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    SACO
      I
      TRUST 2006-8

     

     

    Issuing
      Entity,

    
 

    LASALLE
      BANK NATIONAL ASSOCIATION

     

     

    Securities
      Administrator

     

     

    and
      

     

     

    CITIBANK,
      N.A.

     

     

    Indenture
      Trustee

     

     

    INDENTURE

     

    

     

    Dated
      as
      of September 15, 2006

     

    

     

    

     

    

     

    MORTGAGE-BACKED
      NOTES

     

    

     

    

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF
      CONTENTS

     

    

    Section

     

    ARTICLE
      I

     

     

    DEFINITIONS

     

    
      	
              Section
                1.01

            	
              Definitions

            

    

    
      	
              Section
                1.02

            	
              Incorporation
                by Reference of Trust Indenture Act

            

    

    
      	
              Section
                1.03

            	
              Rules
                of Construction

            

    

     

    ARTICLE
      II

     

     

    ORIGINAL
      ISSUANCE OF NOTES

     

    
      	
              Section
                2.01

            	
              Form

            

    

    
      	
              Section
                2.02

            	
              Execution,
                Authentication and Delivery

            

    

     

    ARTICLE
      III

     

     

    COVENANTS

     

    
      	
              Section
                3.01

            	
              Existence

            

    

    
      	
              Section
                3.02

            	
              Payment
                of Principal and Interest. 

            

    

    
      	
              Section
                3.03

            	
              Protection
                of Trust Estate

            

    

    
      	
              Section
                3.04

            	
              Opinions
                as to Trust Estate

            

    

    
      	
              Section
                3.05

            	
              Performance
                of Obligations

            

    

    
      	
              Section
                3.06

            	
              Negative
                Covenants

            

    

    
      	
              Section
                3.07

            	
              Annual
                Statement as to Compliance

            

    

    
      	
              Section
                3.08

            	
              Representations
                and Warranties Concerning the
                HELOCs

            

    

    
      	
              Section
                3.09

            	
              Investment
                Company Act

            

    

    
      	
              Section
                3.10

            	
              No
                Other Business

            

    

    
      	
              Section
                3.11

            	
              No
                Borrowing

            

    

    
      	
              Section
                3.12

            	
              Guarantees,
                Loans, Advances and Other
                Liabilities

            

    

    
      	
              Section
                3.13

            	
              Capital
                Expenditures

            

    

    
      	
              Section
                3.14

            	
              Determination
                of Note Interest Rate. 

            

    

    
      	
              Section
                3.15

            	
              Restricted
                Payments

            

    

    
      	
              Section
                3.16

            	
              Notice
                of Events of Default

            

    

    
      	
              Section
                3.17

            	
              Further
                Instruments and Acts

            

    

    
      	
              Section
                3.18

            	
              Certain
                Representations Regarding the Trust Estate.

            

    

    
      	
              Section
                3.19

            	
              Allocation
                of Charge-Off Amounts

            

    

    
      	
              Section
                3.20

            	
              Claims
                on the Policy; Policy Payments Account.

            

    

     

    ARTICLE
      IV

     

     

    THE
      NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

     

    
      	
              Section
                4.01

            	
              The
                Notes

            

    

    
      	
              Section
                4.02

            	
              Registration
                of and Limitations on Transfer and Exchange of Notes; Appointment
                of Note
                Registrar and Certificate Registrar

            

    

    
      	
              Section
                4.03

            	
              Mutilated,
                Destroyed, Lost or Stolen Notes

            

    

    
      	
              Section
                4.04

            	
              Persons
                Deemed Owners

            

    

    
      	
              Section
                4.05

            	
              Cancellation

            

    

    
      	
              Section
                4.06

            	
              Book-Entry
                Notes

            

    

    
      	
              Section
                4.07

            	
              Notices
                to Depository

            

    

    
      	
              Section
                4.08

            	
              Definitive
                Notes

            

    

    
      	
              Section
                4.09

            	
              Application
                of Trust Money

            

    

    
      	
              Section
                4.10

            	
              Subrogation
                and Cooperation

            

    

    
      	
              Section
                4.11

            	
              Repayment
                of Monies Held by Paying Agent

            

    

    
      	
              Section
                4.12

            	
              Temporary
                Notes

            

    

    
      	
              Section
                4.13

            	
              Representation
                Regarding ERISA

            

    

     

    ARTICLE
      V

     

     

    DEFAULT
      AND REMEDIES

     

    
      	
              Section
                5.01

            	
              Events
                of Default

            

    

    
      	
              Section
                5.02

            	
              Acceleration
                of Maturity; Rescission and
                Annulment

            

    

    
      	
              Section
                5.03

            	
              Collection
                of Indebtedness and Suits for Enforcement by Indenture Trustee.
                

            

    

    
      	
              Section
                5.04

            	
              Remedies;
                Priorities

            

    

    
      	
              Section
                5.05

            	
              Optional
                Preservation of the Trust Estate

            

    

    
      	
              Section
                5.06

            	
              Limitation
                of Suits

            

    

    
      	
              Section
                5.07

            	
              Unconditional
                Rights of Noteholders To Receive Principal and
                Interest

            

    

    
      	
              Section
                5.08

            	
              Restoration
                of Rights and Remedies

            

    

    
      	
              Section
                5.09

            	
              Rights
                and Remedies Cumulative

            

    

    
      	
              Section
                5.10

            	
              Delay
                or Omission Not a Waiver

            

    

    
      	
              Section
                5.11

            	
              Control
                By Note Insurer and Noteholders

            

    

    
      	
              Section
                5.12

            	
              Waiver
                of Past Defaults

            

    

    
      	
              Section
                5.13

            	
              Undertaking
                for Costs

            

    

    
      	
              Section
                5.14

            	
              Waiver
                of Stay or Extension Laws

            

    

    
      	
              Section
                5.15

            	
              Sale
                of Trust Estate

            

    

    
      	
              Section
                5.16

            	
              Action
                on Notes

            

    

     

    ARTICLE
      VI

     

     

    THE
      INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR

     

    
      	
              Section
                6.01

            	
              Duties
                of Indenture Trustee and Securities
                Administrator

            

    

    
      	
              Section
                6.02

            	
              Rights
                of Indenture Trustee and Securities
                Administrator

            

    

    
      	
              Section
                6.03

            	
              Individual
                Rights of Indenture Trustee

            

    

    
      	
              Section
                6.04

            	
              Indenture
                Trustee’s and Securities Administrator’s
                Disclaimer

            

    

    
      	
              Section
                6.05

            	
              Notice
                of Event of Default

            

    

    
      	
              Section
                6.06

            	
              Reports
                to Residual Certificateholders

            

    

    
      	
              Section
                6.07

            	
              Compensation

            

    

    
      	
              Section
                6.08

            	
              Replacement
                of Indenture Trustee and the Securities
                Administrator

            

    

    
      	
              Section
                6.09

            	
              Successor
                Indenture Trustee and Securities Administrator by
                Merger

            

    

    
      	
              Section
                6.10

            	
              Appointment
                of Co-Indenture Trustee or Separate Indenture
                Trustee

            

    

    
      	
              Section
                6.11

            	
              Eligibility;
                Disqualification

            

    

    
      	
              Section
                6.12

            	
              Representations
                and Warranties

            

    

    
      	
              Section
                6.13

            	
              Representations
                and Warranties

            

    

    
      	
              Section
                6.14

            	
              Directions
                to Indenture Trustee and the Securities Administrator.
                

            

    

    
      	
              Section
                6.15

            	
              The
                Agents

            

    

     

    ARTICLE
      VII

     

     

    NOTEHOLDERS’
      LISTS AND REPORTS

     

    
      	
              Section
                7.01

            	
              Issuing
                Entity To Furnish Securities Administrator and Indenture Trustee
                Names and
                Addresses of Noteholders

            

    

    
      	
              Section
                7.02

            	
              Preservation
                of Information; Communications to
                Noteholders

            

    

    
      	
              Section
                7.03

            	
              Financial
                Information

            

    

    
      	
              Section
                7.04

            	
              Statements
                to Noteholders and
                Certificateholders

            

    

     

    ARTICLE
      VIII

     

     

    ACCOUNTS,
      DISBURSEMENTS AND RELEASES

     

    
      	
              Section
                8.01

            	
              Collection
                of Money

            

    

    
      	
              Section
                8.02

            	
              Officer’s
                Certificate

            

    

    
      	
              Section
                8.03

            	
              Termination
                Upon Distribution to Noteholders

            

    

    
      	
              Section
                8.04

            	
              Release
                of Trust Estate

            

    

    
      	
              Section
                8.05

            	
              Surrender
                of Notes Upon Final Payment

            

    

    
      	
              Section
                8.06

            	
              Optional
                Redemption of the HELOCs

            

    

     

    ARTICLE
      IX

     

     

    SUPPLEMENTAL
      INDENTURES

     

    
      	
              Section
                9.01

            	
              Supplemental
                Indentures Without Consent of
                Noteholders

            

    

    
      	
              Section
                9.02

            	
              Supplemental
                Indentures With Consent of
                Noteholders

            

    

    
      	
              Section
                9.03

            	
              Execution
                of Supplemental Indentures

            

    

    
      	
              Section
                9.04

            	
              Effect
                of Supplemental Indenture

            

    

    
      	
              Section
                9.05

            	
              Conformity
                with Trust Indenture Act

            

    

    
      	
              Section
                9.06

            	
              Reference
                in Notes to Supplemental Indentures

            

    

     

    ARTICLE
      X

     

     

    TAX
      MATTERS

     

    
      	
              Section
                10.01

            	
              Description
                of REMICs and Designation of REMIC Interests.

            

    

    
      	
              Section
                10.02

            	
              REMIC
                Elections and REMIC Distributions. 

            

    

    
      	
              Section
                10.03

            	
              Allocation
                of Charge-Off Amounts. 

            

    

    
      	
              Section
                10.04

            	
              Tax
                Administration. 

            

    

    
      	
              Section
                10.05

            	
              Tax
                Treatment of Net WAC Cap Rate Carryover Amounts.
                

            

    

     

    ARTICLE
      XI

     

     

    MISCELLANEOUS

     

    
      	
              Section
                11.01

            	
              Compliance
                Certificates and Opinions, etc

            

    

    
      	
              Section
                11.02

            	
              Form
                of Documents Delivered to Indenture
                Trustee

            

    

    
      	
              Section
                11.03

            	
              Acts
                of Noteholders

            

    

    
      	
              Section
                11.04

            	
              Notices
                etc., to Indenture Trustee Issuing Entity, Securities Administrator,
                Note
                Insurer and Rating Agencies

            

    

    
      	
              Section
                11.05

            	
              Notices
                to Noteholders; Waiver

            

    

    
      	
              Section
                11.06

            	
              Conflict
                with Trust Indenture Act

            

    

    
      	
              Section
                11.07

            	
              Effect
                of Headings

            

    

    
      	
              Section
                11.08

            	
              Successors
                and Assigns

            

    

    
      	
              Section
                11.09

            	
              Separability

            

    

    
      	
              Section
                11.10

            	
              Legal
                Holidays

            

    

    
      	
              Section
                11.11

            	
              GOVERNING
                LAW

            

    

    
      	
              Section
                11.12

            	
              Counterparts

            

    

    
      	
              Section
                11.13

            	
              Recording
                of Indenture

            

    

    
      	
              Section
                11.14

            	
              Issuing
                Entity Obligation

            

    

    
      	
              Section
                11.15

            	
              No
                Petition

            

    

    
      	
              Section
                11.16

            	
              Inspection

            

    

    
      	
              Section
                11.17

            	
              Benefits
                of Indenture

            

    

    
      	
              Section
                11.18

            	
              Securities
                Administrator to Hold Policy

            

    

    

    

    EXHIBITS

    

    
      	 	
              Exhibit
                A-1

            	
              —

            	
              Form
                of Class A Notes

            
	 	
              Exhibit
                A-2

            	
              —

            	
              Form
                of Class A-IO Notes

            
	 	
              Exhibit
                A-3

            	
              —

            	
              Form
                of Class B Notes

            
	 	
              Exhibit
                B

            	
              —

            	
              Mortgage
                Loan Schedule

            
	 	
              Exhibit
                C

            	
              —

            	
              Form
                of Transferee Certificate

            
	 	
              Exhibit
                D

            	
              —

            	
              Form
                of Transferor Certificate

            
	 	
              Exhibit
                E

            	
              —

            	
              Form
                of Mortgage Loan Purchase Agreement

            

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    This
      Indenture, dated as of September 15, 2006, is entered into among SACO I Trust
      2006-8, a Delaware statutory trust, as Issuing Entity (the “Issuing Entity”),
      LaSalle Bank National Association, as Securities Administrator (the “Securities
      Administrator”) and Citibank, N.A., as Indenture Trustee (the “Indenture
      Trustee”). 

     

    WITNESSETH
      THAT:

     

    Each
      party hereto agrees as follows for the benefit of the other party and for the
      equal and ratable benefit of the Holders of the Issuing Entity’s Mortgage-Backed
      Notes, Series 2006-8 (the “Notes”) and the Note Insurer.

     

    GRANTING
      CLAUSE

     

    The
      Issuing Entity hereby Grants to the Indenture Trustee at the Closing Date,
      as
      trustee for the benefit of the Holders of the Notes and the Note Insurer, all
      of
      the Issuing Entity's right, title and interest in and to, whether now existing
      or hereafter created, (a) the HELOCs; (b) all funds on deposit from time to
      time
      in the Master Servicer Collection Account, excluding any investment income
      from
      such funds; (c) all
      funds
      on deposit from time to time in the Payment Account and in all proceeds thereof;
      (d) any
      REO
      Property; (e) all rights under (I) the Mortgage Loan Purchase Agreement as
      assigned to the Issuing Entity, with respect to the HELOCs, (II) the Required
      Insurance Policies and any amounts paid or payable by the insurer under any
      Insurance Policy (to the extent the mortgagee has a claim thereto) and (III)
      the
      rights with respect to the Sale and Servicing Agreement and the Servicing
      Agreement, as assigned to the Issuing Entity by the Assignment Agreement; and
      (f) all present and future claims, demands, causes and choses in action in
      respect of any or all of the foregoing and all payments on or under, and all
      proceeds of every kind and nature whatsoever in respect of, any or all of the
      foregoing and all payments on or under, and all proceeds of every kind and
      nature whatsoever in the conversion thereof, voluntary or involuntary, into
      cash
      or other liquid property, all cash proceeds, accounts, accounts receivable,
      notes, drafts, acceptances, checks, deposit accounts, rights to payment of
      any
      and every kind, and other forms of obligations and receivables, instruments
      and
      other property which at any time constitute all or part of or are included
      in
      the proceeds of any of the foregoing (collectively, the "Trust Estate" or the
      "Collateral"). 

     

    In
      addition, the Indenture Trustee and the Securities Administrator, on behalf
      of
      the Holders of the Class A Notes, will have the benefit of the
      Policy.

     

    The
      foregoing Grant is made in trust to secure the payment of principal of and
      interest on, and any other amounts owing in respect of, the Notes, subject
      to
      the priority set forth herein, and to secure compliance with the provisions
      of
      this Indenture, all as provided in this Indenture.

     

    The
      Indenture Trustee, as trustee on behalf of the Holders of the Notes and the
      Note
      Insurer, acknowledges such Grant, accepts the trust under this Indenture in
      accordance with the provisions hereof and each of the Indenture Trustee and
      the
      Securities Administrator agree to perform their respective duties as Indenture
      Trustee and Securities Administrator as required herein. The Securities
      Administrator, on behalf of the Indenture Trustee, agrees that it will hold
      the
      Policy in trust and that it will hold any proceeds of any claim made upon the
      Policy solely for the use and benefit of the Holders of the Class A Notes in
      accordance with the terms hereof and the terms of the Policy.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      I 

     

    DEFINITIONS

     

    Section
      1.01  Definitions.
      For all
      purposes of this Indenture, except as otherwise expressly provided herein or
      unless the context otherwise requires, capitalized terms not otherwise defined
      herein shall have the meanings assigned to such terms in the Definitions
      attached hereto as Appendix A which is incorporated by reference herein. All
      other capitalized terms used herein shall have the meanings specified
      herein.

     

    Section
      1.02  Incorporation
      by Reference of Trust Indenture Act.
      Whenever this Indenture refers to a provision of the Trust Indenture Act (the
      “TIA”), the provision is incorporated by reference in and made a part of this
      Indenture. The following TIA terms used in this Indenture have the following
      meanings:

     

    “Commission”
      means the Securities and Exchange Commission.

     

    “indenture
      securities” means the Notes.

     

    “indenture
      security holder” means a Noteholder.

     

    “indenture
      to be qualified” means this Indenture.

     

    “indenture
      trustee” or “institutional trustee” means the Indenture Trustee.

     

    “obligor”
      on the indenture securities means the Issuing Entity and any other obligor
      on
      the indenture securities.

     

    All
      other
      TIA terms used in this Indenture that are defined by the TIA, defined by TIA
      reference to another statute or defined by Commission rules have the meanings
      assigned to them by such definitions.

     

    Section
      1.03  Rules
      of Construction.
      Unless
      the context otherwise requires:

     

    (i)  a
      term
      has the meaning assigned to it;

     

    (ii)  an
      accounting term not otherwise defined has the meaning assigned to it in
      accordance with generally accepted accounting principles as in effect from
      time
      to time;

     

    (iii)  “or”
is
      not exclusive;

     

    (iv)  “including”
      means including without limitation;

     

    (v)  words
      in
      the singular include the plural and words in the plural include the singular;
      and

     

    (vi)  any
      agreement, instrument or statute defined or referred to herein or in any
      instrument or certificate delivered in connection herewith means such agreement,
      instrument or statute as from time to time amended, modified or supplemented
      and
      includes (in the case of agreements or instruments) references to all
      attachments thereto and instruments incorporated therein; references to a Person
      are also to its permitted successors and assigns.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      II  

    ORIGINAL
      ISSUANCE OF NOTES

     

    Section
      2.01  Form.
      The
      Class A, Class A-IO and Class B Notes, together with the Securities
      Administrator’s certificate of authentication, shall be in substantially the
      form set forth in Exhibits A-1, A-2 and A-3 to this Indenture, as applicable,
      with such appropriate insertions, omissions, substitutions and other variations
      as are required or permitted by this Indenture.

     

    The
      Notes
      shall be typewritten, printed, lithographed or engraved or produced by any
      combination of these methods (with or without steel engraved
      borders).

     

    The
      terms
      of the Notes set forth in Exhibits A-1, A-2 and A-3 to this Indenture are part
      of the terms of this Indenture.

     

    Section
      2.02  Execution,
      Authentication and Delivery.
      The
      Notes shall be executed on behalf of the Issuing Entity by any of its Authorized
      Officers. The signature of any such Authorized Officer on the Notes may be
      manual or facsimile.

     

    Notes
      bearing the manual or facsimile signature of individuals who were at any time
      Authorized Officers of the Issuing Entity shall bind the Issuing Entity,
      notwithstanding that such individuals or any of them have ceased to hold such
      offices prior to the authentication and delivery of such Notes or did not hold
      such offices at the date of such Notes.

     

    The
      Securities Administrator shall upon Issuing Entity Request authenticate and
      deliver each Class of Notes for original issue in an aggregate initial principal
      amount equal to the Initial Note Principal Balance or Notional Amount, as
      applicable, for such Class of Notes.

     

    Each
      of
      the Notes shall be dated the date of its authentication. The Notes shall be
      issuable as registered Notes in book-entry form, in the minimum initial Note
      Principal Balances or Notional Amounts, as applicable, of $100,000 and in
      integral multiples of $1 in excess thereof.

     

    No
      Note
      shall be entitled to any benefit under this Indenture or be valid or obligatory
      for any purpose, unless there appears on such Note a certificate of
      authentication substantially in the form provided for herein executed by the
      Securities Administrator by the manual signature of one of its authorized
      signatories, and such certificate upon any Note shall be conclusive evidence,
      and the only evidence, that such Note has been duly authenticated and delivered
      hereunder.

     

      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
      III

    COVENANTS

     

    Section
      3.01  Existence.
      The
      Issuing Entity will keep in full effect its existence, rights and franchises
      as
      a statutory trust under the laws of the State of Delaware (unless it becomes,
      or
      any successor Issuing Entity hereunder is or becomes, organized under the laws
      of any other state or of the United States of America, in which case the Issuing
      Entity will keep in full effect its existence, rights and franchises under
      the
      laws of such other jurisdiction) and will obtain and preserve its qualification
      to do business in each jurisdiction in which such qualification is or shall
      be
      necessary to protect the validity and enforceability of this Indenture, the
      Notes and each other instrument or agreement included in the Trust
      Estate.

     

    Section
      3.02  Payment
      of Principal and Interest. 

     

    (a)  On
      each
      Payment Date, the Floating Allocation Percentage of the Interest Collection
      Amount for such Payment Date, reduced by the servicing and master servicing
      fees, will be distributed in the following order of priority: 

     

    
      	1.  	
              to
                the Note Insurer, the current and any past due premium due for the
                Policy;

            

    

    

    
      	2.  	
              to
                the Class A Notes and the Class A-IO Notes, pro rata, the Current
                Interest
                and any Unpaid Interest Shortfall Amount for such Payment Date;
                

            

    

    

    
      	3.  	
              to
                the Note Insurer, as reimbursement for prior draws (including applicable
                interest) made under the Policy;

            

    

    

    
      	4.  	
              to
                the Class B Notes, the related Current Interest for such Class and
                Payment
                Date;

            

    

    

    
      	5.  	
              on
                each Payment Date prior to the Payment Date in September 2007, to
                the
                Class E Interest and Class E Certificates, the lesser of (i) $20,000
                and
                (ii) the Interest Collection Amount for such Payment Date remaining
                following the payments pursuant to clauses (1)-(4)
                above;

            

    

    

    
      	6.  	
              from
                amounts otherwise distributable to the Class E Interest and the Class
                E
                Certificates, to the Classes of Notes (other than the Class A-IO
                Notes),
                as a payment of principal, the amount necessary to build the
                Overcollateralization Amount to the Overcollateralization Target
                Amount,
                including covering the Floating Allocation Percentage of the Charge-Off
                Amounts during the related Collection
                Period;

            

    

    

    
      	7.  	
              to
                cover any Charge-Off Amounts allocated to the Class A Notes (to the
                extent
                not covered by the Policy);

            

    

    

    
      	8.  	
              to
                the Class B Notes, any Unpaid Interest Shortfall Amount for such
                Payment
                Date and such Class;

            

    

    

    
      	9.  	
              from
                amounts otherwise distributable to the Class E Certificates, to the
                Net
                WAC Cap Rate Carryover Reserve Account, (i) first to pay the Class
                A Notes
                and Class A-IO Notes, pro rata, and then to the Class B Notes, any
                Net WAC
                Cap Rate Carryover Amount for such Payment Date and such Class to
                the
                extent such amount exceeds the amounts then on deposit in the WAC
                Cap Rate
                Carryover Reserve Account, and (ii) second, to maintain a balance
                equal to
                the Net WAC Cap Rate Carryover Reserve Account
                Deposit;

            

    

    

    
      	10.  	
              to
                the Note Insurer, any other amounts owed to the Note Insurer pursuant
                to
                the Insurance Agreement; 

            

    

    

    
      	11.  	
              to
                the Class E Interest, and to the Certificate Paying Agent for distribution
                to the Class E Certificates, as specified in the Trust Agreement,
                any
                remaining amounts not exceeding the Class E Distribution Amount reduced
                by
                amounts distributed in clauses (5), (6) and (9);

            

    

    

    
      	12.  	
              to
                the Certificate Paying Agent for distribution to the Residual
                Certificates, as specified in the Trust Agreement.

            

    

    

    (b)  (1)On
      each
      Payment Date, the Class S Floating Allocation Percentage of the Interest
      Collection Amount for such Payment Date shall be distributed to the holders
      of
      the Class S Certificates.

     

    (2) On
      each
      Payment Date during the Managed Amortization Period, the Class S Principal
      Payment Amount shall be distributed to the holders of the Class S Certificates,
      until their Certificate Principal Balance has been reduced to zero.

     

    (c)  On
      each
      Payment Date, the Available Principal Payment Amount will be distributed as
      principal funds in the following order of priority: 

     

    (1) For
      each
      Payment Date prior to the Stepdown Date or on which a Trigger Event is in
      effect:

     

    (i)
      to
      the Class A Notes, the Available Principal Payment Amount for such Payment
      Date,
      until the Note Principal Balance thereof is reduced to zero; 

     

    (ii)
      to
      the Note Insurer, as reimbursement for prior draws (including applicable
      interest) made under the Policy, to the extent not covered by the Interest
      Collection Amount;

     

    (iii)
      to
      the Class B Notes, the remaining Available Principal Payment Amount, in each
      case until the Note Principal Balance of such Class has been reduced to
      zero;

     

    (iv)
      during the Rapid Amortization Period, to the Class S Certificates, in reduction
      of the Certificate Principal Balance thereof, until the Certificate Principal
      Balance is reduced to zero; 

     

    (v)
      to
      the Note Insurer, any other amounts owed to the Note Insurer pursuant to the
      Insurance Agreement; 

     

    (vi)
      to
      the Class E Interest, and to the Certificate Paying Agent for distribution
      to
      the Class E Certificates, as specified in the Trust Agreement, any remaining
      amounts up to the portion of the Class E Distribution Amount remaining after
      the
      distributions made pursuant to Section 3.02(a); and

     

    (vii)
      to
      the Certificate Paying Agent for distribution to the Residual Certificates,
      as
      specified in the Trust Agreement.

     

    (2) For
      each
      Payment Date on or after the Stepdown Date, so long as a Trigger Event is not
      in
      effect:

     

    (i)
      to
      the Class A Notes, the Class A Principal Payment Amount, for such Payment Date,
      until the Note Principal Balance thereof is reduced to zero;

     

    (ii)
      to
      the Note Insurer, as reimbursement for prior draws (including applicable
      interest) made under the Policy, to the extent not covered by the Interest
      Collection Amount;

     

    (iii)
      to
      the Class B Notes, the Class B Principal Payment Amount for such Payment Date,
      until the Note Principal Balance thereof is reduced to zero;

     

    (iv)
      during the Rapid Amortization Period, to the Class S Certificates, in reduction
      of the Certificate Principal Balance thereof, until the Certificate Principal
      Balance is reduced to zero; 

     

    (v)
      to
      the Note Insurer, any other amounts owed to the Note Insurer pursuant to the
      Insurance Agreement;

     

    (vi)
      to
      the Class E Interest, and to the Certificate Paying Agent for distribution
      to
      the Class E Certificates, as specified in the Trust Agreement, any remaining
      amounts up to the portion of the Class E Distribution Amount remaining after
      the
      distributions made pursuant to Section 3.02(a); and

     

    (vii)
      to
      the Certificate Paying Agent for distribution to the Residual Certificates,
      as
      specified in the Trust Agreement.

    

    (d)  No
      Current Interest will be payable with respect to any Class of Notes after the
      Payment Date on which the Note Principal Balance of such Note has been reduced
      to zero.

     

    (e)  Each
      distribution with respect to a Book-Entry Note shall be paid to the Depository,
      as Holder thereof, and the Depository shall be 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 Note 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 Note Owners that it
      represents. None of the Securities Administrator, the Note Registrar, the Paying
      Agent, the Depositor or the Master Servicer shall have any responsibility
      therefor.

     

    (f)  On
      each
      Payment Date, the Certificate Paying Agent shall deposit in the Payment Account
      all amounts it received pursuant to this Section 3.02 for the purpose of
      distributing such funds to the Certificateholders. The Certificate Paying Agent
      shall make distributions to the Certificateholders under the Trust Agreement
      as
      directed by the Securities Administrator hereunder.

     

    (g)  Any
      installment of interest or principal, if any, payable on any Note that is
      punctually paid or duly provided for by the Issuing Entity on the applicable
      Payment Date shall, if such Holder shall have so requested at least five
      Business Days prior to the related Record Date, be paid to each Holder of record
      on the preceding Record Date, by wire transfer to an account specified in
      writing by such Holder as of the preceding Record Date or in all other cases
      or
      if no such instructions have been delivered to the Securities Administrator,
      by
      check to such Noteholder mailed to such Holder’s address as it appears in the
      Note Register in the amount required to be distributed to such Holder on such
      Payment Date pursuant to such Holder’s Notes; provided, however, that the
      Securities Administrator shall not pay to such Holders any amount required
      to be
      withheld from a payment to such Holder by the Code.

     

    (h)  The
      Note
      Principal Balance of each Note (other than the Class A-IO Notes) shall be due
      and payable in full on the Final Scheduled Payment Date. All principal payments
      on the Notes shall be made to the Noteholders entitled thereto in accordance
      with the Percentage Interests represented by such Notes. Upon notice to the
      Securities Administrator by the Issuing Entity, the Securities Administrator
      shall notify the Person in whose name a Note is registered at the close of
      business on the Record Date preceding the Final Scheduled Payment Date or other
      final Payment Date (including any final Payment Date resulting from any
      redemption pursuant to Section 8.06 hereof). Such notice shall to the extent
      practicable be mailed no later than five Business Days prior to such Final
      Scheduled Payment Date or other final Payment Date and shall specify that
      payment of the principal amount and any interest due with respect to such Note
      at the Final Scheduled Payment Date or other final Payment Date will be payable
      only upon presentation and surrender of such Note and shall specify the place
      where such Note may be presented and surrendered for such final payment. No
      interest shall accrue on the Notes on or after the Final Scheduled Payment
      Date
      or any such other final Payment Date.

     

    Section
      3.03  Protection
      of Trust Estate.
      (a)
      The
      Issuing Entity will from time to time prepare, execute and deliver all such
      supplements and amendments hereto and all such financing statements,
      continuation statements, instruments of further assurance and other instruments,
      and will take such other action necessary or advisable to:

     

    (i)  maintain
      or preserve the lien and security interest (and the priority thereof) of this
      Indenture or carry out more effectively the purposes hereof;

     

    (ii)  perfect,
      publish notice of or protect the validity of any Grant made or to be made by
      this Indenture;

     

    (iii)  cause
      the Issuing Entity or the Securities Administrator to enforce any of the rights
      to the HELOCs;
      or

     

    (iv)  preserve
      and defend title to the Trust Estate and the rights of the Indenture Trustee,
      the Note Insurer and the Noteholders in such Trust Estate against the claims
      of
      all persons and parties.

     

    (b)  Except
      as
      otherwise provided in this Indenture, the Indenture Trustee shall not remove
      or
      permit the Custodian to remove any portion of the Trust Estate that consists
      of
      money or is evidenced by an instrument, certificate or other writing from the
      jurisdiction in which it was held at the date of the most recent Opinion of
      Counsel delivered pursuant to Section 3.04 hereof (or from the jurisdiction
      in
      which it was held as described in the Opinion of Counsel delivered on the
      Closing Date pursuant to Section 3.04(a) hereof, if no Opinion of Counsel has
      yet been delivered pursuant to Section 3.04(b) hereof), unless the Indenture
      Trustee shall have first received an Opinion of Counsel to the effect that
      the
      lien and security interest created by this Indenture with respect to such
      property will continue to be maintained after giving effect to such action
      or
      actions.

     

    The
      Issuing Entity hereby designates the Securities Administrator its agent and
      attorney-in-fact to sign any financing statement, continuation statement or
      other instrument required to be signed pursuant to this Section 3.03 upon the
      Issuing Entity’s preparation thereof and delivery to the Indenture
      Trustee.

     

    Section
      3.04  Opinions
      as to Trust Estate.
      (a)
      On the
      Closing Date, the Issuing Entity shall furnish to the Indenture Trustee, the
      Note Insurer and the Owner Trustee an Opinion of Counsel either stating that,
      in
      the opinion of such counsel, such action has been taken with respect to the
      recording and filing of this Indenture, any indentures supplemental hereto,
      and
      any other requisite documents, and with respect to the execution and filing
      of
      any financing statements and continuation statements, as are necessary to
      perfect and make effective the lien and first priority security interest in
      the
      Collateral and reciting the details of such action, or stating that, in the
      opinion of such counsel, no such action is necessary to make such lien and
      first
      priority security interest effective.

     

    (b)  On
      or
      before December 31st in each calendar year, beginning in 2006, the Issuing
      Entity shall furnish to the Indenture Trustee and the Note Insurer an Opinion
      of
      Counsel at the expense of the Issuing Entity either stating that, in the opinion
      of such counsel, such action has been taken with respect to the recording,
      filing, rerecording and refiling of this Indenture, any indentures supplemental
      hereto and any other requisite documents and with respect to the execution
      and
      filing of any financing statements and continuation statements as is necessary
      to maintain the lien and security interest in the Collateral and reciting the
      details of such action or stating that in the opinion of such counsel no such
      action is necessary to maintain such lien and security interest. Such Opinion
      of
      Counsel shall also describe the recording, filing, re-recording and refiling
      of
      this Indenture, any indentures supplemental hereto and any other requisite
      documents and the execution and filing of any financing statements and
      continuation statements that will, in the opinion of such counsel, be required
      to maintain the lien and security interest in the Collateral until December
      31
      in the following calendar year. 

     

    Section
      3.05  Performance
      of Obligations.
      (a)
      The
      Issuing Entity will punctually perform and observe all of its obligations and
      agreements contained in this Indenture, the Basic Documents and in the
      instruments and agreements included in the Trust Estate.

     

    (b)  The
      Issuing Entity, with the consent of the Note Insurer so long as no Note Insurer
      Default exists, may contract with other Persons to assist it in performing
      its
      duties under this Indenture, and any performance of such duties by a Person
      identified to the Indenture Trustee in an Officer’s Certificate of the Issuing
      Entity shall be deemed to be action taken by the Issuing Entity.

     

    (c)  The
      Issuing Entity will not take any action or permit any action to be taken by
      others which would release any Person from any of such Person’s covenants or
      obligations under any of the documents relating to the HELOCs or under any
      instrument included in the Trust Estate, or which would result in the amendment,
      hypothecation, subordination, termination or discharge of, or impair the
      validity or effectiveness of, any of the documents relating to the HELOCs or
      any
      such instrument, except such actions as the Master Servicer is expressly
      permitted to take in the Sale and Servicing Agreement.

     

    (d)  The
      Issuing Entity may retain an administrator and may enter into contracts
      acceptable to the Note Insurer with other Persons for the performance of the
      Issuing Entity’s obligations hereunder, and performance of such obligations by
      such Persons shall be deemed to be performance of such obligations by the
      Issuing Entity.

     

    (e)  The
      Issuing Entity will perform and observe all of its obligations and agreements
      contained in this Indenture, the Basic Documents and in the instruments and
      agreements included in the Trust Estate and take such other actions, all as
      may
      be required to have the Trust Estate qualify as one or more REMICs formed
      pursuant to the Indenture.

     

    Section
      3.06  Negative
      Covenants.
      So long
      as any Notes are Outstanding, the Issuing Entity shall not:

     

    (i)  except
      as
      expressly permitted by this Indenture, sell, transfer, exchange or otherwise
      dispose of the Trust Estate without the consent of the Note Insurer (if
      applicable);

     

    (ii)  (A)
      permit the validity or effectiveness of this Indenture to be impaired, or permit
      the lien of this Indenture to be amended, hypothecated, subordinated, terminated
      or discharged, or permit any Person to be released from any covenants or
      obligations with respect to the Notes under this Indenture except as may be
      expressly permitted hereby, (B) permit any lien, charge, excise, claim, security
      interest, mortgage or other encumbrance (other than the lien of this Indenture)
      to be created on or extend to or otherwise arise upon or burden the Trust Estate
      or any part thereof or any interest therein or the proceeds thereof or (C)
      permit the lien of this Indenture not to constitute a valid first priority
      security interest in the Trust Estate; 

     

    (iii)  waive
      or
      impair, or fail to assert rights under, the HELOCs, or impair or cause to be
      impaired the Issuing Entity’s interest in the HELOCs, the Mortgage Loan Purchase
      Agreement or in any Basic Document, if any such action would materially and
      adversely affect the interests of the Noteholders, the Certificateholders or
      the
      Note Insurer; or

     

    (iv)  take
      any
      action or fail to take any action that would cause any REMIC created hereunder
      to cease to qualify as a REMIC or result in an imposition of tax on the Issuing
      Entity (including, but not limited to, the tax on prohibited transactions under
      Section 860F of the Code).

     

    Section
      3.07  Annual
      Statement as to Compliance.
      The
      Issuing Entity will deliver to the Indenture Trustee, the Securities
      Administrator and the Note Insurer, by March 1 of each year commencing with
      the
      calendar year 2007, an Officer’s Certificate stating, as to the Authorized
      Officer signing such Officer’s Certificate, that:

     

    (i)  a
      review
      of the activities of the Issuing Entity during the previous calendar year and
      of
      its performance under this Indenture and the Trust Agreement has been made
      under
      such Authorized Officer’s supervision; and

     

    (ii)  to
      the
      best of such Authorized Officer’s knowledge, based on such review, the Issuing
      Entity has complied with all conditions and covenants under this Indenture
      and
      the provisions of the Trust Agreement throughout such year, or, if there has
      been a default in its compliance with any such condition or covenant, specifying
      each such default known to such Authorized Officer and the nature and status
      thereof.

     

    Section
      3.08  Representations
      and Warranties Concerning the HELOCs.
      The
      Indenture Trustee, as pledgee of the HELOCs, has the benefit of the
      representations and warranties made by the Seller in the Mortgage Loan Purchase
      Agreement concerning the Seller and the HELOCs. If a Responsible Officer of
      the
      Indenture Trustee has actual knowledge of any breach of any representation
      or
      warranty made by the Seller in the Mortgage Loan Purchase Agreement, or any
      Subsequent Mortgage Loan Purchase Agreement, the Indenture Trustee shall
      promptly notify the Seller and the Note Insurer of such finding and of the
      Seller’s obligation to cure such defect or repurchase or substitute for the
      related HELOC. 

     

    Section
      3.09  Investment
      Company Act.
      The
      Issuing Entity shall not become an “investment company” or be under the
“control” of an “investment company” as such terms are defined in the Investment
      Company Act of 1940, as amended (or any successor or amendatory statute), and
      the rules and regulations thereunder (taking into account not only the general
      definition of the term “investment company” but also any available exceptions to
      such general definition); provided, however, that the Issuing Entity shall
      be in
      compliance with this Section 3.09 if it shall have obtained an order exempting
      it from regulation as an “investment company” so long as it is in compliance
      with the conditions imposed in such order.

     

    Section
      3.10  No
      Other Business.
      The
      Issuing Entity shall not engage in any business other than as set forth with
      respect thereto in the Trust Agreement and other than financing, purchasing,
      owning and selling and managing the HELOCs and the issuance of the Notes and
      Certificates in the manner contemplated by this Indenture and the Basic
      Documents and all activities incidental thereto.

     

    Section
      3.11  No
      Borrowing.
      The
      Issuing Entity shall not issue, incur, assume, guarantee or otherwise become
      liable, directly or indirectly, for any indebtedness except for the Notes under
      this Indenture and amounts due to the Note Insurer.

     

    Section
      3.12  Guarantees,
      Loans, Advances and Other Liabilities.
      Except
      as contemplated by this Indenture or the Basic Documents, the Issuing Entity
      shall not make any loan or advance or credit to, or guarantee (directly or
      indirectly or by an instrument having the effect of assuring another’s payment
      or performance on any obligation or capability of so doing or otherwise),
      endorse or otherwise become contingently liable, directly or indirectly, in
      connection with the obligations, stocks or dividends of, or own, purchase,
      repurchase or acquire (or agree contingently to do so) any stock, obligations,
      assets or securities of, or any other interest in, or make any capital
      contribution to, any other Person.

     

    Section
      3.13  Capital
      Expenditures.
      The
      Issuing Entity shall not make any expenditure (by long-term or operating lease
      or otherwise) for capital assets (either realty or personalty).

     

    Section
      3.14  Determination
      of Note Interest Rate. 

     

    On
      each
      Interest Determination Date, the Securities Administrator shall determine
      One-Month LIBOR and the related Note Interest Rate for each Class of Notes
      (other than the Class A-IO Notes) for the following Accrual Period and shall
      make such rate available to the Issuing Entity, the Indenture Trustee, the
      Master Servicer, the Note Insurer and the Depositor. The establishment of
      One-Month LIBOR on each Interest Determination Date by the Securities
      Administrator and the Securities Administrator’s calculation of the rate of
      interest applicable to each Class of Notes for the related Accrual Period shall
      (in the absence of manifest error) be final and binding.

     

    Section
      3.15  Restricted
      Payments.
      The
      Issuing Entity shall not, directly or indirectly, (i) pay any dividend or make
      any distribution (by reduction of capital or otherwise), whether in cash,
      property, securities or a combination thereof, to the Owner Trustee or any
      owner
      of a beneficial interest in the Issuing Entity or otherwise with respect to
      any
      ownership or equity interest or security in or of the Issuing Entity, (ii)
      redeem, purchase, retire or otherwise acquire for value any such ownership
      or
      equity interest or security or (iii) set aside or otherwise segregate any
      amounts for any such purpose; provided, however, that the Issuing Entity may
      make, or cause to be made, (x) distributions and payments to the Owner Trustee,
      the Indenture Trustee, the Securities Administrator, the Master Servicer, the
      Servicers, the Certificate Registrar, the Certificate Paying Agent, the
      Noteholders, the Note Insurer and the Certificateholders as contemplated by,
      and
      to the extent funds are available for such purpose under this Indenture and
      the
      Basic Documents and (y) payments to the Master Servicer and the Servicers
      pursuant to the terms of the Sale and Servicing Agreement or the Servicing
      Agreement, as applicable. The Issuing Entity will not, directly or indirectly,
      make payments to or distributions from the Master Servicer Collection Account
      or
      the Payment Account except in accordance with this Indenture and the Basic
      Documents.

     

    Section
      3.16  Notice
      of Events of Default.
      The
      Issuing Entity shall give the Indenture Trustee, the Securities Administrator,
      the Note Insurer and each Rating Agency prompt written notice of each Event
      of
      Default hereunder.

     

    Section
      3.17  Further
      Instruments and Acts.
      Upon
      request of the Indenture Trustee or the Note Insurer, the Issuing Entity will
      execute and deliver such further instruments and do such further acts as may
      be
      reasonably necessary or proper to carry out more effectively the purpose of
      this
      Indenture.

     

    Section
      3.18  Certain
      Representations Regarding the Trust Estate. 

     

    (a)  With
      respect to that portion of the Collateral described in clauses (a) through
      (c)
      of the definition of Trust Estate, the Issuing Entity represents to the
      Indenture Trustee that:

     

    (i)  This
      Indenture creates a valid and continuing security interest (as defined in the
      applicable UCC) in the Collateral in favor of the Indenture Trustee, which
      security interest is prior to all other liens, and is enforceable as such as
      against creditors of and purchasers from the Issuing Entity.

     

    (ii)  The
      Collateral constitutes “deposit accounts,” “instruments” or “certificated
      securities,” as applicable within the meaning of the applicable
      UCC.

     

    (iii)  The
      Issuing Entity owns and has good and marketable title to the Collateral, free
      and clear of any lien, claim or encumbrance of any Person.

     

    (iv)  The
      Issuing Entity has caused or will have caused, within ten days of the Closing
      Date, the filing of all appropriate financing statements in the proper filing
      office in the appropriate jurisdictions under applicable law in order to perfect
      the security interest in the Collateral granted to the Indenture Trustee
      hereunder.

     

    (v)  Other
      than the security interest granted to the Indenture Trustee pursuant to this
      Indenture, the Issuing Entity has not pledged, assigned, sold, granted a
      security interest in, or otherwise conveyed any of the Collateral. The Issuing
      Entity has not authorized the filing of and is not aware of any financing
      statements against the Issuing Entity that include a description of collateral
      covering the Collateral other than any financing statement relating to the
      security interest granted to the Indenture Trustee hereunder or that has been
      terminated.

     

    (vi)  The
      Collateral is not in the name of any Person other than the Issuing Entity or
      the
      Indenture Trustee. The Issuing Entity has in its possession all original copies
      of the security certificates that constitute or evidence the Collateral. The
      security certificates that constitute or evidence the Collateral do not have
      any
      marks or notations indicating that they have been pledged, assigned or otherwise
      conveyed to any Person other than the Indenture Trustee. The Issuing Entity
      has
      not consented to the bank maintaining the Collateral to comply with instructions
      of any Person other than the Indenture Trustee.

     

    Section
      3.19  Allocation
      of Charge-Off Amounts.
      (a)
      On or
      prior to each Payment Date, the Master Servicer shall determine, based solely
      on
      information provided to it by the related Servicer the amount of any Charge-Off
      Amount in respect of each HELOC that occurred during the immediately preceding
      calendar month.

     

    (b)  The
      Floating Allocation Percentage of Charge-Off Amounts on the HELOCs will be
      applied on any Payment Date as follows:

     

    first,
      to any
      available Interest Collection Amount through an increase in the
      Overcollateralization Amount as provided in Section 3.02(a)(6) hereof;
      and

     

    second,
      in
      reduction of the Overcollateralization Amount until reduced to
      zero.

     

    (c)  If
      on any
      Payment Date, as a result of the Charge-Off Amounts, the sum of the aggregate
      Note Principal Balances of the Notes (other than the Class A-IO Notes) exceeds
      the Invested Amount as of the last day of the related Collection Period, such
      excess shall be allocated to the Notes (other than the Class A-IO Notes) in
      the
      following order:

     

    first,
      to the
      Class B Notes, until the Note Principal Balance thereof has been reduced to
      zero; and

     

    second,
      to the
      Class A Notes, until the Note Principal Balance thereof has been reduced to
      zero;

     

    provided,
      however, that any Charge-Off Amounts allocated to the Class A Notes shall be
      covered by the Policy.

     

    (d)  Once
      Charge-Off Amounts have been allocated to a Class of Notes, such amounts with
      respect to such Notes will no longer accrue interest nor will such amounts
      in
      respect of interest be reinstated thereafter.

     

    (e)  Charge-Off
      Amounts shall be allocated on the Payment Date in the month following the month
      in which such loss was incurred and, in the case of the principal portion
      thereof, after giving effect to distributions made on such Payment
      Date.

     

    (f)  In
      addition, in the event that the related Servicer receives any Subsequent
      Recoveries, such Subsequent Recoveries shall be remitted to the Master Servicer
      and then distributed by the Securities Administrator pursuant to Section 3.02
      of
      this Indenture.

     

    (g)  The
      Class
      S Floating Allocation Percentage of Charge-Off Amounts shall be applied on
      any
      Payment Date to the Class S Certificates.

     

    Section
      3.20  Claims
      on the Policy; Policy Payments Account. 

     

    (a)  The
      Securities Administrator shall establish the Policy Payments Account. The
      Securities Administrator shall deposit upon receipt any amount paid under the
      Policy in the Policy Payments Account and use that amount only to pay the Class
      A Notes the Insured Amounts for which a claim was made. Such amount may not
      be
      applied to satisfy any costs, expenses, or liabilities of the Master Servicer,
      the Securities Administrator, the Indenture Trustee or the Issuing Entity (other
      than payments of principal and interest on the Class A Notes). Amounts paid
      under the Policy, to the extent needed to pay any Deficiency Amount, shall
      be
      transferred to the Payment Account on the related Payment Date, and the portion
      thereof representing the Deficiency Amount shall be disbursed by the Securities
      Administrator to the Holders of the Class A Notes, in each case as if it were
      a
      payment to such Noteholders pursuant to Section 3.02. Payments from draws on
      the
      Policy need not be made by checks or wire transfers separate from the checks
      or
      wire transfers used to pay other payments to the Holders of the Class A Notes.
      However, the amount of any payment of principal of or interest on the Class
      A
      Notes to be paid from funds transferred from the Policy Payments Account shall
      be noted as provided in paragraph (d) below and in the statement to be furnished
      to Holders of the Notes pursuant to Section 7.04. Funds held in the Policy
      Payments Account shall not be invested. Any funds remaining in the Policy
      Payments Account on the first Business Day following the later of the Payment
      Date and the Business Day after the day on which a payment on the Policy has
      been paid to the Holders of the Class A Notes shall be returned to the Note
      Insurer, pursuant to the instructions of the Note Insurer, by the end of the
      Business Day.

     

    (b)  If
      the
      Securities Administrator has determined that an Insured Amount is required
      to be
      paid under the Policy with respect to a Payment Date, it shall deliver a notice
      (substantially in the form of the Notice attached as Exhibit A to the
      Certificate Guaranty Insurance Policy No. AB1020BE) to the Note Insurer no
      later
      than 12:00 noon, New York, New York City time on the second Business Day
      preceding the Payment Date and shall provide a copy of such notice to the Master
      Servicer at the time the Notice is delivered to the Note Insurer. That notice
      (substantially in the form of the Notice attached as Exhibit A to the
      Certificate Guaranty Insurance Policy No. AB1020BE) shall constitute a claim
      for
      payment pursuant to the Policy.

     

    (c)  If
      the
      Indenture Trustee receives a certified copy of a final order of a court
      exercising jurisdiction in an insolvency proceeding (an “Order”) that any prior
      payment made on the Class A Notes constitutes a Preference Amount (as defined
      in
      the Policy), the Indenture Trustee shall so notify the Securities Administrator
      and deliver such Order to it. Upon receipt of the Order, whether directly or
      from the Indenture Trustee, the Securities Administrator shall notify the Note
      Insurer and comply with the Policy to obtain payment by the Note Insurer of
      the
      Preference Amount, and shall, at the time notice is provided to the Note
      Insurer, notify each Holder of the affected Notes by mail that, subject to
      the
      terms of the Policy, the Note Insurer will disburse the Preference Amount
      directly to the receiver, conservator, debtor-in-possession, or trustee in
      bankruptcy named in the Order (unless a Holder of the Class A Notes has provided
      evidence satisfactory to the Note Insurer that it has previously paid such
      amount to the receiver, conservator, debtor-in-possession or trustee in
      bankruptcy named in the Order, in which case such payment shall be disbursed
      to
      the Securities Administrator) by 12:00 noon, New York City time on the third
      Business Day following the delivery to the Securities Administrator on behalf
      of
      the Noteholder of (1) a certified copy of the Order to the effect that the
      Securities Administrator or such Noteholder, as applicable, is required to
      return such Preference Amount or portion thereof because such payment was
      avoided as a preferential transfer or otherwise rescinded or required to be
      restored by the Securities Administrator, the Indenture Trustee or the
      Noteholder, (2) a certificate that the Order has been entered and is not subject
      to any stay, (3) an assignment, in form and substance satisfactory to the Note
      Insurer, irrevocably assigning to the Note Insurer all rights and claims of
      the
      Securities Administrator, the Indenture Trustee or the Noteholder relating
      to or
      arising under the Insurance Agreement against the estate of the Securities
      Administrator or the Indenture Trustee or otherwise with respect to such
      Preference Amount, and (4) a payment notice in the form of Exhibit A to the
      Policy appropriately completed and executed by the Securities Administrator
      or
      the Indenture Trustee. If the documents are received after 12:00 noon, New
      York
      City time, on a Business Day, they will be considered received on the following
      Business Day.

     

    A
      copy of
      the Policy shall be made available to each affected Class A Noteholder through
      the Securities Administrator, and the Securities Administrator shall furnish
      to
      the Note Insurer a copy of its records evidencing the payments that have been
      made by the Securities Administrator in respect of any Preference Amounts paid
      by the Note Insurer and the dates on which the payments were made.

     

    (d)  The
      Securities Administrator shall keep a complete and accurate record of the amount
      of interest and principal paid on the Class A Notes from moneys received under
      the Policy. The Note Insurer may inspect the records at reasonable times during
      normal business hours on two Business Days’ notice to the Securities
      Administrator.

     

    (e)  The
      Holders of the Class A Notes are not entitled to institute proceedings directly
      against the Note Insurer. Each Holder of the Class A Notes, by its purchase
      of
      Class A Notes, agrees that the Note Insurer may at any time during the
      continuation of any proceeding relating to a Preference Amount, direct all
      matters relating to the Preference Amount on its behalf, including the direction
      of any appeal of any order relating to the preference claim and the posting
      of
      any surety, supersedeas, or performance bond pending any appeal.

     

    (f)  Any
      payments to the Note Insurer shall be made by wire transfer of immediately
      available funds to the following Federal Reserve Account (until the Note Insurer
      notifies the Securities Administrator of a change in the account
      information):

     

    Ambac
      Assurance Corporation

    Citibank,
      N.A.

    ABA
      Number: 021000089

    DDA
      Number: 40609486

    Re:
      Policy Number AB1020BE

    

    (g)  The
      Securities Administrator shall, upon retirement of the Class A Notes, furnish
      to
      the Note Insurer a notice of the retirement, and, after retirement of the Class
      A Notes and the expiration of the term of the Policy, surrender the Policy
      to
      the Note Insurer for cancellation.

     

    (h)  The
      Securities Administrator shall hold the Policy in trust as agent for the Holders
      of the Class A Notes for the purpose of making claims on the Policy and
      distributing the proceeds of claims on the Policy. Neither the Policy nor the
      amounts paid on the Policy shall constitute part of the Trust Estate created
      by
      this Indenture. Each Holder of the Class A Notes, by accepting its Class A
      Notes, irrevocably appoints the Securities Administrator as attorney-in-fact
      to
      make claims on the Policy and to sign on its behalf any certification required
      with respect to any Notice under the Policy.

     

    (i)  Anything
      in this Indenture to the contrary notwithstanding, any payment with respect
      to
      principal of or interest on the Class A Notes that is made with money received
      pursuant to the Policy shall not be considered payment of the Class A Notes
      from
      the Issuing Entity. The Depositor, the Master Servicer, the Indenture Trustee
      and the Securities Administrator acknowledge, and each Holder of the Class
      A
      Notes by its acceptance of the Class A Notes agrees that, without the need
      for
      any further action on the part of the Note Insurer, the Depositor, the Master
      Servicer, the Indenture Trustee, the Securities Administrator, or the Note
      Registrar 

     

    (i)  to
      the
      extent the Note Insurer makes payments, directly or indirectly, on account
      of
      principal of or interest on the Class A Notes to the related Noteholders, the
      Note Insurer shall be fully subrogated to, and each such Noteholder hereby
      delegates and assigns to the Note Insurer, to the fullest extent permitted
      by
      law, the rights of such Noteholders to receive such principal and interest
      from
      the Issuing Entity, and 

     

    (ii)  the
      Note
      Insurer shall be paid such amounts from the sources and in the manner provided
      in this Indenture for the payment of such amounts and as provided in this
      Indenture until full reimbursement of all Insured Payments and Preference
      Amounts (together with interest thereon at the Late Payment Rate from the date
      paid by the Note Insurer until the date of their reimbursement). 

     

    The
      Securities Administrator and the Master Servicer shall cooperate in all respects
      with any reasonable request by the Note Insurer for action to preserve or
      enforce the Note Insurer’s rights or interests under this Indenture (without
      limiting the rights or affecting the interests of the Holders of the Class
      A
      Notes as otherwise provided in this Indenture).

     

    

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV  

    
 

    THE
      NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

     

    Section
      4.01  The
      Notes.
      Each
      Class of Class A, Class A-IO and Class B Notes shall be registered in the name
      of a nominee designated by the Depository. Beneficial Owners will hold interests
      in the Class A, Class A-IO and Class B Notes through the book-entry facilities
      of the Depository in minimum initial Note Principal Balances or Notional
      Amounts, as applicable, of $100,000 and integral multiples of $1 in excess
      thereof.

     

    The
      Indenture Trustee and Securities Administrator may for all purposes (including
      the making of payments due on the Notes) deal with the Depository as the
      authorized representative of the Beneficial Owners with respect to the Notes
      for
      the purposes of exercising the rights of Holders of the Notes hereunder. Except
      as provided in the next succeeding paragraph of this Section 4.01, the rights
      of
      Beneficial Owners with respect to the Notes shall be limited to those
      established by law and agreements between such Beneficial Owners and the
      Depository and Depository Participants. Except as provided in Section 4.08
      hereof, Beneficial Owners shall not be entitled to definitive certificates
      for
      the Notes as to which they are the Beneficial Owners. Requests and directions
      from, and votes of, the Depository as Holder of the Notes shall not be deemed
      inconsistent if they are made with respect to different Beneficial Owners.
      The
      Securities Administrator may establish a reasonable record date in connection
      with solicitations of consents from or voting by Noteholders and give notice
      to
      the Depository of such record date. Without the consent of the Issuing Entity
      and the Securities Administrator, no Note may be transferred by the Depository
      except to a successor Depository that agrees to hold such Note for the account
      of the Beneficial Owners.

     

    In
      the
      event the Depository Trust Company resigns or is removed as Depository, the
      Depositor may appoint a successor Depository. If no successor Depository has
      been appointed within 30 days of the effective date of the Depository’s
      resignation or removal, each Beneficial Owner shall be entitled to certificates
      representing the Notes it beneficially owns in the manner prescribed in Section
      4.08.

     

    The
      Notes
      shall, on original issue, be executed on behalf of the Issuing Entity by the
      Owner Trustee, not in its individual capacity but solely as Owner Trustee,
      authenticated by the Securities Administrator and delivered by the Securities
      Administrator to or upon the order of the Issuing Entity.

     

    Section
      4.02  Registration
      of and Limitations on Transfer and Exchange of Notes; Appointment of Note
      Registrar and Certificate Registrar.
      The
      Issuing Entity shall cause to be kept at the Corporate Trust Office of the
      Securities Administrator a Note Register in which, subject to such reasonable
      regulations as it may prescribe, the Note Registrar shall provide for the
      registration of Notes and of transfers and exchanges of Notes as herein
      provided.

     

    Subject
      to the restrictions and limitations set forth below, upon surrender for
      registration of transfer of any Note at the Corporate Trust Office of the
      Securities Administrator, the Issuing Entity shall execute and the Note
      Registrar shall authenticate and deliver, in the name of the designated
      transferee or transferees, one or more new Notes in authorized initial Note
      Principal Balances or Notional Amounts, as applicable, evidencing the same
      Class
      and aggregate Percentage Interests.

     

    Subject
      to the foregoing and Section 4.08, Notes may be exchanged for other Notes of
      like tenor and in authorized initial Note Principal Balances or Notional
      Amounts, as applicable, evidencing the same Class and aggregate Percentage
      Interests upon surrender of the Notes to be exchanged at the Corporate Trust
      Office of the Note Registrar. Whenever any Notes are so surrendered for
      exchange, the Issuing Entity shall execute and the Securities Administrator
      shall authenticate and deliver the Notes which the Noteholder making the
      exchange is entitled to receive. Each Note presented or surrendered for
      registration of transfer or exchange shall (if so required by the Note
      Registrar) be duly endorsed by, or be accompanied by a written instrument of
      transfer in form reasonably satisfactory to the Note Registrar duly executed
      by
      the Holder thereof or his attorney duly authorized in writing with such
      signature guaranteed by a commercial bank or trust company located or having
      a
      correspondent located in the city of New York. Notes delivered upon any such
      transfer or exchange will evidence the same obligations, and will be entitled
      to
      the same rights and privileges, as the Notes surrendered.

     

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

     

    The
      Issuing Entity hereby appoints the Securities Administrator as (i) Certificate
      Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
      to Section 3.09 of the Trust Agreement in which, subject to such reasonable
      regulations as it may prescribe, the Certificate Registrar shall provide for
      the
      registration of Certificates and of transfers and exchanges thereof pursuant
      to
      Section 3.04 of the Trust Agreement and (ii) Note Registrar under this
      Indenture. The Securities Administrator hereby accepts such
      appointments.

     

    Any
      transfer of a Note shall be made in accordance with the ERISA restrictions
      in
      Section 4.13.

     

    Section
      4.03  Mutilated,
      Destroyed, Lost or Stolen Notes.
      If (i)
      any mutilated Note is surrendered to the Securities Administrator, or the
      Securities Administrator receives evidence to its satisfaction of the
      destruction, loss or theft of any Note, and (ii) there is delivered to the
      Securities Administrator such security or indemnity as may be required by it
      to
      hold the Issuing Entity, the Note Insurer and the Securities Administrator
      harmless, then, in the absence of notice to the Issuing Entity, the Note
      Registrar or the Securities Administrator that such Note has been acquired
      by a
      bona fide purchaser, and provided that the requirements of Section 8-405 of
      the
      UCC are met, the Issuing Entity shall execute, and upon its request the
      Securities Administrator shall authenticate and deliver, in exchange for or
      in
      lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note;
      provided, however, that if any such destroyed, lost or stolen Note, but not
      a
      mutilated Note, shall have become or within seven days shall be due and payable,
      instead of issuing a replacement Note, the Issuing Entity may pay such
      destroyed, lost or stolen Note when so due or payable without surrender thereof.
      If, after the delivery of such replacement Note or payment of a destroyed,
      lost
      or stolen Note pursuant to the proviso to the preceding sentence, a bona fide
      purchaser of the original Note in lieu of which such replacement Note was issued
      presents for payment such original Note, the Issuing Entity, the Note Insurer
      and the Securities Administrator shall be entitled to recover such replacement
      Note (or such payment) from the Person to whom it was delivered or any Person
      taking such replacement Note from such Person to whom such replacement Note
      was
      delivered or any assignee of such Person, except a bona fide purchaser, and
      shall be entitled to recover upon the security or indemnity provided therefor
      to
      the extent of any loss, damage, cost or expense incurred by the Issuing Entity,
      the Indenture Trustee, the Note Insurer or the Securities Administrator in
      connection therewith.

     

    Upon
      the
      issuance of any replacement Note under this Section 4.03, the Issuing Entity
      or
      the Securities Administrator may require the payment by the Holder of such
      Note
      of a sum sufficient to cover any tax or other governmental charge that may
      be
      imposed in relation thereto and any other reasonable expenses (including the
      fees and expenses of the Securities Administrator) connected
      therewith.

     

    Every
      replacement Note issued pursuant to this Section 4.03 in replacement of any
      mutilated, destroyed, lost or stolen Note shall constitute an original
      additional contractual obligation of the Issuing Entity, whether or not the
      mutilated, destroyed, lost or stolen Note shall be at any time enforceable
      by
      anyone, and shall be entitled to all the benefits of this Indenture equally
      and
      proportionately with any and all other Notes duly issued hereunder.

     

    The
      provisions of this Section 4.03 are exclusive and shall preclude (to the extent
      lawful) all other rights and remedies with respect to the replacement or payment
      of mutilated, destroyed, lost or stolen Notes.

     

    Section
      4.04  Persons
      Deemed Owners.
      Prior
      to due presentment for registration of transfer of any Note, the Issuing Entity,
      the Note Insurer, the Indenture Trustee, the Securities Administrator, the
      Paying Agent and any agent of the Issuing Entity or the Securities Administrator
      or the Paying Agent may treat the Person in whose name any Note is registered
      (as of the day of determination) as the owner of such Note for the purpose
      of
      receiving payments of principal of and interest, if any, on such Note and for
      all other purposes whatsoever, whether or not such Note be overdue, and none
      of
      the Issuing Entity, the Indenture Trustee, the Securities Administrator, the
      Note Insurer, the Paying Agent or any agent of the Issuing Entity, the
      Securities Administrator, the Indenture Trustee, the Note Insurer or the Paying
      Agent shall be affected by notice to the contrary.

     

    Section
      4.05  Cancellation.
      All
      Notes surrendered for payment, registration of transfer, exchange or redemption
      shall, if surrendered to any Person other than the Securities Administrator,
      be
      delivered to the Securities Administrator and shall be promptly cancelled by
      the
      Securities Administrator. The Issuing Entity may at any time deliver to the
      Securities Administrator for cancellation any Notes previously authenticated
      and
      delivered hereunder which the Issuing Entity may have acquired in any manner
      whatsoever, and all Notes so delivered shall be promptly cancelled by the
      Securities Administrator. No Notes shall be authenticated in lieu of or in
      exchange for any Notes cancelled as provided in this Section 4.05, except as
      expressly permitted by this Indenture. All cancelled Notes may be held or
      disposed of by the Securities Administrator in accordance with its standard
      retention or disposal policy as in effect at the time unless the Issuing Entity
      shall direct by an Issuing Entity Request that they be destroyed or returned
      to
      it; provided, however, that such Issuing Entity Request is timely and the Notes
      have not been previously disposed of by the Securities
      Administrator.

     

    Section
      4.06  Book-Entry
      Notes.
      The
      Class A, Class A-IO and Class B Notes, upon original issuance, will be issued
      in
      the form of typewritten Notes representing the Book-Entry Notes, to be delivered
      to The Depository Trust Company, the initial Depository or to the Securities
      Administrator, as custodian for the Depository Trust Company, by, or on behalf
      of, the Issuing Entity. The Notes shall initially be registered on the Note
      Register in the name of Cede & Co., the nominee of the initial Depository,
      and no Beneficial Owner will receive a Definitive Note representing such
      Beneficial Owner’s interest in such Note, except as provided in Section 4.08.
      With respect to such Notes, unless and until definitive, fully registered Notes
      (the “Definitive Notes”) have been issued to Beneficial Owners pursuant to
      Section 4.08:

     

    (i)  the
      provisions of this Section 4.06 shall be in full force and effect;

     

    (ii)  the
      Note
      Registrar, the Paying Agent, the Indenture Trustee and the Securities
      Administrator shall be entitled to deal with the Depository for all purposes
      of
      this Indenture (including the payment of principal of and interest on the Notes
      and the giving of instructions or directions hereunder) as the sole holder
      of
      the Notes, and shall have no obligation to the Beneficial Owners of the
      Notes;

     

    (iii)  to
      the
      extent that the provisions of this Section 4.06 conflict with any other
      provisions of this Indenture, the provisions of this Section 4.06 shall
      control;

     

    (iv)  the
      rights of Beneficial Owners shall be exercised only through the Depository
      and
      shall be limited to those established by law and agreements between such Owners
      of Notes and the Depository and/or the Depository Participants. Unless and
      until
      Definitive Notes are issued pursuant to Section 4.08, the initial Depository
      will make book-entry transfers among the Depository Participants and receive
      and
      transmit payments of principal of and interest on the Notes to such Depository
      Participants; and

     

    (v)  whenever
      this Indenture requires or permits actions to be taken based upon instructions
      or directions of Holders of Notes evidencing a specified percentage of the
      Note
      Principal Balances of the Notes, the Depository shall be deemed to represent
      such percentage with respect to the Notes only to the extent that it has
      received instructions to such effect from Beneficial Owners and/or Depository
      Participants owning or representing, respectively, such required percentage
      of
      the beneficial interest in the Notes and has delivered such instructions to
      the
      Securities Administrator and the Indenture Trustee. 

     

    None
      of
      the Depositor, the Issuing Entity, the Master Servicer, the Seller, the
      Securities Administrator, the Indenture Trustee, the Note Registrar and the
      Owner Trustee shall have any liability for any aspect of the records relating
      to
      or payments made on account of beneficial ownership interests in the Book-Entry
      Notes or for maintaining, supervising or reviewing any records relating to
      beneficial ownership interests or transfers thereof.

     

    Section
      4.07  Notices
      to Depository.
      Whenever a notice or other communication to the Note Holders is required under
      this Indenture, unless and until Definitive Notes shall have been issued to
      Beneficial Owners pursuant to Section 4.08, the Indenture Trustee or Securities
      Administrator, as applicable, shall give all such notices and communications
      specified herein to be given to Holders of the Notes to the Depository, and
      shall have no obligation to the Beneficial Owners.

     

    Section
      4.08  Definitive
      Notes.
      If (i)
      the Depositor advises the Securities Administrator in writing that the
      Depository is no longer willing or able to properly discharge its
      responsibilities with respect to the Book-Entry Notes and the Depositor is
      unable to locate a qualified successor within 30 days or (ii) the Depositor,
      at
      its option (with the consent of the Securities Administrator, such consent
      not
      to be unreasonably withheld) elects to terminate the book-entry system through
      the Depository, then the Securities Administrator shall request that the
      Depository notify all Beneficial Owners of the occurrence of any such event
      and
      of the availability of Definitive Notes to Beneficial Owners requesting the
      same. Upon surrender to the Securities Administrator of the typewritten Notes
      representing the Book-Entry Notes by the Depository, accompanied by registration
      instructions, the Issuing Entity shall execute and the Securities Administrator
      shall authenticate the Definitive Notes in accordance with the instructions
      of
      the Depository. None of the Issuing Entity, the Note Registrar or the Securities
      Administrator shall be liable for any delay in delivery of such instructions
      and
      may conclusively rely on, and shall be protected in relying on, such
      instructions. Upon the issuance of Definitive Notes, the Securities
      Administrator shall recognize the Holders of the Definitive Notes as
      Noteholders.

     

    In
      addition, if an Event of Default has occurred and is continuing, each Note
      Owner
      materially adversely affected thereby may at its option request a Definitive
      Note evidencing such Noteholder's interest in the related Class of Notes. In
      order to make such request, such Noteholder shall, subject to the rules and
      procedures of the Depository, provide the Depository or the related Depository
      Participant with directions for the Securities Administrator to exchange or
      cause the exchange of the Noteholder's interest in such Class of Notes for
      an
      equivalent interest in fully registered definitive form. Upon receipt by the
      Securities Administrator of instructions from the Depository directing the
      Securities Administrator to effect such exchange (such instructions to contain
      information regarding the Class of Notes and the Note Principal Balance or
      Notional Amount, as applicable, being exchanged, the Depository Participant
      account to be debited with the decrease, the registered holder of and delivery
      instructions for the Definitive Note, and any other information reasonably
      required by the Securities Administrator), (i) the Securities Administrator
      shall instruct the Depository to reduce the related Depository Participant's
      account by the aggregate Note Principal Balance or Notional Amount, as
      applicable, of the Definitive Note, (ii) the Securities Administrator shall
      execute, authenticate and deliver, in accordance with the registration and
      delivery instructions provided by the Depository, a Definitive Note evidencing
      such Noteholder's interest in such Class of Notes and (iii) the Issuing Entity
      shall execute and the Securities Administrator shall authenticate a new
      Book-Entry Note reflecting the reduction in the Note Principal Balance or
      Notional Amount, as applicable, of such Class of Notes by the amount of the
      Definitive Notes.

     

    Section
      4.09  Application
      of Trust Money.
      All
      monies deposited with the Securities Administrator pursuant to this Indenture
      shall be held in trust and applied by it, in accordance with the provisions
      of
      the Notes and this Indenture, to the payment, either directly or through any
      Paying Agent or the Certificate Paying Agent as designee of the Issuing Entity,
      as the Securities Administrator may determine, to the Holders of Securities,
      of
      all sums due and to become due thereon for principal and interest or otherwise;
      but such monies need not be segregated from other funds except to the extent
      required herein or required by law.

     

    Section
      4.10  Subrogation
      and Cooperation.
      (a) The
      Issuing Entity and the Indenture Trustee acknowledge that (i) to the extent
      the
      Note Insurer makes payments under the Policy on account of principal of or
      interest on the Class A Notes, the Note Insurer will be fully subrogated to
      the
      rights of such Holders to receive such principal and interest from the Issuing
      Entity, and (ii) the Note Insurer shall be paid such principal and interest
      but
      only from the sources and in the manner provided herein and in the Insurance
      Agreement for the payment of such principal and interest.

     

    (b)  The
      Indenture Trustee shall, so long as it is indemnified to its satisfaction,
      cooperate in all respects with any reasonable written request by the Note
      Insurer for action to preserve or enforce the Note Insurer’s rights or interest
      under this Indenture or the Insurance Agreement, consistent with this Indenture
      and without limiting the rights of the Noteholders as otherwise set forth in
      the
      Indenture, including, without limitation, upon the occurrence and continuance
      of
      a default under the Insurance Agreement, a request to take any one or more
      of
      the following actions:

     

    (i)
      institute Proceedings for the collection of all amounts then payable on the
      Class A Notes, or under this Indenture in respect of the Class A Notes and
      all
      amounts payable under the Insurance Agreement, enforce any judgment obtained
      and
      collect from the Issuing Entity monies adjudged due;

    

    (ii)
      sell or cause to be sold the Trust Estate or any portion thereof or rights
      or
      interest therein, at one or more public or private Sales (as defined in Section
      5.15 hereof) called and conducted in any manner permitted by law;

    

    (iii)
      institute Proceedings from time to time for the complete or partial foreclosure
      of this Indenture; and

    

    (iv)
      exercise any remedies of a secured party under the UCC and take any other
      appropriate action to protect and enforce the rights and remedies of the Note
      Insurer hereunder;

     

    provided,
      however, action shall be taken pursuant to this Section 4.10 by the Indenture
      Trustee to preserve the Note Insurer’s rights or interest under this Indenture
      or the Insurance Agreement only to the extent such action is available to the
      Class A Noteholders or the Note Insurer under other provisions of this
      Indenture.

     

    Notwithstanding
      any provision of this Indenture to the contrary, so long as no Note Insurer
      Default exists, the Note Insurer shall at all times be treated as if it were
      the
      exclusive owner of all Class A Notes Outstanding for the purposes of all
      approvals, consents, waivers and the institution of any action and the written
      direction of all remedies, and the Indenture Trustee shall act in accordance
      with the written directions of the Note Insurer so long as it is indemnified
      therefor to its reasonable satisfaction.

     

    Section
      4.11  Repayment
      of Monies Held by Paying Agent.
      In
      connection with the satisfaction and discharge of this Indenture with respect
      to
      the Notes, all monies then held by any Person other than the Securities
      Administrator under the provisions of this Indenture with respect to such Notes
      shall, upon demand of the Issuing Entity, be paid to the Securities
      Administrator to be held and applied according to Section 3.02 and thereupon
      such Person shall be released from all further liability with respect to such
      monies.

     

    Section
      4.12  Temporary
      Notes.
      Pending
      the preparation of any Definitive Notes, the Issuing Entity may execute and
      upon
      its written direction, the Securities Administrator may authenticate and make
      available for delivery, temporary Notes that are printed, lithographed,
      typewritten, photocopied or otherwise produced, in any denomination,
      substantially of the tenor of the Definitive Notes in lieu of which they are
      issued and with such appropriate insertions, omissions, substitutions and other
      variations as the officers executing such Notes may determine, as evidenced
      by
      their execution of such Notes.

     

    If
      temporary Notes are issued, the Issuing Entity will cause Definitive Notes
      to be
      prepared without unreasonable delay. After the preparation of the Definitive
      Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
      surrender of the temporary Notes at the Corporate Trust Office of the Securities
      Administrator, without charge to the Holder. Upon surrender for cancellation
      of
      any one or more temporary Notes, the Issuing Entity shall execute and the
      Securities Administrator shall authenticate and make available for delivery,
      in
      exchange therefor, Definitive Notes of authorized denominations and of like
      tenor, class and aggregate principal amount. Until so exchanged, such temporary
      Notes shall in all respects be entitled to the same benefits under this
      Indenture as Definitive Notes.

     

    Section
      4.13  Representation
      Regarding ERISA.
      By
      acquiring a Class A, Class A-IO or Class B Notes or interest therein, each
      Holder of such Note or Beneficial Owner of any such interest will be deemed
      to
      represent that either (1) it is not acquiring such Note with Plan Assets or
      (2)
      solely in the case of a Class A Note, (A) the acquisition, holding and transfer
      of such Note will not give rise to a nonexempt prohibited transaction under
      Section 406 of ERISA or Section 4975 of the Code and (B) the Notes are rated
      investment grade or better and such person believes that the Notes are properly
      treated as indebtedness without substantial equity features for purposes of
      the
      Department of Labor regulation 29 C.F.R. § 2510.3-101, and agrees to so treat
      the Notes. Alternatively, regardless of the rating of the Notes, such person
      may
      provide the Securities Administrator and the Note Registrar with an opinion
      of
      counsel, which opinion of counsel will not be at the expense of the Issuing
      Entity, the Seller, the Owner Trustee, the Indenture Trustee, the Securities
      Administrator, the Note Registrar, the Master Servicer or any Servicer which
      opines that the acquisition, holding and transfer of such Note or interest
      therein is permissible under applicable law, will not constitute or result
      in a
      non-exempt prohibited transaction under ERISA or Section 4975 of the Code and
      will not subject the Issuing Entity, the Seller, the Depositor, the Owner
      Trustee, the Indenture Trustee, the Securities Administrator, the Note
      Registrar, the Master Servicer or any Servicer to any obligation in addition
      to
      those undertaken in the Indenture and the other Basic Documents. The Class
      A-IO
      Notes and Class B Notes may not be acquired with Plan Assets.

     

      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

    
 

    DEFAULT
      AND REMEDIES

     

    Section
      5.01  Events
      of Default.
      The
      Issuing Entity shall deliver to the Indenture Trustee, the Securities
      Administrator and the Note Insurer, within five days after learning of the
      occurrence of a Default, written notice in the form of an Officer’s Certificate
      of any event which with the giving of notice and the lapse of time would become
      an Event of Default under clause (ii), (iii) or (iv) of the definition of “Event
      of Default”, its status and what action the Issuing Entity is taking or proposes
      to take with respect thereto. The Indenture Trustee shall not be deemed to
      have
      knowledge of any Default or Event of Default unless a Responsible Officer has
      actual knowledge thereof or unless written notice of such Default or Event
      of
      Default is received by a Responsible Officer and such notice references the
      Notes, the Trust Estate or this Indenture.

     

    Section
      5.02  Acceleration
      of Maturity; Rescission and Annulment.
      If an
      Event of Default should occur and be continuing, then and in every such case
      the
      Indenture Trustee at the written direction of the Note Insurer or the Holders
      of
      Notes representing not less than a majority of the aggregate Note Principal
      Balance of the Notes may, with the written consent of the Note Insurer, declare
      the Notes to be immediately due and payable, by a notice in writing to the
      Issuing Entity (and to the Indenture Trustee if such notice is given by
      Noteholders), and upon any such declaration the unpaid Note Principal Balance
      of
      the Notes, together with accrued and unpaid interest thereon through the date
      of
      acceleration, shall become immediately due and payable; provided, however,
      that
      for purposes of this sentence and for purposes of this Article V, unless a
      Note
      Insurer Default exists, the Note Insurer may exercise the rights of all of
      the
      Holders of the Class A Notes.

     

    At
      any
      time after such declaration of acceleration of maturity with respect to an
      Event
      of Default has been made and before a judgment or decree for payment of the
      money due has been obtained by the Indenture Trustee as hereinafter in this
      Article V provided, the Note Insurer or Holders of the Notes representing not
      less than a majority of the aggregate Note Principal Balance of each Class
      of
      Notes, with the written consent of the Note Insurer, so long as no Note Insurer
      Default exists, by written notice to the Issuing Entity and the Indenture
      Trustee, may, subject to Section 5.12, waive the related Event of Default and
      rescind and annul such declaration and its consequences if:

     

    (i)  the
      Issuing Entity has paid or deposited with the Indenture Trustee or Securities
      Administrator a sum sufficient to pay:

     

    (A)  all
      payments of principal of and interest on the Notes and all other amounts that
      would then be due hereunder or under the Notes if the Event of Default giving
      rise to such acceleration had not occurred;

     

    (B)  all
      sums
      paid or advanced by the Indenture Trustee hereunder and the reasonable
      compensation, expenses, disbursements and advances of the Indenture Trustee
      and
      the Securities Administrator and their respective agents and counsel;

     

    (C)  all
      amounts owed to the Note Insurer; and

     

    (ii)  all
      Events of Default, other than the nonpayment of the principal of the Notes
      that
      has become due solely by such acceleration, have been cured or waived as
      provided in Section 5.12; provided, however, the Note Insurer, so long as no
      Note Insurer Default exists, may waive an Event of Default regardless of Section
      5.02(i) above.

     

    No
      such
      rescission shall affect any subsequent default or impair any right consequent
      thereto.

     

    Section
      5.03  Collection
      of Indebtedness and Suits for Enforcement by Indenture Trustee. 

     

    (a)  The
      Issuing Entity covenants that if (i) default is made in the payment of any
      interest on any Note when the same becomes due and payable, and such default
      continues for a period of five days, or (ii) default is made in the payment
      of
      the principal of or any installment of the principal of any Note when the same
      becomes due and payable, the Issuing Entity shall, upon demand of the Indenture
      Trustee, at the direction of the Note Insurer, so long as no Note Insurer
      Default exists, or if a Note Insurer Default does exist, at the direction of
      the
      Holders of a majority of the aggregate Note Principal Balances of the Notes,
      pay
      to the Securities Administrator, for the benefit of the Holders of Notes and
      the
      Note Insurer, the whole amount then due and payable on the Notes for principal
      and interest, with interest at the applicable Note Interest Rate upon the
      overdue principal, and in addition thereto such further amount as shall be
      sufficient to cover the costs and expenses of collection, including the
      reasonable compensation, expenses, disbursements and advances of the Indenture
      Trustee and the Securities Administrator and their respective agents and counsel
      and all amounts owed to the Note Insurer.

     

    (b)  In
      case
      the Issuing Entity shall fail forthwith to pay such amounts upon such demand,
      the Indenture Trustee, in its own name and as trustee of an express trust,
      and
      at the direction of the Note Insurer, so long as no Note Insurer Default exists,
      subject to the provisions of Section 10.15 hereof, may institute a Proceeding
      for the collection of the sums so due and unpaid, and may prosecute such
      Proceeding to judgment or final decree, and may enforce the same against the
      Issuing Entity or other obligor upon the Notes and collect in the manner
      provided by law out of the property of the Issuing Entity or other obligor
      upon
      the Notes, wherever situated, the monies adjudged or decreed to be
      payable.

     

    (c)  If
      an
      Event of Default occurs and is continuing, the Indenture Trustee, at the
      direction of the Note Insurer, so long as no Note Insurer Default exists subject
      to the provisions of Section 10.15 hereof, may, as more particularly provided
      in
      Section 5.04 hereof, in its discretion, proceed to protect and enforce its
      rights and the rights of the Noteholders and the Note Insurer by such
      appropriate Proceedings as directed in writing by the Note Insurer, so long
      as
      no Note Insurer Default exists, to protect and enforce any such rights, whether
      for the specific enforcement of any covenant or agreement in this Indenture
      or
      in aid of the exercise of any power granted herein, or to enforce any other
      proper remedy or legal or equitable right vested in the Indenture Trustee by
      this Indenture or by law.

     

    (d)  In
      case
      there shall be pending, relative to the Issuing Entity or any other obligor
      upon
      the Notes or any Person having or claiming an ownership interest in the Trust
      Estate, Proceedings under Title 11 of the United States Code or any other
      applicable federal or state bankruptcy, insolvency or other similar law, or
      in
      case a receiver, assignee or trustee in bankruptcy or reorganization,
      liquidator, sequestrator or similar official shall have been appointed for
      or
      taken possession of the Issuing Entity or its property or such other obligor
      or
      Person, or in case of any other comparable judicial Proceedings relative to
      the
      Issuing Entity or other obligor upon the Notes, or to the creditors or property
      of the Issuing Entity or such other obligor, the Indenture Trustee, at the
      direction of the Note Insurer, so long as no Note Insurer Default exists,
      irrespective of whether the principal of any Notes shall then be due and payable
      as therein expressed or by declaration or otherwise and irrespective of whether
      the Indenture Trustee shall have made any demand pursuant to the provisions
      of
      this Section, shall be entitled and empowered, by intervention in such
      Proceedings or otherwise:

     

    (i)  to
      file
      and prove a claim or claims for the whole amount of principal and interest
      owing
      and unpaid in respect of the Notes and to the Note Insurer and to file such
      other papers or documents as may be necessary or advisable in order to have
      the
      claims of the Indenture Trustee (including any claim for reasonable compensation
      to the Indenture Trustee and each predecessor Indenture Trustee, and their
      respective agents, attorneys and counsel, and for reimbursement of all expenses
      and liabilities incurred, and all advances made, by the Indenture Trustee and
      each predecessor Indenture Trustee, except as a result of negligence, willful
      misconduct or bad faith), the Note Insurer and of the Noteholders allowed in
      such Proceedings;

     

    (ii)  unless
      prohibited by applicable law and regulations, to vote on behalf of the Holders
      of Notes in any election of a trustee, a standby trustee or Person performing
      similar functions in any such Proceedings;

     

    (iii)  to
      collect and receive any monies or other property payable or deliverable on
      any
      such claims and to distribute all amounts received with respect to the claims
      of
      the Noteholders, the Note Insurer and of the Indenture Trustee on their behalf,
      and

     

    (iv)  to
      file
      such proofs of claim and other papers or documents as may be necessary or
      advisable in order to have the claims of the Indenture Trustee, the Note Insurer
      or the Holders of Notes allowed in any judicial proceedings relative to the
      Issuing Entity, its creditors and its property;

     

    and
      any
      trustee, receiver, liquidator, custodian or other similar official in any such
      Proceeding is hereby authorized by each of such Noteholders to make payments
      to
      the Securities Administrator, with the consent of the Note Insurer so long
      as no
      Note Insurer Default exists, and, in the event that the Indenture Trustee and
      the Securities Administrator shall consent to the making of payments directly
      to
      such Noteholders, to pay to the Indenture Trustee such amounts as shall be
      sufficient to cover reasonable compensation to the Indenture Trustee, each
      predecessor Indenture Trustee and their respective agents, attorneys and
      counsel, and all other expenses and liabilities incurred, and all advances
      made,
      by the Indenture Trustee and each predecessor Indenture Trustee and all amounts
      due to the Note Insurer.

     

    (e)  Nothing
      herein contained shall be deemed to authorize the Indenture Trustee to authorize
      or consent to or vote for or accept or adopt on behalf of any Noteholder any
      plan of reorganization, arrangement, adjustment or composition affecting the
      Notes or the rights of any Holder thereof or to authorize the Indenture Trustee
      to vote in respect of the claim of any Noteholder in any such proceeding except,
      as aforesaid, to vote for the election of a trustee in bankruptcy or similar
      Person.

     

    (f)  All
      rights of action and of asserting claims under this Indenture, or under any
      of
      the Notes, may be enforced by the Indenture Trustee without the possession
      of
      any of the Notes or the production thereof in any trial or other Proceedings
      relative thereto, and any such action or proceedings instituted by the Indenture
      Trustee shall be brought in its own name as trustee of an express trust, and
      any
      recovery of judgment, subject to the payment of the expenses, disbursements
      and
      compensation of the Indenture Trustee, each predecessor Indenture Trustee and
      their respective agents and attorneys, shall be for the ratable benefit of
      the
      Holders of the Notes, subject to Section 5.05 hereof.

     

    In
      any
      Proceedings brought by the Indenture Trustee with the consent of the Note
      Insurer so long as no Note Insurer Default exists (and also any Proceedings
      involving the interpretation of any provision of this Indenture to which the
      Indenture Trustee shall be a party), the Indenture Trustee shall be held to
      represent all the Holders of the Notes, and it shall not be necessary to make
      any Noteholder a party to any such Proceedings.

     

    Section
      5.04  Remedies;
      Priorities.
      (a)
      If an
      Event of Default shall have occurred and be continuing and if an acceleration
      has been declared and not rescinded pursuant to Section 5.02 hereof, the
      Indenture Trustee, subject to the provisions of Section 10.15 hereof, may,
      with
      the consent of the Note Insurer so long as no Note Insurer Default exists,
      and
      shall, at the direction of the Note Insurer, so long as the Note Insurer is
      not
      in default under the Policy, or at the written direction of the Holders of
      a
      majority of the aggregate Note Principal Balances of the Notes then outstanding
      with the consent of the Note Insurer, do one or more of the following (subject
      to Section 5.05 hereof):

     

    (i)  institute
      Proceedings in its own name and as trustee of an express trust for the
      collection of all amounts then payable on the Notes and to the Note Insurer
      or
      under this Indenture with respect thereto, whether by declaration or otherwise,
      and all amounts payable under the Insurance Agreement, enforce any judgment
      obtained, and collect from the Issuing Entity and any other obligor upon such
      Notes monies adjudged due;

     

    (ii)  institute
      Proceedings from time to time for the complete or partial foreclosure of this
      Indenture with respect to the Trust Estate;

     

    (iii)  exercise
      any remedies of a secured party under the UCC and take any other appropriate
      action to protect and enforce the rights and remedies of the Indenture Trustee
      and the Holders of the Notes and the Note Insurer; and

     

    (iv)  sell
      the
      Trust Estate or any portion thereof or rights or interest therein, at one or
      more public or private sales called and conducted in any manner permitted by
      law;

     

    provided,
      however, that the Indenture Trustee may not sell or otherwise liquidate the
      Trust Estate following an Event of Default, unless (1)(A) the Indenture Trustee
      obtains the consents required under Section 5.11 below, (B) the proceeds of
      such
      sale or liquidation distributable to the Holders of the Notes are sufficient
      to
      discharge in full all amounts then due and unpaid upon such Notes for principal
      and interest and to reimburse the Note Insurer for any amounts drawn under
      the
      Policy and any other amounts due to the Note Insurer under the Insurance
      Agreement or (C) the Indenture Trustee determines that the HELOCs will not
      continue to provide sufficient funds for the payment of principal of and
      interest on the applicable Notes as they would have become due if the Notes
      had
      not been declared due and payable, and the Indenture Trustee obtains the
      consents required under Section 5.11 below and (2) the Securities Administrator
      complies with each of the requirements for a qualified liquidation under Section
      860F of the Code set forth in Section 8.06(c) as if it were the Class E
      Certificateholder. In determining such sufficiency or insufficiency with respect
      to clause (B) and (C), the Indenture Trustee may, but need not, obtain and
      rely
      upon an opinion (obtained at the expense of the Trust) of an Independent
      investment banking or accounting firm of national reputation as to the
      feasibility of such proposed action and as to the sufficiency of the Trust
      Estate for such purpose. Notwithstanding the foregoing, any Sale of the Trust
      Estate shall be made subject to the continued servicing of the HELOCs by the
      related Servicer (other than the Servicer as to which an Event of Servicer
      Termination has occurred and is continuing) as provided in the Sale and
      Servicing Agreement. Notwithstanding any contrary provision of this Indenture,
      no Sale of the Trust Estate shall be made unless an Opinion of Counsel is
      rendered, addressed to the Indenture Trustee, the Note Insurer, the Securities
      Administrator and the Owner Trustee, to the effect that such Sale would not
      (i)
      result in the imposition of the tax on “prohibited transactions” as defined in
      sections 860F(a)(2) of any REMIC created hereunder or (ii) cause any REMIC
      created hereunder to fail to qualify as a REMIC at any time that any Notes
      or
      Certificates are outstanding.

     

    If
      the
      Securities Administrator collects any money or property pursuant to this Article
      V, the Securities Administrator shall pay out the money or property in
      accordance with Section 3.02 hereof.

     

    The
      Securities Administrator may fix a record date and Payment Date for any payment
      to Noteholders pursuant to this Section 5.04. With respect to any acceleration
      at the direction of the Note Insurer, the first Payment Date after the
      acceleration shall be the first Payment Date after the acceleration. At least
      15
      days before such record date, the Securities Administrator shall mail to each
      Noteholder a notice that states the record date, the Payment Date and the amount
      to be paid.

     

    Section
      5.05  Optional
      Preservation of the Trust Estate.
      If the
      Notes have been declared to be due and payable under Section 5.02 following
      an
      Event of Default and such declaration and its consequences have not been
      rescinded and annulled, the Indenture Trustee may, with the consent of the
      Note
      Insurer (which consent shall not be required if a Note Insurer Default exists),
      and shall, at the direction of the Note Insurer so long as no Note Insurer
      Default exists, elect to take and maintain possession of the Trust Estate.
      It is
      the desire of the parties hereto and the Noteholders that there be at all times
      sufficient funds for the payment of principal of and interest on the Notes
      and
      other obligations of the Issuing Entity, and the Indenture Trustee shall take
      such desire into account when determining whether or not to take and maintain
      possession of the Trust Estate. In determining whether to take and maintain
      possession of the Trust Estate, the Indenture Trustee may, but need not, obtain
      and rely upon an opinion of an Independent investment banking or accounting
      firm
      of national reputation as to the feasibility of such proposed action and as
      to
      the sufficiency of the Trust Estate for such purpose.

     

    Section
      5.06  Limitation
      of Suits.
      So long
      as the majority Holder of the Class E Certificates owns 100% of the Securities,
      no Holder of any Note (other than the Note Insurer acting pursuant to Section
      4.10 hereof) shall have any right to institute any Proceeding, judicial or
      otherwise, with respect to this Indenture, or for the appointment of a receiver
      or trustee, or for any other remedy hereunder. No Holder of any Note (other
      than
      the Note Insurer acting pursuant to Section 4.10 hereof) shall have any right
      to
      institute any Proceeding, judicial or otherwise, with respect to this Indenture,
      or for the appointment of a receiver or trustee, or for any other remedy
      hereunder, unless and subject to the foregoing and the provisions of Section
      10.15 hereof:

     

    (i)  such
      Holder has previously given written notice to the Indenture Trustee of a
      continuing Event of Default;

     

    (ii)  the
      Holders of not less than 25% of the aggregate Note Principal Balance of the
      Notes have made a written request to the Indenture Trustee to institute such
      Proceeding in respect of such Event of Default in its own name as Indenture
      Trustee hereunder;

     

    (iii)  such
      Holder or Holders have offered to the Indenture Trustee reasonable indemnity
      against the costs, expenses and liabilities to be incurred in complying with
      such request;

     

    (iv)  the
      Indenture Trustee, for 60 days after its receipt of such notice of request
      and
      offer of indemnity, has failed to institute such Proceedings; 

     

    (v)  such
      Holders have obtained consent of the Note Insurer; and

     

    (vi)  no
      direction inconsistent with such written request has been given to the Indenture
      Trustee during such 60-day period by the Holders of a majority of the Note
      Principal Balances of the Notes.

     

    It
      is
      understood and intended that no one or more Holders of Notes shall have any
      right in any manner whatever by virtue of, or by availing of, any provision
      of
      this Indenture to affect, disturb or prejudice the rights of any other Holders
      of Notes or to obtain or to seek to obtain priority or preference over any
      other
      Holders or to enforce any right under this Indenture, except in the manner
      herein provided.

     

    Subject
      to the last paragraph of Section 5.11 herein, in the event the Indenture Trustee
      shall receive conflicting or inconsistent requests and indemnity from two or
      more groups of Holders of Notes, each representing less than a majority of
      the
      Note Principal Balances of the Notes, the Indenture Trustee shall take such
      action as requested by the Holders representing the highest amount (in the
      aggregate) of the Note Principal Balances, notwithstanding any other provisions
      of this Indenture.

     

    Section
      5.07  Unconditional
      Rights of Noteholders To Receive Principal and Interest.
      Notwithstanding any other provisions in this Indenture, the Holder of any Note
      shall have the right, which is absolute and unconditional, to receive payment
      of
      the principal of and interest, if any, on such Note on or after the respective
      due dates thereof expressed in such Note or in this Indenture and to institute
      suit for the enforcement of any such payment, and such right shall not be
      impaired without the consent of such Holder.

     

    Section
      5.08  Restoration
      of Rights and Remedies.
      If the
      Indenture Trustee or any Noteholder has instituted any Proceeding to enforce
      any
      right or remedy under this Indenture and such Proceeding has been discontinued
      or abandoned for any reason or has been determined adversely to the Indenture
      Trustee, the Note Insurer or to such Noteholder, then and in every such case
      the
      Issuing Entity, the Note Insurer, the Indenture Trustee and the Noteholders
      shall, subject to any determination in such Proceeding, be restored severally
      and respectively to their former positions hereunder, and thereafter all rights
      and remedies of the Indenture Trustee, the Note Insurer and the Noteholders
      shall continue as though no such Proceeding had been instituted.

     

    Section
      5.09  Rights
      and Remedies Cumulative.
      No
      right or remedy herein conferred upon or reserved to the Indenture Trustee,
      to
      the Note Insurer or to the Noteholders is intended to be exclusive of any other
      right or remedy, and every right and remedy shall, to the extent permitted
      by
      law, be cumulative and in addition to every other right and remedy given
      hereunder or now or hereafter existing at law or in equity or otherwise. The
      assertion or employment of any right or remedy hereunder, or otherwise, shall
      not prevent the concurrent assertion or employment of any other appropriate
      right or remedy.

     

    Section
      5.10  Delay
      or Omission Not a Waiver.
      No
      delay or omission of the Indenture Trustee, the Note Insurer or any Holder
      of
      any Note to exercise any right or remedy accruing upon any Event of Default
      shall impair any such right or remedy or constitute a waiver of any such Event
      of Default or an acquiescence therein. Every right and remedy given by this
      Article V or by law to the Indenture Trustee, the Note Insurer or to the
      Noteholders may be exercised from time to time, and as often as may be deemed
      expedient, by the Indenture Trustee or by the Noteholders, as the case may
      be.

     

    Section
      5.11  Control
      By Note Insurer and Noteholders.
      The
      Note Insurer, unless a Note Insurer Default exists, or the Holders of a majority
      of the aggregate Note Principal Balances of Notes, if a Note Insurer Default
      exists, shall have the right to direct the time, method and place of conducting
      any Proceeding for any remedy available to the Indenture Trustee with respect
      to
      the Notes or exercising any trust or power conferred on the Indenture Trustee;
      provided that:

     

    (i)  such
      direction shall not be in conflict with any rule of law or with this
      Indenture;

     

    (ii)  if
      a Note
      Insurer Default exists, any direction to the Indenture Trustee to sell or
      liquidate the Trust Estate shall be by Holders of Notes representing not less
      than 100% of the aggregate Note Principal Balance of the Notes or the Holders
      of
      66 2/3% of the aggregate Note Principal Balance of each Class of Notes then
      outstanding, voting separately as set forth in Section 5.04(a) hereof;
      and

     

    (iii)  the
      Indenture Trustee may take any other action deemed proper by the Indenture
      Trustee that is not inconsistent with such direction of the Holders of Notes
      representing a majority of the Note Principal Balances of the
      Notes.

     

    Notwithstanding
      the rights of Noteholders set forth in this Section 5.11 the Indenture Trustee
      need not take any action that it determines might involve it in
      liability.

     

    Section
      5.12  Waiver
      of Past Defaults.
      Prior
      to the declaration of the acceleration of the maturity of the Notes as provided
      in Section 5.02 hereof, the Note Insurer or the Holders of Notes representing
      not less than a majority of the aggregate Note Principal Balance of each Class
      of Notes, with the Note Insurer’s written consent, may waive any past Event of
      Default and its consequences except an Event of Default (a) with respect to
      payment of principal of or interest on any of the Notes, (b) in respect of
      a
      covenant or provision hereof which cannot be modified or amended without the
      consent of the Holder of each Note, or (c) the waiver of which would materially
      and adversely affect the interests of the Note Insurer or modify its obligation
      under the Policy. In the case of any such waiver, the Issuing Entity, the
      Indenture Trustee, the Note Insurer and the Holders of the Notes shall be
      restored to their former positions and rights hereunder, respectively, but
      no
      such waiver shall extend to any subsequent or other Event of Default or impair
      any right consequent thereto.

     

    Upon
      any
      such waiver, any Event of Default arising therefrom shall be deemed to have
      been
      cured and not to have occurred for every purpose of this Indenture; but no
      such
      waiver shall extend to any subsequent or other Event of Default or impair any
      right consequent thereto.

     

    Section
      5.13  Undertaking
      for Costs.
      All
      parties to this Indenture agree, and each Holder of any Note and each Beneficial
      Owner of any interest therein by such Holder’s or Beneficial Owner’s acceptance
      thereof shall be deemed to have agreed, that any court may in its discretion
      require, in any suit for the enforcement of any right or remedy under this
      Indenture, or in any suit against the Indenture Trustee for any action taken,
      suffered or omitted by it as Indenture Trustee, the filing by any party litigant
      in such suit of an undertaking to pay the costs of such suit, and that such
      court may in its discretion assess reasonable costs, including reasonable
      attorneys’ fees, against any party litigant in such suit, having due regard to
      the merits and good faith of the claims or defenses made by such party litigant;
      but the provisions of this Section 5.13 shall not apply to (a) any suit
      instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder,
      or group of Noteholders, in each case holding in the aggregate more than 10%
      of
      the Note Principal Balances of the Notes or (c) any suit instituted by any
      Noteholder for the enforcement of the payment of principal of or interest on
      any
      Note on or after the respective due dates expressed in such Note and in this
      Indenture.

     

    Section
      5.14  Waiver
      of Stay or Extension Laws.
      The
      Issuing Entity covenants (to the extent that it may lawfully do so) that it
      will
      not at any time insist upon, or plead or in any manner whatsoever, claim or
      take
      the benefit or advantage of, any stay or extension law wherever enacted, now
      or
      at any time hereafter in force, that may affect the covenants or the performance
      of this Indenture; and the Issuing Entity (to the extent that it may lawfully
      do
      so) hereby expressly waives all benefit or advantage of any such law, and
      covenants that it shall not hinder, delay or impede the execution of any power
      herein granted to the Indenture Trustee, but will suffer and permit the
      execution of every such power as though no such law had been
      enacted.

     

    Section
      5.15  Sale
      of Trust Estate.
      (a)
      The
      power to effect any sale or other disposition (a “Sale”) of any portion of the
      Trust Estate pursuant to Section 5.04 hereof is expressly subject to the
      provisions of Sections 5.04 and 5.11(ii) hereof and this Section 5.15. The
      power
      to effect any such Sale shall not be exhausted by any one or more Sales as
      to
      any portion of the Trust Estate remaining unsold, but shall continue unimpaired
      until the entire Trust Estate shall have been sold or all amounts payable on
      the
      Notes and under this Indenture and under the Insurance Agreement shall have
      been
      paid. The Indenture Trustee with the consent of the Note Insurer (which consent
      shall not be required if a Note Insurer Default exists) may from time to time
      postpone any public Sale by public announcement made at the time and place
      of
      such Sale. The Indenture Trustee hereby expressly waives its right to any amount
      fixed by law as compensation for any Sale.

     

    (b)  The
      Indenture Trustee shall not in any private Sale sell the Trust Estate, or any
      portion thereof, unless

     

    (1)  The
      Note
      Insurer, unless a Note Insurer Default exists, or the Holders of all Notes
      if a
      Note Insurer Default exists consent to or direct the Indenture Trustee to make,
      such Sale, or

     

    (2)  the
      proceeds of such Sale would be not less than the entire amount which would
      be
      payable to the Noteholders under the Notes and the Note Insurer in respect
      of
      amounts drawn under the Policy and any other amounts due to the Note Insurer
      under the Insurance Agreement, in full payment thereof in accordance with
      Section 5.02 hereof, on the Payment Date next succeeding the date of such Sale,
      or

     

    (3)  the
      Indenture Trustee determines that the conditions for retention of the Trust
      Estate set forth in Section 5.05 hereof cannot be satisfied (in making any
      such
      determination, the Indenture Trustee may rely upon an opinion of an Independent
      investment banking firm obtained and delivered as provided in Section 5.05
      hereof), and the Note Insurer consents to such Sale, or if a Note Insurer
      Default exists, and the Holders of Notes representing at least 100% of the
      Note
      Principal Balances of the Notes consent to such Sale.

     

    The
      purchase by the Indenture Trustee of all or any portion of the Trust Estate
      at a
      private Sale shall not be deemed a Sale or other disposition thereof for
      purposes of this Section 5.15(b).

     

    (c)  Unless
      the Note Insurer, or if a Note Insurer Default exists, the Holders representing
      at least 100% of the aggregate Note Principal Balance of the Notes or the
      Holders of 66 2/3% of the aggregate Note Principal Balance of each Class of
      Notes then outstanding, voting separately as set forth in Section 5.11 hereof,
      have otherwise consented or directed the Indenture Trustee, at any public Sale
      of all or any portion of the Trust Estate at which a minimum bid equal to or
      greater than the amount described in paragraph (2) of subsection (b) of this
      Section 5.15 has not been established by the Indenture Trustee and no Person
      bids an amount equal to or greater than such amount, the Indenture Trustee,
      as
      trustee for the benefit of the Holders of the Notes, shall bid an amount (which
      shall include the Indenture Trustee’s right, in its capacity as Indenture
      Trustee, to credit bid) at least $1.00 more than the highest other bid in order
      to preserve the Trust Estate on behalf of the Noteholders.

     

    (d)  In
      connection with a Sale of all or any portion of the Trust Estate,

     

    (1)  any
      Holder or Holders of Notes or the Note Insurer may bid for and purchase the
      property offered for sale, and upon compliance with the terms of sale may hold,
      retain and possess and dispose of such property, without further accountability,
      and may, in paying the purchase money therefor, deliver any Notes or claims
      for
      interest thereon in lieu of cash up to the amount which shall, upon distribution
      of the net proceeds of such sale, be payable thereon, and such Notes, in case
      the amounts so payable thereon shall be less than the amount due thereon, shall
      be returned to the Holders thereof after being appropriately stamped to show
      such partial payment;

     

    (2)  the
      Indenture Trustee, with the consent of the Note Insurer so long as no Note
      Insurer Default exists may bid for and acquire the property offered for Sale
      in
      connection with any Sale thereof, and, subject to any requirements of, and
      to
      the extent permitted by, applicable law in connection therewith, may purchase
      all or any portion of the Trust Estate in a private sale, and, in lieu of paying
      cash therefor, may make settlement for the purchase price by crediting the
      gross
      Sale price against the sum of (A) the amount which would be distributable to
      the
      Holders of the Notes and Holders of Certificates and amounts distributable
      to
      the Note Insurer on the Payment Date next succeeding the date of such Sale
      and
      (B) the expenses of the Sale and of any Proceedings in connection therewith
      which are reimbursable to it, without being required to produce the Notes in
      order to complete any such Sale or in order for the net Sale price to be
      credited against such Notes, and any property so acquired by the Indenture
      Trustee shall be held and dealt with by it in accordance with the provisions
      of
      this Indenture;

     

    (3)  the
      Indenture Trustee shall execute and deliver an appropriate instrument of
      conveyance, prepared by the Issuing Entity and satisfactory to the Indenture
      Trustee, transferring its interest in any portion of the Trust Estate in
      connection with a Sale thereof; and

     

    (4)  the
      Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact
      of the Issuing Entity to transfer and convey its interest in any portion of
      the
      Trust Estate in connection with a Sale thereof, and to take all action necessary
      to effect such Sale.

     

    (e)  So
      long
      as a single Holder of the Class E Certificates owns 100% of the Securities,
      the
      majority Holder of the Class E Certificates shall not consent to any Sale of
      the
      Trust Estate as set forth herein. 

     

    (f)  Notwithstanding
      any contrary provision of this Indenture, no Sale of the Trust Estate
shall
      be
      made unless an Opinion of Counsel is rendered, addressed to the Indenture
      Trustee, the Note Insurer, the Securities Administrator and the Owner Trustee,
      to the effect that (i) such Sale would not (A) result in the imposition of
      the
      tax on “prohibited transactions” as defined in sections 860F(a)(2) of any REMIC
      created hereunder or (B) cause any REMIC created hereunder to fail to qualify
      as
      a REMIC at any time that any Notes or Certificates are outstanding,
      or (ii)
      that the Securities Administrator has complied with the requirements for a
      “qualified liquidation” under section 860F of the Code set forth in Section
      8.06(c) hereof as if it were the Class E Certificateholder.

     

    Section
      5.16  Action
      on Notes.
      The
      Indenture Trustee’s right to seek and recover judgment on the Notes or under
      this Indenture shall not be affected by the seeking, obtaining or application
      of
      any other relief under or with respect to this Indenture. Neither the lien
      of
      this Indenture nor any rights or remedies of the Indenture Trustee, the
      Noteholders or the Note Insurer shall be impaired by the recovery of any
      judgment by the Indenture Trustee against the Issuing Entity or by the levy
      of
      any execution under such judgment upon any portion of the Trust Estate or upon
      any of the assets of the Issuing Entity. Any money or property collected by
      the
      Indenture Trustee or the Securities Administrator shall be applied by the
      Securities Administrator in accordance with Section 5.04(b) hereof.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VI  

    
 

    THE
      INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR

     

    Section
      6.01  Duties
      of Indenture Trustee and Securities Administrator.
      (a)
      If an
      Event of Default has occurred and is continuing, the Indenture Trustee shall
      exercise the rights and powers vested in it by this Indenture 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.

     

    (b)  Except
      during the continuance of an Event of Default of which the Indenture Trustee
      has
      actual knowledge or has received written notice, in the case of the Indenture
      Trustee and, at any time, in the case of the Securities
      Administrator:

     

    (i)  the
      Indenture Trustee and the Securities Administrator undertakes to perform such
      duties and only such duties as are specifically set forth in this Indenture
      and
      the other Basic Documents to which it is a party and no implied covenants or
      obligations shall be read into this Indenture and the other Basic Documents
      against the Indenture Trustee or the Securities Administrator; and

     

    (ii)  in
      the
      absence of bad faith on its part, the Indenture Trustee and the Securities
      Administrator may conclusively rely, as to the truth of the statements and
      the
      correctness of the opinions expressed therein, upon certificates, reports,
      documents, Issuing Entity Requests or other instruments or opinions furnished
      to
      the Indenture Trustee and/or the Securities Administrator and conforming to
      the
      requirements of this Indenture or the other Basic Documents; however, the
      Indenture Trustee and the Securities Administrator shall examine the
      certificates, reports, documents, Issuing Entity Requests or other instruments
      and opinions to determine whether or not they conform on their face to the
      requirements of this Indenture.

     

    (c)  The
      Indenture Trustee and the Securities Administrator may not be relieved from
      liability for its own negligent action, its own negligent failure to act or
      its
      own willful misconduct, except that:

     

    (i)  this
      paragraph does not limit the effect of paragraph (b) of this Section
      6.01;

     

    (ii)  neither
      the Indenture Trustee nor the Securities Administrator shall be liable for
      any
      error of judgment made in good faith by a Responsible Officer unless it is
      proved that the Indenture Trustee or the Securities Administrator, as
      applicable, was negligent in ascertaining the pertinent facts; and

     

    (iii)  neither
      the Indenture Trustee nor the Securities Administrator shall be liable with
      respect to any action it takes or omits to take in good faith in accordance
      with
      a direction received by it from Noteholders, the Certificateholders or from
      the
      Issuing Entity, which they are entitled to give under the Basic
      Documents.

     

    (d)  Neither
      the Indenture Trustee nor the Securities Administrator shall be liable for
      interest on any money received by it except as set forth in the Basic Documents
      and as the Indenture Trustee or Securities Administrator, as applicable, may
      agree in writing with the Issuing Entity.

     

    (e)  Money
      held in trust by the Indenture Trustee or Securities Administrator need not
      be
      segregated from other trust funds except to the extent required by law or the
      terms of this Indenture, the Sale and Servicing Agreement or the Trust
      Agreement.

     

    (f)  No
      provision of this Indenture shall require the Indenture Trustee or the
      Securities Administrator to expend or risk its own funds or otherwise incur
      financial liability in the performance of any of its duties hereunder or in
      the
      exercise of any of its rights or powers, if it shall have reasonable grounds
      to
      believe that repayment of such funds or indemnity satisfactory to it against
      such risk or liability is not reasonably assured to it.

     

    (g)  Every
      provision of this Indenture relating to the conduct or affecting the liability
      of or affording protection to the Indenture Trustee or Securities Administrator
      shall be subject to the provisions of this Section.

     

    (h)  The
      Indenture Trustee shall not be deemed to have notice or knowledge of any Default
      or Event of Default unless a Responsible Officer of the Indenture Trustee has
      actual knowledge thereof or unless written notice of any such event that is
      in
      fact an Event of Default or Default is received by the Indenture Trustee at
      its
      Corporate Trust Office and such notice references the Notes or Certificates
      generally, the Issuing Entity, the Trust Estate or this Indenture.

     

    Section
      6.02  Rights
      of Indenture Trustee and Securities Administrator.
      (a)
      The
      Indenture Trustee and the Securities Administrator may rely on any document
      believed by it to be genuine and to have been signed or presented by the proper
      person. The Indenture Trustee and the Securities Administrator need not
      investigate any fact or matter stated in the document.

     

    (b)  Before
      the Indenture Trustee or the Securities Administrator acts or refrains from
      acting, it may require an Officer’s Certificate or an Opinion of Counsel.
      Neither the Indenture Trustee nor the Securities Administrator shall be liable
      for any action it takes or omits to take in good faith in reliance on and in
      accordance with an Officer’s Certificate or Opinion of Counsel.

     

    (c)  Neither
      the Indenture Trustee nor the Securities Administrator shall be liable for
      any
      action it takes or omits to take in good faith which it believes to be
      authorized or within its rights or powers.

     

    (d)  The
      Indenture Trustee or the Securities Administrator may consult with counsel,
      and
      the written advice or Opinion of Counsel (which shall not be at the expense
      of
      the Indenture Trustee or the Securities Administrator) with respect to legal
      matters relating to this Indenture, the other Basic Documents and the Notes
      shall be full and complete authorization and protection from liability in
      respect to any action taken, omitted or suffered by it hereunder in good faith
      and in accordance with the written advice or opinion of such
      counsel.

     

    (e)  For
      the
      limited purpose of effecting any action to be undertaken by each of the
      Indenture Trustee and the Securities Administrator, but not specifically as
      a
      duty of the Indenture Trustee or the Securities Administrator in the Indenture,
      each of the Indenture Trustee and 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, custodians or nominees appointed
      with due care, and shall not be responsible for any willful misconduct or
      negligence on the part of any agent, attorney, custodian or nominee so
      appointed.

     

    (f)  The
      Securities Administrator or its Affiliates are permitted to receive additional
      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. Such compensation shall not be considered an amount
      that
      is reimbursable or payable to the Securities Administrator (i) as part of the
      compensation hereunder or (ii) out of Available Funds.

     

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

     

    (h)  None
      of
      the Securities Administrator, the Issuing Entity or the Indenture Trustee shall
      be responsible for the acts or omissions of the other, it being understood
      that
      this Indenture shall not be construed to render them partners, joint venturers
      or agents of one another.

     

    (i)  Neither
      the Indenture Trustee nor the Securities Administrator shall be required to
      expend or risk its own funds or otherwise incur financial liability in the
      performance of any of its duties hereunder, or in the exercise of any of its
      rights or powers, if there is reasonable ground for believing that the repayment
      of such funds or indemnity reasonably satisfactory to it against such risk
      or
      liability is not reasonably assured to it, and none of the provisions contained
      in this Indenture shall in any event require the Indenture Trustee or the
      Securities Administrator to perform, or be responsible for the manner of
      performance of, any of the obligations of the Master Servicer under the Sale
      and
      Servicing Agreement, except during such time, if any, as the Indenture Trustee
      shall be the successor to, and be vested with the rights, duties, powers and
      privileges of, the Master Servicer in accordance with the terms of the Sale
      and
      Servicing Agreement.

     

    (j)  Except
      for those actions that the Indenture Trustee or the Securities Administrator
      are
      required to take hereunder, neither the Indenture Trustee nor the Securities
      Administrator shall have any obligation or liability to take any action or
      to
      refrain from taking any action hereunder in the absence of written direction
      as
      provided hereunder.

     

    (k)  Neither
      the Indenture Trustee nor the Securities Administrator shall be under any
      obligation to exercise any of the trusts or powers vested in it by this
      Indenture, other than its obligation to give notices pursuant to this Indenture,
      or to institute, conduct or defend any litigation hereunder or in relation
      hereto at the request, order or direction of any of the Noteholders pursuant
      to
      the provisions of this Indenture, unless such Noteholders shall have offered
      to
      the Indenture Trustee or the Securities Administrator, as applicable, reasonable
      security or indemnity against the costs, expenses and liabilities which may
      be
      incurred therein or thereby. Nothing contained herein shall, however, relieve
      the Indenture Trustee of the obligation, upon the occurrence of an Event of
      Default of which a Responsible Officer of the Indenture Trustee has actual
      knowledge (which has not been cured or waived), to exercise such of the rights
      and powers vested in it by this Indenture and to use the same degree of care
      and
      skill in their exercise as a prudent person would exercise under the
      circumstances in the conduct of his own affairs.

     

    (l)  Neither
      the Indenture Trustee nor the Securities Administrator shall 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 Note Insurer or Holders of Notes representing not less than 25%
      of
      the Note Principal Balance of the Notes and provided that the payment within
      a
      reasonable time to the Indenture Trustee or the Securities Administrator, as
      applicable, of the costs, expenses or liabilities likely to be incurred by
      it in
      the making of such investigation is, in the opinion of the Indenture Trustee
      or
      the Securities Administrator, as applicable, reasonably assured to the Indenture
      Trustee by the security afforded to it by the terms of this Indenture. The
      Indenture Trustee or the Securities Administrator may require reasonable
      indemnity against such expense or liability as a condition to taking any such
      action. The reasonable expense of every such examination shall be paid by the
      Noteholders requesting the investigation.

     

    (m)  
      Should
      the Indenture Trustee or the Securities Administrator deem the nature of any
      action required on its part to be unclear, the Indenture Trustee or the
      Securities Administrator, respectively, may require prior to such action that
      it
      be provided by the Depositor with reasonable further instructions.

     

    (n)  The
      right
      of the Indenture Trustee or the Securities Administrator to perform any
      discretionary act enumerated in this Indenture shall not be construed as a
      duty,
      and neither the Indenture Trustee nor the Securities Administrator shall be
      accountable for other than its negligence or willful misconduct in the
      performance of any such act.

     

    (o)  Neither
      the Indenture Trustee nor the Securities Administrator shall be required to
      give
      any bond or surety with respect to the execution of the trust created hereby
      or
      the powers granted hereunder.

     

    (p)  Neither
      the Indenture Trustee nor the Securities Administrator shall have any duty
      to
      conduct any affirmative investigation as to the occurrence of any condition
      requiring the repurchase of any HELOC by the Seller pursuant to this Indenture,
      the Sale and Servicing Agreement or the Mortgage Loan Purchase Agreement, as
      applicable, or the eligibility of any HELOC for purposes of this
      Indenture.

     

    (q)  The
      Indenture Trustee shall not be deemed to have notice or actual knowledge of
      any
      Default or Event of Default unless actually known to a Responsible Officer
      of
      the Indenture Trustee or written notice thereof (making reference to this
      Indenture or the Notes) is received by the Indenture Trustee at the Corporate
      Trust Office.

     

    Section
      6.03  Individual
      Rights of Indenture Trustee.
      The
      Indenture Trustee in its individual or any other capacity may become the owner
      or pledgee of Notes and may otherwise deal with the Issuing Entity or its
      Affiliates with the same rights it would have if it were not Indenture Trustee,
      subject to the requirements of the Trust Indenture Act. Any Note Registrar,
      co-registrar or co-paying agent may do the same with like rights. However,
      the
      Indenture Trustee must comply with Section 6.11 hereof.

     

    Section
      6.04  Indenture
      Trustee’s and Securities Administrator’s Disclaimer.
      Neither
      the Indenture Trustee nor the Securities Administrator shall be responsible
      for
      and makes no representation as to the validity or adequacy of this Indenture,
      the Notes or any other Basic Document, it shall not be accountable for the
      Issuing Entity’s use of the proceeds from the Notes, and it shall not be
      responsible for any statement of the Issuing Entity in the Indenture or in
      any
      document issued in connection with the sale of the Notes or in the Notes other
      than the Securities Administrator’s certificate of authentication.

     

    Section
      6.05  Notice
      of Event of Default.
      Subject
      to Section 5.01, the Indenture Trustee shall promptly mail to each Noteholder
      and the Note Insurer notice of the Event of Default after it is known to a
      Responsible Officer of the Indenture Trustee, unless such Event of Default
      shall
      have been waived or cured. Except in the case of an Event of Default in payment
      of principal of or interest on any Note, the Indenture Trustee may withhold
      the
      notice if and so long as a committee of its Responsible Officers in good faith
      determines that withholding the notice is in the best interests of
      Noteholders.

     

    Section
      6.06  Reports
      to Residual Certificateholders.
      The
      Securities Administrator shall furnish quarterly to the Holders of the Residual
      Certificates each applicable Form 1066Q and shall respond promptly to written
      requests made not more frequently than quarterly by any Holder of a Residual
      Certificate with respect to the following matters:

     

    (i)  The
      original projected principal and interest cash flows on the Closing Date on
      each
      class of Regular Interests and Residual Interests created hereunder and on
      the
      HELOCs, based on the Prepayment Assumption;

     

    (ii)  The
      projected remaining principal and interest cash flows as of the end of any
      calendar quarter with respect to each class of Regular Interests and Residual
      Interests created hereunder and the HELOCs, based on the Prepayment
      Assumption;

     

    (iii)  The
      applicable Prepayment Assumption and any interest rate assumptions used in
      determining the projected principal and interest cash flows described above;
      and

     

    (iv)  The
      original issue discount (or, in the case of the HELOCs, market discount) or
      premium accrued or amortized through the end of such calendar quarter with
      respect to each class of Regular Interests or Residual Interests created
      hereunder and to the HELOCs, together with each constant yield to maturity
      used
      in computing the same.

     

    Certain
      information pursuant to clauses (i) and (iii) above shall be provided by the
      Depositor.

     

    Section
      6.07  Compensation.
      An
      annual fee shall be paid to the Indenture Trustee by the Master Servicer
      pursuant to a separate agreement between the Indenture Trustee and the Master
      Servicer. In addition, the Indenture Trustee and the Securities Administrator
      will each be entitled to recover from the Payment Account pursuant to Section
      4.05 of the Sale and Servicing Agreement all reasonable out-of-pocket expenses,
      disbursements and advances and the expenses of the Indenture Trustee and the
      Securities Administrator, respectively, in connection with any breach of this
      Indenture or any claim or legal action (including any pending or threatened
      claim or legal action) or otherwise incurred or made by the Indenture Trustee
      or
      the Securities Administrator, respectively, in the administration of the trusts
      hereunder (including the reasonable compensation, expenses and disbursements
      of
      its counsel) except any such expense, disbursement or advance as may arise
      from
      its own negligence or intentional misconduct or which is the responsibility
      of
      the Noteholders as provided herein. Such compensation and reimbursement
      obligation shall not be limited by any provision of law in regard to the
      compensation of a trustee of an express trust. Additionally, each of the
      Indenture Trustee and the Securities Administrator (including in their
      individual capacity) and any director, officer, employee or agent of the
      Indenture Trustee or the Securities Administrator shall be indemnified by the
      Trust and held harmless against any loss, liability or expense (including
      reasonable attorney's fees and expenses) incurred in the administration of
      this
      Indenture (other than its ordinary out of pocket expenses incurred hereunder)
      or
      in connection with any claim or legal action relating to (a) the Basic
      Documents, (b) the Notes or (c) the HELOCs, other than any loss, liability
      or
      expense incurred by reason of its own negligence or intentional misconduct,
      or
      which is the responsibility of the Noteholders as provided herein.

     

    The
      Issuing Entity's payment obligations to the Indenture Trustee and Securities
      Administrator pursuant to this Section 6.07 shall survive the discharge of
      this
      Indenture and the termination or resignation of the Indenture Trustee or
      Securities Administrator. When the Indenture Trustee or the Securities
      Administrator incurs expenses after the occurrence of an Event of Default with
      respect to the Issuing Entity, the expenses are intended to constitute expenses
      of administration under Title 11 of the United States Code or any other
      applicable federal or state bankruptcy, insolvency or similar law.

     

    Section
      6.08  Replacement
      of Indenture Trustee and the Securities Administrator.
      No
      resignation or removal of the Indenture Trustee or the Securities Administrator
      and no appointment of a successor Indenture Trustee or a successor Securities
      Administrator shall become effective until the acceptance of appointment by
      the
      successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
      or the Securities Administrator may resign at any time by so notifying the
      Issuing Entity and the Note Insurer. In the event that the Indenture Trustee
      determines that a conflict of interest exists between the Holders of the Class
      A
      Notes and the Holders of any Class of Subordinate Notes, then the Indenture
      Trustee shall be entitled to resign as the indenture trustee for all Classes
      of
      Notes other than the Class A Notes. In such event the Holders of a majority
      of
      Note Principal Balances of all of the Subordinate Notes shall designate a
      separate indenture trustee to represent their interests hereunder. The Note
      Insurer or, if a Note Insurer Default exists, the Holders of a majority of
      Note
      Principal Balances of each Class of Notes may remove the Indenture Trustee
      by so
      notifying the Indenture Trustee and may appoint a successor Indenture Trustee.
      The Issuing Entity shall, with the consent of the Note Insurer so long as no
      Note Insurer Default exists remove the Indenture Trustee or the Securities
      Administrator, as applicable, if:

     

    (i)  the
      Indenture Trustee or the Securities Administrator fails to comply with or
      qualify pursuant to the provisions of Section 6.11 hereof;

     

    (ii)  the
      Indenture Trustee or the Securities Administrator is adjudged a bankrupt or
      insolvent;

     

    (iii)  a
      receiver or other public officer takes charge of the Indenture Trustee or the
      Securities Administrator or its property;

     

    (iv)  the
      Indenture Trustee or the Securities Administrator otherwise becomes incapable
      of
      acting; or

     

    (v)  the
      Master Servicer is terminated pursuant to the Sale and Servicing
      Agreement.

     

    If
      the
      Indenture Trustee or the Securities Administrator resigns or is removed or
      if a
      vacancy exists in the office of the Indenture Trustee or the Securities
      Administrator for any reason (the Indenture Trustee or the Securities
      Administrator in such event being referred to herein as the retiring Indenture
      Trustee or the retiring Securities Administrator ), the Issuing Entity shall,
      with the consent of the Note Insurer so long as no Note Insurer Default exists
      promptly appoint a successor Indenture Trustee or successor Securities
      Administrator.

     

    Each
      of a
      successor Indenture Trustee or successor Securities Administrator shall deliver
      a written acceptance of its appointment to the retiring Indenture Trustee,
      to
      the Note Insurer or the retiring Securities Administrator, as applicable, and
      to
      the Issuing Entity. Thereupon, the resignation or removal of the retiring
      Indenture Trustee or the retiring Securities Administrator shall become
      effective, and the successor Indenture Trustee or successor Securities
      Administrator shall have all the rights, powers and duties of the Indenture
      Trustee or the Securities Administrator, as applicable, under this Indenture.
      The successor Indenture Trustee or successor Securities Administrator shall
      each
      mail a notice of its succession to Noteholders. The retiring Indenture Trustee
      or the retiring Securities Administrator shall promptly transfer all property
      held by it as Indenture Trustee or Securities Administrator, as applicable,
      to
      the successor Indenture Trustee or successor Securities
      Administrator.

     

    If
      a
      successor Indenture Trustee or successor Securities Administrator does not
      take
      office within 60 days after the retiring Indenture Trustee or the retiring
      Securities Administrator, as applicable, resigns or is removed, the retiring
      Indenture Trustee, the Note Insurer or the retiring Securities Administrator,
      the Issuing Entity or the Holders of a majority of Note Principal Balances
      of
      the Notes may petition any court of competent jurisdiction for the appointment
      of a successor Indenture Trustee or successor Securities
      Administrator.

     

    Notwithstanding
      the replacement of the Indenture Trustee or the Securities Administrator
      pursuant to this Section, the Issuing Entity's obligations under Section 6.07
      shall continue for the benefit of the retiring Indenture Trustee or the retiring
      Securities Administrator.

     

    Section
      6.09  Successor
      Indenture Trustee and Securities Administrator by Merger.
      If the
      Indenture Trustee or the Securities Administrator consolidates with, merges
      or
      converts into, or transfers all or substantially all of its corporate trust
      business or assets to, another corporation or banking association, the
      resulting, surviving or transferee corporation, without any further act, shall
      be the successor Indenture Trustee or successor Securities Administrator, as
      applicable; provided, that such corporation or banking association shall be
      otherwise qualified and eligible under Section 6.11 hereof. The Indenture
      Trustee and the Securities Administrator shall provide the Rating Agencies,
      the
      Note Insurer and the Issuing Entity with prior written notice, and the
      Noteholders with prompt written notice, of any such transaction.

     

    If
      at the
      time such successor or successors by merger, conversion or consolidation to
      the
      Indenture Trustee shall succeed to the trusts created by this Indenture and
      any
      of the Notes shall have been authenticated but not delivered, any such successor
      to the Indenture Trustee may adopt the certificate of authentication of any
      predecessor trustee and deliver such Notes so authenticated; and if at that
      time
      any of the Notes shall not have been authenticated, any successor to the
      Indenture Trustee may authenticate such Notes either in the name of any
      predecessor hereunder or in the name of the successor to the Indenture
      Trustee.

     

    Section
      6.10  Appointment
      of Co-Indenture Trustee or Separate Indenture Trustee.
      (a)
      Notwithstanding any other provisions of this Indenture, at any time, for the
      purpose of meeting any legal requirement of any jurisdiction in which any part
      of the Trust Estate may at the time be located, the Indenture Trustee shall
      have
      the power and may, with the consent of Note Insurer, execute and deliver all
      instruments to appoint one or more Persons to act as a co-trustee or
      co-trustees, or separate trustee or separate trustees, of all or any part of
      the
      Trust Estate, and to vest in such Person or Persons, in such capacity and for
      the benefit of the Noteholders and the Note Insurer, such title to the Trust
      Estate, or any part hereof, and, subject to the other provisions of this
      Section, such powers, duties, obligations, rights and trusts as the Indenture
      Trustee or the Note Insurer may consider necessary or desirable. No co-trustee
      or separate trustee hereunder shall be required to meet the terms of eligibility
      as a successor trustee under Section 6.11 hereof.

     

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

     

    (i)  all
      rights, powers, duties and obligations conferred or imposed upon the Indenture
      Trustee shall be conferred or imposed upon and exercised or performed by the
      Indenture 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 Indenture 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 the Indenture Trustee shall be incompetent or
      unqualified to perform such act or acts, in which event such rights, powers,
      duties and obligations (including the holding of title to the Trust Estate
      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 Indenture Trustee;

     

    (ii)  no
      trustee hereunder shall be personally liable by reason of any act or omission
      of
      any other trustee hereunder; and

     

    (iii)  the
      Indenture Trustee may at any time accept the resignation of or remove any
      separate trustee or co-trustee.

     

    (c)  Any
      notice, request or other writing given to the Indenture Trustee shall be deemed
      to have been given to each of the then separate trustees and co-trustees, as
      effectively as if given to each of them. Every instrument appointing any
      separate trustee or co-trustee shall refer to this Indenture and the conditions
      of this Article VI. 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 Indenture Trustee or
      separately, as may be provided therein, subject to all the provisions of this
      Indenture, specifically including every provision of this Indenture relating
      to
      the conduct of, affecting the liability of, or affording protection to, the
      Indenture Trustee. Every such instrument shall be filed with the Indenture
      Trustee.

     

    (d)  Any
      separate trustee or co-trustee may at any time constitute the Indenture 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 Indenture
      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
      Indenture Trustee, to the extent permitted by law, without the appointment
      of a
      new or successor trustee.

     

    Section
      6.11  Eligibility;
      Disqualification.
      The
      Indenture Trustee shall at all times be an entity that meets the requirements
      of
      Section 3(c)(3) under the Investment Company Act of 1940 applicable to a
      trustee, and shall have a combined capital and surplus of at least $50,000,000
      as set forth in its most recent published annual report of condition and it
      or
      its parent shall have a long-term debt rating of Baa3 or better by
      Moody’s.

     

    Each
      of
      the Indenture Trustee and the Securities Administrator hereunder shall at all
      times be a corporation or an association organized and doing business under
      the
      laws of any 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 and subject to supervision or examination by federal or state
      authority. In case at any time the Indenture Trustee or the Securities
      Administrator shall cease to be eligible in accordance with the provisions
      of
      this Section, the Trustee or the Securities Administrator, as the case may
      be,
      shall resign immediately in the manner and with the effect specified in Section
      6.08 hereof.

     

    The
      Securities Administrator and any successor Securities Administrator (i) may
      not
      be an Originator, the Master Servicer, a subservicer, the Depositor or an
      affiliate of the Depositor unless the Securities Administrator is an
      institutional trust department, (ii) must be authorized to exercise corporate
      trust powers under the laws of its jurisdiction of organization, and (iii)
      must
      at all times be rated at least "A/F1" by Fitch if Fitch is a rating
      agency.

     

    The
      Indenture Trustee shall notify the Rating Agencies of any change of Securities
      Administrator. Any resignation or removal of the Indenture Trustee or the
      Securities Administrator and appointment of a successor trustee or trust
      administrator, as the case may be, pursuant to any of the provisions of this
      Section shall not become effective until acceptance of appointment by the
      successor indenture trustee or securities administrator as provided in Section
      6.08 hereof. Notwithstanding the foregoing, in the event the Securities
      Administrator advises the Indenture Trustee that it is unable to continue to
      perform its obligations pursuant to the terms of this Indenture prior to the
      appointment of a successor, the Indenture Trustee shall be obligated to perform
      such obligations until a new securities administrator is appointed. Such
      performance shall be without prejudice to any claim by a party hereto or
      beneficiary hereof resulting from the Securities Administrator's breach of
      its
      obligations hereunder. As compensation therefore, the Indenture Trustee shall
      be
      entitled to all fees the Securities Administrator would have been entitled
      to if
      it had continued to act hereunder.

     

    Section
      6.12  Representations
      and Warranties.
      The
      Indenture Trustee hereby represents that:

     

    (i)  The
      Indenture Trustee is duly organized and validly existing as a national banking
      association in good standing under the laws of the United States with power
      and
      authority to own its properties and to conduct its business as such properties
      are currently owned and such business is presently conducted;

     

    (ii)  The
      Indenture Trustee has the power and authority to execute and deliver this
      Indenture and to carry out its terms; and the execution, delivery and
      performance of this Indenture have been duly authorized by the Indenture Trustee
      by all necessary corporate action;

     

    (iii)  The
      consummation of the transactions contemplated by this Indenture and the
      fulfillment of the terms hereof do not conflict with, result in any breach
      of
      any of the terms and provisions of, or constitute (with or without notice or
      lapse of time) a default under, the articles of incorporation or bylaws of
      the
      Indenture Trustee or any agreement or other instrument to which the Indenture
      Trustee is a party or by which it is bound; and

     

    (iv)  To
      the
      Indenture Trustee’s knowledge, there are no proceedings or investigations
      pending or threatened before any court, regulatory body, administrative agency
      or other governmental instrumentality having jurisdiction over the Indenture
      Trustee or its properties: (A) asserting the invalidity of this Indenture,
      (B)
      seeking to prevent the consummation of any of the transactions contemplated
      by
      this Indenture or (C) seeking any determination or ruling that might materially
      and adversely affect the performance by the Indenture Trustee of its obligations
      under, or the validity or enforceability of, this Indenture.

     

    Section
      6.13  Representations
      and Warranties.
      The
      Securities Administrator hereby represents that:

     

    (i)  The
      Securities Administrator is duly organized and validly existing as a national
      banking association in good standing under the laws of the United States with
      power and authority to own its properties and to conduct its business as such
      properties are currently owned and such business is presently
      conducted;

     

    (ii)  The
      Securities Administrator has the power and authority to execute and deliver
      this
      Indenture and to carry out its terms; and the execution, delivery and
      performance of this Indenture have been duly authorized by the Securities
      Administrator by all necessary corporate action;

     

    (iii)  The
      consummation of the transactions contemplated by this Indenture and the
      fulfillment of the terms hereof do not conflict with, result in any breach
      of
      any of the terms and provisions of, or constitute (with or without notice or
      lapse of time) a default under, the articles of incorporation or bylaws of
      the
      Securities Administrator or any agreement or other instrument to which the
      Securities Administrator is a party or by which it is bound; and

     

    (iv)  To
      the
      Securities Administrator’s knowledge, there are no proceedings or investigations
      pending or threatened before any court, regulatory body, administrative agency
      or other governmental instrumentality having jurisdiction over the Securities
      Administrator or its properties: (A) asserting the invalidity of this Indenture,
      (B) seeking to prevent the consummation of any of the transactions contemplated
      by this Indenture or (C) seeking any determination or ruling that might
      materially and adversely affect the performance by the Securities Administrator
      of its obligations under, or the validity or enforceability of, this
      Indenture.

     

    Section
      6.14  Directions
      to Indenture Trustee and the Securities Administrator. 

     

    (a)  The
      Indenture Trustee is hereby directed to accept the pledge of the HELOCs and
      hold
      the assets of the Trust in trust for the Noteholders and the Note Insurer and
      to
      exercise and deliver the Insurance Agreement and the Custodial Agreement and
      to
      acknowledge and agree to the Assignment Agreement.

     

    (b)  the
      Securities Administrator is hereby directed to (i) authenticate and deliver
      the
      Notes substantially in the form prescribed by Exhibits A-1, A-2 and A-3 to
      this
      Indenture in accordance with the terms of this Indenture and to take all other
      actions as shall be required to be taken by the Securities Administrator
      pursuant to the terms of this Indenture and the other Basic
      Documents.

     

    Section
      6.15  The
      Agents.
      The
      provisions of this Indenture relating to the limitations of the Indenture
      Trustee’s liability and to its rights and protections shall inure also to the
      Paying Agent, Note Registrar and Certificate Registrar.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII  

    
 

    NOTEHOLDERS’
      LISTS AND REPORTS

     

    Section
      7.01  Issuing
      Entity To Furnish Securities Administrator and Indenture Trustee Names and
      Addresses of Noteholders.
      The
      Issuing Entity will furnish or cause to be furnished to the Securities
      Administrator and the Indenture Trustee (a)
      not more
      than five days after each Record Date, a list, in such form as the Securities
      Administrator may reasonably require, of the names and addresses of the Holders
      of Notes as of such Record Date, and (b) at such other times as the Securities
      Administrator and the Note Insurer may request in writing, within 30 days after
      receipt by the Issuing Entity of any such request, a list of similar form and
      content as of a date not more than 10 days prior to the time such list is
      furnished; provided, however, that so long as the Securities Administrator
      is
      the Note Registrar, no such list shall be required to be furnished to the
      Securities Administrator.

     

    Section
      7.02  Preservation
      of Information; Communications to Noteholders.
      (a)
      The
      Securities Administrator shall preserve, in as current a form as is reasonably
      practicable, the names and addresses of the Holders of Notes contained in the
      most recent list furnished to the Securities Administrator as provided in
      Section 7.01 hereof and the names and addresses of Holders of Notes received
      by
      the Securities Administrator in its capacity as Note Registrar. The Securities
      Administrator may destroy any list furnished to it as provided in such Section
      7.01 upon receipt of a new list so furnished.

     

    (b)  Noteholders
      may communicate with other Noteholders with respect to their rights under this
      Indenture or under the Notes.

     

    Section
      7.03  Financial
      Information.
      For so
      long as any of the Notes bearing a restrictive legend remains outstanding and
      is
      a “restricted security” within the meaning of Rule 144(a)(3) under the
      Securities Act, the Issuing Entity shall, during any period in which it is
      not
      subject to Section 13 or 15(d) of the Exchange Act nor exempt from reporting
      pursuant to Rule 12g3-2(b) under such Act, cause the Securities Administrator
      to
      make available to any Holder of any such Note in connection with any sale
      thereof and to any prospective purchaser of any such Note from such Holder,
      in
      each case upon request, the information specified in, and meeting the
      requirements of, Rule 144A(d)(4) under the Securities Act that is in the
      Securities Administrator’s possession or reasonably obtainable by it, if
      requested, from the Master Servicer (and to the extent such information is
      in
      the Master Servicer’s possession or is reasonably obtainable by it from the
      Servicers).

     

    Unless
      the Issuing Entity otherwise determines, the fiscal year of the Issuing Entity
      shall end on December 31 of each year.

     

    Section
      7.04  Statements
      to Noteholders and Certificateholders.
      (a)
      With respect to each Payment Date, the Securities Administrator shall make
      available via the Securities Administrator’s website, initially located at
      www.etrustee.net, to each Noteholder and each Certificateholder, the Indenture
      Trustee, the Depositor, the Issuing Entity, the Seller, the Owner Trustee,
      the
      Certificate Paying Agent, the Note Insurer and the Rating Agencies, a statement
      setting forth the following information as to the Notes, to the extent
      applicable:

     

    (i)  the
      applicable Record Dates, Accrual Periods, Interest Determination Dates and
      Payment Dates;

     

    (ii)  the
      Available Funds, the Net WAC Cap Rate Carryover Amount on each Class of Notes
      for such Payment Date and the aggregate Unpaid Interest Shortfall Amount on
      each
      Class of Notes for such Payment Date;

     

    (iii)  the
      amount of fees and expenses accrued and paid;

     

    (iv)  the
      amount of servicing fees for the related Collection Period;

     

    (v)  (a)
      the
      amount of such distribution to each Class of Notes (other than the Class A-IO
      Notes) applied to reduce the Note Principal Balance thereof, and (b) the
      aggregate amount included therein representing Principal
      Prepayments;

     

    (vi)  the
      amount of such distribution to Holders of each Class of Notes allocable to
      interest;

     

    (vii)  the
      amount of any distribution to the Certificates;

     

    (viii)  the
      Overcollateralization Amount and the Overcollateralization Target
      Amount;

     

    (ix)  the
      Insured Amount, if any, paid by the Note Insurer under the Policy for such
      Payment Date and the aggregate Insured Amounts for all prior Payment Dates
      paid
      by the Note Insurer under the Policy and not yet reimbursed;

     

    (x)  if
      the
      distribution to the Holders of any Class of Notes 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;

     

    (xi)  the
      number and the aggregate Scheduled Principal Balance of the HELOCs as of the
      end
      of the related Due Period and the amount of draws on the HELOCs;

     

    (xii)  the
      aggregate Note Principal Balance of each Class of Notes (other than the Class
      A-IO Notes), after giving effect to the amounts distributed on such Payment
      Date, separately identifying any reduction thereof due to Charge-Off Amounts
      and
      the aggregate Note Principal Balance of the Notes (other than the Class A-IO
      Notes) after giving effect to the distribution of principal on such Payment
      Date;

     

    (xiii)  the
      number and aggregate Scheduled Principal Balance of the HELOCs (a) as to which
      the Monthly Payment is delinquent for 31-60 days, 61-90 days, 91 or more days,
      respectively, (b) in foreclosure and delinquent for 31-60 days, 61-90 days,
      91
      or more days, respectively, (c) that have become REO Property, and (d) subject
      to bankruptcy or similar insolvency proceedings, in each case as of the end
      of
      the preceding calendar month;

     

    (xiv)  the
      aggregate Charge-Off Amounts with respect to the related Payment Date and
      cumulative Charge-Off Amounts since the Closing Date;

     

    (xv)  the
      number and aggregate Scheduled Principal Balance of HELOCs repurchased pursuant
      to the Mortgage Loan Purchase Agreement for the related Payment Date and
      cumulatively since the Closing Date;

     

    (xvi)  the
      book
      value (if available) of any REO Property;

     

    (xvii)  the
      amount of any Relief Act Shortfalls for such Payment Date; 

     

    (xviii)  the
      aggregate Scheduled Principal Balance of HELOCs purchased pursuant to Section
      2.04 of the Sale and Servicing Agreement for the related Payment Date and
      cumulatively since the Closing Date;

     

    (xix)  a
      statement as to whether each element in the definitions of Trigger Event and
      Rapid Amortization Trigger Event, respectively, is satisfied;

     

    (xx)  if
      applicable, material modifications, extensions or waivers to pool asset terms,
      fees, penalties or payments during the payment period or that have become
      material over time;

     

    (xxi)  material
      breaches of pool asset representations or warranties or transaction
      covenants;

     

    (xxii)  the
      60
      Day Plus Delinquent Percentage for the related Payment Date; and

     

    (xxiii)  the
      special hazard amount, fraud loss amount and bankruptcy amount, if applicable,
      as of the close of business on the applicable Payment Date and a description
      of
      any change in the calculation of these amounts.

     

    Items
      (iii) and (iv) above shall be presented on the basis of a Note having a $1,000
      denomination. In addition, by January 31 of each calendar year following any
      year during which the Notes are outstanding, the Securities Administrator shall
      furnish a report to each Noteholder of record if so requested in writing at
      any
      time during each calendar year as to the aggregate of amounts reported pursuant
      to (iii) and (iv) with respect to the Notes for such calendar year.

     

    The
      Securities Administrator may conclusively rely upon the information provided
      by
      the Master Servicer to the Securities Administrator in its preparation of
      monthly statements to Noteholders.

     

    The
      Securities Administrator will make the monthly statements provided for in this
      section (and, at its option, any additional files containing the same
      information in an alternative format) available each month to the Note Insurer,
      each Noteholder and each Certificateholder, the Depositor, the Issuing Entity,
      the Seller, the Owner Trustee, the Certificate Paying Agent and the Rating
      Agency via the Securities Administrator's website. The Securities
      Administrator’s website shall initially be located at “www.etrustee.net.”
Assistance in using the website can be obtained by calling the Securities
      Administrator’s customer service desk at (312) 992-1743. Parties that are unable
      to use the website are entitled to have a paper copy mailed to them via first
      class mail by calling the Securities Administrator’s customer service desk and
      indicating such. The Securities Administrator may have the right to change
      the
      way the monthly statements are distributed in order to make such distribution
      more convenient and/or more accessible to the above parties and the Securities
      Administrator shall provide timely and adequate notification to all above
      parties regarding any such changes.

     

    (b)  The
      Securities Administrator shall be entitled to rely on but shall not be
      responsible for the content or accuracy of any information provided by third
      parties for purposes of preparing the monthly statement, and may affix thereto
      any disclaimer it deems appropriate in its reasonable discretion (without
      suggesting liability on the part of any other party hereto).

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VIII  

    
 

    ACCOUNTS,
      DISBURSEMENTS AND RELEASES

     

    Section
      8.01  Collection
      of Money.
      Except
      as otherwise expressly provided herein, the Securities Administrator may demand
      payment or delivery of, and shall receive and collect, directly and without
      intervention or assistance of any fiscal agent or other intermediary, all money
      and other property payable to or receivable by the Securities Administrator
      pursuant to this Indenture. The Securities Administrator shall apply all such
      money received by it as provided in this Indenture. Except as otherwise
      expressly provided in this Indenture, if any default occurs in the making of
      any
      payment or performance under any agreement or instrument that is part of the
      Trust Estate, the Indenture Trustee may take such action as may be appropriate
      to enforce such payment or performance, including the institution and
      prosecution of appropriate Proceedings. Any such action shall be without
      prejudice to any right to claim a Default or Event of Default under this
      Indenture and any right to proceed thereafter as provided in Article
      V.

     

    Section
      8.02  Officer’s
      Certificate.
      The
      Indenture Trustee shall receive at least seven Business Days’ notice when
      requested by the Issuing Entity to take any action pursuant to Section 8.06(a)
      hereof, accompanied by copies of any instruments to be executed, and the
      Indenture Trustee shall also require, as a condition to such action, an
      Officer’s Certificate, in form and substance satisfactory to the Indenture
      Trustee, stating the legal effect of any such action, outlining the steps
      required to complete the same, and concluding that all conditions precedent
      to
      the taking of such action have been complied with.

     

    Section
      8.03  Termination
      Upon Distribution to Noteholders.
      This
      Indenture and the respective obligations and responsibilities of the Issuing
      Entity, the Securities Administrator and the Indenture Trustee created hereby
      shall terminate upon the distribution to Noteholders, the Note Insurer, the
      Certificate Paying Agent on behalf of the Certificateholders, the Securities
      Administrator and the Indenture Trustee of all amounts required to be
      distributed pursuant to Article III; provided, however, that in no event shall
      the trust created hereby continue beyond the earlier of (i) the expiration
      of 21
      years from the death of the survivor of the descendants of Joseph P. Kennedy,
      the late ambassador of the United States to the Court of St. James, living
      on
      the date hereof or (ii) the Latest Possible Maturity Date.

     

    Section
      8.04  Release
      of Trust Estate.
      (a)
      Subject
      to the payment of its fees and expenses, the Indenture Trustee may, and when
      required by the provisions of this Indenture shall, execute instruments to
      release property from the lien of this Indenture, or convey the Indenture
      Trustee’s interest in the same, in a manner and under circumstances that are not
      inconsistent with the provisions of this Indenture, including for the purposes
      of any purchase of a HELOC by the majority Holder of the Class E Certificates
      pursuant to Section 8.06 of this Indenture. No party relying upon an instrument
      executed by the Indenture Trustee as provided in Article VIII hereunder shall
      be
      bound to ascertain the Indenture Trustee’s authority, inquire into the
      satisfaction of any conditions precedent, or see to the application of any
      monies.

     

    (b)  The
      Indenture Trustee shall, at such time as (i) it is notified by the Securities
      Administrator that there are no Notes Outstanding, (ii) all sums then due and
      unpaid to the Indenture Trustee pursuant to this Indenture have been paid and
      (iii) all sums due to the Note Insurer have been paid, release any remaining
      portion of the Trust Estate that secured the Notes from the lien of this
      Indenture.

     

    (c)  The
      Indenture Trustee shall release property from the lien of this Indenture
      pursuant to this Section 8.05 only upon receipt of a request from the Issuing
      Entity and a letter from the Note Insurer stating that the Note Insurer has
      no
      objection to such request from the Issuing Entity.

     

    Section
      8.05  Surrender
      of Notes Upon Final Payment.
      By
      acceptance of any Note, the Holder thereof agrees to surrender such Note to
      the
      Securities Administrator promptly, prior to such Noteholder’s receipt of the
      final payment thereon.

     

    Section
      8.06  Optional
      Redemption of the HELOCs.
      (a)
      The
      Holder of the Class E Certificates, or if there is no single holder, the
      majority Holder of the Class E Certificates, shall have the option to purchase
      the assets of the Trust and thereby cause the redemption of the Notes, in whole,
      but not in part, on or after the Payment Date on which the sum of the Note
      Principal Balances of the Notes is reduced to an amount less than or equal
      to
      10% of the sum of the original Note Principal Balances of the Notes. Such
      optional purchase shall be subject to the Note Insurer’s consent if the
      termination would result in a draw on the Policy or if, after such purchase,
      amounts would remain owed to the Note Insurer under either this Indenture or
      the
      Insurance Agreement. The aggregate redemption price (the “Redemption Price”) for
      the Notes will be equal to the lesser of (i) the fair market value of the HELOCs
      and (ii) the sum of the outstanding principal balance of the HELOCs, and accrued
      and unpaid interest thereon at the weighted average of the mortgage rates
      through the day preceding the final Payment Date; provided that the option
      shall
      only be exercised if the purchase price is sufficient to repay all outstanding
      principal and accrued and unpaid interest on the Notes and all amounts owing
      under the Insurance Agreement.

     

    (b)  In
      order
      to exercise the foregoing option, the Holder of the Class E Certificates, or
      if
      there is no single holder, the majority Holder of the Class E Certificates,
      shall provide written notice of its exercise of such option to the Securities
      Administrator, the Note Insurer, the Issuing Entity, the Owner Trustee and
      the
      Master Servicer at least 15 days prior to its exercise. Following receipt of
      the
      notice, the Securities Administrator shall provide written notice to the
      Noteholders of the final payment on the Notes. In addition, the Holder of the
      Class E Certificates, or if there is no single holder, the majority Holder
      of
      the Class E Certificates, shall, not less than one Business Day prior to the
      proposed Payment Date on which such redemption is to be made, deposit the
      Redemption Price specified in (a) above with the Securities Administrator,
      who
      shall deposit the Redemption Price into the Payment Account and shall, on the
      Payment Date after receipt of the funds, apply such funds to make final payments
      of principal and interest on the Notes in accordance with Section 3.02 hereof
      and payment to the Securities Administrator and the Master Servicer as set
      forth
      in (a) above, and this Indenture shall be discharged subject to the provisions
      of Section 4.09 hereof. If for any reason the amount deposited by the Holder
      of
      the Class E Certificates, or if there is no single holder, the majority Holder
      of the Class E Certificates, is not sufficient to make such redemption or such
      redemption cannot be completed for any reason, (a) the amount so deposited
      by
      the Holder of the Class E Certificates, or if there is no single holder, the
      majority Holder of the Class E Certificates, with the Securities Administrator
      shall be immediately returned to the Holder of the Class E Certificates, or
      if
      there is no single holder, the majority Holder of the Class E Certificates,
      in
      full and shall not be used for any other purpose or be deemed to be part of
      the
      Trust Estate and (b) the Note Principal Balance or the Notional Amount, as
      applicable, of the Notes shall continue to bear interest at the related Note
      Interest Rate.

     

    (c)  Upon
      exercise by the Class E Certificateholder or the majority Holder of the Class
      E
      Certificates, as applicable, of its purchase option as provided in clause (a)
      above, the Notes shall be redeemed and the Trust Estate shall be terminated
      in
      accordance with the following additional requirements, unless the Indenture
      Trustee, the Securities Administrator and Owner Trustee have been supplied
      with
      an Opinion of Counsel addressed to the Indenture Trustee, the Note Insurer,
      the
      Securities Administrator and Owner Trustee, at the expense of the Class E
      Certificateholder or the majority Holder of the Class E Certificates, as
      applicable, to the effect that the failure of the Trust Estate to comply with
      the requirements of this clause (c) will not (i) result in the imposition of
      taxes on “prohibited transactions” of a REMIC created hereunder, or (ii) cause a
      REMIC created hereunder to fail to qualify as a REMIC at any time that any
      Notes
      or Certificates are outstanding:

     

    (i) The
      Class
      E Certificateholder or the majority Holder of the Class E Certificates, as
      applicable, shall establish a 90-day liquidation period and notify the Indenture
      Trustee, the Securities Administrator and Owner Trustee thereof, and the
      Securities Administrator shall in turn specify the first day of such period
      in a
      statement attached to the tax return for each REMIC created hereunder pursuant
      to Treasury Regulation Section 1.860F-1. The Class E Certificateholder or the
      majority Holder of the Class E Certificates, as applicable, shall satisfy all
      the requirements of a “qualified liquidation” under Section 860F of the Code and
      any regulations thereunder, as evidenced by an Opinion of Counsel obtained
      at
      the expense of the Class E Certificateholder or the majority Holder of the
      Class
      E Certificates, as applicable;

     

    (ii) During
      such 90-day liquidation period, and at or prior to the time of making the final
      payment on the Notes and Certificates, the Indenture Trustee shall sell all
      of
      the assets of REMIC I for cash; and

     

    (iii) At
      the
      time of the making of the final payment on the Notes and Certificates, the
      Securities Administrator and Owner Trustee shall distribute or credit, or cause
      to be distributed or credited, to the Certificate Paying Agent for distribution
      to the Holders of the Residual Certificates all cash on hand (other than cash
      retained to meet claims), and REMIC I shall terminate at that time.

     

    (iv) By
      their
      acceptance of the Notes, the Holders thereof hereby authorize the adoption
      of a
      90-day liquidation period and the adoption of a plan of complete liquidation
      for
      each REMIC created hereunder, which authorization shall be binding upon all
      successor Noteholders.

     

    (v) The
      Securities Administrator, as agent for each REMIC, hereby agrees to adopt and
      sign such a plan of complete liquidation meeting the requirements for a
“qualified liquidation” under Section 860F of the Code and any regulations
      thereunder upon the written request of the Class E Certificateholder or the
      majority Holder of the Class E Certificates, as applicable, and the receipt
      of
      the Opinion of Counsel referred to in clause (c)(i) above and to take such
      other
      action in connection therewith as may be reasonably requested by the Class
      E
      Certificateholder or the majority Holder of the Class E Certificates, as
      applicable.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IX  

    
 

    SUPPLEMENTAL
      INDENTURES

     

    Section
      9.01  Supplemental
      Indentures Without Consent of Noteholders.
      (a)
      Without
      the consent of the Holders of any Notes or Certificates but with prior written
      consent of the Note Insurer (which consent shall not be unreasonably withheld)
      and prior notice to the Rating Agencies, the Issuing Entity, the Indenture
      Trustee, the Note Insurer and the Securities Administrator, when authorized
      by
      an Issuing Entity Request, at any time and from time to time, may enter into
      one
      or more indentures supplemental hereto, in form satisfactory to the Indenture
      Trustee and the Securities Administrator, for any of the following
      purposes:

     

    (i)  to
      correct or amplify the description of any property at any time subject to the
      lien of this Indenture, or better to assure, convey and confirm unto the
      Indenture Trustee any property subject or required to be subjected to the lien
      of this Indenture, or to subject to the lien of this Indenture additional
      property;

     

    (ii)  to
      evidence the succession, in compliance with the applicable provisions hereof,
      of
      another person to the Issuing Entity, and the assumption by any such successor
      of the covenants of the Issuing Entity herein and in the Notes
      contained;

     

    (iii)  to
      add to
      the covenants of the Issuing Entity, for the benefit of the Holders of the
      Notes
      and Certificates, or to surrender any right or power herein conferred upon
      the
      Issuing Entity;

     

    (iv)  to
      cure
      any ambiguity, to correct or supplement any provision herein or in any
      supplemental indenture that may be inconsistent with any other provision herein
      or in any supplemental indenture;

     

    (v)  to
      make
      any other provisions with respect to matters or questions arising under this
      Indenture or in any supplemental indenture; provided, that such action shall
      not
      materially and adversely affect the interests of the Holders of the Notes or
      adversely affect the interests of the Note Insurer; provided further, that
      such
      supplemental indenture will be deemed to not materially and adversely affect
      the
      interests of the Holders of the Notes if a Rating Confirmation is received
      with
      respect to such supplemental indenture; 

     

    (vi)  to
      evidence and provide for the acceptance of the appointment hereunder by a
      successor trustee with respect to the Notes and to add to or change any of
      the
      provisions of this Indenture as shall be necessary to facilitate the
      administration of the trusts hereunder by more than one trustee, pursuant to
      the
      requirements of Article VI hereof; or 

     

    (vii)  to
      modify, eliminate or add to any of the provisions herein to such extent as
      shall
      be necessary or appropriate to maintain the qualification of any REMIC created
      hereunder as a REMIC under the Code or to avoid or minimize the risk of the
      imposition of any tax on any REMIC created hereunder, provided that the
      Indenture Trustee, the Securities Administrator, the Note Insurer and Owner
      Trustee have been provided an Opinion of Counsel addressed to the Indenture
      Trustee, the Securities Administrator and Owner Trustee, which opinion shall
      be
      an expense of the party requesting such opinion but in any case shall not be
      an
      expense of the Indenture Trustee, the Securities Administrator, Owner Trustee,
      the Note Insurer or the Trust Estate, to the effect that such action is
      necessary or appropriate to maintain such qualification or to avoid or minimize
      the risk of the imposition of such a tax;

     

    provided,
      however,
      that no
      such indenture supplements shall be entered into unless the Indenture Trustee,
      the Note Insurer, Owner Trustee and the Securities Administrator shall have
      received an Opinion of Counsel not at the expense of the Indenture Trustee
      or
      the Securities Administrator as to the enforceability of any such indenture
      supplement and to the effect that (i) such indenture supplement is permitted
      hereunder and will not materially and adversely affect the Holders of the Notes
      or the Note Insurer and (ii) entering into such indenture supplement will not
      cause the imposition of any tax on any REMIC created hereunder, any Noteholder
      or any Certificateholder or cause any of REMIC created hereunder to cease to
      qualify as a REMIC at any time that any Notes or Certificates are outstanding.
      

     

    The
      Indenture Trustee and the Securities Administrator are hereby authorized to
      join
      in the execution of any such supplemental indenture and to make any further
      appropriate agreements and stipulations that may be therein
      contained.

     

    (b)  With
      the
      consent of the Note Insurer (which consent shall not be unreasonably withheld),
      the Issuing Entity, the Securities Administrator and the Indenture Trustee,
      when
      authorized by an Issuing Entity Request, in the case of the Securities
      Administrator and the Indenture Trustee may, also without the consent of any
      of
      the Holders of the Notes and prior notice to the Rating Agency enter into an
      indenture or indentures supplemental hereto for the purpose of adding any
      provisions to, or changing in any manner or eliminating any of the provisions
      of, this Indenture or of modifying in any manner the rights of the Holders
      of
      the Notes under this Indenture; provided, however, that such action as evidenced
      by an Opinion of Counsel addressed to the Indenture Trustee, the Note Insurer,
      the Securities Administrator and Owner Trustee, (i) is permitted by this
      Indenture, (ii) shall not adversely affect in any material respect the interests
      of any Noteholder or adversely affect the interests of the Note Insurer and
      (iii) shall not cause the imposition of any tax on any REMIC created hereunder,
      any Noteholder or any Certificateholder or cause any of REMIC created hereunder
      to cease to qualify as a REMIC at any time that any Notes or Certificates are
      outstanding.

     

    Section
      9.02  Supplemental
      Indentures With Consent of Noteholders.
      The
      Issuing Entity, the Securities Administrator and the Indenture Trustee, when
      authorized by an Issuing Entity Request in the case of the Securities
      Administrator and the Indenture Trustee, also may, with prior notice to the
      Rating Agencies and, with the consent of the Note Insurer and the Holders of
      not
      less than a majority of the Note Principal Balance of each Class of Notes
      affected thereby, by Act (as defined in Section 10.03 hereof) of such Holders
      delivered to the Issuing Entity, the Securities Administrator and the Indenture
      Trustee, enter into an indenture or indentures supplemental hereto for the
      purpose of adding any provisions to, or changing in any manner or eliminating
      any of the provisions of, this Indenture or of modifying in any manner the
      rights of the Holders of the Notes under this Indenture; provided, however,
      that
      no such supplemental indenture shall, without the consent of the Holder of
      each
      Note affected thereby:

     

    (i)  change
      the date of payment of any installment of principal of or interest on any Note,
      or reduce the principal amount thereof or the interest rate thereon, change
      the
      provisions of this Indenture relating to the application of collections on,
      or
      the proceeds of the sale of, the Trust Estate and to payment of principal of
      or
      interest on the Notes, or change any place of payment where, or the coin or
      currency in which, any Note or the interest thereon is payable, or impair the
      right to institute suit for the enforcement of the provisions of this Indenture
      requiring the application of funds available therefor, as provided in Article
      V,
      to the payment of any such amount due on the Notes on or after the respective
      due dates thereof;

     

    (ii)  reduce
      the percentage of the Note Principal Balances of the Notes, or any Class of
      Notes, the consent of the Holders of which is required for any such supplemental
      indenture, or the consent of the Holders of which is required for any waiver
      of
      compliance with certain provisions of this Indenture or certain defaults
      hereunder and their consequences provided for in this Indenture;

     

    (iii)  modify
      or
      alter the provisions of the proviso to the definition of the term “Outstanding”
or modify or alter the exception in the definition of the term
“Holder”;

     

    (iv)  reduce
      the percentage of the Note Principal Balances of the Notes, or any Class of
      Notes, required to direct the Indenture Trustee to direct the Issuing Entity
      to
      sell or liquidate the Trust Estate pursuant to Section 5.04 hereof;

     

    (v)  modify
      any provision of this Section 9.02 except to increase any percentage specified
      herein or to provide that certain additional provisions of this Indenture or
      the
      Basic Documents cannot be modified or waived without the consent of the Holder
      of each Note affected thereby;

     

    (vi)  modify
      any of the provisions of this Indenture in such manner as to affect the
      calculation of the amount of any payment of interest or principal due on any
      Note on any Payment Date (including the calculation of any of the individual
      components of such calculation); or

     

    (vii)  permit
      the creation of any lien ranking prior to or on a parity with the lien of this
      Indenture with respect to any part of the Trust Estate or, except as otherwise
      permitted or contemplated herein, terminate the lien of this Indenture on any
      property at any time subject hereto or deprive the Holder of any Note of the
      security provided by the lien of this Indenture; 

     

    and
      provided,
      further,
      that
      such action shall not, as evidenced by an Opinion of Counsel addressed to the
      Indenture Trustee, the Note Insurer, the Securities Administrator and Owner
      Trustee, cause the imposition of any tax on any REMIC created hereunder, any
      Noteholder or any Certificateholder or cause any of REMIC created hereunder
      to
      cease to qualify as a REMIC at any time that any Notes or Certificates are
      outstanding.

     

    Any
      such
      action shall not adversely affect in any material respect the interest of any
      Holder (other than a Holder who shall consent to such supplemental indenture)
      as
      evidenced by an Opinion of Counsel (provided by the Person requesting such
      supplemental indenture) delivered to the Indenture Trustee and the Securities
      Administrator.

     

    It
      shall
      not be necessary for any Act of Noteholders under this Section 9.02 to approve
      the particular form of any proposed supplemental indenture, but it shall be
      sufficient if such Act shall approve the substance thereof.

     

    Promptly
      after the execution by the Issuing Entity, the Securities Administrator and
      the
      Indenture Trustee of any supplemental indenture pursuant to this Section 9.02,
      the Securities Administrator shall mail to the Holders of the Notes to which
      such amendment or supplemental indenture relates a notice setting forth in
      general terms the substance of such supplemental indenture. Any failure of
      the
      Securities Administrator to mail such notice, or any defect therein, shall
      not,
      however, in any way impair or affect the validity of any such supplemental
      indenture.

     

    Section
      9.03  Execution
      of Supplemental Indentures.
      In
      executing, or permitting the additional trusts created by, any supplemental
      indenture permitted by this Article IX or the modification thereby of the trusts
      created by this Indenture, the Indenture Trustee and the Securities
      Administrator shall be entitled to receive, and subject to Sections 6.01 and
      6.02 hereof, shall be fully protected in relying upon, an Opinion of Counsel
      not
      at the expense of the Indenture Trustee or the Securities Administrator stating
      that the execution of such supplemental indenture is authorized or permitted
      by
      this Indenture. The Indenture Trustee and the Securities Administrator each
      may,
      but shall not be obligated to, enter into any such supplemental indenture that
      affects the Indenture Trustee’s or the Securities Administrator’s own rights,
      duties, liabilities or immunities under this Indenture or
      otherwise.

     

    Section
      9.04  Effect
      of Supplemental Indenture.
      Upon
      the execution of any supplemental indenture pursuant to the provisions hereof,
      this Indenture shall be and shall be deemed to be modified and amended in
      accordance therewith with respect to the Notes affected thereby, and the
      respective rights, limitations of rights, obligations, duties, liabilities
      and
      immunities under this Indenture of the Indenture Trustee, the Securities
      Administrator, the Issuing Entity and the Holders of the Notes shall thereafter
      be determined, exercised and enforced hereunder subject in all respects to
      such
      modifications and amendments, and all the terms and conditions of any such
      supplemental indenture shall be and be deemed to be part of the terms and
      conditions of this Indenture for any and all purposes.

     

    Section
      9.05  Conformity
      with Trust Indenture Act.
      Every
      amendment of this Indenture and every supplemental indenture executed pursuant
      to this Article IX shall conform to the requirements of the Trust Indenture
      Act
      as then in effect so long as this Indenture shall then be qualified under the
      Trust Indenture Act.

     

    Section
      9.06  Reference
      in Notes to Supplemental Indentures.
      Notes
      authenticated and delivered after the execution of any supplemental indenture
      pursuant to this Article IX may, and if required by the Securities Administrator
      shall, bear a notation in form approved by the Securities Administrator as
      to
      any matter provided for in such supplemental indenture. If the Issuing Entity
      or
      the Securities Administrator shall so determine, new Notes so modified as to
      conform, in the opinion of the Securities Administrator and the Issuing Entity,
      to any such supplemental indenture may be prepared and executed by the Issuing
      Entity and authenticated and delivered by the Securities Administrator in
      exchange for Outstanding Notes.

     

      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      X

    
 

    TAX
      MATTERS

     

    Section
      10.01  Description
      of REMICs and Designation of REMIC Interests. 

     

    REMIC
      I

     

    As
      provided herein, the Securities Administrator will elect to treat the segregated
      pool of assets consisting of the HELOCs and certain other related assets subject
      to this Indenture and the Basic Documents (other than the Net WAC Cap Rate
      Carryover Reserve Account) as a REMIC for federal income tax purposes, and
      such
      segregated pool of assets will be designated as “REMIC I”. The Class S
      Certificates will be the sole class of Residual Interests in REMIC I for
      purposes of the REMIC Provisions. The following table irrevocably sets forth
      the
      designation, the Uncertificated REMIC I Pass-Through Rate, the initial
      Uncertificated Principal Balance and, for purposes of satisfying Treasury
      Regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for
      each of the REMIC I Regular Interests. None of the REMIC I Regular Interests
      will be certificated.

    

    
      	
              Designation

            	
              Uncertificated
                REMIC I

              Pass-Through
                Rate

            	
              Initial
                Uncertificated Principal Balance

            	
              Latest
                Possible Maturity Date (1)

            
	
              Non-IO

            	
              Variable(2)

            	
              $

            	
              204,343,413.29

            	
              June
                25, 2036

            
	
              1-IO

            	
              Variable(2)

            	
              $

            	
              31,371,000.00

            	
              June
                25, 2036

            
	
              2-IO

            	
              Variable(2)

            	
              $

            	
              37,646,000.00

            	
              June
                25, 2036

            
	
              3-IO

            	
              Variable(2)

            	
              $

            	
              25,097,000.00

            	
              June
                25, 2036

            
	
              4-IO

            	
              Variable(2)

            	
              $

            	
              37,646,000.00

            	
              June
                25, 2036

            
	
              5-IO

            	
              Variable(2)

            	
              $

            	
              12,548,000.00

            	
              June
                25, 2036

            
	
              6-IO

            	
              Variable(2)

            	
              $

            	
              12,549,000.00

            	
              June
                25, 2036

            

    

    ___________________________

    
      	
              (1)

            	
              For
                purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
                the
                Payment Date in the month following the maturity date for the HELOC
                with
                the latest maturity date has been designated as the “latest possible
                maturity date” for each REMIC I Regular
                Interest.

            

    

    

    
      	
              (2)

            	
              Calculated
                in accordance with the definition of “Uncertificated REMIC I Pass-Through
                Rate” herein.

            

    

    

    REMIC
      II

     

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

    

    

    
      	
              Designation

            	
              Uncertificated
                REMIC II

              Pass-Through
                Rate

            	
              Initial
                Uncertificated Principal Balance

            	
              Latest
                Possible Maturity Date (1)

            
	
              AA

            	
              Variable(2)

            	
              $

            	
              353,976,405.02

            	
              June
                25, 2036

            
	
              A

            	
              Variable(2)

            	
              $

            	
              3,559,630.00

            	
              June
                25, 2036

            
	
              B

            	
              Variable(2)

            	
              $

            	
              43,340.00

            	
              June
                25, 2036

            
	
              ZZ

            	
              Variable(2)

            	
              $

            	
              3,621,038.27

            	
              June
                25, 2036

            
	
              A-IO

            	
              (2)

            	 	
              (3)

            	
              June
                25, 2036

            

    

    ___________________________

    
      	
              (1)

            	
              For
                purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
                the
                Payment Date in the month following the maturity date for the HELOC
                with
                the latest maturity date has been designated as the “latest possible
                maturity date” for each REMIC II Regular
                Interest.

            

    

    

    
      	
              (2)

            	
              Calculated
                in accordance with the definition of “Uncertificated REMIC II Pass-Through
                Rate” herein.

            

    

    

    
      	
              (3)

            	
              REMIC
                II Regular Interest A-IO will not have an Uncertificated Principal
                Balance
                but will accrue interest on its uncertificated notional amount calculated
                in accordance with the definition of “Uncertificated Notional Amount”
                herein.

            

    

    

    REMIC
      III

     

    As
      provided herein, the Securities Administrator will elect to treat the segregated
      pool of assets consisting of the REMIC II Regular Interests as a REMIC for
      federal income tax purposes, and such segregated pool of assets will be
      designated as “REMIC III”. The Class R-2 Certificates will represent the sole
      class of Residual Interests in REMIC III for purposes of the REMIC
      Provisions.

     

    The
      following table irrevocably sets forth the class designation, interest rate,
      initial principal balance and, for purposes of satisfying Treasury Regulation
      Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each Class
      of Notes and the Class E Interest that represent ownership of one or more of
      the
      Regular Interests in REMIC III created hereunder. 

     

    

    
      	
              Class
                Designation

            	
              Interest
                Rate

            	
              Initial
                Principal Balance

            	
              Latest
                Possible Maturity Date(1)

            
	
              A

            	
              Variable(2)

            	
              $

            	
              355,963,000.00

            	
              June
                25, 2036

            
	
              A-IO

            	
              (2)

            	
              $

            	
              0

            	
              June
                25, 2036

            
	
              B

            	
              Variable(2)

            	
              $

            	
              4,334,000.00

            	
              June
                25, 2036

            
	
              Class
                E Interest

            	
              Variable(3)

            	
              $

            	
              903,413.29

            	
              June
                25, 2036

            

    

    ___________________

    
      	
              (1)

            	
              For
                purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
                the
                Payment Date in the month following the maturity date for the HELOC
                with
                the latest maturity date has been designated as the “latest possible
                maturity date” for each Note and Class E Interest described
                above.

            

    

    

    
      	
              (2)

            	
              Calculated
                in accordance with the definition of “Note Interest Rate” herein.
                

            

    

    

    
      	
              (3)

            	
              The
                Class E Interest will accrue interest at its variable interest rate
                calculated in accordance with the definition of “Class E Interest Rate” on
                the Class E Notional Amount of the Class E Interest outstanding from
                time
                to time, which shall equal the aggregate Uncertificated Principal
                Balance
                of the REMIC II Regular Interests. The Class E Interest will not
                accrue
                interest on its Uncertificated Principal
                Balance.

            

    

    

    REMIC
      IV

     

    As
      provided herein, the Securities Administrator will elect to treat the segregated
      pool of assets consisting of the Class E Interest as a REMIC for federal income
      tax purposes, and such segregated pool of assets will be designated as “REMIC
      IV”. The Class RX Certificates will represent the sole class of Residual
      Interests in REMIC IV for purposes of the REMIC Provisions.

     

    The
      following table irrevocably sets forth the Class designation, interest rate,
      initial principal balance and, for purposes of satisfying Treasury Regulation
      Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for the Class
      of Certificates that represents ownership of one or more of the Regular
      Interests in REMIC IV created hereunder:

     

    
      	
              Class
                Designation

            	
              Interest
                Rate

            	
              Initial
                Principal Balance

            	
              Latest
                Possible

              Maturity
                Date(1)

            
	
              E

            	
              Variable(2)

            	
              $
                903,413.29

            	
              June
                25, 2036

            

    

    _______________

    
      	
              (1)

            	
              For
                purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
                the
                Payment Date in the month following the maturity date for the HELOC
                with
                the latest maturity date has been designated as the “latest possible
                maturity date” for the Class E Certificates described
                above.

            

    

    

    
      	
              (2)

            	
              The
                Class E Certificates will receive 100% of amounts received in respect
                of
                the Class E Interest.

            

    

    

    Section
      10.02  REMIC
      Elections and REMIC Distributions. 

     

    (a)  The
      Securities Administrator shall elect that each of REMIC I, REMIC II, REMIC
      III
      and REMIC IV shall be treated as a REMIC under Section 860D of the Code. Any
      inconsistencies or ambiguities in this Indenture or any of the Basic Documents
      or in the administration of this Indenture or the Basic Documents shall be
      resolved in a manner that preserves the validity of such REMIC elections.

     

    (b)  On
      each
      Payment Date, the following amounts, in the following order of priority, shall
      be distributed by REMIC I to REMIC II on account of the REMIC I Regular
      Interests or withdrawn from the Payment Account and distributed to the Holders
      of the Class S Certificates, as the case may be:

     

    (i) from
      the
      Floating Allocation Percentage of the Interest Collection Amount, to REMIC
      I
      Regular Interest Non-IO and REMIC I Regular Interest 1-IO through REMIC I
      Regular Interest 6-IO, pro
      rata,
      in an
      amount equal to (A) the Uncertificated Accrued Interest for such REMIC I Regular
      Interest for such Payment Date, plus (B) any amounts payable in respect thereof
      remaining unpaid from previous Payment Dates;

     

    (ii) from
      the
      Available Principal Payment Amount, first, to REMIC I Regular Interest Non-IO,
      until the Uncertificated Principal Balance of such REMIC I Regular Interest
      is
      reduced to zero, and second, to REMIC I Regular Interest 1-IO through REMIC
      I
      Regular Interest 6-IO, starting with the lowest numerical denomination, until
      the Uncertificated Principal Balances of each such REMIC I Regular Interest
      is
      reduced to zero; and

     

    (iii) any
      remaining amount to the Holders of the Class S Certificates.

     

    (c)  On
      each
      Payment Date, the following amounts, in the following order of priority, shall
      be distributed by REMIC II to REMIC III on account of the REMIC II Regular
      Interests or withdrawn from the Payment Account and distributed to the Holders
      of the Class R-1 Certificates, as the case may be:

     

    (i) from
      the
      Floating Allocation Percentage of the Interest Collection Amount, to REMIC
      II
      Regular Interest A-IO, in an amount equal to (A) the Uncertificated Accrued
      Interest for such REMIC II Regular Interest for such Payment Date, plus (B)
      any
      amounts in respect thereof remaining unpaid from previous Payment
      Dates;

     

    (ii) to
      the
      extent of the Floating Allocation Percentage of the Interest Collection Amount
      remaining after the distribution pursuant to clause (i), to each REMIC II
      Regular Interest (other than REMIC II Regular Interest A-IO), pro
      rata,
      in an
      amount equal to (A) the Uncertificated Accrued Interest for such REMIC II
      Regular Interest for such Payment Date, plus (B) any amounts in respect thereof
      remaining unpaid from previous Payment Dates. Amounts payable as Uncertificated
      Accrued Interest in respect of REMIC II Regular Interest ZZ shall be reduced
      when the REMIC II Overcollateralization Amount is less than the REMIC II
      Required Overcollateralization Amount, by the lesser of (x) the amount of such
      difference and (y) the Maximum Uncertificated Accrued Interest Deferral Amount,
      and such amount will be payable to the holders of each REMIC II Regular Interest
      (other than REMIC II Regular Interest A-IO) for which a Note is the
      Corresponding Note in the same proportion as the Overcollateralization Increase
      Amount is allocated to the Corresponding Notes for each such REMIC II Regular
      Interest, and the Uncertificated Principal Balance of REMIC II Regular Interest
      ZZ shall be increased by such amount; and

     

    (iii) to
      the
      holders of REMIC II Regular Interests (other than REMIC II Regular Interest
      A-IO), the Available Principal Payment Amount, allocated as
      follows:

     

    (A)  98%
      of
      such amount to REMIC II Regular Interest AA, until the Uncertificated Principal
      Balance of such REMIC II Regular Interest is reduced to zero;

     

    (B)  2%
      of
      such remainder, first, to each REMIC II Regular Interest (other than REMIC
      II
      Regular Interest A-IO) for which a Note is the Corresponding Note in an
      aggregate amount equal to 1% of and in the same proportion as principal payments
      are allocated to the Corresponding Notes for each such REMIC II Regular
      Interest, until the Uncertificated Principal Balances of such REMIC II Regular
      Interests are reduced to zero; and second, to REMIC II Regular Interest ZZ,
      until the Uncertificated Principal Balance of such REMIC II Regular Interest
      is
      reduced to zero; and

     

    (C)  any
      remaining amount to the Holders of the Class R-1 Certificates. 

     

    (d)  On
      each
      Payment Date, an amount equal to the amounts distributed pursuant to Sections
      3.02(a)(5), (6), (9) and (11), and Sections 3.02(c)(1)(vi) and (2)(vi), on
      such
      date shall be deemed distributed from REMIC III to REMIC IV in respect of the
      Class E Distribution Amount distributable to the Class E Interest.

     

    Section
      10.03  Allocation
      of Charge-Off Amounts. 

     

    The
      Floating
      Allocation Percentage of Charge-Off
      Amounts on the HELOCs shall be allocated on each Payment Date, first, to REMIC
      I
      Regular Interest Non-IO, until the Uncertificated Principal Balance of such
      REMIC I Regular Interest has been reduced to zero, and second, to REMIC I
      Regular Interests 1-IO through REMIC I Regular Interest 6-IO, starting with
      the
      lowest numerical denomination, until the Uncertificated Principal Balance of
      each such REMIC I Regular Interest has been reduced to zero.

     

    The
      Floating Allocation Percentage of Charge-Off Amounts on the HELOCs shall be
      allocated on each Payment Date to the following REMIC II Regular Interests
      in
      the following specified percentages: first, to Uncertificated Accrued Interest
      payable to the REMIC II Regular Interest AA and REMIC II Regular Interest ZZ
      up
      to an aggregate amount equal to the REMIC II Interest Loss Allocation Amount,
      98.00% and 2.00%, respectively; and second, to the Uncertificated Principal
      Balances of the REMIC II Regular Interest AA and REMIC II Regular Interest
      ZZ up
      to an aggregate amount equal to the REMIC II Principal Loss Allocation Amount,
      98.00% and 2.00%, respectively. Any subsequent allocation of the Floating
      Allocation Percentage of Charge-Off Amounts to the Notes pursuant to Section
      3.19 shall be allocated on each Payment Date to the following REMIC II Regular
      Interests in the following specified percentages: first, to the Uncertificated
      Principal Balances of REMIC II Regular Interest AA, REMIC II Regular Interest
      B
      and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until
      the Uncertificated Principal Balance of REMIC II Regular Interest B has been
      reduced to zero; and second, to the Uncertificated Principal Balances of REMIC
      II Regular Interest AA, REMIC II Regular Interest A and REMIC II Regular
      Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
      Principal Balance of REMIC II Regular Interest A has been reduced to zero.
      

     

    Section
      10.04  Tax
      Administration. 

     

    It
      is
      intended that the Trust Estate shall constitute, and that the affairs of the
      Trust Estate shall be conducted so that each REMIC formed hereunder qualifies
      as, a “real estate mortgage investment conduit” as defined in and in accordance
      with the REMIC Provisions. In furtherance of such intention, the Securities
      Administrator covenants and agrees that it shall act as agent (and the
      Securities Administrator is hereby appointed to act as agent) on behalf of
      the
      Trust Estate. The Securities Administrator, as agent on behalf of the Trust
      Estate, shall do or refrain from doing, as applicable, the following: (a) the
      Securities Administrator shall prepare and file, or cause to be prepared and
      filed, in a timely manner, U.S. Real Estate Mortgage Investment Conduit Income
      Tax Returns (Form 1066 or any successor form adopted by the Internal Revenue
      Service) and prepare and file or cause to be prepared and filed with the
      Internal Revenue Service and applicable state or local tax authorities income
      tax or information returns for each taxable year with respect to each such
      REMIC
      containing such information and at the times and in the manner as may be
      required by the Code or state or local tax laws, regulations, or rules, and
      furnish or cause to be furnished to Noteholders and Certificateholders the
      schedules, statements or information at such times and in such manner as may
      be
      required thereby; (b) the Securities Administrator shall apply for an employer
      identification number with the Internal Revenue Service via a Form SS-4 or
      other
      comparable method for each REMIC that is or becomes a taxable entity, and within
      thirty days of the Closing Date, furnish or cause to be furnished to the
      Internal Revenue Service, on Forms 8811 or as otherwise may be required by
      the
      Code, the name, title, address, and telephone number of the Person that the
      Holders of the Notes and Certificates may contact for tax information relating
      thereto, together with such additional information as may be required by such
      Form, and update such information at the time or times in the manner required
      by
      the Code for the Trust Estate; (c) the Securities Administrator shall make
      or
      cause to be made elections, on behalf of each REMIC formed hereunder to be
      treated as a REMIC on the federal tax return of such REMIC for its first taxable
      year (and, if necessary, under applicable state law); (d) the Securities
      Administrator shall prepare and forward, or cause to be prepared and forwarded,
      to the Noteholders and Certificateholders and to the Internal Revenue Service
      and, if necessary, state tax authorities, all information returns and reports
      as
      and when required to be provided to them in accordance with the REMIC
      Provisions, including without limitation, the calculation of any original issue
      discount using the Prepayment Assumption; (e) the Securities Administrator
      shall
      provide information necessary for the computation of tax imposed on the Transfer
      of a Residual Certificate to a Person that is not a Permitted Transferee, or
      an
      agent (including a broker, nominee or other middleman) of a Person that is
      not a
      Permitted Transferee, or a pass-through entity in which a Person that is not
      a
      Permitted Transferee is the record holder of an interest (the reasonable cost
      of
      computing and furnishing such information may be charged to the Person liable
      for such tax); (f) the Indenture Trustee and Securities Administrator shall,
      to
      the extent under their control, conduct the affairs of the Trust Estate at
      all
      times that any Notes or Certificates are outstanding so as to maintain the
      status of each REMIC formed hereunder as a REMIC under the REMIC Provisions;
      (g)
      the Indenture Trustee and Securities Administrator shall not knowingly or
      intentionally take any action or omit to take any action that would (i) cause
      the termination of the REMIC status of any REMIC formed hereunder or
      (ii) result in the imposition of a tax upon any of REMIC formed hereunder
      (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);
      (h) the
      Securities Administrator shall pay, from the sources specified in this Section
      10.04, the amount of any federal, state and local taxes, including prohibited
      transaction taxes as described below, imposed on any REMIC formed hereunder
      prior to the termination of the Trust Estate when and as the same shall be
      due
      and payable (but such obligation shall not prevent the Securities Administrator
      or any other appropriate Person from contesting any such tax in appropriate
      proceedings and shall not prevent the Securities Administrator from withholding
      payment of such tax, if permitted by law, pending the outcome of such
      proceedings); (i) the
      Indenture Trustee shall sign or cause to be signed federal, state or local
      income tax or information returns or any other document prepared by the
      Securities Administrator pursuant to this Section 10.04 requiring a signature
      thereon by the Indenture Trustee;
      (j) the
      Securities Administrator shall maintain records relating to each REMIC formed
      hereunder including but not limited to the income, expenses, assets and
      liabilities of each such REMIC and adjusted basis of the Trust Estate property
      determined at such intervals as may be required by the Code, as may be necessary
      to prepare the foregoing returns, schedules, statements or information; (k)
      the
      Securities Administrator shall, for federal income tax purposes, maintain books
      and records with respect to the REMICs on a calendar year and on an accrual
      basis; (l) the Indenture Trustee and Securities Administrator shall not enter
      into any arrangement not otherwise provided for in this Indenture or the Basic
      Documents by which the REMICs will receive a fee or other compensation for
      services nor permit the REMICs 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; and (m) as and when
      necessary and appropriate, the Securities Administrator, at the expense of
      the
      Trust Estate, shall represent the Trust Estate in any administrative or judicial
      proceedings relating to an examination or audit by any governmental taxing
      authority, request an administrative adjustment as to any taxable year of any
      REMIC formed hereunder, enter into settlement agreements with any governmental
      taxing agency, extend any statute of limitations relating to any tax item of
      the
      Trust Estate, and otherwise act on behalf of each REMIC formed hereunder in
      relation to any tax matter involving any such REMIC.

     

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

     

    Neither
      the Indenture Trustee nor the Securities Administrator shall sell, dispose
      of or
      substitute for any of the HELOCs (except in connection with (i) the default,
      imminent default or foreclosure of a HELOC, including but not limited to, the
      acquisition or sale of a Mortgaged Property acquired by deed in lieu of
      foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of
      any
      REMIC pursuant to Section 8.06 of this Agreement or (iv) a purchase of HELOCs
      pursuant to Article II of the Sale and Servicing Agreement), acquire any assets
      for any REMIC or sell or dispose of any investments in any Account for gain,
      or
      accept any contributions to any REMIC after the Closing Date, unless it has
      received an Opinion of Counsel that such sale, disposition, substitution,
      acquisition or contribution will not (a) affect adversely the status of any
      of
      REMIC formed hereunder as a REMIC or (b) cause any REMIC to be subject to a
      tax
      on “prohibited transactions” or “ contributions” pursuant to the REMIC
      Provisions.

     

    In
      the
      event that any tax is imposed on “prohibited transactions” as defined in Section
      860F(a)(2) of the Code of any REMIC created hereunder, on the “net income from
      foreclosure property” of the Trust Estate as defined in Section 860G(c) of the
      Code, on any contribution to any REMIC created hereunder after the Closing
      Date
      pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
      without limitation, any federal, state or local tax or minimum tax imposed
      upon
      any REMIC created hereunder, and is not paid as otherwise provided for herein,
      such tax shall be paid (i) by the Indenture Trustee, the Securities
      Administrator or Owner Trustee, if any such other tax arises out of or results
      from a breach by the Indenture Trustee, the Securities Administrator or Owner
      Trustee of any of its obligations under this Indenture or the Basic Documents,
      (ii) by any party hereto (other than the Indenture Trustee, the Securities
      Administrator and Owner Trustee) to the extent any such other tax arises out
      of
      or results from a breach by such other party of any of its obligations under
      this Indenture or the Basic Documents or (iii) in all other cases, or in the
      event that any liable party hereto fails to honor its obligations under the
      preceding clauses (i) or (ii), first, with amounts otherwise to be distributed
      to the Residual Certificateholders, and second, with amounts otherwise to be
      distributed to all Noteholders in the following order of priority: first,
      to
      the
      Class B Notes, and second, to the Class A Notes. Notwithstanding anything to
      the
      contrary contained herein, to the extent that such tax is payable by the Holder
      of any Notes or Certificates, the Securities Administrator is hereby authorized
      to retain on any Payment Date, from the Holders of the Residual Certificates
      (and, if necessary, second, from the Holders of the Notes in the priority
      specified in the preceding sentence), funds otherwise distributable to such
      Holders in an amount sufficient to pay such tax. The Securities Administrator
      shall promptly notify in writing the party liable for any such tax of the amount
      thereof and the due date for the payment thereof.

     

    The
      Securities Administrator agrees that, in the event it should obtain any
      information necessary for the other party to perform its obligations pursuant
      to
      this Section 11.04, it will promptly notify and provide such information to
      such
      other party.

     

    Notwithstanding
      any other provision of this Indenture, the Securities Administrator shall comply
      with all federal withholding requirements respecting payments to Noteholders
      or
      Certificateholders of interest or original issue discount that the Securities
      Administrator reasonably believes are applicable under the Code. The consent
      of
      Noteholders or 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 Noteholder or
      Certificateholder pursuant to federal withholding requirements, the Securities
      Administrator shall indicate the amount withheld to such Noteholders or
      Certificateholders.

     

    Section
      10.05  Tax
      Treatment of Net WAC Cap Rate Carryover Amounts. 

     

    On
      each
      Payment Date as to which there is a Net WAC Cap Carryover Amount payable to
      any
      Class of Notes, the Securities Administrator shall deposit the amounts
      distributable pursuant to Section 3.02(a)(9) into the Net WAC Cap Rate Carryover
      Reserve Account and the Securities Administrator has been directed by the Class
      E Certificateholder to distribute amounts in the Net WAC Cap Rate Carryover
      Reserve Account to the Holders of the applicable Notes in the priorities set
      forth in Section 3.02. Any amount paid to the Holders of the applicable Notes
      pursuant to the preceding sentence in respect of Net WAC Cap Rate Carryover
      Amounts shall be treated as distributed to the Class E Certificateholder in
      respect of the Class E Certificates and paid by the Class E Certificateholder
      to
      the Holders of such Notes. Any payments to the Holders of the applicable Notes
      in respect of Net WAC Cap Rate Carryover Amounts pursuant to the second
      preceding sentence shall not be payments with respect to a “regular interest” in
      a REMIC within the meaning of Section 860(G)(a)(1) of the Code.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
ARTICLE
      XI  

    
 

    MISCELLANEOUS

     

    Section
      11.01  Compliance
      Certificates and Opinions, etc.
      (a)
      Upon any
      application or request by the Issuing Entity to the Indenture Trustee or the
      Securities Administrator to take any action under any provision of this
      Indenture, the Issuing Entity shall furnish to the Indenture Trustee, the
      Securities Administrator and the Note Insurer (i) an Officer’s Certificate
      stating that all conditions precedent, if any, provided for in this Indenture
      relating to the proposed action have been complied with and (ii) an Opinion
      of
      Counsel stating that in the opinion of such counsel all such conditions
      precedent, if any, have been complied with, except that, in the case of any
      such
      application or request as to which the furnishing of such documents is
      specifically required by any provision of this Indenture, no additional
      certificate or opinion need be furnished.

     

    Every
      certificate or opinion with respect to compliance with a condition or covenant
      provided for in this Indenture shall include:

     

    (1)  a
      statement that each signatory of such certificate or opinion has read or has
      caused to be read such covenant or condition and the definitions herein relating
      thereto;

     

    (2)  a
      brief
      statement as to the nature and scope of the examination or investigation upon
      which the statements or opinions contained in such certificate or opinion are
      based;

     

    (3)  a
      statement that, in the opinion of each such signatory, such signatory has made
      such examination or investigation as is necessary to enable such signatory
      to
      express an informed opinion as to whether or not such covenant or condition
      has
      been complied with;

     

    (4)  a
      statement as to whether, in the opinion of each such signatory, such condition
      or covenant has been complied with; and

     

    (5)  if
      the
      signatory of such certificate or opinion is required to be Independent, the
      statement required by the definition of the term “Independent”.

     

    (b)  (i)
      Prior
      to the deposit of any Collateral or other property or securities with the
      Indenture Trustee that is to be made the basis for the release of any property
      or securities subject to the lien of this Indenture, the Issuing Entity shall,
      in addition to any obligation imposed in Section 10.01 (a) or elsewhere in
      this
      Indenture, furnish to the Indenture Trustee and the Note Insurer an Officer’s
      Certificate certifying or stating the opinion of each person signing such
      certificate as to the fair value (within 90 days prior to such deposit) to
      the
      Issuing Entity of the Collateral or other property or securities to be so
      deposited and a report from a nationally recognized accounting firm verifying
      such value.

     

    (ii)  Whenever
      the Issuing Entity is required to furnish to the Indenture Trustee, the
      Securities Administrator and the Note Insurer an Officer’s Certificate
      certifying or stating the opinion of any signer thereof as to the matters
      described in clause (i) above, the Issuing Entity shall also deliver to the
      Indenture Trustee an Independent Certificate from a nationally recognized
      accounting firm as to the same matters, if the fair value of the securities
      to
      be so deposited and of all other such securities made the basis of any such
      withdrawal or release since the commencement of the then current fiscal year
      of
      the Issuing Entity, as set forth in the certificates delivered pursuant to
      clause (i) above and this clause (ii), is 10% or more of the Note Principal
      Balances of the Notes, but such a certificate need not be furnished with respect
      to any securities so deposited, if the fair value thereof as set forth in the
      related Officer’s Certificate is less than $25,000 or less than one percent of
      the then outstanding Note Principal Balances of the Notes.

     

    (iii)  Whenever
      any property or securities are to be released from the lien of this Indenture,
      the Issuing Entity shall also furnish to the Indenture Trustee an Officer’s
      Certificate certifying or stating the opinion of each person signing such
      certificate as to the fair value (within 90 days prior to such release) of
      the
      property or securities proposed to be released and stating that in the opinion
      of such person the proposed release will not impair the security under this
      Indenture in contravention of the provisions hereof.

     

    (iv)  Whenever
      the Issuing Entity is required to furnish to the Indenture Trustee, the
      Securities Administrator and the Note Insurer an Officer’s Certificate
      certifying or stating the opinion of any signer thereof as to the matters
      described in clause (iii) above, the Issuing Entity shall also furnish to the
      Indenture Trustee and the Securities Administrator an Independent Certificate
      as
      to the same matters if the fair value of the property or securities and of
      all
      other property or securities released from the lien of this Indenture since
      the
      commencement of the then-current calendar year, as set forth in the certificates
      required by clause (iii) above and this clause (iv), equals 10% or more of
      the
      Note Principal Balances of the Notes, but such certificate need not be furnished
      in the case of any release of property or securities if the fair value thereof
      as set forth in the related Officer’s Certificate is less than $25,000 or less
      than one percent of the then outstanding Note Principal Balances of the
      Notes.

     

    Section
      11.02  Form
      of Documents Delivered to Indenture Trustee.
      In any
      case where several matters are required to be certified by, or covered by an
      opinion of, any specified Person, it is not necessary that all such matters
      be
      certified by, or covered by the opinion of, only one such Person, or that they
      be so certified or covered by only one document, but one such Person may certify
      or give an opinion with respect to some matters and one or more other such
      Persons as to other matters, and any such Person may certify or give an opinion
      as to such matters in one or several documents.

     

    Any
      certificate or opinion of an Authorized Officer of the Issuing Entity may be
      based, insofar as it relates to legal matters, upon a certificate or opinion
      of,
      or representations by, counsel, unless such officer knows, or in the exercise
      of
      reasonable care should know, that the certificate or opinion or representations
      with respect to the matters upon which his certificate or opinion is based
      are
      erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
      may be based, insofar as it relates to factual matters, upon a certificate
      or
      opinion of, or representations by, an officer or officers of the Seller or
      the
      Issuing Entity, stating that the information with respect to such factual
      matters is in the possession of the Seller or the Issuing Entity, unless such
      counsel knows, or in the exercise of reasonable care should know, that the
      certificate or opinion or representations with respect to such matters are
      erroneous.

     

    Where
      any
      Person is required to make, give or execute two or more applications, requests,
      consents, certificates, statements, opinions or other instruments under this
      Indenture, they may, but need not, be consolidated and form one
      instrument.

     

    Whenever
      in this Indenture, in connection with any application or certificate or report
      to the Indenture Trustee, it is provided that the Issuing Entity shall deliver
      any document as a condition of the granting of such application, or as evidence
      of the Issuing Entity’s compliance with any term hereof, it is intended that the
      truth and accuracy, at the time of the granting of such application or at the
      effective date of such certificate or report (as the case may be), of the facts
      and opinions stated in such document shall in such case be conditions precedent
      to the right of the Issuing Entity to have such application granted or to the
      sufficiency of such certificate or report. The foregoing shall not, however,
      be
      construed to affect the Indenture Trustee’s right to rely upon the truth and
      accuracy of any statement or opinion contained in any such document as provided
      in Article VI.

     

    Section
      11.03  Acts
      of Noteholders.
      (a)
      Any
      request, demand, authorization, direction, notice, consent, waiver or other
      action provided by this Indenture to be given or taken by Noteholders may be
      embodied in and evidenced by one or more instruments of substantially similar
      tenor signed by such Noteholders in person or by agents duly appointed in
      writing; and except as herein otherwise expressly provided, such action shall
      become effective when such instrument or instruments are delivered to the
      Indenture Trustee, and, where it is hereby expressly required, to the Issuing
      Entity. Such instrument or instruments (and the action embodied therein and
      evidenced thereby) are herein sometimes referred to as the “Act” of the
      Noteholders signing such instrument or instruments. Proof of execution of any
      such instrument or of a writing appointing any such agent shall be sufficient
      for any purpose of this Indenture and (subject to Section 6.01 hereof)
      conclusive in favor of the Indenture Trustee and the Issuing Entity, if made
      in
      the manner provided in this Section 10.03 hereof.

     

    (b)  The
      fact
      and date of the execution by any person of any such instrument or writing may
      be
      proved in any manner that the Indenture Trustee deems sufficient.

     

    (c)  The
      ownership of Notes shall be proved by the Note Registrar.

     

    (d)  Any
      request, demand, authorization, direction, notice, consent, waiver or other
      action by the Holder of any Notes shall bind the Holder of every Note issued
      upon the registration thereof or in exchange therefor or in lieu thereof, in
      respect of anything done, omitted or suffered to be done by the Indenture
      Trustee or the Issuing Entity in reliance thereon, whether or not notation
      of
      such action is made upon such Note.

     

    Section
      11.04  Notices
      etc., to Indenture Trustee Issuing Entity, Securities Administrator, Note
      Insurer and Rating Agencies.
      Any
      request, demand, authorization, direction, notice, consent, waiver or Act of
      Noteholders or other documents provided or permitted by this Indenture shall
      be
      in writing and if such request, demand, authorization, direction, notice,
      consent, waiver or act of Noteholders is to be made upon, given or furnished
      to
      or filed with:

     

    (i)  the
      Indenture Trustee by any Noteholder or by the Issuing Entity shall be sufficient
      for every purpose hereunder if made, given, furnished or filed in writing to
      or
      with the Indenture Trustee at its Corporate Trust Office. The Indenture Trustee
      shall promptly transmit any notice received by it from the Noteholders to the
      Issuing Entity and the Note Insurer; 

     

    (ii)  the
      Securities Administrator by any Noteholder or by the Issuing Entity shall be
      sufficient for every purpose hereunder if made, given, furnished or filed in
      writing to or with the Securities Administrator at the Corporate Trust Office,
      or such other address as may hereafter be furnished to the other parties hereto
      in writing. The Securities Administrator shall promptly transmit any notice
      received by it from the Noteholders to the Issuing Entity; 

     

    (iii)  the
      Note
      Insurer, Ambac Assurance Corporation, Ambac Assurance Corporation, One State
      Street Plaza, New York, New York 10004, Attention: Risk Management, Consumer
      Asset-Backed Securities (SACO I Trust 2006-8, Policy No.
      AB1020BE), with a copy to the General Counsel at the above address, and in
      each
      case in which a demand, notice or other communication to the Note Insurer refers
      to a Default, an Event of Default or any event with respect to which failure
      on
      the part of the Note Insurer to respond shall be deemed to constitute consent
      or
      acceptance, then such demand, notice or other communication shall be marked
      to
      indicate "URGENT MATERIAL ENCLOSED"; or

     

    (iv)  the
      Issuing Entity by the Indenture Trustee or by any Noteholder shall be sufficient
      for every purpose hereunder if made, given, furnished or filed in writing and
      mailed first-class, postage prepaid to the Issuing Entity addressed to: SACO
      I
      Trust 2006-8, in care of Owner Trustee at the Corporate Trust Office, or at
      any
      other address previously furnished in writing to the Indenture Trustee by the
      Issuing Entity. The Issuing Entity shall promptly transmit any notice received
      by it from the Noteholders to the Indenture Trustee.

     

    Notices
      required to be given to the Rating Agencies by the Issuing Entity, the Indenture
      Trustee, the Securities Administrator or the Owner Trustee shall be in writing,
      mailed first-class postage pre-paid: in the case of Moody’s, to Moody’s, at the
      following address: Moody's Investors Service, Inc., 99 Church Street, New York,
      New York 10007; and in the case of S&P, Standard & Poor's, a division of
      The McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041,
      or
      as to each of the foregoing, at such other address as shall be designated by
      written notice to the other parties.

     

    Section
      11.05  Notices
      to Noteholders; Waiver.
      Where
      this Indenture provides for notice to Noteholders of any event, such notice
      shall be sufficiently given (unless otherwise herein expressly provided) if
      made, given, furnished or filed in writing and mailed, first-class, postage
      prepaid to each Noteholder affected by such event, at such Person’s address as
      it appears on the Note Register, not later than the latest date, and not earlier
      than the earliest date, prescribed for the giving of such notice. In any case
      where notice to Noteholders is given by mail, neither the failure to mail such
      notice nor any defect in any notice so mailed to any particular Noteholder
      shall
      affect the sufficiency of such notice with respect to other Noteholders, and
      any
      notice that is mailed in the manner herein provided shall conclusively be
      presumed to have been duly given regardless of whether such notice is in fact
      actually received.

     

    Where
      this Indenture provides for notice in any manner, such notice may be waived
      in
      writing by any Person entitled to receive such notice, either before or after
      the event, and such waiver shall be the equivalent of such notice. Waivers
      of
      notice by Noteholders shall be filed with the Indenture Trustee but such filing
      shall not be a condition precedent to the validity of any action taken in
      reliance upon such a waiver.

     

    In
      case,
      by reason of the suspension of regular mail service as a result of a strike,
      work stoppage or similar activity, it shall be impractical to mail notice of
      any
      event to Noteholders when such notice is required to be given pursuant to any
      provision of this Indenture, then any manner of giving such notice as shall
      be
      satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving
      of such notice.

     

    Where
      this Indenture provides for notice to the Rating Agency, failure to give such
      notice shall not affect any other rights or obligations created hereunder,
      and
      shall not under any circumstance constitute an Event of Default.

     

    Section
      11.06  Conflict
      with Trust Indenture Act.
      If any
      provision hereof limits, qualifies or conflicts with another provision hereof
      that is required to be included in this Indenture by any of the provisions
      of
      the Trust Indenture Act, such required provision shall control.

     

    The
      provisions of TIA §§ 310 through 317 that impose duties on any Person (including
      the provisions automatically deemed included herein unless expressly excluded
      by
      this Indenture) are a part of and govern this Indenture, whether or not
      physically contained herein.

     

    Section
      11.07  Effect
      of Headings.
      The
      Article and Section headings herein are for convenience only and shall not
      affect the construction hereof.

     

    Section
      11.08  Successors
      and Assigns.
      All
      covenants and agreements in this Indenture and the Notes by the Issuing Entity
      shall bind its successors and assigns, whether so expressed or not. All
      agreements of the Indenture Trustee in this Indenture shall bind its successors,
      co-trustees and agents.

     

    Section
      11.09  Separability.
      In case
      any provision in this Indenture or in the Notes shall be invalid, illegal or
      unenforceable, the validity, legality, and enforceability of the remaining
      provisions shall not in any way be affected or impaired thereby.

     

    Section
      11.10  Legal
      Holidays.
      In any
      case where the date on which any payment is due shall not be a Business Day,
      then (notwithstanding any other provision of the Notes or this Indenture)
      payment need not be made on such date, but may be made on the next succeeding
      Business Day with the same force and effect as if made on the date on which
      nominally due, and no interest shall accrue for the period from and after any
      such nominal date.

     

    Section
      11.11  GOVERNING
      LAW.
      THIS
      INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
      YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS
      5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS, WHICH SHALL APPLY
      HERETO), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
      SHALL
      BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     

    Section
      11.12  Counterparts.
      This
      Indenture may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original, but all such counterparts shall
      together constitute but one and the same instrument.

     

    Section
      11.13  Recording
      of Indenture.
      If this
      Indenture is subject to recording in any appropriate public recording offices,
      such recording is to be effected by the Issuing Entity and at its expense
      accompanied by an Opinion of Counsel at its expense (which may be counsel to
      the
      Indenture Trustee or any other counsel reasonably acceptable to the Indenture
      Trustee) to the effect that such recording is necessary either for the
      protection of the Noteholders, the Note Insurer or any other Person secured
      hereunder or for the enforcement of any right or remedy granted to the Indenture
      Trustee under this Indenture.

     

    Section
      11.14  Issuing
      Entity Obligation.
      No
      recourse may be taken, directly or indirectly, with respect to the obligations
      of the Issuing Entity, the Owner Trustee or the Securities Administrator on
      the
      Notes or under this Indenture or any certificate or other writing delivered
      in
      connection herewith or therewith, against (i) the Indenture Trustee or the
      Owner
      Trustee in its individual capacity, (ii) any owner of a beneficial interest
      in
      the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer,
      director, employee or agent of the Securities Administrator, the Owner Trustee
      in its individual capacity, any holder of a beneficial interest in the Issuing
      Entity, the Securities Administrator, the Owner Trustee or the Indenture Trustee
      or of any successor or assign of the Indenture Trustee or the Owner Trustee
      in
      its individual capacity, except as any such Person may have expressly agreed
      (it
      being understood that the Indenture Trustee and the Owner Trustee have no such
      obligations in their individual capacity) and except that any such partner,
      owner or beneficiary shall be fully liable, to the extent provided by applicable
      law, for any unpaid consideration for stock, unpaid capital contribution or
      failure to pay any installment or call owing to such entity. For all purposes
      of
      this Indenture, in the performance of any duties or obligations of the Issuing
      Entity hereunder, the Owner Trustee shall be subject to, and entitled to the
      benefits of, the terms and provisions of Article VI, VII and VIII of the Trust
      Agreement.

     

    Section
      11.15  No
      Petition.
      The
      Indenture Trustee and the Securities Administrator, by entering into this
      Indenture, each Noteholder, by accepting a Note and each Certificateholder,
      by
      accepting a Certificate, hereby covenant and agree that they will not at any
      time prior to one year from the date of termination hereof, institute against
      the Depositor or the Issuing Entity, or join in any institution against the
      Depositor or the Issuing Entity of, any bankruptcy, reorganization, arrangement,
      insolvency or liquidation proceedings, or other proceedings under any United
      States federal or state bankruptcy or similar law in connection with any
      obligations relating to the Notes, this Indenture or any of the Basic Documents;
      provided however, that nothing herein shall prohibit the Indenture Trustee
      from
      filing proofs of claim in any proceeding.

     

    Section
      11.16  Inspection.
      The
      Issuing Entity agrees that, at its expense, on reasonable prior notice, it
      shall
      permit any representative of the Indenture Trustee, the Note Insurer or the
      Securities Administrator, during the Issuing Entity’s normal business hours, to
      examine all the books of account, records, reports and other papers of the
      Issuing Entity, to make copies and extracts therefrom, to cause such books
      to be
      audited by Independent certified public accountants, and to discuss the Issuing
      Entity’s affairs, finances and accounts with the Issuing Entity’s officers,
      employees, and Independent certified public accountants, all at such reasonable
      times and as often as may be reasonably requested. The Indenture Trustee and
      the
      Note Insurer shall cause its representatives to hold in confidence all such
      information except to the extent disclosure may be required by law (and all
      reasonable applications for confidential treatment are unavailing) and except
      to
      the extent that the Indenture Trustee, the Note Insurer or the Securities
      Administrator may reasonably determine that such disclosure is consistent with
      its obligations hereunder.

     

    Section
      11.17  Benefits
      of
      Indenture.
      The
      Note Insurer and its successors and assigns shall be a third-party beneficiary
      to the provisions of this Indenture. To the extent that this Indenture confers
      upon or gives or grants to the Note Insurer any right, remedy or claim under
      or
      by reason of this Indenture, the Note Insurer may enforce any such right, remedy
      or claim conferred, given or granted hereunder. Nothing in this Indenture,
      express or implied, shall give to any Person, other than the parties hereto
      and
      their successors hereunder, and the Noteholders and the Note Insurer, any
      benefit or any legal or equitable right, remedy or claim under this
      Indenture.

     

    Section
      11.18  Securities
      Administrator to Hold Policy.
      The
      Securities Administrator will hold the Policy in trust as agent for the Class
      A
      Noteholders for the purpose of making claims thereon and distributing the
      proceeds thereof. Each Class A Noteholder, by accepting its Note, appoints
      the
      Securities Administrator as attorney-in-fact for the purpose of making claims
      on
      the Policy. The Securities Administrator shall surrender the Policy to the
      Note
      Insurer for cancellation upon the expiration of the term of the Policy following
      the retirement of the Class A Notes.

     

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuing Entity, the Securities Administrator and the
      Indenture Trustee have caused their names to be signed hereto by their
      respective officers thereunto duly authorized, all as of the day and year first
      above written.

     

    

     

    
      	 	 	 	 	 	 	 	
              SACO
                I TRUST 2006-8, 

              as
                Issuing Entity

            
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              By:
                Wilmington Trust Company, not in its individual capacity but solely
                as
                Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              By:

            	/s/
              Patricia A. Evans
	 	 	 	 	 	 	 	
              Name:

            	Patricia
              A. Evans
	 	 	 	 	 	 	 	
              Title:

            	Vice
              President

    

    

     

    
      	 	 	 	 	 	 	 	
              LASALLE
                BANK NATIONAL ASSOCIATION, 

              as
                Securities Administrator

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              By:

            	
              /s/
                Susan L. Feld

            
	 	 	 	 	 	 	 	
              Name:

            	Susan
              L. Feld
	 	 	 	 	 	 	 	
              Title:

            	Assistant
              Vice President

    

    

    

    
      	 	 	 	 	 	 	 	
              CITIBANK,
                N.A., 

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              By:

            	
              /s/
                John Hannon

            
	 	 	 	 	 	 	 	
              Name:

            	John
              Hannon
	 	 	 	 	 	 	 	
              Title:

            	Vice
              President

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    
      	
              STATE
                OF_____________

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF___________

            	
              )

            	 

    

    

     

    On
      the
      15th
      day of
      September 2006,
      before
      me, a notary public in and for said State, personally appeared
      _______________________________, known to me to be
      a(n)____________________________ of LaSalle Bank National Association, the
      entity that executed the within instrument, and also known to me to be the
      person who executed it on behalf of said entity, and acknowledged to me that
      such entity executed the within instrument.

     

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

     

    
      	 	 
	 	
              Notary
                Public

            

    

    

    [NOTARIAL
      SEAL]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
                OF DELAWARE

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF___________

            	
              )

            	 

    

    

    On
      the
      15th
      day of
      September 2006, before me personally appeared ___________________________ to
      me
      known, who being by me duly sworn, did depose and say, that he/she is a(n)
      ____________________of the Owner Trustee, one of the entities described in
      and
      which executed the above instrument; and that he/her signed his/her name thereto
      by like order.

     

    

     

    
      	 	 
	 	
              Notary
                Public

            

    

    

    [NOTARIAL
      SEAL]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    
      	
              STATE
                OF_____________

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF___________

            	
              )

            	 

    

    

     

    On
      the
      15th
      day of
      September 2006, before me personally appeared _______________________ to me
      known, who being by me duly sworn, did depose and say, that he/she is a(n)
      ___________________ of the Indenture Trustee, one of the corporations described
      in and which executed the above instrument; and that he/she signed his/her
      name
      thereto by like order.

     

    
      	 	 
	 	
              Notary
                Public

            

    

    

    [NOTARIAL
      SEAL]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      

        EXHIBIT
          A-1

         

        FORM
          OF
          CLASS A NOTES

         

        SOLELY
          FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE REPRESENTS 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
          (THE “CODE”).

         

        THE
          NOTE PRINCIPAL BALANCE OF THIS NOTE WILL BE DECREASED BY THE PRINCIPAL
          PAYMENTS
          HEREON AND CHARGE OFF AMOUNTS ALLOCABLE THERETO. ACCORDINGLY, FOLLOWING
          THE
          INITIAL ISSUANCE OF THE NOTES, THE NOTE PRINCIPAL BALANCE OF THIS NOTE
          WILL BE
          DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS NOTE
          MAY
          ASCERTAIN ITS NOTE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR
          NAMED HEREIN.

         

        EACH
          HOLDER OF A NOTE OR BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE MADE THE
          REPRESENTATIONS SET FORTH IN SECTION 4.02 OF THE
          AGREEMENT.

         

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

         

        THIS
          NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT
          OF
          PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE
          REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS
          ON
          THIS NOTE.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	
                  Certificate
                    No. 1

                	
                  Note
                    Interest Rate: Adjustable Rate

                
	 	 
	
                  Class
                    A Senior

                	 
	 	 
	
                  Cut-off
                    Date: August 15, 2006

                	
                  Aggregate
                    Initial Note Principal Balance of this Note as of the Cut-off
                    Date:

                  $[_______]

                
	
                  Date
                    of Indenture: As of September 15, 2006

                	 
	 	 
	
                  First
                    Payment Date:

                  September
                    25, 2006

                	
                  Initial
                    Note Principal Balance of this Note as of the Cut-off Date:

                  $[_______]

                
	 	 
	
                  Master
                    Servicer and Securities Administrator:

                  LaSalle
                    Bank National Association

                	
                  CUSIP:
                    [_______]

                
	 	 

        

        

        SACO
          I
          TRUST 2006-8

        MORTGAGE-BACKED
          NOTES

        SERIES
          2006-8

         

        evidencing
          a Percentage Interest in the distributions allocable to the Class A Notes
          with
          respect to a Trust Estate consisting primarily of a pool of home equity
          lines of
          credit (“HELOCs”) that are secured by first and second liens on one- to four-
          family residences sold by BSABS I LLC.

         

        This
          Note
          is payable solely from the assets of the Trust Estate, and does not represent
          an
          obligation of or interest in BSABS I LLC, the Master Servicer, the Indenture
          Trustee or the Securities Administrator referred to below or any of their
          affiliates or any other person. Neither this Note nor the underlying HELOCs
          are
          guaranteed or insured by any governmental entity or by BSABS I LLC, the
          Master
          Servicer, the Indenture Trustee or the Securities Administrator or any
          of their
          affiliates or any other person. None of BSABS I LLC, the Master Servicer
          or any
          of their affiliates will have any obligation with respect to any note or
          other
          obligation secured by or payable from payments on the Notes.

         

        This
          certifies that Cede & Co. is the registered owner of the Percentage Interest
          evidenced by this Note. This Note is one of a duly authorized issue of
          the
          Issuing Entity’s Mortgage-Backed Notes, Series 2006-8 (the “Notes”), issued
          under an Indenture dated as of September 15, 2006 (the “Indenture” or
“Agreement”), among the Issuing Entity, LaSalle Bank National Association, as
          Securities Administrator and Citibank, N.A., as indenture trustee (the
          “Indenture Trustee”, which term includes any successor Indenture Trustee under
          the Indenture) to which Indenture and all indentures supplemental thereto
          reference is hereby made for a statement of the respective rights thereunder
          of
          the Issuing Entity, the Indenture Trustee, and the Holders of the Notes
          and the
          terms upon which the Notes are to be authenticated and delivered. All terms
          used
          in this Note which are defined in the Indenture shall have the meanings
          assigned
          to them in the Indenture.

         

        Interest
          on this Note will accrue from and including the immediately preceding Payment
          Date (or with respect to the First Payment Date, the Closing Date) to and
          including the day prior to the current Payment Date on the Note Principal
          Balance hereof at a per annum rate equal to the Note Interest Rate set
          forth
          above. The Securities Administrator will distribute on the 25th day of
          each
          month, or, if such 25th day is not a Business Day, the immediately following
          Business Day (each, a “Payment Date”), commencing on the First Payment Date
          specified above, to the Person in whose name this Note is registered at
          the
          close of business on the Business Day immediately preceding such Payment
          Date so
          long as such Note remains in book-entry form (and otherwise, the close
          of
          business on the last Business Day of the month immediately preceding the
          month
          of such Payment Date), an amount equal to the product of the Percentage
          Interest
          evidenced by this Note and the amount (of interest and principal, if any)
          required to be distributed to the Holders of Notes of the same Class as
          this
          Note. The Final Scheduled Payment Date is the Payment Date in the month
          following the latest scheduled maturity date of any HELOC.

         

        Payments
          on this Note will be made by the Securities Administrator by check mailed
          to the
          address of the Person entitled thereto as such name and address shall appear
          on
          the Certificate Register or, if such Person so requests by notifying the
          Securities Administrator in writing as specified in the Indenture.
          Notwithstanding the above, the final distribution on this Note will be
          made
          after due notice by the Securities Administrator of the pendency of such
          distribution and only upon presentation and surrender of this Note at the
          office
          or agency appointed by the Securities Administrator for that purpose and
          designated in such notice. The initial Note Principal Balance of this Note
          is
          set forth above. The Note Principal Balance hereof will be reduced to the
          extent
          of distributions allocable to principal hereon and any Charge-off Amounts
          applicable hereto.

         

        This
          Note
          is one of a duly authorized issue of Notes designated as set forth on the
          face
          hereof (the “Notes”). The Notes, in the aggregate, evidence the entire
          beneficial ownership interest in the Trust Estate formed pursuant to the
          Indenture.

         

        The
          Noteholder, by its acceptance of this Note, agrees that it will look solely
          to
          the Trust Estate for payment hereunder and that the Securities Administrator
          is
          not liable to the Noteholders for any amount payable under this Note or
          the
          Indenture or, except as expressly provided in the Indenture, subject to
          any
          liability under the Indenture.

         

        This
          does
          not purport to summarize the Indenture and reference is made to the Indenture
          for the interests, rights and limitations of rights, benefits, obligations
          and
          duties evidenced hereby, and the rights, duties and immunities of the Securities
          Administrator.

         

        Each
          holder of a Note or beneficial ownership shall be deemed to have made the
          representations set forth in Section 4.02 of the Indenture.

         

        The
          Indenture permits, with certain exceptions therein provided, the amendment
          thereof and the modification of the rights and obligations of the Depositor
          and
          the rights of the Noteholders under the Indenture from time to time by
          the
          parties thereto with the written consent of the Note Insurer and the consent
          of
          the Holder of each Class of Notes affected thereby evidencing over 50%
          of the
          Voting Rights of such Class or Classes. Any such written consent of the
          Note
          Insurer and any such consent by the Holder of this Note shall be conclusive
          and
          binding on such Holder and upon all future Holders of this Note and of
          any Note
          issued upon the transfer hereof or in lieu hereof whether or not notations
          of
          such consents are made upon such Notes. The Indenture also permits the
          amendment
          thereof, in certain limited circumstances, without the consent of the Holders
          of
          any of the Notes.

         

        As
          provided in the Indenture and subject to certain limitations therein set
          forth,
          the transfer of this Notes is registrable with the Securities Administrator
          upon
          surrender of this Notes for registration of transfer at the offices or
          agencies
          maintained by the Securities Administrator for such purposes, duly endorsed
          by,
          or 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 Notes
          in
          authorized denominations representing a like aggregate Percentage Interest
          will
          be issued to the designated transferee.

         

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

         

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

         

        The
          obligations created by the Indenture and the Trust Estate created thereby
          (other
          than the obligations to make payments to Noteholders with respect to the
          termination of the Indenture) shall terminate upon the earlier of (i) the
          later
          of (A) the maturity or other liquidation (or Advance with respect thereto)
          of
          the last HELOC remaining in the Trust Estate and disposition of all property
          acquired upon foreclosure or deed in lieu of foreclosure of any HELOC and
          (B)
          the remittance of all funds due under the Indenture, or (ii) the optional
          repurchase by the party named in the Indenture of all the HELOCs and other
          assets of the Trust Estate in accordance with the terms of the Indenture.
          Such
          optional repurchase may be made only on or after the first Payment Date
          on which
          the sum of the Note Principal Balances of the Notes is reduced to an amount
          less
          than or equal to 10% of the sum of the original Note Principal Balances
          of the
          Notes as of the Cut-off Date as set forth in the Indenture. The exercise
          of such
          right will effect the early retirement of the Notes. In no event, however,
          will
          the Trust Estate created by the Indenture continue beyond the earlier of
          (i) the
          expiration of 21 years after the death of certain persons identified in
          Section
          8.06 of the Indenture and (ii) the Latest Possible Maturity Date as specified
          in
          the Indenture.

         

        Unless
          this Note has been countersigned by an authorized signatory of the Securities
          Administrator by manual signature, this Note shall not be entitled to any
          benefit under the Indenture, or be valid for any purpose.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        IN
          WITNESS WHEREOF, the Owner Trustee has caused this Note to be duly executed
          on
          behalf of the Trust. 

        

        
          	
                  Dated:
                    September 15, 2006

                	 	 	 	
                  SACO
                    I TRUST 2006-8

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By
                    Wilmington Trust Company, not in its individual
                    capacity but solely as Owner Trustee

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By:

                	 
	 	 	 	 	 	 	 	 	
                  Authorized
                    Signatory

                
	 	 	 	 	 	 	 	 	 

        

        

        

        CERTIFICATE
          OF AUTHENTICATION

         

        This
          is
          one of the Class A Notes referred to in the within-mentioned
          Agreement.

         

        
          	 	 	 	 	
                  LASALLE
                    BANK NATIONAL ASSOCIATION,
                    authorized signatory of LaSalle Bank
                    National Association, not in its individual capacity
                    but solely as Securities Administrator

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By:

                	 
	 	 	 	 	 	 	 	 	
                  Authorized
                    Signatory

                
	 	 	 	 	 	 	 	 	 

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        ASSIGNMENT

         

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

         

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

         

        
          	
                  Dated:

                	 
	 	
                  Signature
                    by or on behalf of assignor

                

        

        

         

        
          	 	 
	 	
                  Signature
                    Guaranteed

                

        

        

         

        

         

         PAYMENT
          INSTRUCTIONS

         

        The
          assignee should include the following for purposes of distribution:

         

        Payments
          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-2

         

        FORM
          OF
          CLASS A-IO NOTES

         

        SOLELY
          FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE REPRESENTS 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
          (THE “CODE”).

         

        EACH
          HOLDER OF A NOTE OR BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE MADE THE
          REPRESENTATIONS SET FORTH IN SECTION 4.02 OF THE
          AGREEMENT.

         

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

         

        THIS
          NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT
          OF
          PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE
          REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS
          ON
          THIS NOTE.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	
                  Certificate
                    No. 1

                	
                  Note
                    Interest Rate: Adjustable Rate

                
	 	 
	
                  Class
                    A-IO Senior

                	 
	 	 
	
                  Cut-off
                    Date: August 15, 2006

                	
                  Aggregate
                    Initial Notional Amount of this Note as of the Cut-off Date:

                  $[_______]

                
	
                  Date
                    of Indenture: As of September 15, 2006

                	 
	 	 
	
                  First
                    Payment Date:

                  September
                    25, 2006

                	
                  Initial
                    Notional Amount of this Note as of the Cut-off Date:

                  $[_______]

                
	 	 
	
                  Master
                    Servicer and Securities Administrator:

                  LaSalle
                    Bank National Association

                	
                  CUSIP:
                    [_______]

                
	 	 

        

        

        SACO
          I
          TRUST 2006-8

        MORTGAGE-BACKED
          NOTES

        SERIES
          2006-8

         

        evidencing
          a Percentage Interest in the distributions allocable to the Class A-IO
          Notes
          with respect to a Trust Estate consisting primarily of a pool of home equity
          lines of credit (“HELOCs”) that are secured by first and second liens on one- to
          four- family residences sold by BSABS I LLC.

         

        This
          Note
          is payable solely from the assets of the Trust Estate, and does not represent
          an
          obligation of or interest in BSABS I LLC, the Master Servicer, the Indenture
          Trustee or the Securities Administrator referred to below or any of their
          affiliates or any other person. Neither this Note nor the underlying HELOCs
          are
          guaranteed or insured by any governmental entity or by BSABS I LLC, the
          Master
          Servicer, the Indenture Trustee or the Securities Administrator or any
          of their
          affiliates or any other person. None of BSABS I LLC, the Master Servicer
          or any
          of their affiliates will have any obligation with respect to any note or
          other
          obligation secured by or payable from payments on the Notes.

         

        This
          certifies that Cede & Co. is the registered owner of the Percentage Interest
          evidenced by this Note. This Note is one of a duly authorized issue of
          the
          Issuing Entity’s Mortgage-Backed Notes, Series 2006-8 (the “Notes”), issued
          under an Indenture dated as of September 15, 2006 (the “Indenture” or
“Agreement”), among the Issuing Entity, LaSalle Bank National Association, as
          Securities Administrator and Citibank, N.A., as indenture trustee (the
          “Indenture Trustee”, which term includes any successor Indenture Trustee under
          the Indenture) to which Indenture and all indentures supplemental thereto
          reference is hereby made for a statement of the respective rights thereunder
          of
          the Issuing Entity, the Indenture Trustee, and the Holders of the Notes
          and the
          terms upon which the Notes are to be authenticated and delivered. All terms
          used
          in this Note which are defined in the Indenture shall have the meanings
          assigned
          to them in the Indenture.

         

        Interest
          on this Note will accrue during the month prior to the month in which the
          current Payment Date occurs on the Notional Amount hereof at a per annum
          rate
          equal to the Note Interest Rate set forth above. The Securities Administrator
          will distribute on the 25th day of each month, or, if such 25th day is
          not a
          Business Day, the immediately following Business Day (each, a “Payment Date”),
          commencing on the First Payment Date specified above, to the Person in
          whose
          name this Note is registered at the close of business on the Business Day
          immediately preceding such Payment Date so long as such Note remains in
          book-entry form (and otherwise, the close of business on the last Business
          Day
          of the month immediately preceding the month of such Payment Date), an
          amount
          equal to the product of the Percentage Interest evidenced by this Note
          and the
          amount (of interest, if any) required to be distributed to the Holders
          of Notes
          of the same Class as this Note. The Final Scheduled Payment Date is the
          Payment
          Date in the month following the latest scheduled maturity date of any
          HELOC.

         

        Payments
          on this Note will be made by the Securities Administrator by check mailed
          to the
          address of the Person entitled thereto as such name and address shall appear
          on
          the Certificate Register or, if such Person so requests by notifying the
          Securities Administrator in writing as specified in the Indenture.
          Notwithstanding the above, the final distribution on this Note will be
          made
          after due notice by the Securities Administrator of the pendency of such
          distribution and only upon presentation and surrender of this Note at the
          office
          or agency appointed by the Securities Administrator for that purpose and
          designated in such notice. The initial Notional Amount of this Note is
          set forth
          above. Reference to the Notional Amount of the Class A-IO Notes is solely
          for
          convenience in calculations and does not represent the right to receive
          any
          payments allocable to principal.

         

        This
          Note
          is one of a duly authorized issue of Notes designated as set forth on the
          face
          hereof (the “Notes”). The Notes, in the aggregate, evidence the entire
          beneficial ownership interest in the Trust Estate formed pursuant to the
          Indenture.

         

        The
          Noteholder, by its acceptance of this Note, agrees that it will look solely
          to
          the Trust Estate for payment hereunder and that the Securities Administrator
          is
          not liable to the Noteholders for any amount payable under this Note or
          the
          Indenture or, except as expressly provided in the Indenture, subject to
          any
          liability under the Indenture.

         

        This
          does
          not purport to summarize the Indenture and reference is made to the Indenture
          for the interests, rights and limitations of rights, benefits, obligations
          and
          duties evidenced hereby, and the rights, duties and immunities of the Securities
          Administrator.

         

        Each
          holder of a Note or beneficial ownership shall be deemed to have made the
          representations set forth in Section 4.02 of the Indenture.

         

        The
          Indenture permits, with certain exceptions therein provided, the amendment
          thereof and the modification of the rights and obligations of the Depositor
          and
          the rights of the Noteholders under the Indenture from time to time by
          the
          parties thereto with the written consent of the Note Insurer and the consent
          of
          the Holder of each Class of Notes affected thereby evidencing over 50%
          of the
          Voting Rights of such Class or Classes. Any such written consent of the
          Note
          Insurer and any such consent by the Holder of this Note shall be conclusive
          and
          binding on such Holder and upon all future Holders of this Note and of
          any Note
          issued upon the transfer hereof or in lieu hereof whether or not notations
          of
          such consents are made upon such Notes. The Indenture also permits the
          amendment
          thereof, in certain limited circumstances, without the consent of the Holders
          of
          any of the Notes.

         

        As
          provided in the Indenture and subject to certain limitations therein set
          forth,
          the transfer of this Notes is registrable with the Securities Administrator
          upon
          surrender of this Notes for registration of transfer at the offices or
          agencies
          maintained by the Securities Administrator for such purposes, duly endorsed
          by,
          or 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 Notes
          in
          authorized denominations representing a like aggregate Percentage Interest
          will
          be issued to the designated transferee.

         

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

         

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

         

        The
          obligations created by the Indenture and the Trust Estate created thereby
          (other
          than the obligations to make payments to Noteholders with respect to the
          termination of the Indenture) shall terminate upon the earlier of (i) the
          later
          of (A) the maturity or other liquidation (or Advance with respect thereto)
          of
          the last HELOC remaining in the Trust Estate and disposition of all property
          acquired upon foreclosure or deed in lieu of foreclosure of any HELOC and
          (B)
          the remittance of all funds due under the Indenture, or (ii) the optional
          repurchase by the party named in the Indenture of all the HELOCs and other
          assets of the Trust Estate in accordance with the terms of the Indenture.
          Such
          optional repurchase may be made only on or after the first Payment Date
          on which
          the sum of the Note Principal Balances of the Notes is reduced to an amount
          less
          than or equal to 10% of the sum of the original Note Principal Balances
          of the
          Notes as of the Cut-off Date as set forth in the Indenture. The exercise
          of such
          right will effect the early retirement of the Notes. In no event, however,
          will
          the Trust Estate created by the Indenture continue beyond the earlier of
          (i) the
          expiration of 21 years after the death of certain persons identified in
          Section
          8.06 of the Indenture and (ii) the Latest Possible Maturity Date as specified
          in
          the Indenture.

         

        Unless
          this Note has been countersigned by an authorized signatory of the Securities
          Administrator by manual signature, this Note shall not be entitled to any
          benefit under the Indenture, or be valid for any purpose.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        IN
          WITNESS WHEREOF, the Owner Trustee has caused this Note to be duly executed
          on
          behalf of the Trust. 

        

        
          	
                  Dated:
                    September 15, 2006

                	 	 	 	
                  SACO
                    I TRUST 2006-8

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By
                    Wilmington Trust Company, not in its individual
                    capacity but solely as Owner Trustee

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By:

                	 
	 	 	 	 	 	 	 	 	
                  Authorized
                    Signatory

                
	 	 	 	 	 	 	 	 	 

        

        

        

        CERTIFICATE
          OF AUTHENTICATION

         

        This
          is
          one of the Class A-IO Notes referred to in the within-mentioned
          Agreement.

         

        
          	 	 	 	 	
                  LASALLE
                    BANK NATIONAL ASSOCIATION,
                    authorized signatory of LaSalle Bank
                    National Association, not in its individual capacity
                    but solely as Securities Administrator

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By:

                	 
	 	 	 	 	 	 	 	 	
                  Authorized
                    Signatory

                
	 	 	 	 	 	 	 	 	 

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        ASSIGNMENT

         

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

         

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

         

        
          	
                  Dated:

                	 
	 	
                  Signature
                    by or on behalf of assignor

                

        

        

         

        
          	 	 
	 	
                  Signature
                    Guaranteed

                

        

        

         

        

         

        PAYMENT
          INSTRUCTIONS

         

        The
          assignee should include the following for purposes of distribution:

         

        Payments
          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-3

         

        FORM
          OF
          CLASS B NOTES

         

        THIS
          NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A NOTES AND CLASS
          A-IO
          NOTES AS DESCRIBED IN THE INDENTURE (AS DEFINED BELOW).

         

        SOLELY
          FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE REPRESENTS 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”).

         

        EACH
          HOLDER OF A NOTES OR BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE MADE
          THE
          REPRESENTATIONS SET FORTH IN SECTION 4.02 OF THE
          INDENTURE.

         

        THE
          NOTE PRINCIPAL BALANCE OF THIS NOTE WILL BE DECREASED BY THE PRINCIPAL
          PAYMENTS
          HEREON AND CHARGE-OFF AMOUNTS ALLOCABLE THERETO. ACCORDINGLY, FOLLOWING
          THE
          INITIAL ISSUANCE OF THE NOTES, THE NOTE PRINCIPAL BALANCE OF THIS NOTE
          WILL BE
          DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS NOTE
          MAY
          ASCERTAIN ITS NOTE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR
          NAMED HEREIN.

         

        NOTWITHSTANDING
          THE PREVIOUS PARAGRAPH, A CERTIFICATION WILL NOT BE REQUIRED WITH RESPECT
          TO THE
          TRANSFER OF THIS NOTE TO A DEPOSITORY, OR FOR ANY SUBSEQUENT TRANSFER OF
          THIS
          NOTE FOR SO LONG AS THIS NOTE IS A BOOK-ENTRY NOTE. ANY TRANSFEREE OF THIS
          NOTE
          WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE OR HOLDING
          OF THIS
          NOTE (OR INTEREST HEREIN) THAT SUCH TRANSFEREE IS A “QUALIFIED INSTITUTIONAL
          BUYER” WITHIN THE MEANING OF RULE 144A UNDER THE 1933 ACT.

         

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

         

        THIS
          NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT
          OF
          PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE
          REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS
          ON
          THIS NOTE.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	
                  Certificate
                    No.1

                	
                  Note
                    Interest Rate: Adjustable Rate

                
	 	 
	
                  Class
                    B Subordinate

                	 
	 	 
	
                  Cut-off
                    Date: August 15, 2006

                	
                  Aggregate
                    Initial Note Principal Balance of this Note as of the Cut-off
                    Date:

                  $
                    [_______]

                
	
                  Date
                    of Indenture: As of September 15, 2006

                	 
	 	
                  Initial
                    Note Principal Balance of this Note as of the Cut-off Date:

                  $
                    [_______]

                
	
                  First
                    Payment Date:

                  September
                    25, 2006

                	 
	 	
                  CUSIP:
                    [_______]

                
	
                  Master
                    Servicer and Securities Administrator:

                  LaSalle
                    Bank National Association

                	 
	 	 
	 	 

        

        

        SACO
          I
          TRUST 2006-8

        MORTGAGE-BACKED
          NOTES

        SERIES
          2006-8

         

        evidencing
          a Percentage Interest in the distributions allocable to the Class B Notes
          with
          respect to a Trust Estate consisting primarily of a pool of home equity
          lines of
          credit (“HELOCs”) that are secured by first and second liens on one- to four-
          family residences sold by BSABS I LLC.

         

        This
          Note
          is payable solely from the assets of the Trust Estate, and does not represent
          an
          obligation of or interest in BSABS I LLC, the Master Servicer, the Indenture
          Trustee or the Securities Administrator referred to below or any of their
          affiliates or any other person. Neither this Note nor the underlying HELOCs
          are
          guaranteed or insured by any governmental entity or by BSABS I LLC, the
          Master
          Servicer, the Indenture Trustee or the Securities Administrator or any
          of their
          affiliates or any other person. None of BSABS I LLC, the Master Servicer
          or any
          of their affiliates will have any obligation with respect to any note or
          other
          obligation secured by or payable from payments on the Notes.

         

        This
          certifies that Cede & Co. is the registered owner of the Percentage Interest
          evidenced by this Note. This Note is one of a duly authorized issue of
          the
          Issuing Entity’s Mortgage-Backed Notes, Series 2006-8 (the “Notes”), issued
          under an Indenture dated as of September 15, 2006 (the “Indenture” or
“Agreement”), among the Issuing Entity, LaSalle Bank National Association, as
          Securities Administrator and Citibank, N.A., as indenture trustee (the
          “Indenture Trustee”, which term includes any successor Indenture Trustee under
          the Indenture) to which Indenture and all indentures supplemental thereto
          reference is hereby made for a statement of the respective rights thereunder
          of
          the Issuing Entity, the Indenture Trustee, and the Holders of the Notes
          and the
          terms upon which the Notes are to be authenticated and delivered. All terms
          used
          in this Note which are defined in the Indenture shall have the meanings
          assigned
          to them in the Indenture.

         

        Interest
          on this Note will accrue from and including the immediately preceding Payment
          Date (or with respect to the First Payment Date, the Closing Date) to and
          including the day prior to the current Payment Date on the Note Principal
          Balance hereof at a per annum rate equal to the Note Interest Rate set
          forth
          above. The Securities Administrator will distribute on the 25th day of
          each
          month, or, if such 25th day is not a Business Day, the immediately following
          Business Day (each, a “Payment Date”), commencing on the First Payment Date
          specified above, to the Person in whose name this Note is registered at
          the
          close of business on the Business Day immediately preceding such Payment
          Date so
          long as such Note remains in book-entry form (and otherwise, the close
          of
          business on the last Business Day of the month immediately preceding the
          month
          of such Payment Date), an amount equal to the product of the Percentage
          Interest
          evidenced by this Note and the amount (of interest and principal, if any)
          required to be distributed to the Holders of Notes of the same Class as
          this
          Note. The Final Scheduled Payment Date is the Payment Date in the month
          following the latest scheduled maturity date of any HELOC.

         

        Payments
          on this Note will be made by the Securities Administrator by check mailed
          to the
          address of the Person entitled thereto as such name and address shall appear
          on
          the Certificate Register or, if such Person so requests by notifying the
          Securities Administrator in writing as specified in the Indenture.
          Notwithstanding the above, the final distribution on this Note will be
          made
          after due notice by the Securities Administrator of the pendency of such
          distribution and only upon presentation and surrender of this Note at the
          office
          or agency appointed by the Securities Administrator for that purpose and
          designated in such notice. The initial Note Principal Balance of this Note
          is
          set forth above. The Note Principal Balance hereof will be reduced to the
          extent
          of distributions allocable to principal hereon and any Charge-off Amounts
          applicable hereto.

         

        This
          Note
          is one of a duly authorized issue of Notes designated as set forth on the
          face
          hereof (the “Notes”). The Notes, in the aggregate, evidence the entire
          beneficial ownership interest in the Trust Estate formed pursuant to the
          Indenture.

         

        The
          Noteholder, by its acceptance of this Note, agrees that it will look solely
          to
          the Trust Estate for payment hereunder and that the Securities Administrator
          is
          not liable to the Noteholders for any amount payable under this Note or
          the
          Indenture or, except as expressly provided in the Indenture, subject to
          any
          liability under the Indenture.

         

        Each
          holder of a Note or beneficial ownership shall be deemed to have made the
          representations set forth in Section 4.02 of the Indenture.

         

        The
          Indenture permits, with certain exceptions therein provided, the amendment
          thereof and the modification of the rights and obligations of the Depositor
          and
          the rights of the Noteholders under the Indenture from time to time by
          the
          parties thereto with the written consent of the Note Insurer and the consent
          of
          the Holder of each Class of Notes affected thereby evidencing over 50%
          of the
          Voting Rights of such Class or Classes. Any such written consent of the
          Note
          Insurer and any such consent by the Holder of this Note shall be conclusive
          and
          binding on such Holder and upon all future Holders of this Note and of
          any Note
          issued upon the transfer hereof or in lieu hereof whether or not notations
          of
          such consents are made upon such Notes. The Indenture also permits the
          amendment
          thereof, in certain limited circumstances, without the consent of the Holders
          of
          any of the Notes.

         

        As
          provided in the Indenture and subject to certain limitations therein set
          forth,
          the transfer of this Notes is registrable with the Securities Administrator
          upon
          surrender of this Notes for registration of transfer at the offices or
          agencies
          maintained by the Securities Administrator for such purposes, duly endorsed
          by,
          or 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 Notes
          in
          authorized denominations representing a like aggregate Percentage Interest
          will
          be issued to the designated transferee.

         

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

         

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

         

        The
          obligations created by the Indenture and the Trust Estate created thereby
          (other
          than the obligations to make payments to Noteholders with respect to the
          termination of the Indenture) shall terminate upon the earlier of (i) the
          later
          of (A) the maturity or other liquidation (or Advance with respect thereto)
          of
          the last HELOC remaining in the Trust Estate and disposition of all property
          acquired upon foreclosure or deed in lieu of foreclosure of any HELOC and
          (B)
          the remittance of all funds due under the Indenture, or (ii) the optional
          repurchase by the party named in the Indenture of all the HELOCs and other
          assets of the Trust Estate in accordance with the terms of the Indenture.
          Such
          optional repurchase may be made only on or after the first Payment Date
          on which
          the sum of the Note Principal Balances of the Notes is reduced to an amount
          less
          than or equal to 10% of the sum of the original Note Principal Balances
          of the
          Notes as of the Cut-off Date as set forth in the Indenture. The exercise
          of such
          right will effect the early retirement of the Notes. In no event, however,
          will
          the Trust Estate created by the Indenture continue beyond the earlier of
          (i) the
          expiration of 21 years after the death of certain persons identified in
          Section
          8.06 of the Indenture and (ii) the Latest Possible Maturity Date as specified
          in
          the Indenture.

         

        Unless
          this Note has been countersigned by an authorized signatory of the Securities
          Administrator by manual signature, this Note shall not be entitled to any
          benefit under the Indenture, or be valid for any purpose.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        IN
          WITNESS WHEREOF, the Owner Trustee has caused this Note to be duly executed
          on
          behalf of the Trust. 

        

        
          	
                  Dated:
                    September 15, 2006

                	 	 	 	
                  SACO
                    I TRUST 2006-8

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By
                    Wilmington Trust Company, not in its individual
                    capacity but solely as Owner Trustee

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By:

                	 
	 	 	 	 	 	 	 	 	
                  Authorized
                    Signatory

                
	 	 	 	 	 	 	 	 	 

        

        

        

        CERTIFICATE
          OF AUTHENTICATION

         

        This
          is
          one of the Class B Notes referred to in the within-mentioned
          Agreement.

         

        
          	 	 	 	 	
                  LASALLE
                    BANK NATIONAL ASSOCIATION,
                    authorized signatory of LaSalle Bank
                    National Association, not in its individual capacity
                    but solely as Securities Administrator

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By:

                	 
	 	 	 	 	 	 	 	 	
                  Authorized
                    Signatory

                
	 	 	 	 	 	 	 	 	 

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        ASSIGNMENT

         

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

         

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

         

        
          	
                  Dated:

                	 
	 	
                  Signature
                    by or on behalf of assignor

                

        

        

         

        
          	 	 
	 	
                  Signature
                    Guaranteed

                

        

        

         

        

         

        PAYMENT
          INSTRUCTIONS

         

        The
          assignee should include the following for purposes of distribution:

         

        Payments
          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

         

        MORTGAGE
          LOAN SCHEDULE

         

        

        [SEE
          EXHIBIT A TO THE SALE AND SERVICING AGREEMENT]

         

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

         

        EXHIBIT
          C

         

        FORM
          OF
          TRANSFEREE CERTIFICATE

         

                                                    [Date]

         

        [NOTE
          REGISTRAR] [SECURITIES ADMINISTRATOR]

         

        
          	
                  Re:

                	
                  SACO
                    I Trust 2006-8 Mortgage-Backed Notes, Series 2006-8 (the
                    “Notes”)

                

        

        Ladies
          and Gentlemen:

         

        __________________
          (the “Transferee”) intends to purchase from _________________ (the “Transferor”)
          the Class ___ Notes having an initial aggregate Note Balance as of September
          15,
          2006 (the “Closing Date”) of $_____________ (the “Transferred Notes”). The
          Notes, including the Transferred Notes, were issued pursuant to the Indenture,
          dated as of September 15, 2006 (the “Indenture”), between SACO I Trust 2006-8
          (the “Issuer”), LaSalle Bank National Association (the “Securities
          Administrator”) and Citibank, N.A. (the “Indenture Trustee”). All capitalized
          terms used herein and not otherwise defined shall have the meanings set
          forth in
          the Indenture. The Transferee hereby certifies, represents and warrants
          to you,
          as [Securities Administrator] [Note Registrar], and for the benefit of
          the
          Issuer, the Securities Administrator, the Indenture Trustee and the Transferor,
          that:

         

        1. The
          Transferee is a “qualified institutional buyer” (a “Qualified Institutional
          Buyer”) as that term is defined in Rule 144A (“Rule l44A”) under the Securities
          Act of 1933, as amended (the “Securities Act”), and has completed one of the
          forms of certification to that effect attached hereto as Annex 1 and Annex
          2.
          The Transferee is aware that the sale to it of the Transferred Notes is
          being
          made in reliance on Rule 144A. The Transferee is acquiring the Transferred
          Notes
          for its own account or for the account of a Qualified Institutional Buyer,
          and
          understands that such Transferred Notes 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.

         

        2. The
          Transferee has been furnished with all information regarding (a) the HELOCs
          and
          payments thereon, (b) the nature and performance of the HELOCs, (c) the
          Indenture, and (d) any credit enhancement mechanism associated with the
          HELOCs,
          that it has requested.

         

        3. The
          Transferee is neither (A) an employee benefit plan, an Archer MSA as described
          in Section 220(d) of the Code, an education individual retirement account
          as
          described in Section 530 of the Code or other retirement arrangement, including
          individual retirement accounts and annuities, Keogh plans and collective
          investment funds and separate accounts in which such plans, accounts or
          arrangements are invested, including, without limitation, insurance company
          general accounts, that is subject to ERISA or Section 4975 of the Code
          (each, a
“Plan”), nor (B) any Person who is directly or indirectly purchasing such Note
          or interest therein on behalf of, as named fiduciary of, as trustee of,
          or with
“plan assets” (as defined under the DOL Regulation at 29 C.F.R. Section
          2510.3-101) of a Plan.

         

        
          	 	 	 	 	 	 	 	
                  Very
                    truly yours,

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  (Transferee)

                
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By:

                	 
	 	 	 	 	 	 	 	
                  Name:

                	 
	 	 	 	 	 	 	 	
                  Title:

                	 

        

        

         

        

         

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        ANNEX
          1 TO EXHIBIT C-2

         

        QUALIFIED
          INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

         

        [for
          Transferees other than Registered Investment Companies]

         

        The
          undersigned hereby certifies as follows to [name of Transferor] (the
“Transferor”) an [name of Securities Administrator] [name of Note Registrar], as
          [Securities Administrator] [Note Registrar], with respect to the Notes
          being
          transferred (the “Transferred Notes”) as described in the Transferee Certificate
          to which this certification relates and to which this certification is
          an
          Annex:

         

        1. As
          indicated below, the undersigned is the chief financial officer, a person
          fulfilling an equivalent function, or other executive officer of the entity
          purchasing the Transferred Notes (the “Transferee”).

         

        2. The
          Transferee 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
          Transferee owned and/or invested on a discretionary basis $____________________
          in securities (other than the excluded securities referred to below) as
          of the
          end of the Transferee’s most recent fiscal year (such amount being calculated in
          accordance with Rule 144A) and (ii) the Transferee satisfies the criteria
          in the
          category marked below.

         

        
          	 	
                  ____

                	
                  Corporation,
                    etc.
                    The Transferee is a corporation (other than a bank, savings and
                    loan
                    association or similar institution), Massachusetts or similar
                    business
                    trust, partnership, or any organization described in Section
                    501(c)(3) of
                    the Internal Revenue Code of 1986, as
                    amended.

                

        

         

        
          	 	
                  ____

                	
                  Bank.
                    The Transferee (a) is a national bank or a banking institution
                    organized
                    under the laws of any State, U.S. 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,
                    as of a date not more than 16 months preceding the date of sale
                    of the
                    Note in the case of a U.S. bank, and not more than 18 months
                    preceding
                    such date of sale for a foreign bank or equivalent
                    institution.

                

        

         

        
          	 	
                  ____

                	
                  Savings
                    and Loan.
                    The Transferee (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,
                    as of a date not more than 16 months preceding the date of sale
                    of the
                    Note in the case of a U.S. savings and loan association, and
                    not more than
                    18 months preceding such date of sale for a foreign savings and
                    loan
                    association or equivalent
                    institution.

                

        

         

        
          	 	
                  ____

                	
                  Broker-dealer.
                    The Transferee is a dealer registered pursuant to Section 15
                    of the
                    Securities Exchange Act of 1934, as
                    amended.

                

        

         

        
          	 	
                  ____

                	
                  Insurance
                    Company.
                    The Transferee 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,
                    U.S. territory or the District of
                    Columbia.

                

        

         

        
          	 	
                  ____

                	
                  State
                    or Local Plan.
                    The Transferee 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 Transferee is an employee benefit plan within the meaning
                    of Title I
                    of the Employee Retirement Income Security Act of
                    1974.

                

        

         

        
          	 	
                  ____

                	
                  Investment
                    Advisor.
                    The Transferee is an investment advisor registered under the
                    Investment
                    Advisers Act of 1940, as amended.

                

        

         

        
          	 	
                  ____

                	
                  Other.
                    (Please supply a brief description of the entity and a cross-reference
                    to
                    the paragraph and subparagraph under subsection (a)(1) of Rule
                    l44A
                    pursuant to which it qualifies. Note that registered investment
                    companies
                    should complete Annex 2 rather than this Annex
                    1.)

                

        

         

        3. The
          term
“securities”
as
          used
          herein does
          not include
          (i)
          securities of issuers that are affiliated with the Transferee, (ii) securities
          that are part of an unsold allotment to or subscription by the Transferee,
          if
          the Transferee is a dealer, (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. For purposes of determining the aggregate amount of
          securities owned and/or invested on a discretionary basis by the Transferee,
          the
          Transferee did not include any of the securities referred to in this
          paragraph.

         

        4. For
          purposes of determining the aggregate amount of securities owned and/or
          invested
          on a discretionary basis by the Transferee, the Transferee used the cost
          of such
          securities to the Transferee, unless the Transferee reports its securities
          holdings in its financial statements on the basis of their market value,
          and no
          current information with respect to the cost of those securities has been
          published, in which case the securities were valued at market. Further,
          in
          determining such aggregate amount, the Transferee may have included securities
          owned by subsidiaries of the Transferee, but only if such subsidiaries
          are
          consolidated with the Transferee in its financial statements prepared in
          accordance with generally accepted accounting principles and if the investments
          of such subsidiaries are managed under the Transferee’s direction. However, such
          securities were not included if the Transferee is a majority-owned, consolidated
          subsidiary of another enterprise and the Transferee is not itself a reporting
          company under the Securities Exchange Act of 1934, as amended.

         

        5. The
          Transferee acknowledges that it is familiar with Rule l44A and understands
          that
          the Transferor and other parties related to the Transferred Notes are relying
          and will continue to rely on the statements made herein because one or
          more
          sales to the Transferee may be in reliance on Rule 144A.

         

        
          	
                  ____

                	
                  ____

                	
                  Will
                    the Transferee be purchasing the Transferred Notes

                
	
                  Yes

                	
                  No

                	
                  only
                    for the Transferee’s own account?

                

        

        6. If
          the
          answer to the foregoing question is “no”, then in each case where the Transferee
          is purchasing for an account other than its own, such account belongs to
          a third
          party that is itself a “qualified institutional buyer” within the meaning of
          Rule 144A, and the “qualified institutional buyer” status of such third party
          has been established by the Transferee through one or more of the appropriate
          methods contemplated by Rule 144A.

         

        7. The
          Transferee 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 Transferee’s purchase of the Transferred Notes will constitute a
          reaffirmation of this certification as of the date of such purchase. In
          addition, if the Transferee is a bank or savings and loan as provided above,
          the
          Transferee agrees that it will furnish to such parties any updated annual
          financial statements that become available on or before the date of such
          purchase, promptly after they become available.

         

        
          	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  Print
                    Name of Transferee

                
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By:

                	 
	 	 	 	 	 	 	 	
                  Name:

                	 
	 	 	 	 	 	 	 	
                  Title:

                	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  Date:

                	 

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        ANNEX
          2 TO EXHIBIT C-2

         

        QUALIFIED
          INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

         

        [for
          Transferees that are Registered Investment Companies]

         

        The
          undersigned hereby certifies as follows to [name of Transferor] (the
“Transferor”) and [name of Securities Administrator] [name of Note Registrar],
          as [Securities Administrator] [Note Registrar], with respect to the Notes
          being
          transferred (the “Transferred Notes”) as described in the Transferee Certificate
          to which this certification relates and to which this certification is
          an
          Annex:

         

        1. As
          indicated below, the undersigned is the chief financial officer, a person
          fulfilling an equivalent function, or other executive officer of the entity
          purchasing the Transferred Certificates (the “Transferee”) or, if the Transferee
          is a “qualified institutional buyer” as that term is defined in Rule 144A under
          the Securities Act of 1933, as amended (“Rule 144A”), because the Transferee is
          part of a Family of Investment Companies (as defined below), is an executive
          officer of the investment adviser (the “Adviser”).

         

        2. The
          Transferee is a “qualified institutional buyer” as defined in Rule 144A because
          (i) the Transferee is an investment company registered under the Investment
          Company Act of 1940, as amended, and (ii) as marked below, the Transferee
          alone
          owned and/or invested on a discretionary basis, or the Transferee’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 Transferee’s most
          recent fiscal year. For purposes of determining the amount of securities
          owned
          by the Transferee or the Transferee’s Family of Investment Companies, the cost
          of such securities was used, unless the Transferee or any member of the
          Transferee’s Family of Investment Companies, as the case may be, reports its
          securities holdings in its financial statements on the basis of their market
          value, and no current information with respect to the cost of those securities
          has been published, in which case the securities of such entity were valued
          at
          market.

         

        
          	 	
                  ____

                	
                  The
                    Transferee owned and/or invested on a discretionary basis $____________
                    in
                    securities (other than the excluded securities referred to below)
                    as of
                    the end of the Transferee’s most recent fiscal year (such amount being
                    calculated in accordance with Rule
                    144A).

                

        

         

        
          	 	
                  ____

                	
                  The
                    Transferee 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 Transferee’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 I 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
          Transferee or are part of the Transferee’s Family of Investment Companies, (ii)
          bank deposit notes and certificates of deposit, (iii) loan participations,
          (iv)
          repurchase agreements, (v) securities owned but subject to a repurchase
          agreement and (vi) currency, interest rate and commodity swaps. For purposes
          of
          determining the aggregate amount of securities owned and/or invested on
          a
          discretionary basis by the Transferee, or owned by the Transferee’s Family of
          Investment Companies, the securities referred to in this paragraph were
          excluded.

         

        5. The
          Transferee is familiar with Rule 144A and understands that the parties
          to which
          this certification is being made are relying and will continue to rely
          on the
          statements made herein because one or more sales to the Transferee will
          be in
          reliance on Rule 144A.

         

        
          	
                  ____

                	
                  ____

                	
                  Will
                    the Transferee be purchasing the Transferred Notes

                
	
                  Yes

                	
                  No

                	
                  only
                    for the Transferee’s own account?

                

        

        6. If
          the
          answer to the foregoing question is “no”, then in each case where the Transferee
          is purchasing for an account other than its own, such account belongs to
          a third
          party that is itself a “qualified institutional buyer” within the meaning of
          Rule 144A, and the “qualified institutional buyer” status of such third party
          has been established by the Transferee through one or more of the appropriate
          methods contemplated by Rule l44A.

         

        7. The
          undersigned will notify the parties to which this certification is made
          of any
          changes in the information and conclusions herein. Until such notice, the
          Transferee’s purchase of the Transferred Notes will constitute a reaffirmation
          of this certification by the undersigned as of the date of such
          purchase.

         

        
          	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  Print
                    Name of Transferee or Adviser

                
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By:

                	 
	 	 	 	 	 	 	 	
                  Name:

                	 
	 	 	 	 	 	 	 	
                  Title:

                	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  IF
                    AN ADVISER:

                
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  Print
                    Name of Transferee

                
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  Date:

                	 

        

        

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        EXHIBIT
          D

         

        FORM
          OF
          TRANSFEROR CERTIFICATE

         

                                            [Date]

         

        [SECURITIES
          ADMINISTRATOR]

         

        
          	
                  Re:

                	
                  SACO
                    I Trust 2006-8 Mortgage-Backed Notes, Series 2006-8 (the
                    “Notes”)

                

        

        

         

        Ladies
          and Gentlemen:

         

        In
          connection with the sale by _____________________________ (the “Transferor”) to
          _________________________ (the “Transferee”) of the Class __ Notes having an
          initial aggregate Note Balance as of September 15, 2006 (the “Closing Date”) of
          $______________ (the “Transferred Notes”). The Notes, including the Transferred
          Notes, were issued pursuant to the Indenture, dated as of September 15,
          2006
          (the “Indenture”), among SACO I Trust 2006-8 (the “Issuer”), LaSalle Bank
          National Association (the “Securities Administrator”) and Citibank, N.A. (the
“Indenture Trustee”). All capitalized terms used but not otherwise defined
          herein shall have the respective meanings set forth in the Indenture. The
          Transferor hereby certifies, represents and warrants to you, as [Securities
          Administrator] [Note Registrar], and for the benefit of the Issuer, the
          Securities Administrator, the Indenture Trustee and the Transferee,
          that:

         

        1. The
          Transferor is the lawful owner of the Transferred Notes with the full right
          to
          transfer such Notes free from any and all claims and encumbrances
          whatsoever.

         

        2. Neither
          the Transferor nor anyone acting on its behalf has (a) offered, transferred,
          pledged, sold or otherwise disposed of any Note, any interest in any Note
          or any
          other similar security to any person in any manner, (b) solicited any offer
          to
          buy or accept a transfer, pledge or other disposition of any Note, any
          interest
          in any Note or any other similar security from any person in any manner,
          (c)
          otherwise approached or negotiated with respect to any Note, any interest
          in any
          Note or any other similar security with any person in any manner, (d) made
          any
          general solicitation by means of general advertising or in any other manner,
          or
          (e) taken any other action, which (in the case of any of the acts described
          in
          clauses (a) through (e) hereof) would constitute a distribution of any
          Note
          under the Securities Act of 1933, as amended (the “Securities Act”), or would
          render the disposition of any Note a violation of Section 5 of the Securities
          Act or any state securities laws, or would require registration or qualification
          of any Note pursuant to the Securities Act or any state securities
          laws.

         

        *
          Please
          contact Bear Stearns for pricing information.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        3. The
          Transferor and any person acting on behalf of the Transferor in this matter
          reasonably believe that the Transferee is a “qualified institutional buyer” as
          that term is defined in Rule l44A (“Rule l44A”) under the Securities Act (a
“Qualified Institutional Buyer”) purchasing for its own account or for the
          account of a Qualified Institutional Buyer. In determining whether the
          Transferee is a Qualified Institutional Buyer, the Transferor and any person
          acting on behalf of the Transferor in this matter have relied upon the
          following
          method(s) of establishing the Transferee’s ownership and discretionary
          investments of securities (check one or more):

         

        
          	 	
                  ____

                	
                  (a)
                    The Transferee’s most recent publicly available financial statements,
                    which statements present the information as of a date within
                    16 months
                    preceding the date of sale of the Transferred Note in the case
                    of a U.S.
                    purchaser and within 18 months preceding such date of sale for
                    a foreign
                    purchaser; or

                

        

         

        
          	 	
                  ____

                	
                  (b)
                    The most recent publicly available information appearing in documents
                    filed by the Transferee with the Securities and Exchange Commission
                    or
                    another United States federal, state, or local governmental agency
                    or
                    self-regulatory organization, or with a foreign governmental
                    agency or
                    self-regulatory organization, which information is as of a date
                    within 16
                    months preceding the date of sale of the Transferred Note in
                    the case of a
                    U.S. purchaser and within 18 months preceding such date of sale
                    for a
                    foreign purchaser, or

                

        

         

        
          	 	
                  ____

                	
                  (c)
                    The most recent publicly available information appearing in a
                    recognized
                    securities manual, which information is as of a date within 16
                    months
                    preceding the date of sale of the Transferred Note in the case
                    of a U.S.
                    purchaser and within 18 months preceding such date of sale for
                    a foreign
                    purchaser, or

                

        

         

        
          	 	
                  ____

                	
                  (d)
                    A certification by the chief financial officer, a person fulfilling
                    an
                    equivalent function, or other executive officer of the Transferee,
                    specifying the amount of securities owned and invested on a discretionary
                    basis by the Transferee as of a specific date on or since the
                    close of the
                    Transferee’s most recent fiscal year, or, in the case of a Transferee that
                    is a member of a “family of investment companies”, as that term is defined
                    in Rule 144A, a certification by an executive officer of the
                    investment
                    adviser specifying the amount of securities owned by the “family of
                    investment companies” as of a specific date on or since the close of the
                    Transferee’s most recent fiscal
                    year.

                

        

         

        4. The
          Transferor and any person acting on behalf of the Transferor understand
          that in
          determining the aggregate amount of securities owned and invested on a
          discretionary basis by an entity for purposes of establishing whether such
          entity is a Qualified Institutional Buyer:

         

        (a) the
          following instruments and interests shall be excluded: securities of issuers
          that are affiliated with the Transferee; securities that are part of an
          unsold
          allotment to or subscription by the Transferee, if the Transferee is a
          dealer;
          securities of issuers that are part of the Transferee’s “family of investment
          companies”, if the Transferee is a registered investment company; bank deposit
          notes and certificates of deposit; loan participations; repurchase agreements;
          securities owned but subject to a repurchase agreement; and currency, interest
          rate and commodity swaps;

         

        (b) the
          aggregate value of the securities shall be the cost of such securities,
          except
          where the entity reports its securities holdings in its financial statements
          on
          the basis of their market value, and no current information with respect
          to the
          cost of those securities has been published, in which case the securities
          may be
          valued at market;

         

        (c) securities
          owned by subsidiaries of the entity that are consolidated with the entity
          in its
          financial statements prepared in accordance with generally accepted accounting
          principles may be included if the investments of such subsidiaries are
          managed
          under the direction of the entity, except that, unless the entity is a
          reporting
          company under Section 13 or 15(d) of the Securities Exchange Act of 1934,
          as
          amended, securities owned by such subsidiaries may not be included if the
          entity
          itself is a majority-owned subsidiary that would be included in the consolidated
          financial statements of another enterprise.

         

        5. The
          Transferor or a person acting on its behalf has taken reasonable steps
          to ensure
          that the Transferee is aware that the Transferor is relying on the exemption
          from the provisions of Section 5 of the Securities Act provided by Rule
          144A.

         

        6. The
          Transferor or a person acting on its behalf has furnished, or caused to
          be
          furnished, to the Transferee all information regarding (a) the HELOCs and
          payments thereon, (b) the nature and performance of the HELOCs, (c) the
          Indenture and the Trust Estate, and (d) any credit enhancement mechanism
          associated with the HELOCs, that the Transferee has requested.

         

        
          	 	 	 	 	 	 	 	
                  Very
                    truly yours,

                
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  (Transferor)

                
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
                  By:

                	 
	 	 	 	 	 	 	 	
                  Name:

                	 
	 	 	 	 	 	 	 	
                  Title:

                	 

        

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        EXHIBIT
          E

         

        FORM
          OF MORTGAGE LOAN PURCHASE AGREEMENT

         

        [SEE
          EXHIBIT C-2 TO THE SALE AND SERVICING AGREEMENT]

         

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      APPENDIX
        A

       

      DEFINITIONS

       

      10K
        Filing Deadline:
        As
        defined in Section 4.16(a)(iii) of the Sale and Servicing
        Agreement.

       

      Accepted
        Master Servicing Practices:
        With
        respect to any HELOC, those customary mortgage master servicing practices
        of
        prudent mortgage master servicing institutions that master service HELOCs
        of the
        same type and quality as such HELOCs in the jurisdiction where the related
        Mortgaged Property is located, to the extent applicable to the Master Servicer
        (except in its capacity as successor to either Servicer).

       

      Accepted
        Servicing Practices:
        With
        respect to each EMC HELOC, those mortgage servicing practices (including
        collection procedures) that are in accordance with all applicable statutes,
        regulations and prudent mortgage banking practices for similar revolving
        home
        equity line of credit mortgage loans of the same type and quality as HELOCs
        in
        the jurisdiction where the related Mortgaged Property is located.

       

      Account:
        The
        Master Servicer Collection Account, the Payment Account, the Net WAC Cap
        Rate
        Carryover Reserve Account and the related Protected Account, as the context
        may
        require.

       

      Accrual
        Period:
        With
        respect to the Class A Notes and Class B Notes and the Class E Certificates
        and
        any Payment Date, the period from and including the preceding Payment Date
        (or
        from the Closing Date, in the case of the first Payment Date) to and including
        the day prior to the current Payment Date; and with respect to the Class
        A-IO
        Notes and any Payment Date prior to and including the Payment Date in August
        2008, the calendar month preceding the related Payment Date, provided that,
        with
        respect to the first Payment date, the Class A-IO Notes will receive eight
        (8)
        days of Current Interest. Calculations of interest on the Class A Notes and
        Class B Notes and the Class E Certificates will be based on a 360-day year
        and
        the actual number of days elapsed during the related accrual period.
        Calculations of interest on the Class A-IO Notes will be based on a 360-day
        year
        consisting of twelve 30-day months.

       

      Additional
        Balance:
        As to
        any HELOC, the aggregate amount of all Draws conveyed to the Trust
        Fund.

       

      Additional
        Disclosure:
        As
        defined in Section 4.16(a)(iv) of the Sale and Servicing Agreement.

       

      Additional
        Disclosure Notification:
        The
        form of notice set forth in Exhibit H to the Sale and Servicing Agreement.
        

       

      Additional
        Form 10-D Disclosure:
        As
        defined in Section 4.16(a)(i) of the Sale and Servicing Agreement.

       

      Additional
        Form 10-K Disclosure:
        As
        defined in Section 4.16(a)(iii) of the Sale and Servicing Agreement.

       

      Administration
        Agreement:
        The
        Administration Agreement, dated as of September 15, among the Issuer, the
        Depositor, the Owner Trustee and the Securities Administrator.

       

      Adjustment
        Date:
        As to
        each HELOC, each date set forth in the related Mortgage Note on which an
        adjustment to the interest rate on such HELOC becomes effective.

       

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

       

      Annual
        Statement of Compliance:
        As
        defined in Section 3.14 of the Sale and Servicing Agreement.

       

      Applicable
        Credit Rating:
        For any
        long-term deposit or security, a credit rating of AAA in the case of each
        of
        S&P and Fitch or Aaa in the case of Moody’s. For any short-term deposit or
        security, or a rating of A-l+ in the case of each of S&P and Fitch or P-1 in
        the case of Moody’s.

       

      Appraised
        Value:
        For any
        Mortgaged Property related to a HELOC, the amount set forth as the appraised
        value of such Mortgaged Property in an appraisal made for the mortgage
        originator in connection with its origination of the related HELOC.

       

      Assessment
        of Compliance:
        As
        defined in Section 3.15 of the Sale and Servicing Agreement.

       

      Assignment
        Agreement:
        The
        agreement whereby the Servicing Agreement was assigned to the Indenture Trustee
        for the benefit of the Noteholders and the Note Insurer.

       

      Assignment
        of Mortgage:
        An
        assignment of Mortgage, notice of transfer or equivalent instrument, in
        recordable form, which is sufficient under the laws of the jurisdiction wherein
        the related Mortgaged Property is located to reflect of record the sale of
        the
        Mortgage, which assignment, notice of transfer or equivalent instrument may
        be
        in the form of one or more blanket assignments covering Mortgages secured
        by
        Mortgaged Properties located in the same county, if permitted by
        law.

       

      Attestation
        Report:
        As
        defined in Section 3.15 of the Sale and Servicing Agreement.

       

      Attesting
        Party:
        As
        defined in Section 3.15 of the Sale and Servicing Agreement.

       

      Authorized
        Newspaper:
        A
        newspaper of general circulation in the Borough of Manhattan, The City of
        New
        York, printed in the English language and customarily published on each Business
        Day, whether or not published on Saturdays, Sundays or holidays.

       

      Authorized
        Officer:
        With
        respect to the Issuer, any officer of the Owner Trustee or the Depositor
        who is
        authorized to act for the Owner Trustee or the Depositor in matters relating
        to
        the Issuer and who is identified on the list of Authorized Officers delivered
        by
        the Owner Trustee or the Depositor to the Indenture Trustee and Securities
        Administrator on the Closing Date (as such list may be modified or supplemented
        from time to time thereafter).

       

      Available
        Principal Payment Amount:
        With
        respect to the Notes and any Payment Date, the sum of:

       

      (i)          
         the
        greater of (A) zero and (B)

       

      (1) with
        respect to any Payment Date during the Managed Amortization Period and if
        the
        Sponsor's Certificate Pro Rata Test is not met, the Principal Collection
        Amount
        less (a) the aggregate Draws for such Payment Date and (b) the aggregate
        Certificate Principal Balance of the Class S Certificates immediately prior
        to
        that Payment Date;

       

      (2) with
        respect to any Payment Date during the Managed Amortization Period and if
        the
        Sponsor's Certificate Pro Rata Test is met, the Floating Allocation Percentage
        of the Principal Collection Amount less the aggregate Draws for the related
        Payment Date; and

       

      (3) with
        respect to any Payment Date during the Rapid Amortization Period, the Principal
        Collection Amount; and

       

      (ii)          
         the
        Overcollateralization Increase Amount for that Payment Date,

       

      minus

       

      (iii)         
         the
        Overcollateralization Reduction Amount for that Payment Date; and

       

      (iv)         
        the
        servicing fees and Extraordinary Trust Fund Expenses (subject to the
        Extraordinary Trust Fund Expense Cap), to the extent not already covered
        by a
        reduction to the Interest Collection Amount.

       

      Back-Up
        Certification:
        As
        defined in Section 4.16(a)(iii) of the Sale and Servicing
        Agreement.

       

      Bankruptcy
        Code:
        The
        United States Bankruptcy Code, as amended as codified in 11 U.S.C. §§
101-1330.

       

      Bankruptcy
        Loss:
        With
        respect to any HELOC, any Deficient Valuation or Debt Service Reduction related
        to such HELOC as reported by the related Servicer to the Master
        Servicer.

       

      Basic
        Documents:
        The
        Sale and Servicing Agreement, the Servicing Agreement, the Indenture, the
        Trust
        Agreement, the Mortgage Loan Purchase Agreement, the Custodial Agreement,
        the
        Administration Agreement, the Insurance Agreement and the other documents
        and
        certificates delivered in connection with any of the above.

       

      Basis
        Risk Shortfall:
        With
        respect to the Class A Notes and Class B Notes and any Payment Date, if such
        Notes are subject to the related Net WAC Cap Rate on such Payment Date, the
        excess, if any, of (i) the amount of interest that would have been payable
        to
        such Class of Notes on such Payment Date if the Note Interest Rate for such
        Class for such Payment Date were calculated at the Formula Rate over (ii)
        the
        amount of interest payable on such Class of Notes at the related Net WAC
        Cap
        Rate for such Payment Date; and with respect to the Class A-IO Notes and
        any
        Payment Date prior to and including the Payment Date in August 2008, if such
        Notes are subject to the related Net WAC Cap Rate on such Payment Date, the
        excess, if any, of (i) the amount of interest that would have been payable
        to
        such Class of Notes on such Payment Date if the Note Interest Rate for such
        Class were equal to 5.50% per annum over (ii) the amount of interest payable
        on
        such Class of Notes at the related Net WAC Cap Rate for such Payment
        Date.

       

      Beneficial
        Owner:
        With
        respect to any Note or Certificate, the Person who is the beneficial owner
        of
        such Note or Certificate as reflected on the books of the Depository or on
        the
        books of a Person maintaining an account with such Depository (directly as
        a
        Depository Participant or indirectly through a Depository Participant, in
        accordance with the rules of such Depository).

       

      Book-Entry
        Notes:
        Beneficial interests in the Class A, Class A-IO and Class B Notes, ownership
        and
        transfers of which shall be made through book entries by the Depository as
        described in the Indenture.

       

      BSABS
        I:
        Bear
        Stearns Asset Backed Securities I LLC.

       

      Business
        Day:
        Any day
        other than (i) a Saturday or a Sunday, or (ii) a day on which the New York
        Stock
        Exchange or Federal Reserve is closed or on which banking institutions in
        the
        jurisdiction in which the Indenture Trustee, the Owner Trustee, the Master
        Servicer, the Servicers or the Securities Administrator is located are
        authorized or obligated by law or executive order to be closed.

       

      Calendar
        Quarter:
        A
        calendar quarter shall consist of one of the following time periods in any
        given
        year: January 1 through March 31, April 1 through June 30, July 1 through
        September 30, and October 1 through December 31.

       

      Certificate
        Paying Agent:
        Initially, the Securities Administrator, in its capacity as Certificate Paying
        Agent, or any successor to Securities Administrator in such
        capacity.

       

      Certificate
        Register:
        The
        register maintained by the Certificate Registrar in which the Certificate
        Registrar shall provide for the registration of Certificates and of transfers
        and exchanges of Certificates.

       

      Certificate
        Registrar:
        Initially, the Securities Administrator, in its capacity as Certificate
        Registrar, or any successor to the Securities Administrator in such capacity
        pursuant to the Trust Agreement.

       

      Certificate
        of Trust:
        The
        Certificate of Trust filed for the Trust pursuant to Section 3810(a) of the
        Statutory Trust Statute.

       

      Certificateholder:
        The
        Person in whose name a Certificate is registered in the Certificate Register.
        Owners of Certificates that have been pledged in good faith may be regarded
        as
        Holders if the pledgee establishes to the satisfaction of the Securities
        Administrator or the Owner Trustee, as the case may be, the pledgee’s right so
        to act with respect to such Certificates and that the pledgee is not the
        Issuer,
        any other obligor upon the Certificates or any Affiliate of any of the foregoing
        Persons.

       

      Certificate
        Principal Balance:
        With
        respect to the Class S Certificates shall equal the amount by which Draws
        on any
        Payment Date exceed the Principal Collection Amount, minus (i) all amounts
        in
        respect of principal distributed to the Class S Certificates on previous
        Payment
        Dates and (ii) any Charge-Off Amounts allocated to such Class on previous
        Payment Dates. With respect to the Class E Certificates shall equal an amount
        equal to the Uncertificated Principal Balance of the Class E
        Interest.

       

      Certificates:
        The
        Class E, Class S, Class R-1, Class R-2 and Class RX Certificates.

       

      Certification
        Parties:
        As
        defined in Section 4.16(a)(iii) of the Sale and Servicing
        Agreement.

       

      Certifying
        Person:
        As
        defined in Section 4.16(a)(iii) of the Sale and Servicing
        Agreement.

       

      Charge-Off
        Amount:
        With
        respect to any Charged-Off HELOC, the amount of the Stated Principal Balance
        of
        such HELOC that has been written down. To the extent that the Servicers or
        the
        Master Servicer receive(s) Subsequent Recoveries with respect to any HELOC,
        the
        amount of Charge-Off Amount with respect to that HELOC will be reduced to
        the
        extent that such recoveries are applied to reduce the Note Principal Balance
        of
        any Class of related Notes on any Payment Date.

       

      Charged-Off
        HELOC:
        Any
        HELOC that is more than 180 days (or, earlier, in accordance with the related
        Servicer’s servicing practices) past due.

       

      Class:
        Any of
        the Class A, Class A-IO or Class B Notes, or any of the Class E, Class S,
        Class
        R-1, Class R-2 or Class RX Certificates.

       

      Class
        A Principal Payment Amount:
        With
        respect to any Payment Date is the lesser of (I) the Available Principal
        Payment
        Amount and, with respect to the Class A Notes, any amounts drawn on the Policy
        for Charged-Off HELOCs, for such Payment Date and (II) an amount equal to
        the
        excess (if any) of (A) the Note Principal Balance of the Class A Notes
        immediately prior to such Payment Date over (B) the lesser of (x) the product
        of
        (1) the Invested Amount as of the end of the related Collection Period
        multiplied by (2) 93.60% and (y) (1) the Invested Amount as of the end of
        the
        related Collection Period, less (2) the Overcollateralization
        Floor.

       

      Class
        B Principal Payment Amount:
        With
        respect to any Payment Date is the lesser of (I) the Available Principal
        Payment
        Amount remaining after payment of the Class A Principal Payment Amount on
        such
        Payment Date and (II) an amount equal to the excess (if any) of (A) the sum
        of
        (1) the Note Principal Balance of the Class A Notes (after taking into account
        the payment of the Class A Principal Payment Amount for that Payment Date)
        and
        (2) the Note Principal Balance of the Class B Notes immediately prior to
        such
        Payment Date over (B) the lesser of (x) the product of (1) the Invested Amount
        as of the end of the related Collection Period multiplied by (2) 96.00% and
        (y)
        (1) the Invested Amount as of the end of the related Collection Period, less (2)
        the Overcollateralization Floor

       

      Class
        E Distribution Amount:
        With
        respect to any Payment Date, the sum of (i) the Current Interest for the
        Class E
        Interest for such Payment Date, (ii) any Overcollateralization Reduction
        Amount
        for such Payment Date and (iii) without duplication, any Subsequent Recoveries
        not distributed to the Notes on such Payment Date; provided, however that
        on any
        Payment Date after the Payment Date on which the Note Principal Balances
        of the
        Notes have been reduced to zero, the Class E Distribution Amount shall include
        the Overcollateralization Amount.

      

      Class
        E Interest Rate:
        With
        respect to the Class E Interest and any Payment Date, a rate per annum equal
        to
        the percentage equivalent of a fraction, the numerator of which is the sum
        of
        the amount determined for each REMIC II Regular Interest (other than REMIC
        II
        Regular Interest A-IO) equal to (x) the excess, if any, of the Uncertificated
        REMIC II Pass-Through Rate for such REMIC II Regular Interest over the Marker
        Rate, applied to (y) a notional amount equal to the Uncertificated Principal
        Balance of such REMIC II Regular Interest, and the denominator of which is
        the
        aggregate Uncertificated Principal Balance of such REMIC II Regular
        Interests.

       

      Class
        E Notional Amount:
        With
        respect to the Class E Interest and any Payment Date, an amount equal to
        the
        aggregate Stated Principal Balance of the HELOCs at the beginning of the
        related
        Collection Period. The initial Class E Notional Amount of the Class E Interest
        shall be $361,200,413.29. For federal income tax purposes, the Class E Notional
        Amount of the Class E Interest for any Payment Date shall be an amount equal
        to
        the aggregate Uncertificated Principal Balance of the REMIC II Regular Interests
        for such Payment Date.

       

      Class
        S Floating Allocation Percentage:
        With
        respect to any Payment Date, 100% minus the Floating Allocation
        Percentage.

       

      Class
        S Principal Payment Amount:
        With
        respect to the Class S Certificates, the sum of : (i) with respect to any
        Payment Date during the Managed Amortization Period and if the Sponsor’s
        Certificate Pro Rata Test is not met, the lesser of (a) the Certificate
        Principal Balance of the Class S Certificates immediately prior to such Payment
        Date and (b) the Principal Collection Amount less the aggregate Draws for
        the
        related Payment Date, and (ii) with respect to any Payment Date during the
        Managed Amortization Period and if the Sponsor’s Certificate Pro Rata Test is
        met, the Class S Floating Allocation Percentage of the Principal Collection
        Amount less the aggregate Draws for the related Payment Date.

       

      Closing
        Date:
        September 15, 2006.

       

      Code:
        The
        Internal Revenue Code of 1986, as amended, and the rules and regulations
        promulgated thereunder.

       

      Collateral:
        The
        meaning specified in the Granting Clause of the Indenture.

       

      Collection
        Period:
        With
        respect to any Payment Date and the HELOCs, the
        calendar month immediately preceding the calendar month in which such Payment
        Date occurs.

       

      Commission:
        The
        Securities and Exchange Commission.

       

      Constant
        Draw Rate:
        A
        constant rate of additional balances drawn on the HELOCs.

       

      Corporate
        Trust Office:
        With
        respect to the Indenture Trustee, the principal corporate trust office of
        the
        Indenture Trustee at which at any particular time its corporate trust business
        shall be administered, which office at the date of the execution of this
        instrument is located at 388 Greenwich Street, 14th
        Floor,
        New York, NY 10013, Attention: Agency and Trust - SACO I Trust 2006-8. With
        respect to the Owner Trustee, the principal corporate trust office of the
        Owner
        Trustee at which at any particular time its corporate trust business shall
        be
        administered, which office at the date of the execution of this Trust Agreement
        is located at 1100 North Market Street, Wilmington, Delaware 19890, Attention:
        Corporate Trust Administration. With respect to the Securities Administrator,
        Certificate Registrar, Note Registrar and Paying Agent, the Corporate Trust
        Office of the Note Registrar and the Certificate Registrar for purposes of
        presentment and surrender of the Notes and the Certificates for the final
        payment or distribution thereon and for transfer is located at 135 South
        LaSalle
        Street, Suite 1511, Chicago, IL 60603, Attention: Global Securities and Trust
        Services Group - SACO I Trust 2006-8, or any other address that the Securities
        Administrator may designate from time to time by notice to the Noteholders
        and
        the Certificateholders.

       

      Corresponding
        Note:
        With
        respect to each REMIC II Regular Interest (other than REMIC II Regular Interests
        AA and ZZ), the Note with the corresponding designation.

       

      CPR:
        A
        constant rate of prepayment on the HELOCs.

       

      Credit
        Line Agreement:
        With
        respect to any HELOC, the credit line account agreement executed by the related
        Mortgagor and any amendment or modification thereof.

       

      Cumulative
        Charge-Off Percentage:
        With
        respect to the Notes and any Payment Date is equal to the percentage obtained
        by
        dividing (x) the aggregate Charge-Off Amounts on the HELOCs incurred since
        the
        Cut-off Date through the end of the related Collection Period, minus the
        principal portion of any amounts received in respect of the HELOCs following
        the
        charge-off, by (y) the aggregate Stated Principal Balance of the HELOCs as
        of
        the Cut-off Date.

       

      Current
        Interest:
        With
        respect to each Class of Notes and each Payment Date is the interest accrued
        at
        the applicable Note Interest Rate for the applicable accrual period on the
        Note
        Principal Balance or Notional Amount, as applicable, of such Class. With
        respect
        to the Class E Interest and each Payment Date is the interest accrued at
        the
        Class E Interest Rate for the applicable Accrual Period on the Class E Notional
        Amount of such Class. With respect to the Class E Certificates and each Payment
        Date is 100% of the amounts distributed in respect of the Class E
        Interest.

       

      Current
        Specified Enhancement Percentage:
        With
        respect to any Payment Date, the percentage obtained by dividing (x) the
        sum of
        (i) the aggregate Note Principal Balance of the Class B Notes and (ii) the
        Overcollateralization Amount, in each case prior to the payment of the Available
        Principal Payment Amount on such Payment Date, by (y) the Invested Amount
        as of
        the end of the related Collection Period

       

      Custodial
        Agreement:
        The
        custodial agreement, dated as of September 15, 2006, among the Indenture
        Trustee, the Custodian, the Sponsor, the Master Servicer and the Depositor,
        relating to the SACO I Trust 2006-8, Mortgage-Backed Notes, Series
        2006-8.

       

      Custodian:
        LaSalle
        Bank National Association, and its successors and assigns.

       

      Cut-off
        Date:
        With
        respect to the HELOCs, August 15, 2006.

       

      Cut-off
        Date Balance:
        $361,200,413.29.

       

      Cut-off
        Date Principal Balance:
        With
        respect to any HELOC, the unpaid principal balance thereof as of the Cut-off
        Date after applying the principal portion of Monthly Payments due on or before
        such date, whether or not received, and without regard to any payments due
        after
        such date.

       

      Debt
        Service Reduction:
        Any
        reduction of the Scheduled Payments which a Mortgagor is obligated to pay
        with
        respect to a HELOC as a result of any proceeding under the Bankruptcy Code
        or
        any other similar state law or other proceeding.

       

      Default:
        Any
        occurrence which is or with notice or the lapse of time or both would become
        an
        Event of Default.

       

      Deficiency
        Amount:
        The
        meaning specified in the Policy.

       

      Deficient
        Valuation:
        With
        respect to any HELOC, a valuation of the Mortgaged Property by a court of
        competent jurisdiction in an amount less than the then outstanding indebtedness
        under the HELOC, which valuation results from a proceeding initiated under
        the
        Bankruptcy Code or any other similar state law or other proceeding.

       

      Definitive
        Notes:
        The
        meaning specified in Section 4.08 of the Indenture.

       

      Depositor:
        Bear
        Stearns Asset Backed Securities I LLC, a Delaware limited liability company,
        or
        its successor in interest.

       

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

       

      Depository
        Participant:
        A
        Person for whom, from time to time, the Depository effects book-entry transfers
        and pledges of securities deposited with the Depository.

       

      Designated
        Depository Institution:
        A
        depository institution (commercial bank, federal savings bank, mutual savings
        bank or savings and loan association) or trust company (which may include
        the
        Indenture Trustee), the deposits of which are fully insured by the FDIC to
        the
        extent provided by law.

       

      Determination
        Date:
        With
        respect to any Payment Date, the 15th day of the month of such Payment Date
        or,
        if such 15th day is not a Business Day, the immediately preceding Business
        Day.

       

      Draw:
        With
        respect to any HELOC, an additional borrowing by the related mortgagor
        subsequent to the Cut-off Date in accordance with the related mortgage
        note.

       

      Draw
        Period:
        With
        respect to any HELOC, the period during which the related mortgagor is permitted
        to make Draws.

       

      Due
        Date:
        With
        respect to each HELOC, the day of the month on which each scheduled Monthly
        Payment is due.

       

      Eligible
        Account:
        An
        account that is any of the following: (i) maintained with a depository
        institution the short-term debt obligations of which have been rated by each
        Rating Agency in its highest rating category available, or (ii) an account
        or
        accounts in a depository institution in which such accounts are fully insured
        to
        the limits established by the FDIC, provided that any deposits not so insured
        shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
        be maintained such that (as evidenced by an Opinion of Counsel delivered
        to the
        Indenture Trustee, each Rating Agency and the Note Insurer) the Indenture
        Trustee have a claim with respect to the funds in such account or a perfected
        first priority security interest against any collateral (which shall be limited
        to Permitted Investments) securing such funds that is superior to claims
        of any
        other depositors or creditors of the depository institution with which such
        account is maintained, or (iii) in the case of the Master Servicer Collection
        Account and the Payment Account, a trust account or accounts maintained in
        the
        corporate trust division of the Master Servicer or Securities Administrator,
        or
        (iv) an account or accounts of a depository institution acceptable to each
        Rating Agency and the Note Insurer in writing (in the case of the Rating
        Agencies, as evidenced in writing by each Rating Agency that use of any such
        account as the Master Servicer Collection Account or the Payment Account
        will
        not reduce the rating assigned to any of the Notes by such Rating Agency
        as of
        the Closing Date by such Rating Agency without regard to the
        Policy).

       

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

       

      EMC
        HELOC:
        Any
        HELOC serviced by EMC.

       

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

       

      Event
        of Default:
        With
        respect to the Indenture, any one of the following events (whatever the reason
        for such Event of Default and whether it shall be voluntary or involuntary
        or be
        effected by operation of law or pursuant to any judgment, decree or order
        of any
        court or any order, rule or regulation of any administrative or governmental
        body):

       

      (i) a
        failure
        by the Issuer to pay Current Interest on the Class A, Class A-IO or Class
        B
        Notes on any Payment Date and such default shall continue for a period of
        one
        Business Day; or

       

      (ii) the
        failure by the Issuer on the Final Scheduled Payment Date to pay all Current
        Interest of any Class of Notes, all remaining Net WAC Cap Rate Carryover
        Amounts
        to any of the Class of Notes and to reduce the Note Principal Balances of
        any
        Class of Notes (other than the Class A-IO Notes) to zero; or

       

      (iii) there
        occurs a default in the observance or performance of any covenant or agreement
        of the Issuer made in the Indenture, or any representation or warranty of
        the
        Issuer made in the Indenture or in any certificate or other writing delivered
        pursuant hereto or in connection herewith proving to have been incorrect
        in any
        material respect as of the time when the same shall have been made, and such
        default shall continue or not be cured, or the circumstance or condition
        in
        respect of which such representation or warranty was incorrect shall not
        have
        been eliminated or otherwise cured, for a period of 30 days after there shall
        have been given, by registered or certified mail, to the Issuer by the Indenture
        Trustee (with a copy to the Note Insurer) or to the Issuer and the Indenture
        Trustee by the Note Insurer or Holders of at least 25% of the aggregate Note
        Principal Balance of the Outstanding Notes, a written notice specifying such
        default or incorrect representation or warranty and requiring it to be remedied
        and stating that such notice is a notice of default hereunder; or

       

      (iv) there
        occurs the filing of a decree or order for relief by a court having jurisdiction
        in the premises in respect of the Issuer or any substantial part of the Trust
        Estate in an involuntary case under any applicable federal or state bankruptcy,
        insolvency or other similar law now or hereafter in effect, or appointing
        a
        receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
        official of the Issuer or for any substantial part of the Trust Estate, or
        ordering the winding-up or liquidation of the Issuer’s affairs, and such decree
        or order shall remain unstayed and in effect for a period of 60 consecutive
        days; or

       

      (v) there
        occurs the commencement by the Issuer of a voluntary case under any applicable
        federal or state bankruptcy, insolvency or other similar law now or hereafter
        in
        effect, or the consent by the Issuer to the entry of an order for relief
        in an
        involuntary case under any such law, or the consent by the Issuer to the
        appointment or taking possession by a receiver, liquidator, assignee, custodian,
        trustee, sequestrator or similar official of the Issuer or for any substantial
        part of the assets of the Trust Estate, or the making by the Issuer of any
        general assignment for the benefit of creditors, or the failure by the Issuer
        generally to pay its debts as such debts become due, or the taking of any
        action
        by the Issuer in furtherance of any of the foregoing.

       

      Event
        of Servicer Termination:
        The
        occurrence of an event permitting termination or removal of the related Servicer
        under the Servicing Agreement or the Sale and Servicing Agreement, as
        applicable, as servicer of the HELOCs.

       

      Excess
        Liquidation Proceeds:
        To the
        extent that such amount is not required by law to be paid to the related
        Mortgagor, the amount, if any, by which Liquidation Proceeds with respect
        to a
        Charged-Off HELOC exceed the sum of (i) the Outstanding Principal Balance
        of
        such HELOC and accrued but unpaid interest at the related Mortgage Interest
        Rate
        through the last day of the month in which the related Liquidation Date occurs,
        (ii) related Liquidation Expenses (including Liquidation Expenses which are
        payable therefrom to the Servicers or the Master Servicer in accordance with
        the
        Servicing Agreement or Sale and Servicing Agreement) and (iii) unreimbursed
        advances by the Servicers or the Master Servicer.

       

      Excess
        Overcollateralization Amount:
        With
        respect to HELOCs and any Payment Date, the excess, if any, of the
        Overcollateralization Amount on that Payment Date over the Overcollateralization
        Target Amount.

       

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

       

      Expense
        Adjusted Mortgage Rate:
        With
        respect to any HELOC or REO Property is the then applicable interest rate
        thereon less the Expense Fee Rate.

       

      Expense
        Fee Rate:
        With
        respect to any HELOC or REO Property is the sum of (i) the Servicing Fee
        Rate,
        (ii) the Master Servicing Fee Rate and (iii) the premium due to the Note
        Insurer
        under the Policy multiplied by a fraction the numerator of which is the
        aggregate Note Principal Balance of the Class A Notes and the denominator
        of
        which is the Stated Principal Balance of the HELOCs, expressed as a per annum
        rate.

       

      Expenses:
        The
        meaning specified in Section 7.02 of the Trust Agreement

       

      Extraordinary
        Trust Fund Expenses:
        Any
        amounts reimbursable to the Securities Administrator or the Indenture Trustee,
        or any director, officer, employee or agent of the Securities Administrator
        or
        the Indenture Trustee, from the Trust Estate, any amounts reimbursable to
        the
        Depositor, the Master Servicer, the Securities Administrator, the Custodian,
        or
        any director, officer, employee or agent thereof, and any other amounts payable
        or reimbursable from the Trust Estate as Extraordinary Trust Fund Expenses
        pursuant to the terms of the Sale and Servicing Agreement, the Indenture,
        the
        Trust Agreement, the Administration Agreement, the Custodial Agreement, the
        Policy or the Insurance Agreement, including Extraordinary Trust Fund Expenses
        that are not reimbursed in any calendar year as a result of the Extraordinary
        Trust Fund Expenses Cap. Extraordinary Trust Fund Expenses for any calendar
        year, to the extent they may exceed the Extraordinary Trust Fund Expenses
        Cap,
        shall be paid pro rata among the parties entitled thereto from the amounts
        available therefor.

       

      Extraordinary
        Trust Fund Expenses Cap:
        $250,000 for each calendar year; provided, however, that such cap will not
        apply
        to any costs and expenses (i) of the Indenture Trustee incurred in connection
        with the termination of the Securities Administrator or the Master Servicer,
        the
        transfer of master servicing to a successor master servicer, any costs incurred
        with the replacement of the Custodian and costs and expenses incurred following
        an Event of Default (so long as such Event of Default is continuing), or
        (ii) of
        the Master Servicer incurred in connection with the termination of either
        Servicer and the transfer of servicing to a successor servicer.

       

      Fannie
        Mae:
        Fannie
        Mae (formally, Federal National Mortgage Association), or any successor
        thereto.

       

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

       

      Final
        Certification:
        The
        final certification delivered by the Custodian pursuant to Section 2.3(c)
        of the
        Custodial Agreement in the form attached thereto as Exhibit Three.

       

      Final
        Scheduled Payment Date:
        With
        respect to each Class of Notes, the Payment Date in June 2036.

       

      Fitch:
        Fitch,
        Inc.

       

      Floating
        Allocation Percentage:
        With
        respect to any Payment Date, the percentage equivalent of a fraction with
        a
        numerator equal to the Invested Amount at the end of the previous related
        Collection Period (in the case of the first Payment Date, the Invested Amount
        as
        of the Closing Date) and a denominator equal to the aggregate Stated Principal
        Balance of the HELOCs at the end of the previous Collection Period (in the
        case
        of the first Payment Date, the Closing Date), provided such percentage shall
        not
        be greater than 100%.

       

      Formula
        Rate:
        With
        respect to any Class of Notes (other than the Class A-IO Notes) and, for
        purposes of the definition of “Note Interest Rate”, each of the REMIC II Regular
        Interests (other than REMIC II Regular Interest A-IO) for which a Note is
        the
        Corresponding Note, a per annum rate equal to One-Month LIBOR plus the
        applicable Margin.

       

      Freddie
        Mac:
        Federal
        Home Loan Mortgage Corporation, or any successor thereto.

       

      GMACM:
        GMAC
        Mortgage Corporation.

       

      Grant:
        Pledge,
        bargain, sell, warrant, alienate, remise, release, convey, assign, transfer,
        create, and grant a lien upon and a security interest in and right of set-off
        against, deposit, set over and confirm pursuant to the Indenture. A Grant
        of the
        Collateral or of any other agreement or instrument shall include all rights,
        powers and options (but none of the obligations) of the granting party
        thereunder, including the immediate and continuing right to claim for, collect,
        receive and give receipt for principal and interest payments in respect of
        such
        collateral or other agreement or instrument and all other moneys payable
        thereunder, to give and receive notices and other communications, to make
        waivers or other agreements, to exercise all rights and options, to bring
        proceedings in the name of the granting party or otherwise, and generally
        to do
        and receive anything that the granting party is or may be entitled to do
        or
        receive thereunder or with respect thereto.

       

      HELOC:
        A home
        equity line of credit transferred and assigned to the Trust pursuant to Section
        2.01 or Section 2.04 of the Sale and Servicing Agreement, as identified in
        the
        Mortgage Loan Schedule, including a HELOC the property securing which has
        become
        an REO Property

       

      Holder:
        Any
        Certificateholder or any Noteholder, as the context requires.

       

      Indemnified
        Persons:
        The
        Indenture Trustee, the Master Servicer, the Company, the Owner Trustee, the
        Trust, the Note Insurer and the Securities Administrator, including LaSalle
        Bank
        National Association in its individual capacity, and their respective officers,
        directors, agents and employees and, with respect to the Indenture Trustee,
        any
        separate co-trustee and its officers, directors, agents and
        employees.

       

      Indenture:
        The
        indenture, dated as of September 15, 2006, among the Issuer, the Indenture
        Trustee and the Securities Administrator, relating to the SACO I Trust 2006-8,
        Mortgage-Backed Notes, 2006-8.

       

      Indenture
        Trustee:
        Citibank, N.A., and its successors and assigns or any successor indenture
        trustee appointed pursuant to the terms of the Indenture.

       

      Independent:
        When
        used with respect to any specified Person, the Person (i) is in fact independent
        of the Issuer, any other obligor on the Notes, the Sponsor, the Master Servicer,
        the Depositor and any Affiliate of any of the foregoing Persons, (ii) does
        not
        have any direct financial interest or any material indirect financial interest
        in the Issuer, any such other obligor, the Sponsor, the Master Servicer,
        the
        Depositor or any Affiliate of any of the foregoing Persons and (iii) is not
        connected with the Issuer, any such other obligor, the Sponsor, the Master
        Servicer, the Depositor or any Affiliate of any of the foregoing Persons
        as an
        officer, employee, promoter, underwriter, trustee, partner, director or person
        performing similar functions.

       

      Independent
        Certificate:
        A
        certificate or opinion to be delivered to the Indenture Trustee under the
        circumstances described in, and otherwise complying with, the applicable
        requirements of Section 10.01 of the Indenture, made by an independent appraiser
        or other expert appointed by an Issuer Request and approved by the Indenture
        Trustee in the exercise of reasonable care, and such opinion or certificate
        shall state that the signer has read the definition of “Independent” in this
        Indenture and that the signer is Independent within the meaning
        thereof.

       

      Index:
        The
        index, if any, specified in a Mortgage Note by reference to which the related
        Mortgage Interest Rate will be adjusted from time to time.

       

      Initial
        Certification:
        The
        initial certification delivered by the Custodian pursuant to Section 2.3(a)
        of
        the Custodial Agreement in the form attached thereto as Exhibit
        One.

       

      Initial
        Note Principal Balance:
        With
        respect to the Class A Notes, $355,963,000.00, and
        with
        respect to the Class B Notes, $4,334,000.00.

       

      Insurance
        Agreement:
        The
        Insurance and Indemnity Agreement dated as of September 15, 2006, among the
        Note
        Insurer, the Sponsor, the Depositor, the Issuer, the Master Servicer, the
        Securities Administrator and the Indenture Trustee, including any amendments
        and
        supplements thereto in accordance with the terms thereof.

       

      Insurance
        Policy:
        With
        respect to any HELOC, any standard hazard insurance policy, flood insurance
        policy or title insurance policy.

       

      Insurance
        Proceeds:
        Amounts
        paid by the insurer under any Insurance Policy covering any HELOC or Mortgaged
        Property other than amounts required to be paid over to the Mortgagor pursuant
        to law or the related Mortgage Note or Security Instrument and other than
        amounts used to repair or restore the Mortgaged Property or to reimburse
        insured
        expenses.

       

      Insured
        Amount:
        The
        meaning specified in the Policy.

       

      Interest
        Adjustment Date:
        With
        respect to a HELOC, the date, if any, specified in the related Mortgage Note
        on
        which the Mortgage Interest Rate is subject to adjustment.

       

      Interest
        Collection Amount:
        With
        respect to each Payment Date, an amount equal to the amount received by the
        related Servicer and consisting of interest collected during the related
        Collection Period on the HELOCs and allocated to interest in accordance with
        the
        terms of the Servicing Agreement or the Sale and Servicing Agreement, as
        applicable, together with the interest portion of any repurchase price relating
        to any repurchased HELOCs and the interest portion of any substitution
        adjustment amount paid during the related Collection Period and any Subsequent
        Recoveries on HELOCs that were previously Charged-Off HELOCs, to the extent
        such
        Subsequent Recoveries relate to interest, reduced, without duplication, by
        any
        Extraordinary Trust Fund Expenses (subject to the Extraordinary Trust Fund
        Expense Cap).

       

      Interest
        Determination Date:
        With
        respect to the first Accrual Period, the second LIBOR Business Day preceding
        the
        Closing Date, and with respect to each Accrual Period thereafter, the second
        LIBOR Business Day preceding the related Payment Date on which such Accrual
        Period commences.

       

      Interest
        Shortfall:
        With
        respect to any Payment Date and each HELOC that during the related Prepayment
        Period was the subject of a Principal Prepayment or constitutes a Relief
        Act
        HELOC, an amount determined as follows:

       

      (a) Partial
        principal prepayments received during the relevant Prepayment Period: The
        difference between (i) one month’s interest at the applicable Net Rate on the
        amount of such prepayment and (ii) the amount of interest for the calendar
        month
        of such prepayment (adjusted to the applicable Net Rate) received at the
        time of
        such prepayment;

       

      (b) Principal
        prepayments in full received during the relevant Prepayment Period: The
        difference between (i) one month’s interest at the applicable Net Rate on the
        Stated Principal Balance of such HELOC immediately prior to such prepayment
        and
        (ii) the amount of interest for the calendar month of such prepayment (adjusted
        to the applicable Net Rate) received at the time of such prepayment;
        and

       

      (c) Relief
        Act HELOCs: As to any Relief Act HELOC, the excess of (i) 30 days’ interest (or,
        in the case of a principal prepayment in full, interest to the date of
        prepayment) on the Stated Principal Balance thereof (or, in the case of a
        principal prepayment in part, on the amount so prepaid) at the related Net
        Rate
        over (ii) 30 days’ interest (or, in the case of a principal prepayment in full,
        interest to the date of prepayment) on such Stated Principal Balance (or,
        in the
        case of a Principal Prepayment in part, on the amount so prepaid) at the
        Net
        Rate required to be paid by the Mortgagor as limited by application of the
        Relief Act.

       

      Interim
        Certification:
        The
        interim certification delivered by the Custodian pursuant to Section 2.3(b)
        of
        the Custodial Agreement in the form attached thereto as Exhibit
        Two.

       

      Intervening
        Assignments:
        The
        original intervening assignments of the Mortgage, notices of transfer or
        equivalent instrument.

       

      Invested
        Amount:
        With
        respect to any Payment Date, the aggregate Stated Principal Balance of the
        HELOCs reduced by the aggregate Certificate Principal Balance of the Class
        S
        Certificates, if any. 

       

      Investment
        Company Act:
        The
        Investment Company Act of 1940, as amended, and any amendments
        thereto.

       

      IRS:
        The
        Internal Revenue Service.

       

      Issuer
        Request:
        A
        written order or request signed in the name of the Issuer by any one of its
        Authorized Officers and delivered to the Indenture Trustee and the Note
        Insurer.

       

      Issuing
        Entity:
        SACO I
        Trust 2006-8, a Delaware statutory trust, or its successor in
        interest.

       

      Latest
        Possible Maturity Date:
        June
        25, 2036. For purposes of the Treasury regulations under Sections 860A through
        860G of the Code, the latest possible maturity date of each Regular Interest
        issued by REMIC I, REMIC II, REMIC III and REMIC IV shall be the Latest Possible
        Maturity Date.

       

      LIBOR
        Business Day:
        A day
        on which banks are open for dealing in foreign currency and exchange in London
        and New York City.

       

      Lien:
        Any
        mortgage, deed of trust, pledge, conveyance, hypothecation, assignment,
        participation, deposit arrangement, encumbrance, lien (statutory or other),
        preference, priority right or interest or other security agreement or
        preferential arrangement of any kind or nature whatsoever, including, without
        limitation, any conditional sale or other title retention agreement, any
        financing lease having substantially the same economic effect as any of the
        foregoing and the filing of any financing statement under the UCC (other
        than
        any such financing statement filed for informational purposes only) or
        comparable law of any jurisdiction to evidence any of the
        foregoing.

       

      Liquidation
        Date:
        With
        respect to any Charged-Off HELOC, the date on which the Master Servicer or
        the
        related Servicer has certified that such HELOC has become a Charged-Off
        HELOC.

       

      Liquidation
        Expenses:
        With
        respect to a HELOC in liquidation, unreimbursed expenses paid or incurred
        by or
        for the account of the Master Servicer or the related Servicer in connection
        with the liquidation of such HELOC and the related Mortgaged Property, such
        expenses including (a) property protection expenses, (b) property sales
        expenses, (c) foreclosure and sale costs, including court costs and reasonable
        attorneys’ fees, and (d) similar expenses reasonably paid or incurred in
        connection with liquidation.

       

      Liquidation
        Proceeds:
        Cash
        received in connection with the liquidation of a defaulted HELOC, whether
        through trustee’s sale, foreclosure sale, Insurance Proceeds, condemnation
        proceeds or otherwise.

       

      Loan-to-Value
        Ratio:
        With
        respect to any HELOC, the fraction, expressed as a percentage, the numerator
        of
        which is the original principal balance of the related HELOC and the denominator
        of which is the Original Value of the related Mortgaged Property.

       

      Lost
        Notes:
        The
        original Mortgage Notes that have been lost, as indicated on the Mortgage
        Loan
        Schedule.

       

      Majority
        Securityholders:
        The
        Note Insurer or, if a Note Insurer Default has occurred and is continuing,
        the
        holder or holders of in excess of 50% of the balance of the Notes, and following
        the reduction of the aggregate balance of the Notes to zero, the holders
        of the
        Residual Certificates (voting collectively as a single class).

       

      Managed
        Amortization Period:
        With
        respect to the Notes is the period beginning on the Cut-off Date and ending
        on
        the occurrence of a Rapid Amortization Event.

       

      Margin:
        With
        respect to any Payment Date on or prior to the first possible Optional
        Termination Date and (i) with respect to the Class A Notes and, for purposes
        of
        the definition of “Formula Rate,” REMIC II Regular Interest A, 0.140% per annum,
        and (ii) with respect to the Class B Notes and, for purposes of the definition
        of “Formula Rate,” REMIC II Regular Interest B, 3.000% per annum; and with
        respect to any Payment Date after the first possible Optional Termination
        Date,
        the Margin will increase to (i) with respect to the Class A Notes and, for
        purposes of the definition of “Formula Rate,” REMIC II Regular Interest A,
        0.280% per annum, and (ii) with respect to the Class B Notes and, for purposes
        of the definition of “Formula Rate,” REMIC II Regular Interest B, 4.500% per
        annum.

       

      Marker
        Rate:
        With
        respect to the Class E Interest and any Payment Date, a per annum rate equal
        to
        two (2) times the weighted average of the Uncertificated REMIC II Pass-Through
        Rates for the REMIC II Regular Interests (other than REMIC II Regular Interests
        AA and A-IO), with the rate on each such REMIC II Regular Interest (other
        than
        REMIC II Regular Interest ZZ) subject to a cap equal to the Note Interest
        Rate
        for the Corresponding Note for such Payment Date for the purpose of this
        calculation, and with the rate on REMIC II Regular Interest ZZ subject to
        a cap
        of zero for the purpose of this calculation; provided, however, that solely
        for
        this purpose, the related cap with respect to each REMIC II Regular Interest
        (other than REMIC II Regular Interests AA, A-IO and ZZ) shall be multiplied
        by a
        fraction, the numerator of which is 30 and the denominator of which is the
        actual number of days in the related Accrual Period.

       

      Master
        Servicer:
        LaSalle
        Bank National Association, and its successors and assigns.

       

      Master
        Servicer Collection Account:
        The
        trust account or accounts created and maintained pursuant to Section 5.02
        of the
        Sale and Servicing Agreement. The Master Servicer Collection Account shall
        be an
        Eligible Account.

       

      Master
        Servicer Compensation:
        As
        defined in Section 4.13 of the Sale and Servicing Agreement.

       

      Master
        Servicer Event of Default:
        Has the
        meaning assigned to such term in Section 7.01 of the Sale and Servicing
        Agreement.

       

      Master
        Servicing Fee Rate:
        0.0195%
        per annum.

       

      Master
        Servicing Officer:
        Any
        officer of the Master Servicer involved in, or responsible for, the
        administration and master servicing of the HELOCs whose name and specimen
        signature appear on a list of master servicing officers furnished to the
        Indenture Trustee by the Master Servicer, as such list may be amended from
        time
        to time.

       

      Material
        Defect:
        The
        meaning specified in Section 2.02(a) of the Sale and Servicing
        Agreement.

       

      Maximum
        Lifetime Mortgage Rate:
        The
        maximum level to which a Mortgage Interest Rate can adjust in accordance
        with
        its terms, regardless of changes in the applicable Index.

       

      Maximum
        Uncertificated Accrued Interest Deferral Amount:
        With
        respect to any Payment Date, the excess, if any, of (i) accrued interest
        at the
        Uncertificated REMIC II Pass-Through Rate applicable to REMIC II Regular
        Interest ZZ for such Payment Date on a balance equal to the Uncertificated
        Principal Balance of REMIC II Regular Interest ZZ minus the REMIC II
        Overcollateralization Amount, in each case for such Payment Date, over (ii)
        the
        aggregate amount of Uncertificated Accrued Interest for such Payment Date
        on the
        REMIC II Regular Interests (other than REMIC II Regular Interests AA, A-IO
        and
        ZZ), with the rate on each such REMIC II Regular Interest subject to a cap
        equal
        to the Note Interest Rate for the Corresponding Note for such Payment Date
        for
        the purpose of this calculation; provided, however, that solely for this
        purpose, the related cap with respect to each REMIC II Regular Interest (other
        than REMIC II Regular Interests AA, A-IO and ZZ) shall be multiplied by a
        fraction, the numerator of which is 30 and the denominator of which is the
        actual number of days in the related Accrual Period.

       

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

       

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

       

      MIN:
        The
        Mortgage Identification Number for HELOCs registered with MERS on the MERS®
System.

       

      Minimum
        Lifetime Mortgage Rate:
        The
        minimum level to which a Mortgage Interest Rate can adjust in accordance
        with
        its terms, regardless of changes in the applicable Index.

       

      MOM
        Loan:
        Any
        HELOC for which MERS is acting as the mortgagee of such HELOC, solely as
        nominee
        for the originator of such HELOC and its successors and assigns, at the
        origination thereof, or as nominee for any subsequent assignee of the originator
        pursuant to an assignment of mortgage to MERS.

       

      Monthly
        Payment:
        With
        respect to any HELOC (including any REO Property) and any Due Date, the payment
        of principal and interest due thereon in accordance with the amortization
        schedule at the time applicable thereto (after adjustment, if any, for partial
        Principal Prepayments and for Deficient Valuations occurring prior to such
        Due
        Date but before any adjustment to such amortization schedule by reason of
        any
        bankruptcy, other than a Deficient Valuation, or similar proceeding or any
        moratorium or similar waiver or grace period).

       

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

       

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

       

      Mortgage
        File:
        The
        file containing the Related Documents pertaining to a particular HELOC and
        any
        additional documents required to be added to the Mortgage File pursuant to
        the
        Indenture.

       

      Mortgage
        Interest Rate:
        The
        annual rate at which interest accrues from time to time on any HELOC pursuant
        to
        the related Mortgage Note, which rate is initially equal to the “Mortgage
        Interest Rate” set forth with respect thereto on the applicable Mortgage Loan
        Schedule.

       

      Mortgage
        Loan Purchase Agreement:
        The
        Mortgage Loan Purchase Agreement, dated as of September 15, 2006, between
        EMC
        Mortgage Corporation, as seller, and Bear Stearns Asset Backed Securities
        I LLC,
        as purchaser, and all amendments thereof and supplements thereto, attached
        to
        the Sale and Servicing Agreement as Exhibit E.

       

      Mortgage
        Loan Schedule:
        The
        schedule, attached as Exhibit A to the Sale and Servicing Agreement with
        respect
        to the HELOCs.

       

      Mortgage
        Note:
        The
        originally executed note or other evidence of the indebtedness of a Mortgagor
        under the related HELOC.

       

      Mortgaged
        Property:
        Land
        and improvements securing the indebtedness of a Mortgagor under the related
        HELOC or, in the case of REO Property, such REO Property.

       

      Mortgagor:
        The
        obligor on a Mortgage Note.

       

      Net
        Collections:
        With
        respect to any Charged-Off HELOC, an amount equal to all payments on account
        of
        interest and principal on such HELOC.

       

      Net
        Liquidation Proceeds:
        With
        respect to any Charged-Off HELOC, Liquidation Proceeds and Subsequent Recoveries
        net of unreimbursed advances by the related Servicer, expenses incurred by
        the
        related Servicer in connection with the liquidation of such HELOC and the
        related Mortgaged Property, and any other amounts payable to the related
        Servicer under the related Servicing Agreement.

       

      Net
        Rate
        or
Net
        Mortgage Rate:
        For any
        HELOC, the then applicable Mortgage Rate thereon less the Servicing Fee
        Rate.

       

      Net
        WAC Cap Rate:
        With
        respect to any Payment Date and any Note (other than the Class A-IO Notes),
        a
        per annum rate equal to the excess, if any, of (i) the weighted average of
        the
        Expense Adjusted Mortgage Rates of the HELOCs as of the first day of the
        Collection Period preceding such Payment Date over (ii) the quotient of (a)
        the
        Current Interest payable to the Class A-IO Notes on such Payment Date, divided
        by (b) the Invested Amount on such Payment Date. The
        Net
        WAC Cap Rate for each Class of Notes (other than the Class A-IO Notes) will
        be
        calculated based on a 360-day year and the actual number of days elapsed
        in the
        related Accrual Period.
        For
        federal income tax purposes, however, such rate shall be the equivalent of
        the
        foregoing, expressed as the weighted average of (adjusted for the actual
        number
        of days elapsed in the related Accrual Period) the Uncertificated REMIC II
        Pass-Through Rates on the REMIC II Regular Interests (other than REMIC II
        Regular Interest A-IO), weighted on the basis of the Uncertificated Principal
        Balances of each such REMIC II Regular Interest.

       

      With
        respect to any Payment Date prior to and including the Payment Date in August
        2008 and the Class A-IO Notes, a per annum rate equal to the weighted average
        of
        the Expense Adjusted Mortgage Rates of the HELOCs as of the first day of
        the
        Collection Period preceding such Payment Date. The Net WAC Cap Rate for the
        Class A-IO Notes will be calculated based on a 360-day year consisting of
        twelve
        30-day months. For federal income tax purposes, however, such rate shall
        be the
        equivalent of the foregoing, expressed as the weighted average of the
        Uncertificated REMIC II Pass-Through Rates on the REMIC II Regular Interests,
        weighted on the basis of the Uncertificated Principal Balances of each REMIC
        II
        Regular Interest.

       

      Net
        WAC Cap Rate Carryover Amount:
        With
        respect to any Class of Notes (other than the Class A-IO Notes) and any Payment
        Date, the sum of (A) if such Notes are subject to the related Net WAC Cap
        Rate
        on such Payment Date, the excess, if any, of (i) the amount of interest that
        would have been payable to such Class of Notes on such Payment Date if the
        Note
        Interest Rate for such class for such Payment Date were calculated at the
        Formula Rate, over (ii) the amount of interest payable on such Class of Notes
        at
        the related Net WAC Cap Rate for such Payment Date, and (B) the Net WAC Cap
        Rate
        Carryover Amount for the previous Payment Date not previously paid, together
        with interest thereon at a rate equal to the related Formula Rate for such
        Class
        of Notes for the current Payment Date. With respect to the Class A-IO Notes
        and
        any Payment Date prior to and including the Payment Date in August 2008,
        the sum
        of (A) if such Notes are subject to the related Net WAC Cap Rate on such
        Payment
        Date, the excess, if any, of (i) the amount of interest that that would have
        been payable to such Class of Notes on such Payment Date if the Note Interest
        Rate for such Class were equal to 5.50% per annum, over (ii) the amount of
        interest payable on such Class of Notes at the related Net WAC Cap Rate for
        such
        Payment Date, and (B) the Net WAC Cap Rate Carryover Amount for the previous
        Payment Date not previously paid, together with interest thereon at a rate
        equal
        to 5.50% per annum.

       

      Net
        WAC Cap Rate Carryover Reserve
        Account:
        The
        Account created pursuant to Section 5.06 of the Sale and Servicing
        Agreement.

       

      Net
        WAC Cap Rate Carryover Reserve
        Account Deposit:
        With
        respect to the Net WAC Cap Rate Carryover Reserve
        Account, an amount equal to $5,000, which the Depositor shall deposit into
        the
        Net WAC Cap Rate Carryover Reserve
        Account, pursuant to Section 5.06 of the Sale and Servicing
        Agreement.

       

      Note:
        A Class
        A, Class A-IO or Class B Note.

       

      Noteholder:
        The
        Person in whose name a Note is registered in the Note Register, except that,
        any
        Note registered in the name of the Depositor, the Issuer, the Indenture Trustee,
        the Sponsor, the Securities Administrator or the Master Servicer or any
        Affiliate of any of them shall be deemed not to be a Holder or Holders, nor
        shall any so owned be considered outstanding, for purposes of giving any
        request, demand, authorization, direction, notice, consent or waiver under
        the
        Indenture or the Trust Agreement; provided that, in determining whether the
        Indenture Trustee or Securities Administrator shall be protected in relying
        upon
        any such request, demand, authorization, direction, notice, consent or waiver,
        only Notes that a Responsible Officer of the Indenture Trustee or Securities
        Administrator has actual knowledge to be so owned shall be so disregarded.
        Owners of Notes that have been pledged in good faith may be regarded as Holders
        if the pledgee establishes to the satisfaction of the Securities Administrator
        or the Indenture Trustee the pledgee’s right so to act with respect to such
        Notes and that the pledgee is not the Issuer, any other obligor upon the
        Notes
        or any Affiliate of any of the foregoing Persons.

       

      Note
        Insurer:
        Ambac
        Assurance Corporation.

       

      Note
        Insurer Default:
        The
        existence and continuance of any of the following: (a) a failure by the Note
        Insurer to make a payment required under the Policy in accordance with its
        terms; or (b) the Note Insurer (A) files any petition or commences any case
        or
        proceeding under any provision or chapter of the Bankruptcy Code or any other
        similar federal or state law relating to insolvency, bankruptcy, rehabilitation,
        liquidation or reorganization, (B) makes a general assignment for the benefit
        of
        its creditors, or (C) has an order for relief entered against it under the
        Bankruptcy Code or any other similar federal or state law relating to
        insolvency, bankruptcy, rehabilitation, liquidation or reorganization which
        is
        final and nonappealable.

       

      Note
        Interest
        Rate:
        With
        respect to each Class of Notes (other than the Class A-IO Notes) and, for
        purposes of the definition of “Marker Rate” and “Maximum Uncertificated Accrued
        Interest Deferral Amount,” each REMIC II Regular Interest (other than REMIC II
        Regular Interest A-IO) for which a Note is the Corresponding Note, is the
        lesser
        of (a) the Formula Rate and (b) the Net WAC Cap Rate.

       

      With
        respect to the Class A-IO Notes (i) for each Payment Date from and including
        September 2006 to and including the Payment Date in August 2008, the lesser
        of
        (a) 5.50% per annum and (b) the related Net WAC Cap Rate, and (ii) for each
        Payment Date thereafter, 0.00% per annum. For federal income tax purposes,
        the
        Class A-IO Notes shall not have a Note Interest Rate, but Current Interest
        for
        such Notes and each Payment Date shall be an amount equal to 100% of the
        amounts
        distributable to REMIC II Regular Interest A-IO for such Payment
        Date.

       

      Note
        Owner:
        The
        Beneficial Owner of a Note.

       

      Note
        Principal Balance:
        With
        respect to any Note (other than the Class A-IO Notes) as of any Payment Date,
        will equal such Note’s initial principal balance on the Closing Date, as reduced
        by (i) all amounts distributed on previous Payment Dates on such Note with
        respect to principal, (ii) the principal portion of all Charge-Off Amounts
        allocated prior to such Payment Date to such Note, plus any Subsequent
        Recoveries added to the Note Principal Balance of such Note. With respect
        to any
        Class of Note (other than the Class A-IO Notes), the Note Principal Balance
        thereof shall be equal to the sum of the Note Principal Balances of all
        Outstanding Notes of such Class.

       

      Note
        Register:
        The
        register maintained by the Note Registrar in which the Note Registrar shall
        provide for the registration of Notes and of transfers and exchanges of
        Notes.

       

      Note
        Registrar:
        The
        Securities Administrator, in its capacity as Note Registrar, or any successor
        to
        the Securities Administrator in such capacity.

       

      Notional
        Amount:
        With
        respect to the Class A-IO Notes, the lesser of (a) the Invested Amount as
        of the
        first day of the related Collection Period and (b) (i) for each Payment Date
        from and including September 2006 to and including the Payment Date in February
        2007, $156,857,000, (ii) for each Payment Date from and including March 2007
        to
        and including the Payment Date in August 2007, $125,486,000, (iii) for each
        Payment Date from and including September 2007 to and including the Payment
        Date
        in November 2007, $87,840,000, (iv) for each Payment Date from and including
        December 2007 to and including the Payment Date in February 2008, $62,743,000,
        (v) for each Payment Date from and including March 2008 to and including
        the
        Payment Date in May 2008, $25,097,000, (vi) for each Payment Date from and
        including June 2008 to and including the Payment Date in August 2008,
        $12,549,000, and (vii) for each Payment Date thereafter, $0. 

       

      Officer’s
        Certificate:
        With
        respect to the Master Servicer, a certificate signed by the President, Managing
        Director, a Director, a Vice President or an Assistant Vice President, of
        the
        Master Servicer and delivered to the Indenture Trustee or the Securities
        Administrator, as applicable. With respect to the Issuer, a certificate signed
        by any Authorized Officer of the Issuer or a Responsible Officer of the
        Securities Administrator, under the circumstances described in, and otherwise
        complying with, the applicable requirements of Section 10.01 of the Indenture,
        and delivered to the Indenture Trustee. Unless otherwise specified, any
        reference in the Indenture to an Officer’s Certificate shall be to an Officer’s
        Certificate of any Responsible Officer of the Securities
        Administrator.

       

      One-Month
        LIBOR:
        With
        respect to any Accrual Period, the rate determined by the Securities
        Administrator on the related Interest Determination Date on the basis of
        the
        London interbank offered rate for one-month United States dollar deposits,
        as
        such rates appear on the Telerate Screen Page 3750, as of 11:00 a.m. (London
        time) on such Interest Determination Date.

       

      In
        the
        event that on any Interest Determination Date, Telerate Screen 3750 fails
        to
        indicate the London interbank offered rate for one-month United States dollar
        deposits, then One-Month LIBOR for the related Interest Accrual Period will
        be
        established by the Securities Administrator as follows:

       

      1.  If
        on
        such Interest Determination Date two or more Reference Banks provide such
        offered quotations, One-Month LIBOR for the related Accrual Period shall
        be the
        arithmetic mean of such offered quotations (rounded upwards if necessary
        to the
        nearest whole multiple of 1/16%).

       

      2.  If
        on
        such Interest Determination Date fewer than two Reference Banks provide such
        offered quotations, One-Month LIBOR for the related Accrual Period shall
        be the
        higher of (i) One-Month LIBOR as determined on the previous Interest
        Determination Date and (ii) the Reserve Interest Rate.

       

      The
        establishment of One-Month LIBOR on each Interest Determination Date by the
        Securities Administrator and the Securities Administrator’s calculation of the
        rate of interest applicable for the related Accrual Period shall (in the
        absence
        of manifest error) be final and binding. 

       

      Opinion
        of Counsel:
        A
        written opinion of counsel acceptable to the Indenture Trustee (and Owner
        Trustee, if applicable) and the Note Insurer which counsel may be in-house
        counsel for the Depositor or the Sponsor if acceptable to the Indenture Trustee
        (and Owner Trustee, if applicable), the Note Insurer and the Rating Agencies
        or
        outside counsel for the Depositor, the Sponsor, the Issuer or the Master
        Servicer, as the case may be.

       

      Optional
        Termination Date:
        The
        first date on which the majority holder of the Class E Certificates may
        terminate the Trust (with the consent of the Note Insurer if such termination
        would result in a draw against the Policy).

       

      Original
        Value:
        The
        lesser of (i) the Appraised Value or (ii) the sales price of a Mortgaged
        Property at the time of origination of a HELOC, except in instances where
        either
        clauses (i) or (ii) is unavailable, the other may be used to determine the
        Original Value, or if both clauses (i) and (ii) are unavailable, Original
        Value
        may be determined from other sources reasonably acceptable to the
        Depositor.

       

      Originator:
        Any
        originator of the HELOCs.

       

      Outstanding:
        With
        respect to the Notes, as of the date of determination, all Notes theretofore
        executed, authenticated and delivered under this Indenture except:

       

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

       

      (ii) Notes
        in
        exchange for or in lieu of which other Notes have been executed, authenticated
        and delivered pursuant to the Indenture unless proof satisfactory to the
        Securities Administrator is presented that any such Notes are held by a holder
        in due course;

       

      provided,
        Notes
        that have been paid with proceeds of the Policy will be considered outstanding
        for purposes of Section 4.12 of the Indenture. 

       

      Outstanding
        HELOC:
        With
        respect to any Due Date, a HELOC which, prior to such Due Date, was not the
        subject of a Principal Prepayment in full, did not become a Charged-Off HELOC
        and was not purchased or replaced.

       

      Outstanding
        Principal Balance:
        As of
        the time of any determination, the principal balance of a HELOC remaining
        to be
        paid by the Mortgagor, or, in the case of an REO Property, the principal
        balance
        of the related HELOC remaining to be paid by the Mortgagor at the time such
        property was acquired by the Trust less any Excess Liquidation Proceeds with
        respect thereto to the extent applied to principal.

       

      Overcollateralization
        Amount:
        With
        respect to any Payment Date is the amount, if any, by which the Invested
        Amount
        exceeds the aggregate Note Principal Balance of the Notes as of such Payment
        Date after giving effect to payments to be made on such Payment
        Date.

       

      Overcollateralization
        Floor:
        With
        respect to the Notes, 0.50% of the Invested Amount as of the Cut-Off
        Date.

       

      Overcollateralization
        Increase Amount:
        With
        respect to any Payment Date is the amount payable to the Notes pursuant to
        Section 3.02(a)(6) of the Indenture.

       

      Overcollateralization
        Reduction Amount:
        With
        respect to the Notes and any Payment Date for which the Excess
        Overcollateralization Amount is, or would be, after taking into account all
        other payments to be made on that Payment Date, greater than zero, an amount
        equal to the lesser of (i) the Excess Overcollateralization Amount for that
        Payment Date and (ii) the Available Principal Payment Amount for that Payment
        Date (without giving effect to the Overcollateralization Reduction
        Amount).

       

      Overcollateralization
        Target Amount:
        With
        respect to any Payment Date (a) prior to the Stepdown Date, an amount equal
        to
        2.00% of the Invested Amount as of the Cut-off Date, (b) on or after the
        Stepdown Date and if a Trigger Event is not in effect, the greater of (A)
        the
        lesser of (i) an amount equal to 2.00% of the Invested Amount as of the Cut-off
        Date and (ii) approximately 4.00% of the then current Invested Amount as
        of the
        last day of the related Collection Period and (B) the Overcollateralization
        Floor or (c) on or after the Stepdown Date and if a Trigger Event is in effect,
        the Overcollateralization Target Amount for the immediately preceding Payment
        Date

       

      Owner
        Trust Estate:
        The
        corpus of the Issuer created by the Trust Agreement which consists of items
        referred to in Section 3.01 of the Trust Agreement.

       

      Owner
        Trustee:
        Wilmington Trust Company, acting not in its individual capacity but solely
        as
        owner trustee under the Trust Agreement, and its successors and assigns or
        any
        successor owner trustee appointed pursuant to the terms of the Trust
        Agreement.

       

      Paying
        Agent:
        Any
        paying agent or co-paying agent appointed under the Indenture, which initially
        shall be the Securities Administrator.

       

      Payment
        Account:
        The
        trust account or accounts created and maintained pursuant to Section 3.01
        of the
        Indenture, which shall be denominated LaSalle Bank National Association,
        as
        Securities Administrator f/b/o holders of SACO I Trust 2006-8, Mortgage-Backed
        Notes, Series 2006-8 - Payment Account.” The Payment Account shall be an
        Eligible Account.

       

      Payment
        Account Deposit Date:
        The
        Business Day prior to each Payment Date.

       

      Payment
        Date:
        The
        25th day of each month, or if such day is not a Business Day, then the next
        Business Day, commencing in September 2006.

       

      Percentage
        Interest:
        With
        respect to any Note, the percentage obtained by dividing the Note Principal
        Balance or the Notional Amount, as applicable, of such Note by the aggregate
        Note Principal Balances of all Notes of that Class. With respect to any
        Certificate, the percentage as stated on the face thereof.

       

      Periodic
        Rate Cap:
        With
        respect to any HELOC, the maximum rate, if any, by which the Mortgage Rate
        on
        such HELOC can adjust on any Adjustment Date, as stated in the related Mortgage
        Note or Mortgage.

       

      Permitted
        Investments:
        Any one
        or more of the following obligations or securities held in the name of the
        Indenture Trustee for the benefit of the Noteholders or in the name of the
        Securities Administrator for the benefit of the Certificateholders:

       

      (i) direct
        obligations of, and obligations the timely payment of which are fully guaranteed
        by the United States of America or any agency or instrumentality of the United
        States of America the obligations of which are backed by the full faith and
        credit of the United States of America;

       

      (ii) (a)
        demand or time deposits, federal funds or bankers’ acceptances issued by any
        depository institution or trust company incorporated under the laws of the
        United States of America or any state thereof (including the Indenture Trustee,
        Securities Administrator or the Master Servicer or its Affiliates acting
        in its
        commercial banking capacity) and subject to supervision and examination by
        federal and/or state banking authorities, provided that the commercial paper
        and/or the short-term debt rating and/or the long-term unsecured debt
        obligations of such depository institution or trust company at the time of
        such
        investment or contractual commitment providing for such investment have the
        Applicable Credit Rating or better from the Rating Agencies and (b) any other
        demand or time deposit or certificate of deposit that is fully insured by
        the
        FDIC;

       

      (iii) repurchase
        obligations with respect to (a) any security described in clause (i) above
        or
        (b) any other security issued or guaranteed by an agency or instrumentality
        of
        the United States of America, the obligations of which are backed by the
        full
        faith and credit of the United States of America, in either case entered
        into
        with a depository institution or trust company (acting as principal) described
        in clause (ii)(a) above where the Securities Administrator holds the security
        therefor;

       

      (iv) securities
        bearing interest or sold at a discount issued by any corporation (including
        the
        Indenture Trustee, Securities Administrator or the Master Servicer or its
        Affiliates) incorporated under the laws of the United States of America or
        any
        state thereof that have the Applicable Credit Rating or better from the Rating
        Agencies at the time of such investment or contractual commitment providing
        for
        such investment; provided, however, that securities issued by any particular
        corporation will not be Permitted Investments to the extent that investments
        therein will cause the then outstanding principal amount of securities issued
        by
        such corporation and held as part of the Trust to exceed 10% of the aggregate
        Outstanding Principal Balances of all the HELOCs and Permitted Investments
        held
        as part of the Trust as determined by the Master Servicer;

       

      (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 one year after the date of issuance thereof) having the Applicable Credit
        Rating or better from the Rating Agencies at the time of such
        investment;

       

      (vi) a
        reinvestment agreement issued by any bank, insurance company or other
        corporation or entity;

       

      (vii) any
        other
        demand, money market or time deposit, obligation, security or investment
        as may
        be acceptable to the Note Insurer and the Rating Agencies as evidenced in
        writing by the Rating Agencies to the Securities Administrator; and

       

      (viii) any
        money
        market or common trust fund having the Applicable Credit Rating or better
        from
        the Rating Agencies, including any such fund for which the Securities
        Administrator or Master Servicer or any affiliate of the Securities
        Administrator or Master Servicer acts as a manager or an advisor; provided,
        however, that no instrument or security shall be a Permitted Investment if
        such
        instrument or security evidences a right to receive only interest payments
        with
        respect to the obligations underlying such instrument or if such security
        provides for payment of both principal and interest with a yield to maturity
        in
        excess of 120% of the yield to maturity at par or if such instrument or security
        is purchased at a price greater than par as determined by the Master
        Servicer.

       

      Permitted
        Transferee:
        Any
        person (x) other than (i) the United States, any State or political subdivision
        thereof, any possession of the United States 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) that
        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 or (v) on electing large partnership
        within
        the meaning of Section 775(a) of the Code, (y) that is a citizen or resident
        of
        the United States, a corporation, partnership (other than a partnership that
        has
        any direct or indirect foreign partners) or other entity (treated as a
        corporation or a partnership for federal income tax purposes), created or
        organized in or under the laws of the United States, any State thereof or
        the
        District of Columbia, an estate whose income from sources without the United
        States is includible in gross income for United States federal income tax
        purposes regardless of its connection with the conduct of a trade or business
        within the United States, or a trust if a court within the United States
        is able
        to exercise primary supervision over the administration of the trust and
        one or
        more United States persons have authority to control all substantial decisions
        of the trust or if it has a valid election in effect under applicable U.S.
        Treasury regulations to be treated as a United States person and (z) other
        than
        any other Person so designated by the Securities Administrator based upon
        an
        Opinion of Counsel addressed to the Securities Administrator (which shall
        not be
        an expense of the Securities Administrator or the Indenture Trustee) that
        states
        that the Transfer of an ownership interest in a Residual Certificate to such
        Person may cause REMIC I, REMIC II, REMIC III or REMIC IV to fail to qualify
        as
        a REMIC at any time that any Notes or Certificates are Outstanding. The terms
        “United States,” “State” and “International Organization” shall have the
        meanings set forth in section 7701 of the Code or successor provisions. A
        corporation will not be treated as an instrumentality of the United States
        or of
        any State or political subdivision thereof for these purposes if all of its
        activities are subject to tax and, with the exception of Freddie Mac, a majority
        of its board of directors is not selected by such government unit.

       

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

       

      Plan:
        Any
        employee benefit plan or certain other retirement plans and arrangements,
        including individual retirement accounts and annuities, Keogh plans and bank
        collective investment funds and insurance company general or separate accounts
        in which such plans, accounts or arrangements are invested, that are subject
        to
        ERISA or Section 4975 of the Code.

       

      Plan
        Assets:
        Assets
        of a Plan within the meaning of Department of Labor regulation 29 C.F.R.
§
2510.3-101.

       

      Policy:
        The
        certificate guaranty insurance policy (No. AB1020BE) with respect to the
        Class A
        Notes and all endorsements thereto, if any, dated the Closing Date, issued
        by
        the Note Insurer for the benefit of the holders of the Class A Notes
        only.

       

      Pool
        Balance:
        With
        respect to any date of determination, the aggregate of the Stated Principal
        Balances of all HELOCs as of such date.

       

      Premium
        Amount:
        The
        amount of premium due to the Note Insurer in accordance with the terms of
        the
        Insurance Agreement and the Policy.

       

      Prepayment
        Assumption:
        A
        specified CPR and a Constant Draw Rate of 10%.

       

      Prepayment
        Period:
        With
        respect any Payment Date, the calendar month immediately preceding the month
        in
        which such payment occurs.

       

      Principal
        Collection Amount:
        With
        respect to each Payment Date, an amount equal to the amount received by the
        related Servicer and consisting of amounts collected during the related
        Collection Period on the HELOCs and allocated to principal in accordance
        with
        the terms of the Sale and Servicing Agreement, together with the principal
        portion of any repurchase price relating to any repurchased HELOCs and
        substitution adjustment amount paid during the related Collection Period
        and
        Subsequent Recoveries, to the extent such Subsequent Recoveries relate to
        principal.

       

      Principal
        Prepayment:
        Any
        payment (whether partial or full) or other recovery of principal on a HELOC
        which is received in advance of its scheduled Due Date to the extent that
        it is
        not accompanied by an amount as to interest representing scheduled interest
        due
        on any date or dates in any month or months subsequent to the month of
        prepayment, including Insurance Proceeds and Repurchase Proceeds, but excluding
        the principal portion of Excess Liquidation Proceeds.

       

      Proceeding:
        Any
        suit in equity, action at law or other judicial or administrative
        proceeding.

       

      Protected
        Account:
        The
        trust account or accounts created and maintained by each Servicer pursuant
        to
        the Servicing Agreement or the Sale and Servicing Agreement, as applicable.
        Each
        Protected Account shall be an Eligible Account.

       

      Purchaser:
        Bear
        Stearns Asset Backed Securities I LLC, a Delaware limited liability company,
        and
        its successors and assigns.

       

      Qualified
        Insurer:
        Any
        insurance company duly qualified as such under the laws of the state or states
        in which the related Mortgaged Property or Mortgaged Properties is or are
        located, duly authorized and licensed in such state or states to transact
        the
        type of insurance business in which it is engaged and approved as an insurer
        by
        the Master Servicer, so long as the claims paying ability of which is acceptable
        to the Rating Agencies for mortgage-backed notes having the same rating as
        the
        Notes rated by the Rating Agencies as of the Closing Date.

       

      Rapid
        Amortization Event:
        Any one
        of the following events: 

       

      (a)  the
        failure of the Sponsor to make any payments or deposits as required by the
        Sale
        and Servicing Agreement, or to observe or perform in any material respect
        any
        covenant of the Sponsor in the Mortgage Loan Purchase Agreement or the Sale
        and
        Servicing Agreement that materially and adversely affects the interests of
        the
        Noteholders or the Note Insurer and that continues unremedied and continues
        to
        affect materially and adversely the interests of the Noteholders or the Note
        Insurer for sixty (60) days (five days in the case of any failure to repurchase
        an affected HELOC when required or to substitute a Substitute HELOC for an
        affected HELOC) after the date on which written notice of the failure, requiring
        it to be remedied, shall have been given to the Sponsor by the Indenture
        Trustee
        or the Securities Administrator, or to the Sponsor, the Indenture Trustee
        and
        the Securities Administrator by the Note Insurer or the Holders of greater
        than
        50% of the aggregate Note Principal Balance of the Notes;

       

      (b)  any
        representation or warranty made by the Sponsor in the Mortgage Loan Purchase
        Agreement or the Sale and Servicing Agreement proves to have been incorrect
        in
        any material respect when made, as a result of which the interests of the
        Noteholders or the Note Insurer are materially and adversely affected and
        that
        continues to be incorrect in any material respect and continues to affect
        materially and adversely the interests of the Noteholders or the Note Insurer
        for thirty (30) days after the date on which notice of the failure, requiring
        it
        to be remedied, shall have been given to the Sponsor by the Indenture Trustee
        or
        the Securities Administrator, or to the Sponsor, the Indenture Trustee and
        the
        Securities Administrator by either the Note Insurer or the Holders of greater
        than 50% of the aggregate Note Principal Balance of the Notes (a Rapid
        Amortization Event pursuant to this subparagraph (b) shall not occur if the
        Sponsor has repurchased the related HELOCs or substituted for them during
        the
        60-day period (or such longer period (not to exceed an additional 60 days)
        as
        the Indenture Trustee or the Securities Administrator may specify) in accordance
        with the Sale and Servicing Agreement);

       

      (c)  a
        declaration of bankruptcy or insolvency by any of the Trust, the Depositor,
        the
        Master Servicer or the Servicers;

       

      (d)  the
        Trust
        becomes subject to the Investment Company Act of 1940; 

       

      (e)  the
        occurrence of a Rapid Amortization Trigger Event; or

       

      (f)  a
        draw is
        made on the Policy which remains unreimbursed for three months.

       

      If
        any
        event described in clause (a), (b) or (e) occurs, a Rapid Amortization Event
        will occur only if, after the applicable grace period, either the Indenture
        Trustee,
        the
        Note Insurer, or the Securities Administrator acting at the direction of
        the
        Noteholders holding Notes evidencing more than 51% in Note Principal Balance
        of
        the Notes then outstanding, with the consent of the Note Insurer, by written
        notice to the holder of the Class E Certificates, the Depositor, the Sponsor
        and
        the Servicers (and to the Securities Administrator, if given by the Note
        Insurer
        or the Noteholders) declare that a Rapid Amortization Event has occurred.
        If any
        event described in clauses (c), (d) or (f) occurs, a Rapid Amortization Event
        will occur without any notice or other action on the part of the Securities
        Administrator, the Note Insurer or the Noteholders immediately on the occurrence
        of such event .

       

      Rapid
        Amortization Period:
        The
        period beginning upon the occurrence of the Rapid Amortization
        Event.

       

      Rapid
        Amortization Trigger Event:
        Is in
        effect with respect to the Notes and any Payment Date if the cumulative amount
        of Charge-Off Amounts (net of Subsequent Recoveries) incurred on the HELOCs
        from
        the Cut-off Date through the end of the Collection Period immediately preceding
        such Payment Date exceeds the applicable percentage set forth below of the
        aggregate Stated Principal Balance of the HELOCs as of the Cut-off
        Date:

       

      
        	
                Prior
                  to March 2009

              	
                3.25%

              
	
                March
                  2009-February 2010

              	
                3.25%,
                  plus an additional 1/12th of 2.25% for each payment date after
                  March 2009
                  up to and including the payment date in February 2010

              
	
                March
                  2010 to February 2011

              	
                5.50%,
                  plus an additional 1/12th of 1.75% for each payment date after
                  March 2010
                  up to and including the payment date in February 2011

              
	
                March
                  2011 to February 2012

              	
                7.25%,
                  plus an additional 1/12th of 1.25% for each payment date after
                  March 2011
                  up to and including the payment date in February 2012

              
	
                March
                  2012 to February 2013

              	
                8.50%,
                  plus an additional 1/12th of 1.00% for each payment date after
                  March 2012
                  up to and including the payment date in February 2013

              
	
                March
                  2013 to February 2014

              	
                9.50%,
                  plus an additional 1/12th of 0.50% for each payment date after
                  March 2013
                  up to and including the payment date in February 2014

              
	
                March
                  2014 and thereafter

              	
                10.00%

              

      

       

      Rating
        Agency:
        Any
        nationally recognized statistical rating organization, or its successor,
        that
        rated the Notes at the request of the Depositor at the time of the initial
        issuance of the Notes. Initially, Standard & Poor’s and Moody’s. If such
        organization or a successor is no longer in existence, “Rating Agency” with
        respect to the Notes shall be such nationally recognized statistical rating
        organization, or other comparable Person, designated by the Depositor, notice
        of
        which designation shall be given to the Securities Administrator, the Indenture
        Trustee, the Note Insurer and Master Servicer. References herein to the highest
        short term unsecured rating category of a Rating Agency shall mean A-1 or
        better
        in the case of Standard & Poor’s, P-1 in the case of Moody’s and in the case
        of any other Rating Agency shall mean such equivalent ratings. References
        herein
        to the highest long-term rating category of a Rating Agency shall mean “AAA” in
        the case of Standard & Poor’s, “Aaa” in the case of Moody’s and in the case
        of any other Rating Agency, such equivalent rating.

       

      Rating
        Confirmation:
        A
        letter from each Rating Agency then providing a rating for any of the Notes
        at
        the request of the Issuer confirming that the action proposed to be taken
        by the
        Issuer will not, in and of itself, result in a downgrade of any of the ratings
        then applicable to the Notes (without regard to the Policy), or cause any
        Rating
        Agency to suspend or withdraw the Ratings then applicable to the Notes (without
        regard to the Policy).

       

      Recordation
        Event:
        Any of
        (i) the resignation of a Servicer, (ii) the occurrence of an Event of Servicer
        Termination, or (iii) the occurrence of a bankruptcy, insolvency or foreclosure
        relating to a Servicer; provided,
        that
        any Recordation Event may be waived by the Majority
        Securityholders.

       

      Record
        Date:
        With
        respect to any Class of Notes (other than the Class A-IO Notes), the business
        day preceding the applicable Payment Date so long as such Class of Notes
        is in
        book-entry form; and otherwise the Record Date shall be the close of business
        on
        the last business day of the month immediately preceding the month of the
        applicable Payment Date. With respect to the Class A-IO Notes, the Certificates
        and the Trust Certificate, the close of business on the last business day
        of the
        month immediately preceding the month of the applicable Payment Date.

       

      Reference
        Banks:
        Any
        leading banks engaged in transactions in Eurodollar deposits in the
        international Eurocurrency market (i) with an established place of business
        in
        London, (ii) whose quotations appear on the Telerate Screen Page 3750 on
        the
        Interest Determination Date, (iii) which have been designated as such by
        the
        Securities Administrator and (iv) which are not Affiliates of the Depositor
        or
        the Sponsor.

       

      Registered
        Holder:
        The
        Person in whose name a Note is registered in the Note Register on the applicable
        Record Date.

       

      Regular
        Interest:
        A
“regular interest” in a REMIC within the meaning of Section 860G(a)(1) of the
        Code.

       

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

       

      Related
        Documents:
        With
        respect to each HELOC, the documents specified in Section 2.01(b)(i)-(vii)
        of
        the Sale and Servicing Agreement, and any documents required to be added
        to such
        documents pursuant to the Sale and Servicing Agreement, the Trust Agreement,
        the
        Indenture or the Mortgage Loan Purchase Agreement.

       

      Release:
        The
        Federal Reserve Board’s statistical Release No. H.15(519).

       

      Relief
        Act:
        Servicemembers Civil Relief Act.

       

      Relief
        Act HELOC:
        Any
        HELOC as to which the Scheduled Payment thereof has been reduced due to the
        application of the Relief Act.

       

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

       

      REMIC
        I:
        The
        segregated pool of assets described in Section 10.01 of the
        Indenture.

      

      REMIC
        I Regular Interest:
        Any of
        the separate non-certificated beneficial ownership interests in REMIC I issued
        hereunder and designated as a Regular Interest in REMIC I. Each REMIC I Regular
        Interest shall accrue interest at the related Uncertificated REMIC I
        Pass-Through 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 Principal Balance as
        set
        forth in the Section 10.01 of the Indenture. The designations for the respective
        REMIC I Regular Interests are set forth in Section 10.01 of the
        Indenture.

      

      REMIC
        II:
        The
        segregated pool of assets described in Section 10.01 of the
        Indenture.

      REMIC
        II Interest Loss Allocation Amount:
        With
        respect to any Payment Date, an amount (subject to adjustment based on the
        actual number of days elapsed in the respective Accrual Period) equal to
        (a) the
        product of (i) the aggregate Stated Principal Balance of the HELOCs and REO
        Properties then outstanding and (ii) the Uncertificated REMIC II Pass-Through
        Rate for REMIC II Regular Interest AA minus the Marker Rate, divided by (b)
        12.

       

      REMIC
        II Overcollateralization Amount:
        With
        respect to any date of determination, (i) 1.00% of the aggregate Uncertificated
        Principal Balance of the REMIC II Regular Interests minus (ii) the aggregate
        Uncertificated Principal Balance of each REMIC II Regular Interest (other
        than REMIC II Regular Interest A-IO) for
        which
        a Note is the Corresponding Note, in each case, as of such date of
        determination.

       

      REMIC
        II Principal Loss Allocation Amount:
        With
        respect to any Payment Date, an amount equal to the product of (i) the aggregate
        Stated Principal Balance of the HELOCs and REO Properties then outstanding
        and
        (ii) 1 minus a fraction, the numerator of which is two (2) times the aggregate
        Uncertificated Principal Balance of each REMIC II Regular Interest (other
        than
        REMIC II Regular Interest A-IO) for which a Note is the Corresponding Note,
        and
        the denominator of which is the aggregate Uncertificated Principal Balance
        of
        each REMIC II Regular Interest (other than REMIC II Regular Interest A-IO)
        for
        which a Note is the Corresponding Note and REMIC II Regular Interest
        ZZ.

       

      REMIC
        II Regular Interest:
        Any of
        the separate non-certificated beneficial ownership interests in REMIC II
        issued
        hereunder and designated as a Regular Interest in REMIC II. Each REMIC II
        Regular Interest shall accrue interest at the related Uncertificated REMIC
        II
        Pass-Through Rate in effect from time to time, and (other than REMIC II Regular
        Interest A-IO) shall be entitled to distributions of principal, subject to
        the
        terms and conditions hereof, in an aggregate amount equal to its initial
        Uncertificated Principal Balance as set forth in the Section 10.01 of the
        Indenture. The designations for the respective REMIC II Regular Interests
        are
        set forth in Section 10.01 of the Indenture.

       

      REMIC
        II Required Overcollateralization Amount:
        1.00%
        of the Overcollateralization Target Amount.

      

      REMIC
        III:
        The
        segregated pool of assets described in Section 10.01 of the
        Indenture.

       

      REMIC
        IV:
        The
        segregated pool of assets described in Section 10.01 of the
        Indenture.

       

      REMIC
        Provisions:
        Provisions of the federal income tax law relating to real estate mortgage
        investment conduits, which appear at Sections 860A through 860G of the Code,
        and
        related provisions, and Treasury Regulations and published rulings, notices
        and
        announcements promulgated thereunder, as the foregoing may be in effect from
        time to time, as well as provisions of applicable state laws.

       

      REO
        Property:
        A
        Mortgaged Property acquired in the name of the Indenture Trustee, for the
        benefit of the Noteholders, by foreclosure or deed-in-lieu of foreclosure
        in
        connection with a defaulted HELOC.

       

      Reportable
        Event:
        As
        defined in Section 4.16(a)(iv) of the Sale and Servicing Agreement.

       

      Repurchase
        Price:
        With
        respect to any HELOC (or any property
        acquired
        with respect thereto) required to be repurchased by the Sponsor pursuant
        to the
        Mortgage Loan Purchase Agreement or Article II of the Sale and Servicing
        Agreement, an amount equal to the sum of (i)(a) 100% of the Outstanding
        Principal Balance of such HELOC as of the date of repurchase (or if the related
        Mortgaged Property was acquired with respect thereto, 100% of the Outstanding
        Principal Balance at the date of the acquisition), plus (b) accrued but unpaid
        interest on the Outstanding Principal Balance at the related Net Mortgage
        Rate,
        through and including the last day of the month of repurchase, plus (c) any
        unreimbursed servicing advances payable to the Servicers or to the Master
        Servicer and (ii) any costs and damages (if any) incurred by the Trust in
        connection with any violation of such HELOC of any predatory lending
        laws.

       

      Repurchase
        Proceeds:
        the
        Repurchase Price in connection with any repurchase of a HELOC by the Sponsor
        and
        any cash deposit in connection with the substitution of a HELOC.

       

      Request
        for Release:
        A
        request for release in the form attached to the Custodial Agreement as Exhibit
        Four.

       

      Required
        Insurance Policy:
        With
        respect to any HELOC, any insurance policy which is required to be maintained
        from time to time under the Sale and Servicing Agreement with respect to
        such
        HELOC.

       

      Residual
        Certificates:
        Any of
        the Class S, Class R-1, Class R-2 and Class RX Certificates, each evidencing
        the
        sole class of Residual Interests in the related REMIC.

       

      Residual
        Interest:
        The
        sole class of “residual interests” in a REMIC within the meaning of Section
        860G(a)(2) of the Code.

       

      Responsible
        Officer:
        With
        respect to the Securities Administrator, any officer of the Securities
        Administrator with direct responsibility for the administration of the Indenture
        and also, with respect to a particular matter, any other officer to whom
        such
        matter is referred because of such officer’s knowledge of and familiarity with
        the particular subject; and with respect to the Indenture Trustee, any vice
        president, assistant vice president, any assistant secretary, any assistant
        treasurer, any associate or any other officer of the Indenture Trustee
        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 or who shall have direct
        responsibility for the administration of the Indenture or the Trust
        Agreement.

       

      Sale
        and Servicing Agreement:
        The
        Sale and Servicing Agreement, dated as of September 15, 2006, among the Issuer,
        the Sponsor, the Indenture Trustee, the Master Servicer, the Securities
        Administrator and the Depositor.

       

      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:
        The
        meaning set forth in Section 4.16(a)(iii) of the Sale and Servicing
        Agreement.

       

      Scheduled
        Payment:
        With
        respect to any HELOC and any month, the scheduled payment or payments of
        principal and interest due during such month on such HELOC which either is
        payable by a Mortgagor in such month under the related Mortgage Note or,
        in the
        case of REO Property, would otherwise have been payable under the related
        Mortgage Note.

       

      Scheduled
        Principal:
        The
        principal portion of any Scheduled Payment.

       

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

       

      Securities
        Administrator:
        LaSalle
        Bank National Association, or its successor in interest, or any successor
        securities administrator.

       

      Security:
        Any of
        the Certificates or Notes.

       

      Securityholder
        or
Holder:
        Any
        Noteholder or Certificateholder.

       

      Security
        Instrument:
        A
        written instrument creating a valid first lien on a Mortgaged Property securing
        a Mortgage Note, which may be any applicable form of mortgage, deed of trust,
        deed to secure debt or security deed, including any riders or addenda
        thereto.

       

      Seller:
        EMC
        Mortgage Corporation, and its successors and assigns.

       

      Servicer:
        GMACM
        or EMC, or its successors and assigns.

       

      Servicer
        Remittance Date:
        With
        respect to each HELOC serviced by GMACM, the date set forth in the Servicing
        Agreement, and with respect to each EMC HELOC, on or before 1:00 p.m. New
        York
        City time on the second Business Day immediately preceding the related Payment
        Date. 

       

      Servicing
        Advances:
        All
        customary, reasonable and necessary “out of pocket” costs and expenses
        (including reasonable legal fees) incurred in the performance by the Company
        or
        GMACM of its servicing obligations under the Sale and Servicing Agreement
        or the
        Servicing Agreement, including, but not limited to, the cost of (i) the
        preservation, restoration and protection of a Mortgaged Property, (ii) any
        enforcement or judicial proceedings, including foreclosures, and including
        any
        expenses incurred in relation to any such proceedings that result from the
        HELOC
        being registered in the MERS® System, (iii) the management and liquidation of
        any REO Property (including, without limitation, realtor’s commissions) and (iv)
        compliance with any obligations under Section 3.07 of the Sale and
        Servicing Agreement to cause insurance to be maintained.

       

      Servicing
        Agreement:
        The
        Servicing Agreement, dated as of August 1, 2005, between GMACM and the Sponsor,
        as amended. 

       

      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:
        As
        to any
        HELOC and Payment Date, an amount equal to the product of (i) the Stated
        Principal Balance of such HELOC as of the Due Date in the preceding calendar
        month and (ii) the Servicing Fee Rate.

       

      Servicing
        Fee Rate:
        As
        to any
        HELOC, a per annum rate of 0.500%.

       

      60
        Day
        Plus Delinquency Percentage:
        With
        respect to any Payment Date is the arithmetic average for each of the three
        successive Payment Dates ending with the applicable Payment Date of the
        percentage equivalent of a fraction, (A) the numerator of which is the aggregate
        Stated Principal Balance of (i) the HELOCs that are 60 or more days delinquent
        in the payment of principal or interest for the relevant Payment Date, (ii)
        HELOCs in foreclosure, (iii) REO Property and (iv) HELOCs with a related
        mortgagor subject to bankruptcy procedures, and (B) the denominator of which
        is
        the aggregate Stated Principal Balance of all of the HELOCs immediately
        preceding the relevant Payment Date.

       

      Sponsor:
        EMC
        Mortgage Corporation, and its successors and assigns.

       

      Sponsor’s
        Certificate Pro Rata Test:
        Is met
        with respect to any Payment Date during the Managed Amortization Period if
        the
        Certificate Principal Balance of the Class S Certificates is greater than
        3.00%
        of the aggregate Stated Principal Balance of the HELOCs.

       

      Standard
        & Poor’s:
        Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or its
        successor in interest.

       

      Stated
        Principal Balance:
        With
        respect to any HELOC and any Payment Date, the principal balance of the HELOC
        as
        of the Cut-Off date, plus the aggregate amount of all Draws conveyed to the
        Trust in respect of such HELOC minus all collections credited against the
        principal balance of such HELOC in accordance with the related mortgage note
        and
        minus all prior related Charge-Off Amounts. The Stated Principal Balance
        of any
        Charged-Off HELOC is equal to zero.

       

      Statutory
        Trust Statute:
        Chapter
        38 of Title 12 of the Delaware Code, 12 Del.
        Code
§§3801 et seq.,
        as the
        same may be amended from time to time.

       

      Stepdown
        Date:
        The
        later to occur of

       

      (x) the
        Payment Date occurring in April 2009 and

       

      (y) the
        first
        Payment Date for which the Current Specified Enhancement Percentage is greater
        than or equal to approximately 6.40%.

       

      Subsequent
        Recoveries:
        Means
        any amount recovered by the related Servicer or the Master Servicer (net
        of
        reimbursable expenses) with respect to a Charged-Off HELOC with respect to
        which
        a Charge-Off Amount was incurred after the liquidation or disposition of
        such
        HELOC.

       

      Substitute
        HELOC:
        The
        meaning specified in the Mortgage Loan Purchase Agreement.

       

      Tax
        Matters Person:
        The
        person designated as “tax matters person” in the manner provided under Treasury
        Regulation Sections 1.860F-4(d) and 301.6231(a)(7)-1T. The Holder of the
        greatest Percentage Interest in a Class of Residual Certificates shall be
        the
        Tax Matters Person for the related REMIC. The Securities Administrator, or
        any
        successor thereto or assignee thereof, shall serve as tax administrator
        hereunder and as agent for the related Tax Matters Person(s).

       

      Telerate
        Screen Page 3750:
        The
        display designated as page 3750 on the Telerate Service (or such other page
        as
        may replace page 3750 on that service for the purpose of displaying London
        interbank offered rates of major banks).

       

      Transfer:
        Any
        direct or indirect transfer or sale of any ownership interest in a Note or
        a
        Certificate.

       

      Treasury
        Regulations:
        Regulations, including proposed or temporary regulations, promulgated under
        the
        Code. References herein to specific provisions of proposed or temporary
        regulations shall include analogous provisions of final Treasury Regulations
        or
        other successor Treasury Regulations.

       

      Trigger
        Event:
        With
        respect to any Payment Date is if any of the following tests is not satisfied:
        (A) the 60 Day Plus Delinquency Percentage is less than 4.50% of the aggregate
        Stated Principal Balance of the HELOCs, (B) for any Payment Date, the Cumulative
        Charge-off Percentage for such Payment Date is less than the
        following:

       

      
        	
                Prior
                  to March 2009

              	
                2.65%

              
	
                March
                  2009-February 2010

              	
                2.65%,
                  plus an additional 1/12th of 1.45% for each payment date after
                  March 2009
                  up to and including the payment date in February 2010

              
	
                March
                  2010 to February 2011

              	
                4.10%,
                  plus an additional 1/12th of 0.65% for each payment date after
                  March 2010
                  up to and including the payment date in February 2011

              
	
                March
                  2011 to February 2012

              	
                4.75%,
                  plus an additional 1/12th of 0.25% for each payment date after
                  March 2011
                  up to and including the payment date in February 2012

              
	
                March
                  2012 and thereafter

              	
                5.00%

              

      

       

      Trust:
        The
        SACO I Trust 2006-8 created pursuant to the Trust Agreement.

       

      Trust
        Agreement:
        The
        Trust Agreement, dated as of September 6, 2006 between the Depositor and
        the
        Owner Trustee, as amended and restated by the Amended and Restated Trust
        Agreement, dated as of September 15, 2006, among the Depositor, the Owner
        Trustee, and the Securities Administrator.

       

      Trust
        Estate:
        The
        meaning specified in the Granting Clause of the Indenture.

       

      Trust
        Indenture Act or TIA:
        The
        Trust Indenture Act of 1939, as amended from time to time, as in effect on
        any
        relevant date.

       

      UCC:
        The
        Uniform Commercial Code, as amended from time to time, as in effect in any
        specified jurisdiction.

       

      Uncertificated
        Accrued Interest:
        With
        respect to each REMIC I Regular Interest and REMIC II Regular Interest on
        each
        Payment Date, an amount equal to one month’s interest at the Uncertificated
        REMIC I Pass-Through Rate or Uncertificated REMIC II Pass-Through Rate, as
        applicable, on the related Uncertificated Principal Balance or Uncertificated
        Notional Amount, as applicable, of such REMIC I Regular Interest or REMIC
        II
        Regular Interest. In each case, Uncertificated Accrued Interest will be reduced
        by any Interest Shortfalls allocated to such REMIC I Regular Interests and
        REMIC
        II Regular Interests.

      

      Uncertificated
        Notional Amount:
        With
        respect to REMIC II Regular Interest A-IO and each Payment Date listed below,
        the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests
        ending with the designation “IO” listed below:

      

      
        	
                Payment
                  Date

              	 	
                REMIC
                  I Regular Interests

              
	
                1-
                  6

              	 	
                1-IO
                  through 6-IO

              
	
                7
                  -
                  12

              	 	
                2-IO
                  through 6-IO

              
	
                13
                  - 15

              	 	
                3-IO
                  through 6-IO

              
	
                16
                  - 18

              	 	
                4-IO
                  through 6-IO

              
	
                19
                  -21

              	 	
                5-IO
                  through 6-IO

              
	
                22
                  -24

              	 	
                6-IO

              
	
                thereafter

              	 	
                $0.00

              

      

      

      Uncertificated
        Principal Balance:
        The
        amount of REMIC I Regular Interests, REMIC II Regular Interests or Class
        E
        Interest outstanding as of any date of determination. As of the Closing Date,
        the Uncertificated Principal Balance of each REMIC I Regular Interest, REMIC
        II
        Regular Interest and Class E Interest shall equal the amount set forth in
        the
        Section 10.01 of the Indenture as its initial uncertificated principal balance.
        On each Payment Date, the Uncertificated Principal Balance of the REMIC I
        Regular Interests and REMIC II Regular Interest shall be reduced by all
        distributions of principal made on such REMIC I Regular Interests and REMIC
        II
        Regular Interest on such Payment Date pursuant to Sections 10.02(b) and 10.02(c)
        of the Indenture and, if and to the extent necessary and appropriate, shall
        be
        further reduced on such Payment Date by Charge-Off Amounts as provided in
        Section 10.03 of the Indenture, and the Uncertificated Principal Balance
        of
        REMIC II Regular Interest ZZ shall be increased by interest deferrals as
        provided in Section 10.02(c)(ii) of the Indenture. The Uncertificated Principal
        Balance of each REMIC I Regular Interest, REMIC II Regular Interest and Class
        E
        Interest shall never be less than zero. With respect to the Class E Interest
        as
        of any date of determination, an amount equal to the excess, if any, of (A)
        the
        then aggregate Uncertificated Principal Balance of the REMIC II Regular
        Interests over (B) the then aggregate Note Principal Balance of the Notes
        then
        outstanding.

      

      Uncertificated
        REMIC I Pass-Through Rate:
        With
        respect to any REMIC I Regular Interest and any Payment Date, a per annum
        rate
        equal to the weighted average of the Expense Adjusted Mortgage Rates of the
        HELOCs as of the first day of the Collection Period preceding such Payment
        Date.

      

      Uncertificated
        REMIC II Pass-Through Rate:
        With
        respect to REMIC II Regular Interest AA, each REMIC II Regular Interest (other
        than REMIC II Regular Interest A-IO) for which a Note is a Corresponding
        Note
        and REMIC II Regular Interest ZZ, and any Payment Date from and including
        the
        Payment Date in September 2006 to and including the Payment Date in August
        2008,
        a per annum rate equal to the weighted average of the rates listed below
        for the
        REMIC I Regular Interests for such Payment Date, weighted on the basis of
        the
        Uncertificated Principal Balances of each such REMIC I Regular Interest for
        such
        Payment Date: 

      

      
        	
                Payment
                  Date

              	 	
                REMIC
                  I Regular Interest

              	 	
                Rate

              
	
                1
                  -
                  6

              	 	
                1-IO
                  through 6-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate minus 5.50% per annum

              
	 	 	
                Non-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate

              
	
                7
                  -
                  12

              	 	
                2-IO
                  through 6-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate minus 5.50% per annum

              
	 	 	
                Non-IO
                  and 1-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate

              
	
                13
                  - 15

              	 	
                3-IO
                  through 6-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate minus 5.50% per annum

              
	 	 	
                Non-IO
                  and 1-IO through 2-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate

              
	
                16
                  - 18

              	 	
                4-IO
                  through 6-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate minus 5.50% per annum

              
	 	 	
                Non-IO
                  and 1-IO through 3-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate

              
	
                19
                  - 21

              	 	
                5-IO
                  through 6-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate minus 5.50% per annum

              
	 	 	
                Non-IO
                  and 1-IO through 4-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate

              
	
                22
                  - 24

              	 	
                6-IO
                  

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate minus 5.50% per annum

              
	 	 	
                Non-IO
                  and 1-IO through 5-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate

              
	
                thereafter

              	 	
                Non-IO
                  and 1-IO through 6-IO

              	 	
                Uncertificated
                  REMIC I Pass-Through Rate

              

      

      

      With
        respect to REMIC II Regular Interest AA, each REMIC II Regular Interest (other
        than REMIC II Regular Interest A-IO) for which a Note is a Corresponding
        Note
        and REMIC II Regular Interest ZZ, and any Payment Date after August 2008,
        a per
        annum rate equal to the weighted average of the Uncertificated REMIC I
        Pass-Through Rates for the REMIC I Regular Interests, weighted on the basis
        of
        the Uncertificated Principal Balances of each such REMIC I Regular Interest
        for
        such Payment Date. 

      

      With
        respect to REMIC II Regular Interest A-IO, and (i) any Payment Date from
        and
        including the Payment Date in September 2006 to and including the Payment
        Date
        in August 2008, a per annum rate equal to the excess, if any, of (x) the
        weighted average of the Uncertificated REMIC I Pass-Through Rates for the
        REMIC
        I Regular Interests for such Payment Date over (y) the excess, if any, of
        (1)
        the weighted average of the Uncertificated REMIC I Pass-Through Rates for
        each
        REMIC I Regular Interest for such Payment Date over (2) 5.50% per annum,
        in each
        case weighted on the basis of the Uncertificated Principal Balances of each
        such
        REMIC I Regular Interest for such Payment Date, and (ii) any Payment Date
        after
        August 2008, a per annum rate equal to the excess, if any, of (A) the weighted
        average of the Uncertificated REMIC I Pass-Through Rates for the REMIC I
        Regular
        Interests for such Payment Date over (B) the weighted average of the
        Uncertificated REMIC I Pass-Through Rates for the REMIC I Regular Interests
        for
        such Payment Date, in each case weighted on the basis of the Uncertificated
        Principal Balances of each such REMIC I Regular Interest for such Payment
        Date.

       

      Underwriter:
        Bear,
        Stearns & Co. Inc.

       

      Uninsured
        Cause:
        Any
        cause of damage to a Mortgaged Property or related REO Property such that
        the
        complete restoration of such Mortgaged Property or related REO Property is
        not
        fully reimbursable by the hazard insurance policies required to be maintained
        pursuant to the related Servicing Agreement, without regard to whether or
        not
        such policy is maintained.

       

      Unpaid
        Interest Shortfall Amount:
        With
        respect to any Class of Notes and (i) the first Payment Date, zero, and (ii)
        any
        Payment Date after the first Payment Date, the amount, if any, by which (A)
        the
        sum of (1) the Current Interest for such Class of Notes for the immediately
        preceding Payment Date and (2) the outstanding Unpaid Interest Shortfall
        Amount,
        if any, for such Class of Notes for such preceding Payment Date exceeds (B)
        the
        aggregate amount distributed on such Class of Notes in respect of interest
        pursuant to clause (A) above on such preceding Payment Date, plus interest
        on
        the amount of the interest due but not paid on such Class of Notes on such
        preceding Payment Date, to the extent permitted by law, at the Note Interest
        Rate for such Class for the related Accrual
        Period.Exhibit 4(b)

                        SUB-INVESTMENT ADVISORY AGREEMENT

      AGREEMENT dated October 2, 2006, between BlackRock Advisors, LLC, a
Delaware limited liability company (the "Advisor"), and BlackRock Investment
Management, LLC, a Delaware limited liability company (the "Sub-Advisor").

      WHEREAS, the Advisor has agreed to furnish investment advisory services to
the BlackRock New Jersey Municipal Bond Fund (the "Fund"), a series of BlackRock
Multi-State Municipal Series Trust, a Massachusetts business trust (the
"Trust"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act");

      WHEREAS, the Advisor wishes to retain the Sub-Advisor to provide it with
certain sub-advisory services as described below in connection with Advisor's
advisory activities on behalf of the Fund;

      WHEREAS, the advisory agreement between the Advisor and the Trust, dated
October 2, 2006 (such agreement or the most recent successor agreement between
such parties relating to advisory services to the Trust is referred to herein as
the "Advisory Agreement") contemplates that the Advisor may sub-contract
investment advisory services with respect to the Fund to a sub-advisor pursuant
to a sub-advisory agreement agreeable to the Fund and approved in accordance
with the provisions of the 1940 Act; and

      WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Sub-Advisor is willing to furnish such
services upon the terms and conditions herein set forth;

      NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties hereto as
follows:

      1. Appointment. The Advisor hereby appoints the Sub-Advisor to act as
sub-advisor with respect to the Fund and the Sub-Advisor accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.

      2. Services of the Sub-Advisor. Subject to the succeeding provisions of
this section, the oversight and supervision of the Advisor and the direction and
control of the Trustees, the Sub-Advisor will perform certain of the day-to-day
operations of the Fund, which may include one or more of the following services,
at the request of the Advisor: (a) acting as investment advisor for and managing
the investment and reinvestment of those assets of the Fund as the Advisor may
from time to time request and in connection therewith have complete discretion
in purchasing and selling such securities and other

<PAGE>

assets for the Fund and in voting, exercising consents and exercising all other
rights appertaining to such securities and other assets on behalf of the Fund;
(b) arranging, subject to the provisions of paragraph 3 hereof, for the purchase
and sale of securities and other assets of the Fund; (c) providing investment
research and credit analysis concerning the Fund's investments, (d) assisting
the Advisor in determining what portion of the Fund's assets will be invested in
cash, cash equivalents and money market instruments, (e) placing orders for all
purchases and sales of such investments made for the Fund, and (f) maintaining
the books and records as are required to support Fund investment operations. At
the request of the Advisor, the Sub-Advisor will also, subject to the oversight
and supervision of the Advisor and the direction and control of the Trust's
Board of Trustees, provide to the Advisor or the Fund any of the facilities and
equipment and perform any of the services described in Section 3 of the Advisory
Agreement. In addition, the Sub-Advisor will keep the Fund and the Advisor
informed of developments materially affecting the Fund and shall, on its own
initiative, furnish to the Fund from time to time whatever information the
Sub-Advisor believes appropriate for this purpose. The Sub-Advisor will
periodically communicate to the Advisor, at such times as the Advisor may
direct, information concerning the purchase and sale of securities for the Fund,
including: (a) the name of the issuer, (b) the amount of the purchase or sale,
(c) the name of the broker or dealer, if any, through which the purchase or sale
is effected, (d) the CUSIP number of the instrument, if any, and (e) such other
information as the Advisor may reasonably require for purposes of fulfilling its
obligations to the Fund under the Advisory Agreement. The Sub-Advisor will
provide the services rendered by it under this Agreement in accordance with the
Fund's investment objectives, policies and restrictions (as currently in effect
and as they may be amended or supplemented from time to time) as stated in the
Fund's Prospectus and Statement of Additional Information and the resolutions of
the Trust's Board of Trustees.

      3. Covenants. (a) In the performance of its duties under this Agreement,
the Sub-Advisor shall at all times conform to, and act in accordance with, any
requirements imposed by: (i) the provisions of the 1940 Act and the Investment
Advisers Act of 1940, as amended (the "Advisers Act") and all applicable Rules
and Regulations of the Securities and Exchange Commission (the "SEC"); (ii) any
other applicable provision of law; (iii) the provisions of the Declaration of
Trust and By-Laws of the Fund, as such documents are amended from time to time;
(iv) the investment objectives and policies of the Fund as set forth in the
Registration Statement on Form N-1A and/or the resolutions of the Board of
Trustees; and (v) any policies and determinations of the Board of the Trustees
of the Trust and

            (b) In addition, the Sub-Advisor will:

                  (i) place orders either directly with the issuer or with any
broker or dealer. Subject to the other provisions of this paragraph, in placing
orders with brokers and dealers, the Sub-Advisor will attempt to obtain the best

                                       2
<PAGE>

price and the most favorable execution of its orders. In placing orders, the
Sub-Advisor will consider the experience and skill of the firm's securities
traders as well as the firm's financial responsibility and administrative
efficiency. Consistent with this obligation, the Sub-Advisor may select brokers
on the basis of the research, statistical and pricing services they provide to
the Fund and other clients of the Advisor or the Sub-Advisor. Information and
research received from such brokers will be in addition to, and not in lieu of,
the services required to be performed by the Sub-Advisor hereunder. A commission
paid to such brokers may be higher than that which another qualified broker
would have charged for effecting the same transaction, provided that the
Sub-Advisor determines in good faith that such commission is reasonable in terms
either of the transaction or the overall responsibility of the Advisor and the
Sub-Advisor to the Fund and their other clients and that the total commissions
paid by the Fund will be reasonable in relation to the benefits to the Fund over
the long-term. Subject to the foregoing and the provisions of the 1940 Act, the
Securities Exchange Act of 1934, as amended, and other applicable provisions of
law, the Sub-Advisor may select brokers and dealers with which it or the Fund is
affiliated;

                  (ii) maintain books and records with respect to the Fund's
securities transactions and will render to the Advisor and the Fund's Board of
Trustees such periodic and special reports as they may request;

                  (iii) maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. When the Sub-Advisor makes investment
recommendations for the Fund, its investment advisory personnel will not inquire
or take into consideration whether the issuer of securities proposed for
purchase or sale for the Fund's account are customers of the commercial
department of its affiliates; and

                  (iv) treat confidentially and as proprietary information of
the Fund all records and other information relative to the Fund, and the Fund's
prior, current or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund, which approval shall not be unreasonably withheld and may not be
withheld where the Sub-Advisor may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Fund.

      4. Services Not Exclusive. Nothing in this Agreement shall prevent the
Sub-Advisor or any officer, employee or other affiliate thereof from acting as
investment advisor for any other person, firm or corporation, or from engaging
in any other lawful activity, and shall not in any way limit or restrict the
Sub-Advisor or any of its officers,

                                       3
<PAGE>

employees or agents from buying, selling or trading any securities for its or
their own accounts or for the accounts of others for whom it or they may be
acting; provided, however, that the Sub-Advisor will undertake no activities
which, in its judgment, will adversely affect the performance of its obligations
under this Agreement.

      5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Advisor hereby agrees that all records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any such records upon the Fund's request. The
Sub-Advisor further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act (to the extent such books and records are not maintained by the
Advisor).

      6. Expenses. During the term of this Agreement, the Sub-Advisor will bear
all costs and expenses of its employees and any overhead incurred by the
Sub-Advisor in connection with its duties hereunder; provided that the Board of
Trustees of the Trust may approve reimbursement to the Sub-Advisor of the
pro-rata portion of the salaries, bonuses, health insurance, retirement benefits
and all similar employment costs for the time spent on Fund operations
(including, without limitation, compliance matters) (other than the provision of
investment advice and administrative services required to be provided hereunder)
of all personnel employed by the Sub-Advisor who devote substantial time to Fund
operations or the operations of other investment companies advised or
sub-advised by the Sub-Advisor.

      7. Compensation.

            (a) The Advisor agrees to pay to the Sub-Advisor and the Sub-Advisor
agrees to accept as full compensation for all services rendered by the
Sub-Advisor as such, a monthly fee in arrears at an annual rate equal to the
amount set forth in Schedule A hereto. For any period less than a month during
which this Agreement is in effect, the fee shall be prorated according to the
proportion which such period bears to a full month of 28, 29, 30 or 31 days, as
the case may be.

            (b) For purposes of this Agreement, the net assets of the Fund shall
be calculated pursuant to the procedures adopted by resolutions of the Trustees
of the Trust for calculating the value of the Fund's assets or delegating such
calculations to third parties.

      8. Indemnity.

            (a) The Trust may, in the discretion of the Board of Trustees of the
Trust, indemnify the Sub-Advisor, and each of the Sub-Advisor's directors,
officers, employees, agents, associates and controlling persons and the
directors, partners,

                                       4
<PAGE>

members, officers, employees and agents thereof (including any individual who
serves at the Sub-Advisor's request as director, officer, partner, member,
trustee or the like of another entity) (each such person being an "Indemnitee")
against any liabilities and expenses, including amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees (all as
provided in accordance with applicable state law) reasonably incurred by such
Indemnitee in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, before any court or administrative
or investigative body in which such Indemnitee may be or may have been involved
as a party or otherwise or with which such Indemnitee may be or may have been
threatened, while acting in any capacity set forth herein or thereafter by
reason of such Indemnitee having acted in any such capacity, except with respect
to any matter as to which such Indemnitee shall have been adjudicated not to
have acted in good faith in the reasonable belief that such Indemnitee's action
was in the best interest of the Trust and furthermore, in the case of any
criminal proceeding, so long as such Indemnitee had no reasonable cause to
believe that the conduct was unlawful; provided, however, that (1) no Indemnitee
shall be indemnified hereunder against any liability to the Trust or its
shareholders or any expense of such Indemnitee arising by reason of (i) willful
misfeasance, (ii) bad faith, (iii) gross negligence or (iv) reckless disregard
of the duties involved in the conduct of such Indemnitee's position (the conduct
referred to in such clauses (i) through (iv) being sometimes referred to herein
as "disabling conduct"), (2) as to any matter disposed of by settlement or a
compromise payment by such Indemnitee, pursuant to a consent decree or
otherwise, no indemnification either for said payment or for any other expenses
shall be provided unless there has been a determination that such settlement or
compromise is in the best interests of the Fund and that such Indemnitee appears
to have acted in good faith in the reasonable belief that such Indemnitee's
action was in the best interest of the Fund and did not involve disabling
conduct by such Indemnitee and (3) with respect to any action, suit or other
proceeding voluntarily prosecuted by any Indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution of such action, suit
or other proceeding by such Indemnitee was authorized by a majority of the full
Board of Trustees of the Trust.

            (b) The Trust shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Trust receives a written affirmation of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification has
been met and a written undertaking to reimburse the Trust unless it is
subsequently determined that such Indemnitee is entitled to such indemnification
and if the Trustees of the Trust determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the Indemnitee shall provide a security for such
Indemnitee's undertaking, (B) the Trust shall be insured against losses arising
by reason of any unlawful advance, or (C) a majority of a quorum consisting of
Trustees of the Trust who are neither "interested persons" of the Trust (as
defined in Section 2(a)(19) of the 1940 Act) nor parties to the proceeding
("Disinterested Non-Party

                                       5
<PAGE>

Trustees") or an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the Indemnitee
ultimately will be found entitled to indemnification.

            (c) All determinations with respect to the standards for
indemnification hereunder shall be made (1) by a final decision on the merits by
a court or other body before whom the proceeding was brought that such
Indemnitee is not liable by reason of disabling conduct, or (2) in the absence
of such a decision, by (i) a majority vote of a quorum of the Disinterested
Non-Party Trustees of the Trust, or (ii) if such a quorum is not obtainable or
even, if obtainable, if a majority vote of such quorum so directs, independent
legal counsel in a written opinion. All determinations that advance payments in
connection with the expense of defending any proceeding shall be authorized
shall be made in accordance with the immediately preceding clause (2) above.

      The rights accruing to any Indemnitee under these provisions shall not
exclude any other right to which such Indemnitee may be lawfully entitled.

      9. Limitation on Liability. The Sub-Advisor will not be liable for any
error of judgment or mistake of law or for any loss suffered by the Advisor or
by the Fund in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its duties under this Agreement. As used in this
Section 9, the term "Sub-Advisor" shall include any affiliates of the
Sub-Advisor performing services for the Fund contemplated hereby and partners,
directors, officers and employees of the Sub-Advisor and such affiliates.

      10. Duration and Termination. This Agreement shall become effective as of
the date hereof and, unless sooner terminated with respect to the Fund as
provided herein, shall continue in effect for a period of two years. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to the
Fund for successive periods of 12 months, provided such continuance is
specifically approved at least annually by both (a) the vote of a majority of
the Trust's Board of Trustees or a vote of a majority of the outstanding voting
securities of the Fund at the time outstanding and entitled to vote and (b) by
the vote of a majority of the Trustees, who are not parties to this Agreement or
interested persons (as such term is defined in the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund or
the Advisor at any time, without the payment of any penalty, upon giving the
Sub-Advisor 60 days' notice (which notice may be waived by the Sub-Advisor),
provided that such termination by the Fund or the Advisor shall be directed or
approved by the vote of a majority of the Trustees of the Trust in office at the
time or by the vote of the holders of a majority of the voting securities of the
Fund at the time outstanding and entitled to vote, or by the Sub-Advisor

                                       6
<PAGE>

on 60 days' written notice (which notice may be waived by the Trust and the
Advisor), and will terminate automatically upon any termination of the Advisory
Agreement between the Trust and the Advisor. This Agreement will also
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person" and "assignment" shall have the same meanings of such terms
in the 1940 Act.)

      11. Notices. Any notice under this Agreement shall be in writing to the
other party at such address as the other party may designate from time to time
for the receipt of such notice and shall be deemed to be received on the earlier
of the date actually received or on the fourth day after the postmark if such
notice is mailed first class postage prepaid.

      12. Amendment of this Agreement. This Agreement may be amended by the
parties only if such amendment is specifically approved by the vote of the Board
of Trustees of the Trust, including a majority of those Trustees who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval and, where
required by the 1940 Act, by a vote of a majority of the outstanding voting
securities of the Fund.

      13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding on, and shall inure to the
benefit of the parties hereto and their respective successors.

      14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York for contracts to be performed
entirely therein without reference to choice of law principles thereof and in
accordance with the applicable provisions of the 1940 Act. To the extent that
the applicable laws of the State of New York, or any of the provisions, conflict
with the applicable provisions of the 1940 Act, the latter shall control.

      15. Counterparts. This Agreement may be executed in counterparts by the
parties hereto, each of which shall constitute an original counterpart, and all
of which, together, shall constitute one Agreement.

                                       7
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers designated below as of the day and
year first above written.

                                    BLACKROCK ADVISORS, LLC

                                    By:
                                       ------------------------------------
                                       Name:
                                       Title:

                                    BLACKROCK INVESTMENT MANAGEMENT, LLC

                                    By:
                                       ------------------------------------
                                       Name:
                                       Title:

AGREED AND ACCEPTED
as of the date first set forth above

BLACKROCK MULTI-STATE MUNICIPAL SERIES TRUST

By:
   --------------------------
Name:
Title:

                                       8
<PAGE>

                                   Schedule A

                           Sub-Investment Advisory Fee

      59% of the monthly advisory fee received by the Advisor from the Fund.

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