01 of 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.

                                  EXHIBIT A-7

<PAGE>

                                   ASSIGNMENT

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

(Please  print or  typewrite name  and  address  including  postal  zip  code of
assignee)

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  Securities  Administrator  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.

                                  EXHIBIT A-8

<PAGE>

                                  EXHIBIT B

                   FORM OF CLASS B-[4] [-5] [-6] CERTIFICATE

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES,
CLASS B-1, CLASS B-2 CERTIFICATES,  [AND] CLASS B-3 CERTIFICATES, [AND CLASS B-4
CERTIFICATES,]  [AND CLASS B-5  CERTIFICATES]  DESCRIBED  IN THE  AGREEMENT  (AS
DEFINED HEREIN).

THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE SECURITIES
ACT OF 1933,  AS  AMENDED,  OR THE  SECURITIES  LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED  UNLESS IT IS REGISTERED  PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS  WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER  APPLICABLE  STATE LAW AND IS TRANSFERRED IN ACCORDANCE  WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

NO  TRANSFER OF THIS  CERTIFICATE  (OR ANY  INTEREST  HEREIN) MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE MASTER
SERVICER  WITH EITHER (A) A  CERTIFICATION  PURSUANT  TO SECTION  5.02(d) OF THE
AGREEMENT OR (B) AN OPINION OF COUNSEL  ACCEPTABLE  TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER TO THE EFFECT
THAT  THE  PURCHASE  AND  HOLDING  OF  THIS  CERTIFICATE  IS  PERMISSIBLE  UNDER
APPLICABLE  LAW,  WILL NOT  CONSTITUTE  OR  RESULT  IN A  NON-EXEMPT  PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE  RETIREMENT INCOME SECURITY ACT OF
1974,  AS AMENDED  ("ERISA"),  OR SECTION 4975 OF THE  INTERNAL  REVENUE CODE OF
1986,  AS AMENDED  (THE  "CODE") (OR  COMPARABLE  PROVISIONS  OF ANY  SUBSEQUENT
ENACTMENTS) AND WILL NOT SUBJECT THE TRUSTEE, THE COMPANY OR THE MASTER SERVICER
TO ANY OBLIGATION OR LIABILITY  (INCLUDING  OBLIGATIONS  AND  LIABILITIES  UNDER
ERISA OR  SECTION  4975 OF THE  CODE) 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.

                                  EXHIBIT B-1

<PAGE>

      Certificate No. [____]          [____]% Pass-Through Rate

    Class [B-___] Subordinate

      Date of Pooling and               Principal Balance of the Class B-___
      Servicing Agreement              Certificates as of the Cut-off Date:
        and Cut-off Date:                      $________
        December 1, 2006

    First Distribution Date:          Initial Class Certificate Balance of this
       January 25, 2007                            Certificate:
                                                $[______________]

       Master Servicer:
      CitiMortgage, Inc.

Assumed Final Distribution Date:                      CUSIP
     [__________________]                       [______________]

                                  EXHIBIT B-2

<PAGE>

                      HSI ASSET SECURITIZATION CORPORATION

                   HSI Asset Loan Obligation Trust, 2006-[__]
             Mortgage Pass-Through Certificates, Series 2006- [___]
                                  Class B[-__]

             evidencing a  percentage interest in the distributions allocable to
             the Certificates of the above-referenced Class.

       Principal in respect of this Certificate is distributable  monthly as set
forth herein. Accordingly, the Class Certificate Balance at any time may be less
than the Class  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 Trustee or any other party to the Agreement 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 CEDE & CO. is the registered  owner of the Percentage
Interest  evidenced by this Certificate  (obtained by dividing the Initial Class
Certificate   Balance  of  this  Certificate  by  the  aggregate  Initial  Class
Certificate Balance of all Class B-___ Certificates, both as specified above) in
certain monthly  distributions  of principal and interest  pursuant to a Pooling
and  Servicing  Agreement  dated as of the  Cut-off  Date  specified  above (the
"Agreement")  among HSI Asset  Securitization  Corporation,  as  depositor  (the
"Depositor"),  CitiMortgage,  Inc., as master  servicer (in such  capacity,  the
"Master Servicer"), Citibank N.A., as securities administrator (the "Securities
Administrator"),  Wells Fargo Bank,  N.A. as custodian  (the  "Custodian"),  and
Deutsche Bank National Trust Company, 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.

       No transfer of this Class B Certificate will be made unless such transfer
is exempt from the  registration  requirements of the Securities Act of 1933, as
amended,  and any applicable state securities laws or is made in accordance with
said Act and laws.  In the event  that such a  transfer  is to be made,  (i) the
Trustee or the Depositor may require an opinion of counsel  acceptable to and in
form and  substance  satisfactory  to the  Trustee and the  Depositor  that such
transfer is exempt (describing the applicable exemption and the basis therefore)
from  or is  being  made  pursuant  to  the  registration  requirements  of  the
Securities Act of 1933, as amended,  and of any applicable  statute of any state
and (ii) the transferee shall execute an investment letter in the form described
by Section  5.02(b) of the Agreement.  The Holder hereof desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee,  the Depositor,
the  Master  Servicer  and the  Certificate  Registrar  acting  on behalf of the
Trustee  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.

       As  described  above,  no transfer of this  Certificate  (or any interest
herein) shall be made unless the transferee provides the Trustee,  the Depositor
and the Master  Servicer  with  either (a) a  certification  pursuant to Section
5.02(b) of the Agreement stating that either (i) the transferee is

                                  EXHIBIT B-3

<PAGE>

not an  employee  benefit or other plan  subject to the  prohibited  transaction
provisions of ERISA or Section 4975 of the Code (each, a "Plan"),  or any Person
(including,  without  limitation,  an investment manager, a named fiduciary or a
trustee of any Plan) who is using "plan assets,"  within the meaning of the U.S.
Department of Labor regulation  promulgated at 29 C.F.R. ss. 2510.3-101,  of any
Plan (each, a "Plan Investor") to effect such acquisition or (ii) the transferee
is an  insurance  company,  the  source of funds used to  purchase  or hold such
Certificate (or any interest therein) is an "insurance  company general account"
(as defined in U.S.  Department of Labor Prohibited  Transaction Class Exemption
("PTCE")  95-60 and the conditions set forth in Sections I and III of PTCE 95-60
have been satisfied,  or (b) an opinion of counsel acceptable to and in form and
substance  satisfactory to the Trustee, the Depositor and the Master Servicer to
the effect that the  purchase  and holding of this  Certificate  is  permissible
under  applicable law, will not constitute or result in a non-exempt  prohibited
transaction  under  Section  406 of  ERISA  or  Section  4975  of the  Code  (or
comparable  provisions of any subsequent  enactments),  and will not subject the
Trustee,  the  Depositor or the Master  Servicer to any  obligation or liability
(including  obligations or liabilities  under ERISA or Section 4975 of the Code)
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.

       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  authenticated  by an  authorized
signatory of the Securities Administrator.

                                 *     *     *

                                  EXHIBIT B-4

<PAGE>

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

Dated:

                              CITIBANK, N.A.,
                              not in its individual capacity, but solely as
                              Securities Administrator
                              By:_______________________________________________

Authenticated:

By:____________________________________________
   Authorized Signatory of
   CITIBANK, N.A.,
   not in its individual capacity,
   but solely as Securities Administrator

                                  EXHIBIT B-5

<PAGE>

                      HSI ASSET SECURITIZATION CORPORATION

                    HSI Asset Loan Obligation Trust 2006-[__]
                       Mortgage Pass-Through Certificates

       This  Certificate  is one  of a duly  authorized  issue  of  Certificates
designated as HSI Asset Loan Obligation  Trust 2006-[__]  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 neither the Trustee nor the Securities  Administrator
is  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 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 the Class B-
[ ] Certificates on such Distribution Date pursuant to the Agreement.

       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  Securities  Administrator  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 offices  designated by the
Securities  Administrator for such purposes or such other location  specified in
the notice to Certificateholders  of such final distribution.  The Initial Class
Certificate   Balance  of  this  Certificate  is  set  forth  above.  The  Class
Certificate  Balance  hereof will be reduced to the extent of the  distributions
allocable to principal and any Realized Losses allocable hereto.

       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 parties to the Agreement 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

                                  EXHIBIT B-6

<PAGE>

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.

       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 Securities  Administrator upon surrender of this Certificate for
registration   of  transfer  at  the  offices   designated  by  the   Securities
Administrator for such purposes, accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator 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  Securities  Administrator  may  require  payment  of a  sum
sufficient to cover any tax or other  governmental  charge payable in connection
therewith.

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

       The Master Servicer,  upon the instruction of the Depositor or at its own
discretion,   shall  purchase  the  Mortgage  Loans  and  therefore   cause  the
termination  of the  Trust  on  any  Optional  Termination  Date,  which  is any
Distribution  Date in  which  the  aggregate  Stated  Principal  Balance  of the
Mortgage  Loans as of the last day of the  related  Due  Period  is less than or
equal to 10% of the aggregate Stated Principal  Balance of the Mortgage Loans as
of the Cut-off Date.

       The  obligations  and  responsibilities  created  by the  Agreement  will
terminate as provided in Section 12.01 of 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.

                                  EXHIBIT B-7

<PAGE>

                                   ASSIGNMENT

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

(Please  print  or  typewrite  name  and  address  including postal  zip code of
assignee)

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  Securities  Administrator  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.

                                  EXHIBIT B-8

<PAGE>

                                   EXHIBIT C

                        FORM OF CLASS R-[ ] CERTIFICATE

SOLELY FOR U.S.  FEDERAL  INCOME TAX PURPOSES,  THIS  CERTIFICATE IS A "RESIDUAL
INTEREST" IN TWO "REAL ESTATE MORTGAGE INVESTMENT  CONDUITS," 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  SECURITIES   ADMINISTRATOR  A  TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NEITHER THIS  CERTIFICATE  NOR ANY INTEREST  HEREIN MAY BE TRANSFERRED  (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02I OF THE
AGREEMENT OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR
A  REPRESENTATION  LETTER TO THE EFFECT THAT SUCH  TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE  RETIREMENT  INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"),  OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL,  STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN.  IN THE  EVENT  THAT SUCH  REPRESENTATION  IS  VIOLATED,  OR ANY
ATTEMPT IS MADE TO TRANSFER TO A PLAN OR  ARRANGEMENT  SUBJECT TO SECTION 406 OF
ERISA,  A PLAN  SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR
LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR  ARRANGEMENT  OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT,  SUCH ATTEMPTED  TRANSFER OR ACQUISITION
SHALL BE VOID AND OF NO EFFECT.

             Certificate No.                :                         R-[ ]

              Cut-off Date                  :                   December 1, 2006

        First Distribution Date             :                   January 25, 2007

Percentage Interest of this Certificate     :                        100.00%

              Interest Rate                 :                         None

                  CUSIP                     :

                   ISN                      :

                                  EXHIBIT C-1

<PAGE>

                     HSI ASSET SECURITIZATION CORPORATION

                   HSI Asset Loan Obligation Trust 2006-[__]
             Mortgage Pass-Through Certificates, Series 2006-[__]

                                  Class R-[__]

             evidencing  a percentage interest in the distributions allocable to
             the Certificates of the above-referenced Class.

       Distributions in respect of this Certificate are distributable monthly as
set forth herein. This Class R-[ ] Certificate has no Certificate Balance and is
not  entitled  to  distributions  in  respect of  principal  or  interest.  This
Certificate  does not evidence an  obligation  of, or an interest in, and is not
guaranteed  by the  Depositor,  the Trustee or any other party to the  Agreement
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 HSBC SECURITIES (USA) INC. is the registered owner of
the Percentage Interest specified above of any monthly  distributions due to the
Class R-[ ] Certificates  pursuant to a Pooling and Servicing Agreement dated as
of  the  Cut-off  Date  specified  above  (the  "Agreement")   among  HSI  Asset
Securitization Corporation, as depositor (the "Depositor"),  CitiMortgage, Inc.,
as master  servicer  (the  "Master  Servicer"),  Citibank  N.A.,  as  securities
administrator  (the  "Securities  Administrator")  Wells  Fargo  Bank,  N.A.  as
custodian  (the  "Custodian"),  and Deutsche Bank  National  Trust  Company,  as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings  assigned in the  Agreement.  This  Certificate is
issued  under and is subject  to the terms,  provisions  and  conditions  of the
Agreement,  to which  Agreement the Holder of this  Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

       Any  distribution  of the proceeds of any  remaining  assets of the Trust
will be made only upon presentment and surrender of this Class R-[ ] Certificate
at the offices designated by the Securities  Administrator for such purpose,  or
such other location specified in the notice to Certificateholders.

       No  transfer  of a Class  R-[ ]  Certificate  shall  be made  unless  the
Securities  Administrator  shall have received a representation  letter from the
transferee  of  such  Certificate,  acceptable  to and  in  form  and  substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement  subject to Section 406 of ERISA,
a plan or  arrangement  subject to Section 4975 of the Code or a plan subject to
Similar Law, or 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,  which
representation  letter  shall not be an expense of the Trustee,  the  Securities
Administrator,  the  Depositor,  the Master  Servicer or the Trust Fund.  In the
event that such  representation is violated,  or any attempt is made to transfer
to a plan or  arrangement  subject to Section 406 of ERISA or a plan  subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or  arrangement  or using the assets of any such plan or
arrangement,  such  attempted  transfer or  acquisition  shall be void and of no
effect.

                                  EXHIBIT C-3

<PAGE>

       Each  Holder  of this  Class  R-[ ]  Certificate  shall be  deemed by the
acceptance or acquisition an Ownership  Interest in this Class R-[ ] Certificate
to have agreed to be bound by the following  provisions,  and the rights of each
Person  acquiring  any Ownership  Interest in this Class R-[ ]  Certificate  are
expressly  subject  to the  following  provisions:  (i) each  Person  holding or
acquiring  any  Ownership  Interest in this Class R-[ ]  Certificate  shall be a
Permitted  Transferee and shall promptly notify the Securities  Administrator of
any change or impending change in its status as a Permitted Transferee,  (ii) no
Ownership  Interest in this Class R-[ ]  Certificate  may be  registered  on the
Closing Date or thereafter transferred,  and the Securities  Administrator shall
not  register  the  Transfer  of this  Certificate  unless,  in  addition to the
certificates  required to be delivered  to the  Securities  Administrator  under
Section 5.02(b) of the Agreement,  the Securities  Administrator shall have been
furnished  with a  Transfer  Affidavit  of the  initial  owner  or the  proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or  acquiring  any  Ownership  Interest in this Class R-[ ]  Certificate
shall  agree (A) to obtain a Transfer  Affidavit  from any other  Person to whom
such  Person  attempts  to  Transfer  its  Ownership  Interest  this Class R-[ ]
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
this Class R-[ ] Certificate,  (C) not to cause income with respect to the Class
R-[ ] Certificate to be attributable  to a foreign  permanent  establishment  or
fixed base,  within the  meaning of an  applicable  income tax  treaty,  of such
Person or any other U.S.  Person and (D) not to Transfer the Ownership  Interest
in this  Class R-[ ]  Certificate  or to cause  the  Transfer  of the  Ownership
Interest in this Class R-[ ]  Certificate  to any other  Person if it has actual
knowledge that such Person is a Non-Permitted  Transferee and (iv) any attempted
or purported  Transfer of the Ownership Interest in this Class R-[ ] Certificate
in violation of the  provisions  herein  shall be  absolutely  null and void and
shall vest no rights in the purported Transferee.

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

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

                                  *     *     *

                                  EXHIBIT C-4

<PAGE>

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

Dated:

                              CITIBANK, N.A.,
                              not in its individual capacity, but solely as
                              Securities Administrator
                              By:_______________________________________________

Authenticated:

By:____________________________________________
   Authorized Signatory of
   CITIBANK, N.A.,
   not in its individual capacity,
   but solely as Securities Administrator

                                  EXHIBIT C-5

<PAGE>

                    HSI ASSET SECURITIZATION CORPORATION

                  HSI Asset Loan Obligation Trust 2006-[__]
                     Mortgage Pass-Through Certificates

       This  Certificate  is one  of a duly  authorized  issue  of  Certificates
designated as HSI Asset Loan Obligation  Trust 2006-[__]  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 neither the Trustee nor the Securities  Administrator
is  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 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  Securities  Administrator  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 offices  designated by the
Securities  Administrator for such purpose,  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 parties to the Agreement 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

                                  EXHIBIT C-6

<PAGE>

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.

       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 Securities  Administrator upon surrender of this Certificate for
registration   of  transfer  at  the  offices   designated  by  the   Securities
Administrator for such purposes, accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator 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  Securities  Administrator  may  require  payment  of a  sum
sufficient to cover any tax or other  governmental  charge payable in connection
therewith.

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

       The Master Servicer,  upon the instruction of the Depositor or at its own
discretion,   shall  purchase  the  Mortgage  Loans  and  therefore   cause  the
termination  of the  Trust  on  any  Optional  Termination  Date,  which  is any
Distribution  Date in  which  the  aggregate  Stated  Principal  Balance  of the
Mortgage  Loans as of the last day of the  related  Due  Period  is less than or
equal to 10% of the aggregate Stated Principal  Balance of the Mortgage Loans as
of the Cut-off Date.

       The  obligations  and  responsibilities  created  by the  Agreement  will
terminate as provided in Section 12.01 of 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.

                                  EXHIBIT C-7

<PAGE>

                                   ASSIGNMENT

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

(Please  print  or  typewrite  name  and  address  including postal  zip code of
assignee)

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  Securities  Administrator  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.

                                  EXHIBIT C-8

<PAGE>

                                   EXHIBIT D

                          FORM OF CLASS P CERTIFICATE

NEITHER THIS  CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED  UNLESS THE
PROPOSED  TRANSFEROR  DELIVERS  TO THE  SECURITIES  ADMINISTRATOR  A  TRANSFEROR
CERTIFICATE  IN THE FORM OF EXHIBIT H TO THE  AGREEMENT  REFERRED  TO HEREIN AND
EITHER (I) THE SECURITIES  ADMINISTRATOR  RECEIVES EITHER A RULE 144A INVESTMENT
LETTER OR REGULATION S INVESTMENT  LETTER IN THE FORM OF EXHIBIT I-A AND EXHIBIT
I-B,  RESPECTIVELY,  TO THE AGREEMENT  REFERRED TO HEREIN OR (II) THE SECURITIES
ADMINISTRATOR  RECEIVES AN OPINION OF COUNSEL,  DELIVERED  AT THE EXPENSE OF THE
TRANSFEROR,  STATING THAT SUCH TRANSFER MAY BE MADE WITHOUT  REGISTRATION  UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.

NEITHER THIS  CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED  UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES  ADMINISTRATOR A REPRESENTATION  LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE
I OF THE EMPLOYEE  RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR A PLAN SUBJECT TO SECTION  4975 OF THE CODE OR A PLAN  SUBJECT TO  MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL,  STATE OR LOCAL LAW ("SIMILAR LAW") OR
A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
THAT SUCH  REPRESENTATION  IS VIOLATED,  OR ANY ATTEMPT IS MADE TO TRANSFER TO A
PLAN OR  ARRANGEMENT  SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION
4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON  ACTING ON BEHALF
OF ANY  SUCH  PLAN OR  ARRANGEMENT  OR USING  THE  ASSETS  OF ANY  SUCH  PLAN OR
ARRANGEMENT,  SUCH  ATTEMPTED  TRANSFER OR  ACQUISITION  SHALL BE VOID AND OF NO
EFFECT.

Certificate No.                       :                P-1

Cut-off Date                          :                December 1, 2006

First Distribution Date               :                January 25, 2007

Percentage Interest of this
Certificate                           :                100%

Interest                              :                None

CUSIP                                 :

ISIN                                  :

                                  EXHIBIT D-1

<PAGE>

                     HSI ASSET SECURITIZATION CORPORATION

                   HSI Asset Loan Obligation Trust 2006-[ ]
             Mortgage Pass-Through Certificates, Series 2006- [ ]

                                   Class P

       evidencing   a  percentage  interest in the  distribution  of  Prepayment
       Charges  allocable  to  the  Certificates of  the above-referenced Class.

             Distributions  in respect  of this  Certificate  are  distributable
monthly as set forth herein.  This  Certificate  does not evidence an obligation
of, or an interest in, and is not  guaranteed by the  Depositor,  the Trustee or
any other party to the  Agreement  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 HSBC  SECURITIES  (USA) INC. is the registered
owner of the  Percentage  Interest  evidenced  by this  Certificate  in  certain
monthly  distributions of Prepayment Charges pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the  "Agreement")  among
HSI  Asset   Securitization   Corporation,   as  depositor  (the   "Depositor"),
CitiMortgage,   Inc.,  as  master  servicer  (in  such  capacity,   the  "Master
Servicer"),  Citibank,  N.A., as securities administrator (in such capacity, the
"Securities Administrator"),  Wells Fargo Bank, N.A., as custodian, and Deutsche
Bank  National  Trust  Company,  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.

             This  Certificate does not have an Interest Rate and will solely be
entitled to receive  distributions of Prepayment Charges to the extent set forth
in the Agreement. In addition, any distribution of the proceeds of any remaining
assets of the Trust will be made only upon  presentment  and  surrender  of this
Certificate at the offices  designated by the Securities  Administrator for such
purpose, or such other location specified in the notice to Certificateholders.

             No  transfer  of a  Certificate  of this Class shall be made unless
such disposition is exempt from the registration  requirements of the Securities
Act of 1933, as amended (the "1933 Act"),  and any applicable  state  securities
laws or is made in  accordance  with the 1933 Act and such laws. In the event of
any such transfer, the Securities  Administrator shall require the transferor to
execute a transferor  certificate  (in  substantially  the form  attached to the
Agreement) and deliver either (i) a Rule 144A Investment  Letter or a Regulation
S Investment  Letter,  as applicable,  in either case  substantially in the form
attached as Exhibit I-A and Exhibit I-B, respectively, to the Agreement, or (ii)
a written Opinion of Counsel to the Securities  Administrator that such transfer
may be made pursuant to an exemption,  describing the  applicable  exemption and
the basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act,
which Opinion of Counsel shall be an expense of the transferor.

                                  EXHIBIT D-2

<PAGE>

             No transfer of a Certificate of this Class shall be made unless the
Securities  Administrator  shall have received a representation  letter from the
transferee  of  such  Certificate,  acceptable  to and  in  form  and  substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA, Section 4975 of
the Code or any materially  similar provisions of applicable  federal,  state or
local law ("Similar  Law"),  or a person  acting on behalf of or investing  plan
assets of any such plan, which representation  letter shall not be an expense of
the Securities Administrator.

             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  authenticated  by an
authorized signatory of the Securities Administrator.

                                  *     *     *

                                  EXHIBIT D-3

<PAGE>

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

Dated:

                              CITIBANK, N.A.,
                              not in its individual capacity, but solely as
                              Securities Administrator

                              By: ______________________________________________

Authenticated:

By: ___________________________________________
    Authorized Signatory of
    CITIBANK, N.A.,
    not in its individual capacity,
    but solely as Securities Administrator

                                  EXHIBIT D-4

<PAGE>

                     HSI ASSET SECURITIZATION CORPORATION

                   HSI Asset Loan Obligation Trust 2006-[ ]
                      Mortgage Pass-Through Certificates

             This  Certificate is one of a duly authorized issue of Certificates
designated  as HSI Asset Loan  Obligation  Trust 2006-[ ] 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  constituting  Prepayment Charges for payment hereunder and that neither
the Trustee nor the Securities Administrator is 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 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  Securities  Administrator  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 offices  designated by the
Securities  Administrator for such purposes 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 parties to the Agreement 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

                                  EXHIBIT D-5

<PAGE>

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.

             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  Securities  Administrator  upon  surrender of this
Certificate  for  registration  of  transfer at the  offices  designated  by the
Securities Administrator for such purposes,  accompanied by a written instrument
of transfer in form satisfactory to the Securities  Administrator  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 Securities  Administrator may require payment of a
sum  sufficient  to  cover  any tax or  other  governmental  charge  payable  in
connection therewith.

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

             The Master  Servicer,  upon the  instruction of the Depositor or at
its own  discretion,  shall purchase the Mortgage Loans and therefore  cause the
termination of the Trust on the initial Optional  Termination Date, which is any
Distribution  Date in  which  the  aggregate  Stated  Principal  Balance  of the
Mortgage  Loans as of the last day of the  related  Due  Period  is less than or
equal to 10% of the aggregate Stated Principal  Balance of the Mortgage Loans as
of the Cut-off Date.

             The obligations and responsibilities  created by the Agreement will
terminate as provided in Section 12.01 of 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.

                                  EXHIBIT D-6

<PAGE>

                                   ASSIGNMENT

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

(Please  print or  typewrite  name  and  address  including  postal  zip code of
assignee)

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  Securities  Administrator  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.

                                  EXHIBIT D-7

<PAGE>

                                   EXHIBIT E

                   FORM OF INITIAL CERTIFICATION OF CUSTODIAN

                                     [date]

HSI Asset Securitization Corporation
452 Fifth Avenue
New York, New York  10018

Wells Fargo Bank, N.A.
1015 10th Avenue SE
Minneapolis, Minnesota  55414

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California  92705-4934

       Re:   HSI Asset Securitization Corporation, Series 2006-[__]

Ladies and Gentlemen:

       In accordance  with Section 2.02 of the Pooling and  Servicing  Agreement
(the "Pooling and Servicing  Agreement")  dated as of December 1, 2006 among HSI
Asset  Securitization  Corporation,  as  depositor,  Wells Fargo Bank,  N.A., as
custodian, CitiMortgage, Inc., as master servicer, Citibank, N.A., as securities
administrator,  and Deutsche Bank National Trust Company,  as trustee,  for 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  of the  Mortgage (which may be
       included in a blanket assignment or assignments).

       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
Pooling and Servicing  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.

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

                                       WELLS FARGO BANK, N.A., as Custodian
                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                  EXHIBIT E-1

<PAGE>

                                    EXHIBIT F

                         FORM OF DOCUMENT CERTIFICATION
                        AND EXCEPTION REPORT OF CUSTODIAN

                                                                   ______, 20___

HSI Asset Securitization Corporation
452 Fifth Avenue
New York, New York  10018

               Wells Fargo Bank, N.A.
                1015 10th Avenue SE
             Minneapolis, Minnesota 55414

Deutsche Bank National Trust Company

1761 East St. Andrew Place

Santa Ana, California 92705-4934

Wells Fargo Bank, N.A.

1 Home Campus

Des Moines, Iowa 50328-0001

       Re:      HSI Asset Securitization Corporation, Series 2006-[__]

Ladies and Gentlemen:

       In accordance  with Section 2.02 of the Pooling and  Servicing  Agreement
(the "Pooling and Servicing  Agreement")  dated as of December 1, 2006 among HSI
Asset  Securitization  Corporation,  as  depositor,  Wells Fargo Bank,  N.A., as
custodian, CitiMortgage, Inc., as master servicer, Citibank, N.A., as securities
administrator,  and  Deutsche  Bank  National  Trust  Company,  as trustee,  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 Document Exception Report) it has received:

               (i) The original Mortgage Note,  endorsed in the form provided in
       Section 2.01 of the Pooling and Servicing Agreement, with all intervening
       endorsements

                                  EXHIBIT F-1

<PAGE>

       showing a complete chain of endorsement from the applicable mortgage loan
       seller to the last endorsee.

               (ii)  The original recorded Mortgage.

               (iii) A duly  executed  assignment  of the  Mortgage  in the form
       provided in Section 2.01 of the Pooling and Servicing  Agreement;  or, if
       the Mortgage Loan Seller has certified or the Custodian  otherwise  knows
       that the  related  Mortgage  has not been  returned  from the  applicable
       recording  office,  a copy of the  assignment of the Mortgage  (excluding
       information to be provided by the recording office).

               (iv) The original or duplicate  original  recorded  assignment or
       assignments of the Mortgage  showing a complete chain of assignment  from
       the applicable mortgage loan seller to the last endorsee.

               (v) The original or duplicate  original lender's title policy and
       all riders thereto or, any one of an original  title binder,  an original
       preliminary  title  report or an  original  title  commitment,  or a copy
       thereof certified by the title company.

       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 (1), (2), (3), (15),
(18) and (22) of the Data Tape Information  accurately reflects  information set
forth in the Custodial File.

       The  Custodian  has  made no  independent  examination  of any  documents
contained  in each  Mortgage  File  beyond  the  review  of the  Custodial  File
specifically  required in the Pooling and  Servicing  Agreement.  The  Custodian
makes  no  representation  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 Pooling and Servicing Agreement.

                                       WELLS FARGO BANK, N.A., as Custodian
                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                  EXHIBIT F-2

<PAGE>

                                   EXHIBIT G

                       FORM OF RESIDUAL TRANSFER AFFIDAVIT

                    HSI Asset Loan Obligation Trust 2006-[__]
             Mortgage Pass-Through Certificates, Series 2006- [___]

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 R Certificate (the "Certificate")
issued  pursuant to the  Pooling  and  Servicing  Agreement  (the  "Agreement"),
relating to the above-referenced  Series, dated as of December 1, 2006 among HSI
Asset  Securitization  Corporation,  as  depositor,  Wells Fargo Bank,  N.A., as
custodian, CitiMortgage, Inc., as master servicer, Citibank, N.A., as securities
administrator, and Deutsche Bank National Trust Company, as trustee. Capitalized
terms used,  but not defined  herein,  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 for the benefit of the Depositor, the
Securities Administrator and the Trustee.

       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 for its own account. The Transferee has no
knowledge that any such affidavit is false.

       3. The  Transferee  has been advised of, and  understands  that (i) a tax
will  be  imposed  on  Transfers  of  the   Certificate   to  Persons  that  are
Non-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 a Non-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 will 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 a  Non-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.)

                                  EXHIBIT G-1

<PAGE>

       5. The Transferee  has reviewed the provisions of Section  5.02(c) of the
Agreement  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  5.02(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  a  Non-Permitted
Transferee.  In  connection  with  any  such  Transfer  by the  Transferee,  the
Transferee  agrees to  deliver to the  Securities  Administrator  a  certificate
substantially in the form set forth as Exhibit H to the Agreement (a "Transferor
Certificate")  to the effect that,  among other things,  such  Transferee has no
actual  knowledge  that the  Person  to which  the  Transfer  is to be made is a
Non-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.  The Transferee has  historically  paid its debts as they have come
due and intends to pay its debts as they come due in the future.  The Transferee
intends to pay all taxes due with respect to the Certificate as they become due.

       8. The Transferee's taxpayer identification number is __________.

       9. The Transferee is not a Disqualified Non-U.S. Person as defined in the
Agreement.

       10. The  Transferee is aware that the  Certificate  may be a "noneconomic
residual   interest"  within  the  meaning  of  proposed  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 will not cause income from the Residual Certificate to
be attributable to a foreign  permanent  establishment or fixed base, within the
meaning of an applicable  income tax treaty, of the Transferee or any other U.S.
Person.

       12. Check the applicable paragraph:

       [_] The present value of the anticipated tax liabilities  associated with
holding the Certificate, as applicable, does not exceed the sum of:

               (i)  the  present  value  of  any  consideration   given  to  the
       Transferee to acquire such Certificate;

                                  EXHIBIT G-2

<PAGE>

               (ii) the present value of the expected  future  distributions  on
       such Certificate; and

               (iii) the present value of the anticipated tax savings associated
       with holding such Certificate as the related REMIC generates losses.

       For purposes  of this calculation,  (i) the Transferee is  assumed to pay
tax at the highest rate  currently  specified in Section  11(b) of the Code (but
the tax  rate in  Section  55(b)(1)(B)  of the  Code  may be used in lieu of the
highest rate  specified in Section 11(b) of the Code if the  Transferee has been
subject  to the  alternative  minimum  tax under  Section  55 of the Code in the
preceding two years and will compute its taxable  income in the current  taxable
year  using  the  alternative  minimum  tax rate) and (ii)  present  values  are
computed using a discount rate equal to the short-term  Federal rate  prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.

       [_]  The  transfer  of  the  Certificate   complies  with  U.S.  Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,

               (i) the  Transferee is an "eligible  corporation,"  as defined in
       U.S. Treasury Regulations Section  1.860E-1(c)(6) (i), as to which income
       from the Certificate will only be taxed in the United States;

               (ii)  at the  time  of the  transfer,  and  at the  close  of the
       Transferee's  two fiscal years  preceding the year of the  transfer,  the
       Transferee had gross assets for financial  reporting purposes  (excluding
       any obligation of a person  related to the Transferee  within the meaning
       of U.S. Treasury  Regulations  Section  1.860E-1(c)(6)(ii))  in excess of
       $100 million and net assets in excess of $10 million;

               (iii)  the  Transferee  will  transfer  the  Certificate  only to
       another "eligible  corporation," as defined in U.S. Treasury  Regulations
       Section   1.860E-1(c)(6)(i),   in  a  transaction   that   satisfies  the
       requirements  of Sections  1.860E-1(c)(4)(i),  (ii) and (iii) and Section
       1.860E-1(c)(5) of the U.S. Treasury Regulations; and

               (iv) the Transferee  determined the  consideration  paid to it to
       acquire  the   Certificate   based  on  reasonable   market   assumptions
       (including,   but  not  limited  to,  borrowing  and  investment   rates,
       prepayment and loss  assumptions,  expense and reinvestment  assumptions,
       tax rates and  other  factors  specific  to the  Transferee)  that it has
       determined in good faith.

               [_] None of the above.

       13. The  Transferee  is not an employee  benefit  plan that is subject to
Title I of ERISA or a plan that is subject to Section 4975 of the Code or a plan
subject  to any  Federal,  state or local law that is  substantially  similar to
Title I of ERISA or Section 4975 of the Code,  and the  Transferee is not acting
on behalf of or investing plan assets of such a plan.

                                     * * *

                                  EXHIBIT G-3

<PAGE>

       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:

[Corporate Seal]

ATTEST:

__________________________________________
[Assistant] Secretary

       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__

                                  EXHIBIT G-4

<PAGE>

                                   EXHIBIT H

                        FORM OF TRANSFEROR CERTIFICATE

                                                                __________, 20__

HSI Asset Securitization Corporation
452 Fifth Avenue
New York, New York  10018
Attention:  Head MBS Principal Finance

Citibank, N.A.,
  as Securities Administrator
388 Greenwich Street, 14th Floor
New York, New York  10013
Attention: Corporate Trust Services - HSI Asset Loan Obligation Trust 2006-2

       Re:    HSI  Asset  Loan  Obligation  Trust 2006-2  Mortgage  Pass-Through
              Certificates, Series 2006-2, Class [__]

Ladies and Gentlemen:

       In connection with our  disposition of the above  Certificates we certify
that (a) we understand that the Certificates  have not been registered under the
Securities Act of 1933, as amended (the "Act"),  and are being disposed 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,  (i) we  have no
knowledge the Transferee is a Non-Permitted Transferee,  (ii) after conducting a
reasonable  investigation of the financial condition of the Transferee,  we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual  Certificates  as they become due and (iii) we have
no reason to believe that the statements  made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.

       In  connection   with  any  disposition  of  the  above  Certificates  in
accordance with Rule 904 of Regulation S we hereby certify that:

               a.   the  offer  of the  Certificates  was  not  made to a person
                    in the United States;

               b.   at  the time  the buy order  was originated, the  transferee
                    was  outside the  United  States or the Transferor  and  any
                    person   acting  on   its  behalf  responsibly  believed the
                    transferee was outside the United States;

               c.   no directed selling  efforts have been made in contravention
                    of the requirements of Rule 903 or Rule 904 of Regulation S,
                    as applicable;

                                  EXHIBIT H-1

<PAGE>

               d    the transaction is not part of a plan or scheme to evade the
                    registration requirements of the Securities Act, as amended;
                    and

               e.   the  transferee  is  not  a  U.S.  person  (as   defined  in
                    Regulation S).

                                           Very truly yours,
                                                 _______________________________
                                                 Print Name of Transferor

                                                 By:____________________________
                                                         Authorized Officer

                                  EXHIBIT H-2

<PAGE>

                                    EXHIBIT I

                      FORM OF RULE 144A INVESTMENT LETTER

                                                              ____________, 20__

HSI Asset Securitization Corporation
452 Fifth Avenue
New York, New York  10018
Attention:  Head MBS Principal Finance

Citibank, N.A.,
  as Securities Administrator
388 Greenwich Street, 14th Floor
New York, New York  10013
Attention:  Corporate Trust Services - HSI Asset Loan Obligation Trust 2006-2

       Re:     HSI Asset Loan Obligation Trust 2006-2
               Mortgage Pass-Through Certificates, Series 2006-2, 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) in the case of an ERISA-Restricted  Certificate,
we are not an employee  benefit  plan that is subject to Title I of the Employee
Retirement  Income  Security  Act of 1974,  as amended  ("ERISA"),  or a plan or
arrangement  that is subject to Section  4975 of the  Internal  Revenue  Code of
1986,  as  amended,  or a plan  subject  to  materially  similar  provisions  of
applicable federal,  state or local law, 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  or, with  respect to an  ERISA-Restricted  Certificate
other  than  a  Class  P  Certificate,  a  Class  X  Certificate  or a  Residual
Certificate,  such  Certificate  has been  the  subject  of an  ERISA-Qualifying
Underwriting  and the purchaser is an insurance  company that is purchasing this
certificate  with funds contained in an "insurance  company general account" (as
such term is defined in Section V(e) of Prohibited  Transaction  Class Exemption
("PTCE")  95-60) and that the  purchase  and  holding of such  Certificates  are
covered  under  Sections  I and  III  of  PTCE  95-60,  (e) in  the  case  of an
ERISA-Restricted  Trust  Certificate,  either (i) we are not an employee benefit
plan that is  subject  to Title I of  ERISA,  or a plan or  arrangement  that is
subject to Section 4975 of the Internal Revenue Code of 1986, as amended,  nor a
person  acting on behalf of any such  plan,  nor are we using the  assets of any
such plan to effect  such  transfer or (ii) our  acquisition  and holding of the
ERISA-Restricted Trust Certificate is eligible for exemptive relief

                                  EXHIBIT I-1

<PAGE>

under the statutory exemption for non-fiduciary  service providers under Section
408(b)(17) of ERISA and Section  4975(d)(20) of the Code, PTCE 84-14, PTCE 90-1,
PTCE 91-38, PTCE 95-60 or PTCE 96-23 or some other applicable exemption,  (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  Securities Act or that would render the  disposition of the  Certificates a
violation of Section 5 of the  Securities 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,  and (g) we are a  "qualified
institutional  buyer" as that term is defined in Rule 144A under the  Securities
Act and have  completed  either of the  forms of  certification  to that  effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A.  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  (i)  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 (ii)  pursuant  to  another  exemption  from  registration  under  the
Securities Act.

                                  EXHIBIT I-2

<PAGE>

                                                            ANNEX 1 TO EXHIBIT I

           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.

                                  EXHIBIT I-3

<PAGE>

           ____   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

                                  EXHIBIT I-4

<PAGE>

the  statements  made herein  because one or  more sales to  the Buyer may be in
reliance on Rule 144A.

       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:_______________________________________

                                  EXHIBIT I-5

<PAGE>

                                                            ANNEX 2 TO EXHIBIT I

           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.

                                  EXHIBIT I-6

<PAGE>

       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 Transferee

                                      Date:_____________________________________

                                  EXHIBIT I-7

<PAGE>

                                   EXHIBIT J

                           FORM OF REQUEST FOR RELEASE
                                 (for Custodian)

To:    Wells Fargo Bank, N.A.
       1015 10th Avenue SE
       Minneapolis, Minnesota  55414

       Re:     Pooling  and  Servicing  Agreement  (the  "Pooling  and Servicing
               Agreement")  dated  as  of  December  1,  2006  among  HSI  Asset
               Securitization Corporation, as depositor, Wells Fargo Bank, N.A.,
               as custodian, CitiMortgage, Inc., as master  servicer,  Citibank,
               N.A.,  as  securities  administrator, and Deutsche  Bank National
               Trust Company, as trustee.

       In connection with the  administration  of the Mortgage Loans held by you
as the  Custodian on behalf of the  Certificateholders,  we request the release,
and acknowledge  receipt,  of the (Custodial  File/[specify  documents]) for the
Mortgage Loan described below, for the reason indicated.

Mortgagor's Name, Address & Zip Code:

Mortgage Loan Number:

Send Custodial File to:

Delivery Method (check one)

____1.         Regular mail

____2.         Overnight courier (Tracking information: )

               If neither box 1 nor 2 is checked, regular mail shall be assumed.

Reason for Requesting Documents (check one)

____1.         Mortgage   Loan Paid in Full.   (The Servicer   hereby  certifies
               that all amounts  received in connection   therewith   have  been
               credited to the  Collection  Account as  provided in the  Pooling
               and Servicing Agreement.)

____2.         Mortgage Loan   Repurchase  Pursuant  to Subsection  2.03 of  the
               Pooling   and  Servicing   Agreement.    (The   Servicer   hereby
               certifies that the   repurchase  price  has been  credited to the
               Collection  Account  as provided  in  the  Pooling and  Servicing
               Agreement.)

____3.         Mortgage     Loan      Liquidated     by    ____________________.
               (The   servicer   hereby     certifies     that    all   proceeds
               of     foreclosure,    insurance,     condemnation    or    other

                                  EXHIBIT J-1

<PAGE>

               liquidation   have  been finally  received  and  credited  to the
               Collection  Account   pursuant  to  the   Pooling  and  Servicing
               Agreement.)

____4.         Mortgage Loan in Foreclosure.

____5.         Other (explain)._________________________________________________

       If box 1, 2 or 3 above is  checked,  and if all or part of the  Custodial
File was previously  released to us, please  release to us our previous  request
and  receipt  on file  with you,  as well as any  additional  documents  in your
possession relating to the specified Mortgage Loan.

       If box 4 or 5 above is  checked,  upon  our  return  of all of the  above
documents to you as the Trustee,  please  acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.

                                                [___________________]
                                                By:_____________________________
                                                   Name:
                                                   Title:
                                                   Date:
ACKNOWLEDGED AND AGREED:

[WELLS FARGO BANK, N.A.]

By:_________________________________
   Name:
   Title:
   Date:

                                  EXHIBIT J-2

<PAGE>

                                    EXHIBIT K

                         CONTENTS OF EACH MORTGAGE FILE

       With respect to each Mortgage  Loan, the Mortgage File shall include each
of the following items, which shall be available for inspection by the Depositor
and which shall be retained by the  Servicer or delivered to and retained by the
Custodian:

               (a) The documents or  instruments  set forth as items (i) to (ix)
       in Section 2.01(b) of the Pooling and Servicing Agreement.

               (b) Residential loan application.

               (c) Mortgage Loan closing statement.

               (d) Verification of employment and income.

               (e)  Verification of acceptable  evidence of source and amount of
       downpayment.

               (f) Credit report on Mortgagor.

               (g) Residential appraisal report.

               (h) Photograph of the Mortgaged Property.

               (i) Survey of the Mortgaged Property.

               (j) Copy of each instrument necessary to complete  identification
       of any exception set forth in the exception schedule in the title policy,
       i.e.,  map or  plat,  restrictions,  easements,  sewer  agreements,  home
       association declarations, etc.

               (k) All required disclosure statements and statement of Mortgagor
       confirming receipt thereof.

               (l) If available,  termite report,  structural engineer's report,
       water portability and septic certification.

               (m) Sales contract, if applicable.

               (n) Hazard insurance policy.

               (o) Tax receipts,  insurance  premium  receipts,  ledger  sheets,
       payment  history  from  date  of  origination,   insurance  claim  files,
       correspondence,  current and historical  computerized data files, and all
       other  processing,  underwriting and closing papers and records which are
       customarily  contained in a mortgage  loan file and which are required to
       document the Mortgage Loan or to service the Mortgage Loan.

               (p) Amortization schedule, if available.

               (q) Payment  history for Mortgage Loans that have been closed for
       more than 90 days.

                                  EXHIBIT K-1

<PAGE>

                                   EXHIBIT L

                   FORM OF SARBANES-OXLEY CERTIFICATION TO BE
           PROVIDED BY MASTER SERVICER (OR OTHER CERTIFICATION PARTY)
                                 WITH FORM 10-K

                    HSI Asset Loan Obligation Trust 2006-[__]
                       Mortgage Pass-Through Certificates
                                Series 2006-[__]

       This  Certification  is being made  pursuant to Section  3.05 and Section
8.12 of the Pooling and  Servicing  Agreement  dated as of December 1, 2006 (the
"Pooling and  Servicing  Agreement")  relating to the  above-referenced  Series,
among HSI Asset  Securitization  Corporation,  as  depositor,  Wells Fargo Bank,
N.A., as custodian,  CitiMortgage,  Inc., as master servicer, Citibank, N.A., as
securities administrator,  and Deutsche Bank National Trust Company, as trustee.
Capitalized  terms used but not defined herein shall have the meanings  assigned
in the Pooling and Servicing Agreement.

       1. I have reviewed  this annual  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 HSI Asset  Loan  Obligation  Trust  2006-2  (the  "Exchange  Act
periodic reports");

       2. Based on my knowledge,  the Exchange Act periodic 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 periodic reports;

       4. I am  responsible  for  reviewing  the  activities  performed  by each
Servicer  and based on my  knowledge  and the  compliance  review  conducted  in
preparing the Servicer  compliance  statement required in this report under Item
1123 of  Regulation  AB, and except as  disclosed  in the  Exchange Act periodic
reports, each Servicer has fulfilled its obligations under its related 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 parties: [_______].

                                                CITIMORTGAGE, INC.
                                                as Master Servicer
                                                By:_____________________________
                                                   Name:
                                                   Title:
                                                   Date:

                                  EXHIBIT L-1

<PAGE>

                                    EXHIBIT M

             1. Master Mortgage Loan Purchase and Servicing  Agreement,  between
HSBC Mortgage Corporation (USA) and HSBC Bank USA, National Association, each as
reconstituted  pursuant to an Assignment,  Assumption and Recognition Agreement,
dated as of December 1, 2006, among HSBC Bank (USA), National  Association,  HSI
Asset  Securitization  Corporation and  acknowledged by  CitiMortgage,  Inc., as
master servicer and Deutsche Bank National Trust Company, as trustee.

             2. Reconstituted  Servicing Agreement,  as amended by Amendment Reg
AB, dated as of December 1, 2006, between HSBC Bank (USA), National Association,
HSI Asset  Securitization   Corporation, Wells Fargo Bank,  N.A.,  CitiMortgage,
Inc., and acknowledged by Deutsche Bank National Trust Company, as trustee.

             3. Seller's Purchase,  Warranties and Servicing  Agreement dated as
of August 1, 2006, by and among HSBC Bank (USA), Nation Association and Wachovia
Mortgage  Corporation,   each  as  reconstituted   pursuant  to  an  Assignment,
Assumption and Recognition  Agreement,  dated as of December 1, 2006, among HSBC
Bank (USA), National Association, HSI Asset Securitization Corporation, Wachovia
Mortgage Corporation and acknowledged by CitiMortgage,  Inc., as master servicer
and Deutsche Bank National Trust Company, as trustee.

             4. Servicing Agreement, as amended by Amendment Reg AB, dated as of
September 1, 2006,  between HSBC Bank (USA),  Nation Association and Countrywide
Home Loans, Inc, each as reconstituted pursuant to an Assignment, Assumption and
Recognition  Agreement,  dated as of  December  1, 2006,  among HSBC Bank (USA),
National  Association,  HSI Asset Securitization  Corporation,  Countrywide Home
Loans,   Inc.,   Countrywide   Home  Loans  Servicing  LP  and  acknowledged  by
CitiMortgage, Inc., as master servicer and Deutsche Bank National Trust Company,
as trustee.

             5. Master Mortgage Loan Purchase and Servicing Agreement,  dated as
of June 21, 2006,  between HSBC Bank (USA),  Nation  Association,  American Home
Mortgage Corp., and American Home Mortgage Servicing, Inc. each as reconstituted
pursuant to an Assignment,  Assumption and  Recognition  Agreement,  dated as of
December  1,  2006,  among  HSBC Bank  (USA),  National  Association,  HSI Asset
Securitization  Corporation,  Countrywide American Home Mortgage Corp., American
Home Mortgage Servicing, Inc., and acknowledged by CitiMortgage, Inc., as master
servicer and Deutsche Bank National Trust Company, as trustee.

                                  EXHIBIT M-1

<PAGE>

                                 [EXHIBIT N-1]

                    FORM OF SERVICER (OR SERVICING FUNCTION
                       PARTICIPANT) BACK-UP CERTIFICATION

CitiMortgage, Inc.,
4000 Regent Blvd.
Irving, TX 75063
Attention:  Master Servicing Division, Compliance Manager - HALO 2006-2

       Re:   HSI Asset Securitization Loan Obligation Trust 2006-2

       [_______], the [_______] of [_______] (the "Company") hereby certifies to
the   Depositor,   the  Master   Servicer,   the  Trustee  and  the   Securities
Administrator, and each of their officers, directors and affiliates that:

             (1)  I  have  reviewed  the  Company's   report  on  assessment  of
       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 the  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  1 122(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
       [____]  during  200[  ]  that  were  delivered  by  [____]  to any of the
       Depositor,  the Master Servicer,  the Securities  Administrator,  and the
       Trustee pursuant to the Agreement  (collectively,  the "Company Servicing
       Information");

             (2) Based on 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
       the 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  Agreement  has been
       provided  to  the  Depositor,   the  Master   Servicer,   the  Securities
       Administrator and the Trustee;

             (4) I am  responsible  for  reviewing the  activities  performed by
       [____] as [____] under the  Agreement,  and based on my knowledge and the
       compliance review conducted in preparing the Servicing  Assessment or the
       Attestation  Report,  the Company has fulfilled its obligations under the
       Agreement in all material respects; and

             (5) The Servicing  Assessment and Attestation Report required to be
       provided by [____] and [by any Subservicer or Subcontractor]  pursuant to
       the Agreement,  have been provided to the Depositor, the Master Servicer,
       the Securities  Administrator and the Trustee.  Any material instances of
       noncompliance  described  in such  reports  have  been  disclosed  to the
       Depositor, the Master Servicer, the Securities Administrator and the

                                  EXHIBIT N-1

<PAGE>

       Trustee.  Any  material  instance  of  noncompliance  with  the Servicing
       Criteria has been disclosed in such reports.

       Capitalized  terms used but not defined herein have the meanings ascribed
to them in the Pooling  Servicing  Agreement,  dated as of December 1, 2006 (the
"Pooling  and  Servicing  Agreement"),  by and among  HSI  Asset  Securitization
Corporation,  as depositor,  CitiMortgage,  Inc., as master servicer,  Citibank,
N.A.,  as  securities  administrator,  Wells Fargo Bank,  N.A., as custodian and
Deutsche Bank National Trust Company, as trustee.

                                              [____]
                                                 as [____]

                                            By:
                                               Name:
                                               Title:
                                               Date:

                                  EXHIBIT N-2

<PAGE>

                                    EXHIBIT O

                       FORM OF YIELD MAINTENANCE AGREEMENT

                                   EXHIBIT O-1

<PAGE>

                                    EXHIBIT P

                                   [Reserved]

                                   EXHIBIT P-1

<PAGE>

                                    EXHIBIT Q

                               TRANSFER AGREEMENTS

                                   EXHIBIT Q-1

<PAGE>

                                    EXHIBIT R

                                   [Reserved]

                                   EXHIBIT R-1

<PAGE>

                                    EXHIBIT S

                            SERVICING CRITERIA MATRIX

       The  assessment  of  compliance  to be  delivered by  CitiMortgage,  Inc.
("CitiMortgage"),  in its  capacity as Master  Servicer  and by  Citibank,  N.A.
("Citibank"),  in its capacity as Securities Administrator,  shall address, at a
minimum, the criteria identified below as "Applicable Servicing Criteria":

       Capitalized  terms used  herein  but not  defined  herein  shall have the
meanings  assigned to them in the Pooling and  Servicing  Agreement  dated as of
December 1, 2006 (the "Pooling and Servicing Agreement"), by and among HSI Asset
Securitization  Corporation, as depositor, Wells Fargo Bank, N.A., as custodian,
CitiMortgage,   Inc.,  as  master  servicer,   Citibank,   N.A.,  as  securities
administrator, and Deutsche Bank National Trust Company, as trustee.

<TABLE>
<CAPTION>
 Reg AB                  Servicing Criteria                                         Master         Securities         Custodian
 Reference                                                                         Servicer        Administrator
 <S>                 <C>                                                             <C>                <C>           <C>
                     General Servicing  Considerations

 1122(d)(1)(i)       Policies and procedures are instituted to                       X
                     monitor any performance or other triggers and
                     events of default in accordance with the
                     transaction agreements.

 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.

 1122(d)(1)(iii)     Any requirements in the transaction agreements                  X
                     to maintain a back-up servicer for the pool
                     assets are maintained.

 1122(d)(1)(iv)      A fidelity bond and errors and omissions                        X
                     policy is in effect on the party participating
                     in the servicing function throughout the
                     reporting period in the amount of coverage
                     required by and otherwise in accordance with
                     the terms of the transaction agreements.

                     Cash Collection and Administration

 1122(d)(2)(i)       Payments on pool assets are deposited into the                  X                  X
                     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.

 1122(d)(2)(ii)      Disbursements made via wire transfer on behalf                  X                  X
                     of an obligor or to an investor are made only
                     by authorized personnel.

 1122(d)(2)(iii)     Advances of funds or guarantees regarding                       X
                     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.
</TABLE>

                                  EXHIBIT S-1

<PAGE>

<TABLE>
<CAPTION>
 Reg AB                  Servicing Criteria                                         Master         Securities         Custodian
 Reference                                                                          Servicer        Administrator
 <S>                 <C>                                                             <C>                <C>           <C>
 1122(d)(2)(iv)      The related accounts for the transaction, such                  X                  X
                     as cash reserve accounts or accounts
                     established as a form of over
                     collateralization, are separately maintained
                     (e.g., with respect to commingling of cash) as
                     set forth in the transaction agreements.

 1122(d)(2)(v)       Each custodial account is maintained at a                       X                  X
                     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.

 1122(d)(2)(vi)      Unissued checks are safeguarded so as to                        X                  X
                     prevent unauthorized access.

 1122(d)(2)(vii)     Reconciliations are prepared on a monthly                       X                  X
                     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.

                     Investor Remittances and Reporting

 1122(d)(3)(i)       Reports to investors, including those to be                                        X
                     filed with the Commission, are maintained in
                     accordance with the transaction agreements and
                     applicable Commission requirements.
                     Specifically,  such reports (A) are prepared in  accordance
                     with   timeframes   and  other   terms  set  forth  in  the
                     transaction agreements;  (B) provide information calculated
                     in accordance  with the terms  specified in the transaction
                     agreements;  (C) are filed with the  Commission as required
                     by its rules and regulations; and (D) agree with investors'
                     or the trustee's  records as to the total unpaid  principal
                     balance and number of pool assets serviced by the Servicer.

 1122(d)(3)(ii)      Amounts due to investors are allocated and                                         X
                     remitted in accordance with timeframes,
                     distribution priority and other terms set
                     forth in the transaction agreements.

 1122(d)(3)(iii)     Disbursements made to an investor are posted                                       X
                     within two business days to the Servicer's
                     investor records, or such other number of days
                     specified in the transaction agreements.

</TABLE>

                                  EXHIBIT S-2

<PAGE>

<TABLE>
<CAPTION>
 Reg AB                  Servicing Criteria                                         Master         Securities         Custodian
 Reference                                                                         Servicer        Administrator
 <S>                 <C>                                                             <C>           <C>                   <C>
 1122(d)(3)(iv)      Amounts remitted to investors per the investor                  X
                     reports agree with cancelled checks, or other
                     form of payment, or custodial bank statements.

                     Pool Asset Administration

 1122(d)(4)(i)       Collateral or security on pool assets is                                                            X
                     maintained as required by the transaction
                     agreements or related pool asset documents.

 1122(d)(4)(ii)      Pool assets and related documents are                                                               X
                     safeguarded as required by the transaction
                     agreements

 1122(d)(4)(iii)     Any additions,  removals or substitutions to the asset pool
                     are made,  reviewed  and  approved in  accordance  with any
                     conditions or requirements in the transaction agreements.

 1122(d)(4)(iv)      Payments on pool assets, including any
                     payoffs, made in accordance with the related
                     pool asset documents are posted to the
                     Servicer's obligor records maintained no more
                     than two business days after receipt, or such
                     other number of days specified in the
                     transaction agreements, and allocated to
                     principal, interest or other items (e.g.,
                     escrow) in accordance with the related pool
                     asset documents.

 1122(d)(4)(v)       The Servicer's records regarding the pool assets agree with
                     the Servicer's  records with respect to an obligor's unpaid
                     principal balance.

 1122(d)(4)(vi)      Changes with respect to the terms or status of                  X
                     an obligor's pool assets (e.g., loan
                     modifications or re-agings) are made, reviewed
                     and approved by authorized personnel in
                     accordance with the transaction agreements and
                     related pool asset documents.

 1122(d)(4)(vii)     Loss mitigation or recovery actions (e.g.,                      X
                     forbearance plans, modifications and deeds in
                     lieu of foreclosure, foreclosures and
                     repossessions, as applicable) are initiated,
                     conducted and concluded in accordance with the
                     timeframes or other requirements established
                     by the transaction agreements.

 1122(d)(4)(viii)    Records documenting collection efforts are
                     maintained during the period a pool asset is
                     delinquent in accordance with the transaction
                     agreements. Such records are maintained on at
                     least a monthly basis, or such other period
                     specified in the transaction agreements, and
                     describe the entity's activities in monitoring
                     delinquent pool assets including, for example,
                     phone calls, letters and payment rescheduling
                     plans in cases where delinquency is deemed
                     temporary (e.g., illness or unemployment).
</TABLE>

                                  EXHIBIT S-3

<PAGE>

<TABLE>
<CAPTION>
 Reg AB                  Servicing Criteria                                         Master         Securities         Custodian
 Reference                                                                         Servicer        Administrator
 <S>                 <C>                                                             <C>                <C>           <C>
 1122(d)(4)(ix)      Adjustments to interest rates or rates of return for pool
                     assets with variable rates are computed based on the
                     related pool asset documents.

 1122(d)(4)(x)       Regarding any funds held in trust for an
                     obligor (such as escrow accounts): (A) such
                     funds are analyzed, in accordance with the
                     obligor's pool asset documents, on at least an
                     annual basis, or such other period specified
                     in the transaction agreements; (B) interest on
                     such funds is paid, or credited, to obligors
                     in accordance with applicable pool asset
                     documents and state laws; and (C) such funds
                     are returned to the obligor within 30 calendar
                     days of full repayment of the related pool
                     assets, or such other number of days specified
                     in the transaction agreements.

 1122(d)(4)(xi)      Payments made on behalf of an obligor (such as
                     tax or insurance payments) are made on or
                     before the related penalty or expiration
                     dates, as indicated on the appropriate bills
                     or notices for such payments, provided that
                     such support has been received by the servicer
                     at least 30 calendar days prior to these
                     dates, or such other number of days specified
                     in the transaction agreements.

 1122(d)(4)(xii)     Any late payment penalties in connection with any payment
                     to be made on behalf of an obligor are paid from the
                     Servicer's funds and not charged to the obligor, unless the
                     late payment was due to the obligor's error or omission.

 1122(d)(4)(xiii)    Disbursements made on behalf of an obligor are posted
                     within two business days to the obligor's records
                     maintained by the servicer, or such other number of days
                     specified in the transaction agreements.

 1122(d)(4)(xiv)     Delinquencies, charge-offs and uncollectible                    X
                     accounts are recognized and recorded in
                     accordance with the transaction agreements.

 1122(d)(4)(xv)      Any external enhancement or other support,                                         X*
                     identified in Item 1114(a)(1) through (3) or
                     Item 1115 of Regulation AB, is maintained as
                     set forth in the transaction agreements.
</TABLE>
_________________
(*) Solely  with respect to  premiums paid on certificate insurance policies, if
any.

                                  EXHIBIT S-4

<PAGE>

                                    EXHIBIT T

Trustee: Deutsche Bank National Trust Company

Securities Administrator: Citibank, N.A.

Master Servicer: CitiMortgage, Inc.

Yield Maintenance Agreement Provider: Bear Stearns Financial Products Inc.

Custodian: Wells Fargo Bank, N.A.

Sponsor: HSBC Bank USA, National Association

Servicers: HSBC Mortgage Corporation (USA), Wells Fargo Bank, N.A., Countrywide
Home Loans Servicing LP and Wachovia Mortgage Corporation.

                                  EXHIBIT T-1

<PAGE>

                                   EXHIBIT U

                      FORM OF ANNUAL COMPLIANCE CERTIFICATE

Via Overnight Delivery

[DATE]

HSI Asset Securitization Corporation,
452 Fifth Avenue
New York, New York  10018
Attention:  Head MBS Principal Finance

Citibank, N.A.,
388 Greenwich Street, 14th Floor
New York, New York  10013
Attention:  Corporate Trust Services - [___] 2006-[__]

     RE:  Annual  officer's  certificate  delivered  pursuant to Section 3.05 of
          that certain Pooling Servicing Agreement, dated as of December 1, 2006
          (the   "Pooling   and   Servicing   Agreement"),   among   HSI   Asset
          Securitization    Corporation,   as   depositor   (the   "Depositor"),
          CitiMortgage,   Inc.  as  master  servicer  (the  "Master  Servicer"),
          Citibank,   N.A.  as   securities   administrator   (the   "Securities
          Administrator")  and  Wells  Fargo  Bank,  N.A.  as  custodian,   (the
          "Custodian") and Deutsche Bank National Trust Company, as trustee (the
          "Trustee")

[_______],  the undersigned,  a duly authorized  [_______] of [Master  Servicer]
[Securities  Administrator]  [Name of  Subservicer],  does  hereby  certify  the
following for the [calendar  year][identify other period] ending on December 31,
20[__]:

1.   A  review  of  the   activities  of  the  [Master   Servicer]   [Securities
     Administrator]  during the preceding calendar year (or portion thereof) and
     of its performance  under the Agreement for such period has been made under
     my supervision.

2.   To the best of my knowledge,  based on such review,  the [Master  Servicer]
     [Securities  Administrator]  has fulfilled all of its obligations under the
     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,  I have specifically  identified to the
     Depositor  and the [Master  Servicer][Securities  Administrator]  each such
     failure known to me and the nature and status thereof,  including the steps
     being taken by the [Master Servicer]  [Securities  Administrator] to remedy
     such default.

Certified By:

__________________________________
Name:
Title:

                                  EXHIBIT U-1

<PAGE>

                                   EXHIBIT V

                         ADDITIONAL FORM 10-D DISCLOSURE

<TABLE>
<CAPTION>
ADDITIONAL FORM 10-D DISCLOSURE
  <S>                                                                                 <C>
                    Item on Form 10-D                                                       Party Responsible

  Item 1: Distribution and Pool Performance Information

  Information included in the [Monthly Statement]                                     Master Servicer, each Servicer(2)
                                                                                         Securities Administrator

   Any information required by 1121 which is NOT included                                     Depositor
                 on the [Monthly Statement]

                  Item 2: Legal Proceedings

  Any legal proceeding pending against the following entities or their respective
  property, that is material to Certificateholders, including any proceeding known
  to be contemplated by governmental authorities:

    Issuing Entity (Trust Fund)                                                       Master Servicer, Securities Administrator,
                                                                                         Each Servicer(1) and Depositor

    Sponsor (Seller)                                                                  Seller (if a party to the Pooling and
                                                                                         Servicing Agreement) or Depositor

    Depositor                                                                                  Depositor

    Trustee                                                                                     Trustee

    Securities Administrator                                                             Securities Administrator

    Master Servicer                                                                        Master Servicer

    Each Servicer                                                                          Each Servicer(1)

    Custodian                                                                                Custodian

    1110(b) Originator                                                                       Depositor

    Any 1108(a)(2) Servicer (other than the Servicers, the                                 Each Servicer(1)
   Master Servicer or Securities Administrator)

    Any other party contemplated by 1100(d)(1)                                               Depositor

        Item 3: Sale of Securities and Use of                                                Depositor
                       Proceeds
  Information from Item 2(a) of Part II of Form 10-Q:

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

______________________________

(1) This information to be provided pursuant to the applicable Servicing
    Agreement.

                                  EXHIBIT V-1

<PAGE>

<TABLE>
<CAPTION>
ADDITIONAL FORM 10-D DISCLOSURE
  <S>                                                                                 <C>
                    Item on Form 10-D                                                       Party Responsible

  Pricing information can be omitted if securities were not registered.

           Item 4: Defaults Upon Senior Securities                                        Securities Administrator

  Information from Item 3 of Part II of Form 10-Q:
  Report  the  occurrence  of any Event of  Default  (after
  expiration  of any  grace  period  and  provision  of any
  required notice)

       Item 5: Submission of Matters to a Vote of Security                                Securities Administrator
                           Holders

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

        Item 6: Significant Obligors of Pool                                                  Depositor
                           Assets

  Item 1112(b) - Significant Obligor Financial Information(*)

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

        Item 7: Significant Enhancement
                  Provider Information
  Item 1114(b)(2) - Credit Enhancement Provider Financial
  Information(*)

    Determining applicable disclosure threshold                                               Depositor

    Requesting  required financial information  (including                                    Depositor
   any required  accountants' consent to the use thereof) or
   effecting incorporation by reference

       Item 1115(b) - Derivative Counterparty Financial
                        Information(*)

    Determining current maximum probably exposure                                             Depositor

    Determining current significance percentage                                               Depositor

    Requesting required financial  information  (including  Depositor any required
   accountants' consent  to  the  use  thereof)  or  effecting   incorporation  by
   reference.

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

                                  EXHIBIT V-2

<PAGE>

<TABLE>
<CAPTION>
ADDITIONAL FORM 10-D DISCLOSURE
  <S>                                                                                 <C>
                    Item on Form 10-D                                                       Party Responsible

                 Item 8: Other Information                                             Any party responsible for the applicable
                                                                                                Form 8-K Disclosure item
  Disclose any information  required to be reported on Form
  8-K during  the  period  covered by the Form 10-D but not
  reported

                       Item 9: Exhibits
           Monthly Statement to Certificateholders                                        Securities Administrator

  Exhibits required by Item 601 of Regulation S-K, such as                                    Depositor
                     material agreements
</TABLE>

                                  EXHIBIT V-3

<PAGE>

                                   EXHIBIT W

                         ADDITIONAL FORM 10-K DISCLOSURE

<TABLE>
<CAPTION>
                                                 ADDITIONAL FORM 10-K DISCLOSURE
  <S>                                                                                     <C>
                    Item on Form 10-K                                                       Party Responsible

   Item 1B: Unresolved Staff Comments                                                         Depositor

            Item 9B: Other  Information Any party  responsible for disclosure
  items on Form 8-K Disclose any  information  required to be reported on Form 8-K
  during the fourth quarter covered by the Form 10-K but not reported

   Item 15: Exhibits, Financial Statement Schedules                                       Securities Administrator
                                                                                              Depositor

  Reg AB Item 1112(b): Significant Obligors of Pool Assets

  Significant Obligor Financial Information(*)                                                Depositor

  (*)This information need only be reported on the Form 10-K if updated
  information is required pursuant to the Item.

     Reg AB Item 1114(b)(2): Credit Enhancement Provider
                    Financial Information

    Determining applicable disclosure threshold                                               Depositor

    Requesting required financial information  (including                                     Depositor
    any   required   accountants'   consent  to  the  use
    thereof) or effecting incorporation by reference

  (*)This information need only be reported on the Form 10-K if updated
  information is required pursuant to the Item.

     Reg AB Item 1115(b): Derivative Counterparty Financial
                         Information

    Determining current maximum portable exposure                                             Depositor

    Determining current significance percentage.                                              Depositor

    Requesting required financial information                                                 Depositor
    (including any required accountants' consent to the
    use thereof) or effecting incorporation by reference

  (*)This information need only be reported on the Form 10-K if updated
  information is required pursuant to the Item.

    Reg AB Item 1117:  Legal  Proceedings  Any legal  proceeding  pending
  against the following entities or their respective property, that is material to
  Certificateholders,  including  any  proceeding  known  to  be  contemplated  by
  governmental authorities:

    Issuing Entity (Trust Fund)                                                           Servicer and Depositor

    Sponsor (Seller)                                                                Seller (if a party to the Pooling and Servicing
                                                                                          Agreement) or Depositor
</TABLE>

                                  EXHIBIT W-1

<PAGE>

<TABLE>
<CAPTION>
                                                      ADDITIONAL FORM 10-K DISCLOSURE
                    Item on Form 10-K                                                                  Party Responsible
   <S>                                                                                               <C>
   Depositor                                                                                               Depositor
   Trustee                                                                                                  Trustee
   Securities Administrator                                                                         Securities Administrator
   Master Servicer                                                                                       Master Servicer
   Servicer                                                                                                 Servicer
   Custodian                                                                                               Custodian
   1110(b) Originator                                                                                      Depositor
   Any 1108(a)(2) Servicer (other than the Servicers,                                                       Servicer
  Master Servicer or Securities Administrator)
   Any other party contemplated by 1100(d)(1)                                                              Depositor
      Reg AB Item 1119: Affiliations and Relationships
  Whether (a) the  Sponsor  (Seller),  Depositor  or Issuing  Depositor  as to (a)
  Entity is an affiliate of the following  parties,  and (b)  Sponsor/Seller as to
  (a) to  the  extent  known  and  material,  any of  the  following  parties  are
  affiliated with one another:

   Master Servicer                                                                                      Master Servicer
   Servicer                                                                                                Servicer(1)
   Securities Administrator                                                                         Securities Administrator
   Trustee                                                                                                   Trustee
   Any other 1108(a)(3) servicer                                                                           Servicer(1)
   Any 1110 Originator                                                                                  Depositor/Sponsor
   Any 1112(b) Significant Obligor                                                                      Depositor/Sponsor
   Any 1114 Credit Enhancement Provider                                                                 Depositor/Sponsor
   Any 1115 Derivative Counterparty Provider                                                            Depositor/Sponsor
   Any other 1101(d)(1) material party                                                                  Depositor/Sponsor
  Whether there are any "outside the ordinary course                                                    Depositor as to (a)
  business arrangements" other than would be obtained in                                              Sponsor/Seller as to (a)
  an arm's length transaction between (a) the Sponsor
  (Seller), Depositor or Issuing Entity on the one hand,
  and (b) any of the following parties (or their
  affiliates) on the other hand, that exist currently or
  within the past two years and that are material to a
  Certificateholder's understanding of the Certificates:

   Master Servicer                                                                                       Master Servicer
   Servicer                                                                                                Servicer(1)
   Securities Administrator                                                                         Securities Administrator
   Trustee                                                                                              Depositor/Sponsor
   Any other 1108(a)(3) servicer                                                                        Depositor/Sponsor
   Any 1110 Originator                                                                                  Depositor/Sponsor
</TABLE>

                                  EXHIBIT W-2

<PAGE>

<TABLE>
<CAPTION>
                                                      ADDITIONAL FORM 10-K DISCLOSURE
                    Item on Form 10-K                                                                   Party Responsible
   <S>                                                                                                  <C>
   Any 1112(b) Significant Obligor                                                                      Depositor/Sponsor
   Any 1114 Credit Enhancement Provider                                                                 Depositor/Sponsor
   Any other 1101(d)(1) material party                                                                  Depositor/Sponsor
  Whether there are any specific  relationships  involving Depositor as to (a) the
  transaction or the pool assets between (a) the  Sponsor/Seller as to (a) Sponsor
  (Seller),  Depositor  or  Issuing  Entity  on the one  hand,  and (b) any of the
  following  parties (or their affiliates) on the other hand, that exist currently
  or within the past two years and that are material:

   Master Servicer                                                                                       Master Servicer
   Servicer                                                                                                 Servicer(1)
   Securities Administrator                                                                          Securities Administrator
   Trustee                                                                                              Depositor/Sponsor
   Any other 1108(a)(3) servicer                                                                             Servicer
   Any 1110 Originator                                                                                  Depositor/Sponsor
   Any 1112(b) Significant Obligor                                                                      Depositor/Sponsor
   Any 1114 Credit Enhancement Provider                                                                 Depositor/Sponsor
   Any 1115 Derivate Counterparty Provider                                                              Depositor/Sponsor
   Any other 1101(d)(1) material party                                                                  Depositor/Sponsor
</TABLE>

----------------
(1) This information to be provided persuant to the applicable Servicing
    Agreement.

                                  EXHIBIT W-3

<PAGE>

                                   EXHIBIT X

                        FORM 8-K DISCLOSURE INFORMATION

<TABLE>
<CAPTION>
                                                      FORM 8-K DISCLOSURE INFORMATION
                    Item on Form 8-K                                                                    Party Responsible
    <S>                                                                                          <C>
    Item 1.01- Entry into a Material Definitive Agreement                                        All parties other than the Trustee
  Disclosure is required regarding entry into or amendment
  of any definitive agreement that is material to the
  securitization, even if depositor is not a party.

  Examples: servicing agreement, custodial agreement.

  Note:   disclosure   not   required   as  to   definitive
  agreements that are fully disclosed in the prospectus
       Item 1.02- Termination of a Material Definitive Agreement                                 All parties other than the Trustee

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

  Examples: servicing agreement, custodial agreement.
      Item 1.03- Bankruptcy or Receivership                                                                Depositor

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

   Sponsor (Seller)                                                                                Depositor/Sponsor (Seller)
   Depositor                                                                                               Depositor
   Master Servicer                                                                                       Master Servicer
   Affiliated Servicer                                                                                     Servicer(1)
   Other  Servicer  servicing  20% or  more  of the  pool                                                  Servicer(1)
   assets at the time of the report
   Other material servicers                                                                                Servicer(1)
   Trustee                                                                                                   Trustee
   Securities Administrator                                                                         Securities Administrator
   Significant Obligor                                                                                      Depositor
   Credit Enhancer (10% or more)                                                                            Depositor
   Derivative Counterparty                                                                                  Depositor
</TABLE>

----------
(1) This information to be provided pursuant to the applicable Servicing
    Agreement.

                                  EXHIBIT X-1

<PAGE>

<TABLE>
<CAPTION>
                                                      FORM 8-K DISCLOSURE INFORMATION
                    Item on Form 8-K                                                                    Party Responsible
   <S>                                                                                                      <C>
   Custodian                                                                                                Custodian
        Item 2.04- Triggering Events that                                                                   Depositor
    Accelerate or Increase a Direct Financial Obligation or
    an Obligation under an Off-Balance Sheet Arrangement

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

  Disclosure  will be made of  events  other  than  waterfall  triggers  which are
  disclosed in the monthly statements to the certificateholders.
   Item 3.03- Material Modification to Rights                                                               Depositor
              of Security Holders

  Disclosure is required of any material  modification  to documents  defining the
  rights of Certificateholders, including the Pooling and Servicing Agreement.
       Item 5.03- Amendments of Articles of Incorporation or                                                Depositor
     Bylaws; Change of Fiscal Year
  Disclosure  is required of any  amendment  "to the  governing  documents  of the
  issuing entity".
        Item 6.01- ABS Informational and Computational Material                                             Depositor

    Item 6.02- Change of Servicer or Securities Administrator                                      Master Servicer/ Depositor/
                                                                                                           Servicer(1)
  Requires disclosure of any removal, replacement, substitution or addition of any
  master servicer,  affiliated  servicer,  other servicer servicing 10% or more of
  pool assets at time of report, other material servicers or trustee.
  Reg  AB  disclosure   about  any  new  servicer  or  master                                  Servicer(1)/Master Servicer/Depositor
  servicer is also required.

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

   Item 6.03- Change in Credit Enhancement or External                                                      Depositor
                Support
  Covers  termination of any  enhancement  in manner other than by its terms,  the
  addition of an enhancement,  or a material  change in the enhancement  provided.
  Applies to external credit enhancements as well as derivatives.
</TABLE>
----------
(1) This information to be provided persuant to the applicable Servicing
    Agreement.

                                  EXHIBIT X-2

<PAGE>

<TABLE>
<CAPTION>
                                                      FORM 8-K DISCLOSURE INFORMATION
                    Item on Form 8-K                                                               Party Responsible
  <S>                                                                                <C>
  Reg AB disclosure about any new enhancement provider is Depositor also required.

      Item 6.04- Failure to Make a Required Distribution                                        Securities Administrator

        Item 6.05- Securities Act Updating                                                             Depositor
                    Disclosure

  If any  material  pool  characteristic  differs  by 5% or  more  at the  time of
  issuance of the securities from the description in the final prospectus, provide
  updated Reg AB disclosure about the actual asset pool.
  If there are any new servicers or originators required Depositor to be disclosed
  under Regulation AB as a result of the foregoing, provide the information called
  for in Items 1108 and 1110 respectively.

            Item 7.01- Reg FD Disclosure                                                   All parties other than the Trustee

               Item 8.01- Other Events                                                                 Depositor

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

        Item 9.01- Financial Statements and                                          Responsible party for reporting/disclosing the
                      Exhibits                                                                financial statement or exhibit
</TABLE>

                                  EXHIBIT X-3

<PAGE>

                                   EXHIBIT Y

                       ADDITIONAL DISCLOSURE NOTIFICATION

**SEND   TO   CITIBANK   VIA  FAX  TO   (212)   816-5527   AND  VIA   EMAIL   TO
JENNIFER.MCCOURT@CITIGROUP.COM AND VIA OVERNIGHT MAIL TO THE ADDRESS IMMEDIATELY
BELOW. SEND TO THE DEPOSITOR AT THE ADDRESS BELOW**

Citibank, N.A.,
 as Securities Administrator
388 Greenwich, 14th Floor
New York, New York 10013
Attention:  Structured  Finance  Agency  and Trust - HSI Asset  Loan  Obligation
2006-2
Fax: (212) 816-5527
E-mail:  jennifer.mccourt@citigroup.com

HSI Asset Securitization Corporation
452 Fifth Avenue
New York, New York 10018
Attention: Head MBS Principal Finance

       Attn: Corporate Trust Services - [DEAL NAME]-SEC REPORT PROCESSING

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

Ladies and Gentlemen:

       In accordance  with Section [ ] of the Pooling and  Servicing  Agreement,
dated as of [ ] [ ], 2006,  among [ ], as [ ], [ ], as [ ], [ ], as [ ] and [ ],
as [ ]. The  Undersigned,  as [ ], hereby  notifies you that certain events have
come to our attention that [will][may] need to be disclosed on Form [ ].

Description of Additional Form [ ] Disclosure:

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

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

                                               [NAME OF PARTY]
                                               as [role]
                                               By: _____________________________
                                                   Name:
                                                   Title:

                                  EXHIBIT Y-1

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