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<tr>
<td width="33%" valign="top"><div>&#160;</div>
</td>
<td width="33%" style="border-top: 0.0133333in solid; border-bottom: 0.0133333in solid" align="center" valign="top"><div>EXHIBIT 10.4</div>
</td>
<td width="34%" valign="top"><div>&#160;</div>
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</table>
<br>
<br>
<div>CONSULTING AGREEMENT</div>
<br>
<div>This Consulting Agreement is made as of the 27th day of November, 2006, by and between
Victor Nostas (&#8220;Consultant&#8221;), and I Crystal, Inc., a Delaware corporation (the &#8220;Company&#8221;).</div>
<br>
<div>WHEREAS, the Company desires to be assured of the association and services of Consultant, in
order to avail itself of Consultant&#8217;s experience, skills, abilities, knowledge and background to
develop a financial public relations strategy; and</div>
<br>
<div>WHEREAS, Consultant agrees to be engaged and retained by the Company upon the terms and
conditions set forth herein.</div>
<br>
<div>NOW THEREFORE, in consideration of the mutual covenants herein contained, it is agreed:</div>
<br>
<div>1. The Company hereby engages Consultant, on a non-exclusive basis, to render consulting
services with respect to the development and implementation of a financial public relations
strategy on behalf of the Company.  Consultant hereby accepts such engagement and agrees to
render such consulting services throughout the term of this Agreement.  Consultant agrees that it
shall be responsible for all expenses incurred in his performance hereunder.</div>
<br>
<div>It is further agreed that Consultant shall have no authority to bind the Company to any contract or
obligation or to transact any business in the Company&#8217;s name or on behalf of the Company, in
any manner.  The parties intend that Consultant shall perform his services required hereunder as
an independent contractor.</div>
<br>
<div>2. The term of this Agreement shall commence upon the mutual execution of this Agreement and
shall continue until November 26, 2007.  This Agreement may be terminated by either party,
without cause, after 30 days from the date of mutual execution hereof, on 30 days&#8217; written notice.</div>
<br>
<div>3. In consideration of the services to be performed by Consultant, the Company agrees to pay to
Consultant the following compensation:</div>
<br>
<div>the Company shall issue 50,000 shares of the Company&#8217;s $.001 par value common stock upon
the mutual execution of the Agreement.</div>
<br>
<div>4. The Company represents and warrants to Consultant that:</div>
<br>
<div>A. The Company will cooperate fully and timely with Consultant to enable Consultant to perform
his obligations hereunder.</div>
<br>
<div>B. The execution and performance of this Agreement by the Company has been duly authorized
by the Board of Directors of the Company.</div>
<div>C. The performance by the Company of this Agreement will not violate any applicable court
decree, law or regulation, nor will it violate any provisions of the organizational documents of
the Company or any contractual obligation by which the Company may be bound.</div>
<br>
<div>5. Consultant represents and warrants to the Company that:</div>
<br>
<div>A. Seller is under no disability with respect to entering into, and performing under, this
Agreement.</div>
<br>
<div>B. The performance by Consultant under this Agreement will not violate any applicable court
decree, law or regulation, nor will it violate any provisions of any contractual obligation by
which Consultant may be bound.</div>
<br>
<div>C. Consultant represents and warrants that it has investigated the Company, its financial
condition, business and prospects, and has had the opportunity to ask questions of, and to receive
answers from, the Company with respect thereto.  Consultant acknowledges that it is aware that
the Company currently lacks adequate capital to pursue its full plan of business.</div>
<br>
<div>D. Consultant represents and warrants to the Company that the shares of common stock being
acquired pursuant to this Agreement are being acquired for his own account and for investment
and not with a view to the public resale or distribution of such shares and further acknowledges
that the shares being issued have not been registered under the Securities Act or any state
securities law and are &#8220;restricted securities&#8221;, as that term is defined in Rule 144 promulgated by
the SEC, and must be held indefinitely, unless they are subsequently registered or an exemption
from such registration is available.</div>
<br>
<div>E. Consultant consents to the placement of a legend restricting future transfer on the share
certificates representing the shares of common stock to be issued hereunder, which legend shall
be in the following, or similar, form:</div>
<br>
<div>&#8220;THE STOCK REPRESENTED BY THIS CERTIFICATE HAS BEEN ISSUED IN
RELIANCE UPON THE EXEMPTION FROM REGISTRATION AFFORDED BY
REGULATION S PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE STOCK MAY NOT BE TRANSFERRED WITHOUT REGISTRATION
EXCEPT IN TRANSACTIONS EXEMPT FROM SUCH REGISTRATION.&#8221;</div>
<br>
<div>6. Until such time as the same may become publicly known, the parties agree that any
information provided to either of them by the other of a confidential nature will not be revealed
or disclosed to any person or entity, except in the performance of this Agreement, and upon
completion of Consultant's services and upon the written request of the Company, any original
documentation provided by the Company will be returned to it.  Consultant, including each of his
affiliates, will not directly or indirectly buy or sell the securities of the Company at any time
when he or they are privy to non-public information.</div>
<br>
<div>Consultant agrees that he will not disseminate any printed matter relating to the Company
without prior written approval of the Company.</div>
<br>
<div>Consultant agrees that he will comply with all applicable securities laws, in performing on behalf
of the Company hereunder.</div>
<br>
<div>7. All notices hereunder shall be in writing and addressed to the party at the address herein set
forth, or at such other address as to which notice pursuant to this section may be given, and shall
be given by personal delivery, by certified mail (return receipt requested), Express Mail or by
national or international overnight courier.  Notices will be deemed given upon the earlier of
actual receipt of three (3) business days after being mailed or delivered to such courier service.</div>
<br>
<div>Notices shall be addressed to Consultant at:</div>
<br>
<div>Victor Nostas</div>
<div>3500 Parfet Street</div>
<div>Wheatridge, Colorado 80033</div>
<br>
<div>and to the Company at:</div>
<br>
<div>I Crystal, Inc.</div>
<div>Attention: James Kaufman</div>
<div>______________________</div>
<div>______________________</div>
<br>
<div>8. Miscellaneous.</div>
<br>
<div>A. In the event of a dispute between the parties arising out of this Agreement, both Consultant
and the Company agree to submit such dispute to arbitration before the American Arbitration
Association (the &#8220;Association&#8221;) at its Dallas, Texas, offices, in accordance with the then-current
rules of the Association; the award given by the arbitrators shall be binding and a judgment can
be obtained on any such award in any court of competent jurisdiction.  It is expressly agreed that
the arbitrators, as part of their award, can award attorneys fees to the prevailing party.</div>
<br>
<div>B. This Agreement is not assignable in whole or in any part, and shall be binding upon the
parties, their heirs, representatives, successors or assigns.</div>
<br>
<div>C. This Agreement may be executed in multiple counterparts which shall be deemed an original.
It shall not be necessary that each party execute each counterpart, or that any one counterpart be
executed by more than one party, if each party executes at least one counterpart.</div>
<br>
<div>D. This Agreement shall be governed by, and construed in accordance with, the laws of the State
of Delaware.</div>
<br>
<div>I CRYSTAL, INC.</div>
<br>
<br>
<div>By: /s/ JAMES KAUFMAN</div>
<div>James Kaufman</div>
<div>President</div>
<br>
<div>/s/ VICTOR NOSTAS</div>
<div>Victor Nostas</div>
</body>

</html>Unassociated Document

    INDENTURE

    Dated
      as of November 1, 2006

    
 

     

    Between

     

    

     

    FIRST
      HORIZON ABS TRUST 2006-HE2

    (Issuer)

     

    

     

    And

     

    

     

    THE
      BANK
      OF NEW YORK

    (Indenture
      Trustee)

     

    

     

    FIRST
      HORIZON ABS TRUST 2006-HE2

     

     

    

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    TABLE
      OF CONTENTS

     

    
      	 	 	
              Page

            
	 	 
	
              ARTICLE
                I DEFINITIONS

            	
              5

            
	
              Section
                1.1

            	
              Definitions

            	
              5

            
	
              Section
                1.2

            	
              Incorporation
                by Reference of Trust Indenture Act

            	
              12

            
	
              Section
                1.3

            	
              Rules
                of Construction

            	
              12

            
	 	 
	
              ARTICLE
                II THE NOTES

            	
              13

            
	
              Section
                2.1

            	
              Form

            	
              13

            
	
              Section
                2.2

            	
              Execution,
                Authentication, Delivery and Dating

            	
              13

            
	
              Section
                2.3

            	
              Registration;
                Registration of Transfer and Exchange

            	
              13

            
	
              Section
                2.4

            	
              Mutilated,
                Destroyed, Lost or Stolen Notes

            	
              15

            
	
              Section
                2.5

            	
              Persons
                Deemed Owner

            	
              16

            
	
              Section
                2.6

            	
              Payment
                of Principal and Interest Defaulted Interest

            	
              16

            
	
              Section
                2.7

            	
              Cancellation

            	
              16

            
	
              Section
                2.8

            	
              [Reserved]

            	
              17

            
	
              Section
                2.9

            	
              Release
                of Trust Estate

            	
              17

            
	
              Section
                2.10

            	
              Book-Entry
                Notes

            	
              17

            
	
              Section
                2.11

            	
              Notices
                to Clearing Agency

            	
              18

            
	
              Section
                2.12

            	
              Definitive
                Notes

            	
              18

            
	
              Section
                2.13

            	
              Tax
                Treatment

            	
              19

            
	 	 
	
              ARTICLE
                III COVENANTS

            	
              19

            
	
              Section
                3.1

            	
              Payment
                of Principal and Interest

            	
              19

            
	
              Section
                3.2

            	
              Maintenance
                of Office or Agency

            	
              19

            
	
              Section
                3.3

            	
              Money
                for Payments To Be Held in Trust

            	
              19

            
	
              Section
                3.4

            	
              Existence

            	
              20

            
	
              Section
                3.5

            	
              Protection
                of Trust Estate

            	
              21

            
	
              Section
                3.6

            	
              Annual
                Opinions as to the Trust Estate

            	
              21

            
	
              Section
                3.7

            	
              Performance
                of Obligations: Servicing of Mortgage Loans

            	
              22

            
	
              Section
                3.8

            	
              Negative
                Covenants

            	
              23

            
	
              Section
                3.9

            	
              Annual
                Statement as to Compliance

            	
              24

            
	
              Section
                3.10

            	
              Covenants
                of the Issuer (not Covenants of the Owner Trustee)

            	
              25

            
	
              Section
                3.11

            	
              Master
                Servicer’s Obligations

            	
              25

            
	
              Section
                3.12

            	
              Restricted
                Payments

            	
              25

            
	
              Section
                3.13

            	
              Treatment
                of Notes as Debt for All Purposes

            	
              26

            
	
              Section
                3.14

            	
              Notice
                of Events of Default

            	
              26

            
	
              Section
                3.15

            	
              Further
                Instruments and Acts

            	
              26

            
	
              Section
                3.16

            	
              Issuer
                May Consolidate, etc

            	
              26

            
	
              Section
                3.17

            	
              Successor
                or Transferee

            	
              28

            
	
              Section
                3.18

            	
              No
                Other Business

            	
              28

            
	
              Section
                3.19

            	
              No
                Borrowing

            	
              28

            
	
              Section
                3.20

            	
              Guarantees
                Loans Advances and Other Liabilities

            	
              28

            
	
              Section
                3.21

            	
              Capital
                Expenditures

            	
              28

            
	
              Section
                3.22

            	
              Validity
                of Notes

            	
              28

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	 
	
              ARTICLE
                IV SATISFACTION AND DISCHAGE

            	
              30

            
	
              Section
                4.1

            	
              Satisfaction
                and Discharge of Indenture

            	
              30

            
	
              Section
                4.2

            	
              Application
                of Trust Money

            	
              31

            
	
              Section
                4.3

            	
              Subrogation
                and Cooperation

            	
              31

            
	
              Section
                4.4

            	
              Repayment
                of Moneys Held by Paying Agent

            	
              32

            
	 	 
	
              ARTICLE
                V REMEDIES

            	
              32

            
	
              Section
                5.1

            	
              Events
                of Default

            	
              32

            
	
              Section
                5.2

            	
              Acceleration
                of Maturity; Rescission and Annulment

            	
              33

            
	
              Section
                5.3

            	
              Collection
                of Indebtedness and Suits for Enforcement by Indenture
                Trustee

            	
              34

            
	
              Section
                5.4

            	
              Remedies;
                Priorities

            	
              36

            
	
              Section
                5.5

            	
              Optional
                Preservation of the Trust Estate

            	
              38

            
	
              Section
                5.6

            	
              Limitation
                of Suits

            	
              38

            
	
              Section
                5.7

            	
              Unconditional
                Rights of Noteholders To Receive Principal and Interest

            	
              39

            
	
              Section
                5.8

            	
              Restoration
                of Rights and Remedies

            	
              39

            
	
              Section
                5.9

            	
              Rights
                and Remedies Cumulative

            	
              39

            
	
              Section
                5.10

            	
              Delay
                or Omission Not a Waiver

            	
              39

            
	
              Section
                5.11

            	
              Control
                by Noteholders

            	
              39

            
	
              Section
                5.12

            	
              Waiver
                of Past Defaults

            	
              40

            
	
              Section
                5.13

            	
              Undertaking
                for Costs

            	
              40

            
	
              Section
                5.14

            	
              Waiver
                of Stay or Extension Laws

            	
              40

            
	
              Section
                5.15

            	
              Action
                on Notes

            	
              41

            
	
              Section
                5.16

            	
              Performance
                and Enforcement of Certain Obligations

            	
              41

            
	 	 
	
              ARTICLE
                VI THE INDENTURE TRUSTEE

            	
              42

            
	
              Section
                6.1

            	
              Duties
                of Indenture Trustee

            	
              42

            
	
              Section
                6.2

            	
              Rights
                of Indenture Trustee

            	
              43

            
	
              Section
                6.3

            	
              Individual
                Rights of Indenture Trustee

            	
              45

            
	
              Section
                6.4

            	
              Indenture
                Trustee’s Disclaimer

            	
              45

            
	
              Section
                6.5

            	
              Notice
                of Defaults

            	
              45

            
	
              Section
                6.6

            	
              Reports
                by Indenture Trustee to Holders

            	
              45

            
	
              Section
                6.7

            	
              Compensation
                and Indemnity

            	
              46

            
	
              Section
                6.8

            	
              Replacement
                of Indenture Trustee

            	
              46

            
	
              Section
                6.9

            	
              Successor
                Indenture Trustee by Merger

            	
              47

            
	
              Section
                6.10

            	
              Appointment
                of Co-Indenture Trustee or Separate Indenture Trustee

            	
              48

            
	
              Section
                6.11

            	
              Eligibility:
                Disqualification

            	
              49

            
	
              Section
                6.12

            	
              Preferential
                Collection of Claims Against Issuer

            	
              49

            
	
              Section
                6.13

            	
              Representations
                and Warranties

            	
              49

            
	
              Section
                6.14

            	
              Directions
                to Indenture Trustee

            	
              50

            
	
              Section
                6.15

            	
              Indenture
                Trustee To Act Solely with Consent of the Insurer

            	
              50

            
	
              Section
                6.16

            	
              Mortgage
                Loans, Trust Estate and Accounts Held for Benefit of the
                Insurer

            	
              50

            
	
               

            	 
	
              ARTICLE
                VII NOTEHOLDERS’ LISTS AND REPORTS

            	
              50

            
	
              Section
                7.1

            	
              Issuer
                To Furnish Indenture Trustee Names and Addresses of
                Noteholders

            	
              50

            
	
              Section
                7.2

            	
              Preservation
                of Information; Communications to Noteholders

            	
              51

            
	
              Section
                7.3

            	
              Reports
                by Issuer

            	
              51

            
	
              Section
                7.4

            	
              Reports
                by Indenture Trustee

            	
              52

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	 
	
              ARTICLE
                VIII ACCOUNTS, DISBURSEMENTS AND RELEASES

            	
              52

            
	
              Section
                8.1

            	
              Collection
                of Money

            	
              52

            
	
              Section
                8.2

            	
              Accounts,
                Distributions

            	
              52

            
	
              Section
                8.3

            	
              [Reserved]

            	
              53

            
	
              Section
                8.4

            	
              Master
                Servicer’s Monthly Statements

            	
              53

            
	
              Section
                8.5

            	
              [Reserved]

            	
              53

            
	
              Section
                8.6

            	
              Opinion
                of Counsel

            	
              53

            
	 	 
	
              ARTICLE
                IX SUPPLEMENTAL INDENTURES

            	
              53

            
	
              Section
                9.1

            	
              Supplemental
                Indentures Without Consent of Noteholders

            	
              53

            
	
              Section
                9.2

            	
              Supplemental
                Indentures with Consent of Noteholders

            	
              55

            
	
              Section
                9.3

            	
              Execution
                of Supplemental Indentures

            	
              56

            
	
              Section
                9.4

            	
              Effect
                of Supplemental Indenture

            	
              56

            
	
              Section
                9.5

            	
              Conformity
                with Trust Indenture Act

            	
              56

            
	
              Section
                9.6

            	
              Reference
                in Notes to Supplemental Indentures

            	
              57

            
	 	 
	
              ARTICLE
                X REDEMPTION OF NOTES

            	
              57

            
	
              Section
                10.1

            	
              Redemption

            	
              57

            
	 	 
	
              ARTICLE
                XI MISCELLANEOUS

            	
              57

            
	
              Section
                11.1

            	
              Compliance
                Certificates and Opinions, etc.

            	
              57

            
	
              Section
                11.2

            	
              Form
                of Documents Delivered to Indenture Trustee

            	
              59

            
	
              Section
                11.3

            	
              Acts
                of Noteholders

            	
              59

            
	
              Section
                11.4

            	
              Notices

            	
              60

            
	
              Section
                11.5

            	
              Notices
                to Noteholders, Waiver

            	
              61

            
	
              Section
                11.6

            	
              Rights
                of the Insurer to Exercise Rights of Noteholders

            	
              61

            
	
              Section
                11.7

            	
              Conflict
                with Trust Indenture Act

            	
              62

            
	
              Section
                11.8

            	
              Effect
                of Headings and Table of Contents

            	
              62

            
	
              Section
                11.9

            	
              Successors
                and Assigns

            	
              62

            
	
              Section
                11.10

            	
              Separability

            	
              62

            
	
              Section
                11.11

            	
              Benefits
                of Indenture

            	
              62

            
	
              Section
                11.12

            	
              Legal
                Holidays

            	
              62

            
	
              Section
                11.13

            	
              GOVERNING
                LAW

            	
              62

            
	
              Section
                11.14

            	
              Counterparts

            	
              62

            
	
              Section
                11.15

            	
              Recording
                of Indenture

            	
              63

            
	
              Section
                11.16

            	
              Trust
                Obligation

            	
              63

            
	
              Section
                11.17

            	
              No
                Petition

            	
              63

            
	
              Section
                11.18

            	
              Inspection

            	
              63

            
	
              Section
                11.19

            	
              Inconsistencies
                With the Sale and Servicing Agreement

            	
              63

            
	
              Section
                11.20

            	
              Third
                Party Beneficiaries

            	
              64

            

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    INDENTURE
      dated as of November 1, 2006 between First Horizon ABS Trust 2006-HE2, a
      Delaware statutory trust (the “Issuer”) and The Bank of New York, a New York
      banking corporation, as trustee and not in its individual capacity (the
“Indenture Trustee”).

     

    Each
      party agrees as follows for the benefit of the other party and for the equal
      and
      ratable benefit of the holders of the Issuer’s First Horizon HELOC Notes, Series
      2006-HE2 (the “Notes”) and the Insurer:

     

    GRANTING
      CLAUSE

     

    The
      issuer hereby Grants to the Indenture Trustee for the benefit of the Noteholders
      and the Insurer, all of the Issuer’s right, title and interest, now owned or
      hereinafter acquired, in and to: (i) the Trust Estate; (ii) the Sale and
      Servicing Agreement and the Mortgage Loan Purchase Agreement with respect to
      the
      Mortgage Loans (including the Issuer’s right to cause the Seller to repurchase
      Mortgage Loans from the Issuer under certain circumstances described therein);
      (iii) all present and future claims, demands, causes of action 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, including all proceeds of the conversion thereof, voluntary
      or
      involuntary, into cash or other liquid property, all cash proceeds, accounts,
      accounts receivable, notes, drafts, acceptances, chattel paper, instruments,
      documents, checks, deposit accounts, investment property, insurance proceeds,
      condemnation awards, 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; (iv) the Collection Account, the Distribution Account and all funds
      and other property on deposit from time to time therein; (v) all other money,
      investments, investment property, accounts, general intangibles and other
      property of the Trust from time to time; and (vi) any and all proceeds of the
      foregoing (collectively the “Collateral”).

     

    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, equally
      and
      ratably without prejudice, priority or distinction, and to secure compliance
      with the provisions of this Indenture, all as provided in this
      Indenture.

     

    The
      Indenture Trustee, as Indenture Trustee on behalf of the holders of the Notes
      and the Insurer, acknowledges the foregoing Grant, accepts the trusts hereunder
      in good faith and without notice of any adverse claim or liens and agrees to
      perform its duties required in this Indenture to the best of its ability to
      the
      end that the interests of the holders of the Notes and the Insurer may be
      adequately and effectively protected. The Indenture Trustee further agrees
      and
      acknowledges that the documents listed in Section 2.01(b) of the Sale and
      Servicing Agreement for each Mortgage Loan will be held initially by the Seller
      as custodian and bailee and that each item of Collateral
      that is physically delivered to the Indenture Trustee will be held by the
      Indenture
      Trustee
      in the State of New York and/or the State of California.

     

    ARTICLE
      I

    DEFINITIONS

     

    Section
      1.1 Definitions.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (a) 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 Sale and Servicing
      Agreement. All other capitalized terms used herein shall have the meanings
      specified herein.

     

    Act:
      As
      specified in Section 11.3(a).

     

    Administration
      Agreement:
      The
      Administration Agreement dated as of November 1, 2006, among the Administrator,
      the Issuer, the Indenture Trustee and the Seller.

     

    Administrator:
      The
      Bank of New York, a New York banking corporation, in its capacity as
      administrator under the Administration Agreement, or any successor appointed
      in
      accordance with the terms of the Administration Agreement.

     

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

     

    Authorized
      Officer:
      With
      respect to the Issuer, any officer of the Owner Trustee who is authorized to
      act
      for the Owner Trustee in matters relating to the Issuer and who is identified
      on
      the list of Authorized Officers delivered by the Owner Trustee to the Indenture
      Trustee on the closing
      Date (as such list may be modified or supplemented from time to time thereafter)
      and, so
      long as
      the Administration Agreement is in effect, any Vice President or more senior
      officer of the Administrator who is authorized to act for the Administrator
      or
      in matters relating to the Issuer and to be acted upon by the Administrator
      pursuant to the Administration Agreement and who is identified on the list
      of
      Authorized Officers delivered by the Administrator to the Indenture Trustee
      on
      the Closing Date (as such list may be modified or supplemented from time to
      time
      thereafter).

     

    Book-Entry
      Note:
      Any
      Note registered in the name of the Depository or its nominee,
      ownership of a security entitlement with respect to which is reflected on the
      books of
      the
      Depository or on the books of a Person maintaining an account with such
      Depository (directly or as an indirect participant in accordance with the rules
      of such Depository).

     

    Business
      Day:
      As
      defined in the Sale and Servicing Agreement.

     

    Certificate
      of Trust:
      The
      certificate of trust of the Issuer substantially in the form of Exhibit A to
      the
      Trust Agreement.

     

    Clearing
      Agency:
      An
      organization registered as a “clearing agency” pursuant to Section 17A of the
      Exchange Act.

     

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

     

    Closing
      Date:
      November 21, 2006.

     

    Code:
      The
      Internal Revenue Code of 1986, as amended from time to time, and Treasury
      Regulations promulgated thereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Collateral:
      As
      defined in the Granting Clause of this Indenture.

     

    Commission:
      The
      Securities and Exchange Commission.

     

    Corporate
      Trust Office:
      The
      principal office of the Indenture Trustee at which at any particular time its
      corporate trust business shall be administered, which office at date of
      execution of this Agreement is located at 101 Barclay Street, 4W, New York,
      New
      York 10286, Attention: Corporate Trust Mortgage-Backed Securities Group, First
      Horizon ABS Trust 2006-HE2, or at such other address as the Indenture Trustee
      may designate from time to time by notice to the Noteholders, the Issuer and
      the
      Insurer or the principal corporate trust office of any successor Indenture
      Trustee at the address designated by such successor Indenture Trustee by notice
      to the Noteholders, the Insurer, and the Issuer.

     

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

     

    Definitive
      Notes:
      As
      specified in Article 11.

     

    Depositor:
      First
      Horizon Asset Securities Inc., a Delaware corporation, in its capacity as
      depositor under the Sale and Servicing Agreement, and its successor in
      interest.

     

    Depository
      Institution:
      Shall
      mean either (1) a depository institution or trust company (which may be the
      Indenture Trustee) organized under the laws of the United States or any one
      of
      the States thereof, including the District of Columbia (or any domestic branch
      of a foreign bank) which at all times (a) has a short-term unsecured debt rating
      of “P-1” by Moody’s, (b) has a short-term unsecured debt rating of “A-1” by
      Standard & Poor’s and (c) has its accounts fully insured by the FDIC or
      maintains trust accounts in a fiduciary capacity, or (2) any other institution
      that is acceptable to each Rating Agency; provided, however, that if such other
      institution does not satisfy the rating criteria set forth in clause (1), such
      other institution shall also be acceptable to the Insurer.

     

    Distribution
      Account:
      The
      Distribution Account (as defined in the Sale and Servicing Agreement),
      established by the Indenture Trustee.

     

    ERISA:
      The
      Employee Retirement Income Security Act of 1974, as amended. Event of Default:
      As defined in Section 5.1.

     

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

     

    Executive
      Officer:
      With
      respect to any corporation, the Chief Executive Officer, Chief operating
      officer, Chief Financial Officer, President, Executive Vice President, any
      Vice
      President, the Secretary or the Treasurer of such corporation; and with respect
      to any partnership, any general partner thereof.

     

    Final
      Payment Date:
      With
      respect to any Note, the Payment Date in October 2026.

     

    Grant:
      Means
      mortgage, pledge, bargain, 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 this Indenture.
      A
      Grant of the Collateral 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 the Collateral 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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Holder
      or Noteholder:
      The
      Person in whose name a Note is registered on the Note Register.

     

    Indenture
      Trustee:
      The
      Bank of New York, a New York banking corporation, as Indenture Trustee under
      this Indenture, or any successor Indenture Trustee appointed pursuant to the
      terms of this Indenture.

     

    Independent:
      When
      used with respect to any specified Person, that the Person (a) is in fact
      independent of the Issuer, any other obligor on the Notes, the Transferor and
      any Affiliate of any of the foregoing Persons, (b) does not have any direct
      financial interest or any material indirect financial interest in the Issuer,
      any such other obligor, the Transferor or any Affiliate of any of the foregoing
      Persons and (c) is not connected with the Issuer, any such other obligor, the
      Transferor 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 11.1 herein, made by an Independent appraiser or other
      expert appointed by an Issuer Order 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.

     

    Insurance
      and Indemnity Agreement:
      As
      defined in the Sale and Servicing Agreement. 

     

    Insurer:
      As
      defined in the Sale and Servicing Agreement.

     

    Insurer
      Default:
      As
      defined in the Sale and Servicing Agreement.

     

    Interest
      Accrual Period:
      As
      defined in the Sale and Servicing Agreement.

     

    Issuer:
      First
      Horizon ABS Trust 2006-HE2 until a successor replaces it in accordance with
      the
      terms of the Transaction Documents and, thereafter, means the
      successor.

     

    Issuer
      Order and 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.

     

    LIBOR:
      As
      defined in the Sale and Servicing Agreement.

     

    LIBOR
      Business Day:
      As
      defined in the Sale and Servicing Agreement. Moody’s: Moody’s Investors Service,
      Inc., or any successor thereto.

     

    Master
      Servicer:
      First
      Tennessee Bank National Association, in its capacity as master servicer under
      the Sale and Servicing Agreement, or any Successor Master Servicer appointed
      in
      accordance with the terms of the Sale and Servicing Agreement.

     

    Mortgage
      Loan Schedule:
      With
      respect to the Cut-Off Date, the schedule of Mortgage Loans constituting assets
      of the Trust. The Mortgage Loan Schedule is the schedule set forth herein as
      Schedule A, which schedule sets forth as to each Mortgage Loan: (i) the Cut-Off
      Date Principal Balance, (ii) the account number, (iii) the Credit Limit, (iv)
      the CLTV as of the date of the origination of the related Mortgage Loan, (v)
      occupancy and loan purpose, (vi) the Loan Rate as of the Cut-Off Date, (vii)
      the
      Margin, (viii) the type of property, (ix) the debt-to-income ratio, and (x)
      the
      FICO score. Terms used in this definition and not defined in this Indenture
      have
      the meanings assigned thereto in the Sale and Servicing Agreement and if not
      defined in the Sale and Servicing Agreement, the meanings assigned thereto
      in
      the Mortgage Loan Purchase Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Note:
      Any of
      the First Horizon HELOC Notes, Series 2006-HE2, executed
      by the Issuer and authenticated by the Indenture Trustee substantially in the
      form of Exhibit A hereto.

     

    Note
      Depository Agreement:
      The
      agreement dated November 21, 2006, among the Issuer, the Indenture Trustee
      and
      The Depository Trust Company, as the initial Clearing Agency, relating to the
      Book-Entry Notes.

     

    Note
      Owner:
      With
      respect to a Book Entry Note, the Person who is the owner of a security
      entitlement with respect to such Book Entry Note, as reflected on the books
      of
      the Clearing Agency or on the books of a Person maintaining an account with
      such
      Clearing Agency (directly as a Clearing Agency Participant or as an indirect
      participant, in each case in accordance with the rules of such Clearing
      Agency).

     

    Note
      Rate:
      As
      defined in the Sale and Servicing Agreement.

     

    Note
      Register and Note Registrar:
      Each as
      defined in Article II. 

     

    Obligations:
      The
      Mortgage Loans.

     

    Officer’s
      Certificate:
      A
      certificate signed by any Authorized Officer of the Issuer, under the
      circumstances described in, and otherwise complying with, the applicable
      requirements of Section 11.1 herein, and delivered to the Indenture Trustee.
      Unless otherwise specified, any reference in this Indenture to an Officer’s
      Certificate shall be to an Officer’s Certificate of any Authorized Officer of
      the Issuer.

     

    Opinion
      of Counsel:
      One or
      more written opinions of counsel who may, except as otherwise expressly provided
      in this Indenture, be employees of or counsel to the Issuer and who shall be
      satisfactory to the Indenture Trustee and the Insurer, and which opinion or
      opinions shall be addressed to the Indenture Trustee and the Insurer, as
      Indenture Trustee and the Insurer, respectively, and shall comply with any
      applicable requirements of Section 11.1 herein and shall be in form and
      substance satisfactory to the Indenture Trustee and the Insurer.

     

    Outstanding:
      With
      respect to any Note and as of the date of determination, any Note theretofore
      authenticated and delivered under this Indenture except:

     

    (i) Notes
      theretofore canceled by the Note Registrar or delivered to the Note Registrar
      for cancellation;

     

    (ii) Notes
      or
      portions thereof the payment for which money in the necessary amount has been
      theretofore deposited with the Indenture Trustee or any Paying Agent in trust
      for the Holders of such Notes (provided, however, that if such Notes are to
      be
      redeemed, notice of such redemption has been duly given pursuant to this
      Indenture or provision for such notice has been made, satisfactory to the
      Indenture Trustee);

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (iii) Notes
      in
      exchange for or in lieu of which other Notes have been authenticated and
      delivered pursuant to this Indenture unless proof satisfactory to the Indenture
      Trustee is presented that any such Notes are held by a protected purchaser;
      and

     

    (iv) Notes
      for
      which the Final Payment Date has occurred;

     

    provided,
      however, in determining whether the Holders of the requisite Outstanding Amount
      of the Notes have given any request, demand, authorization, direction, notice,
      consent, or waiver hereunder or under any Transaction Document, Notes owned
      by
      the Issuer, any other
      obligor upon the Notes, the Depositor, the Transferor or any Affiliate of any
      of
      the
      foregoing persons shall be disregarded and deemed not to be Outstanding, except
      that, in determining whether the Indenture Trustee 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 knows
      to
      be so owned shall be so disregarded and provided
      further that for purposes of determining the Insurer’s subrogation rights, a
      Note
      shall be
      deemed Outstanding to the extent of any payment made by the Insurer that has
      not
      been reimbursed. Notes so owned that have been pledged in good faith may be
      regarded as Outstanding if the pledgee establishes to the satisfaction of 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, the Transferor or any Affiliate of any of the foregoing
      Persons.

     

    Outstanding
      Amount:
      The
      aggregate principal amount of all Notes Outstanding at the date of
      determination.

     

    Owner
      Trustee:
      Wilmington Trust Company, a Delaware banking corporation, not in its individual
      capacity but solely as Owner Trustee under the Trust Agreement.

     

    Paving
      Agent:
      The
      Indenture Trustee or any other Person that meets the eligibility standards
      for
      the Indenture Trustee specified in Section 6.11 of the Sale and Servicing
      Agreement and is authorized by the Issuer to make payments to and distributions
      from the Distribution Account, including payment of principal of or interest
      on
      the Notes on behalf of the Issuer.

     

    Payment
      Date:
      The
      25th day of each month or, if such day is not a Business Day, then the next
      Business Day, beginning in December 2006.

     

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

     

    Predecessor
      Note:
      With
      respect to any particular Note, every previous Note evidencing all or a portion
      of the same debt as that evidenced by such particular Note; and, for the purpose
      of this definition, any Note authenticated and delivered under Article II in
      lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence
      the same debt as the mutilated, lost, destroyed or stolen Note.

     

    Proceeding:
      Any
      suit inequity, action at law or other judicial or administrative
      proceeding.

     

    Rating
      Agency Condition:
      With
      respect to certain actions requiring prior Rating Agency consent, that each
      Rating Agency shall have been given 10 days (or such shorter period as is
      acceptable to each Rating Agency) prior notice thereof and that each of the
      Rating Agencies shall have notified the Issuer, the Master Servicer, the
      Indenture Trustee and the Insurer in writing that such action will not result
      in
      a reduction or withdrawal of the then current rating of the Notes without regard
      to the Insurance Policy.

     

    Rating
      Agency:
      Either
      of (i) Moody’s or (ii) Standard & Poor’s. If no such organization or
      successor is any longer in existence, “Rating Agency” shall be a nationally
      recognized statistical rating organization or other comparable person designated
      by the Master Servicer and the insurer, notice of which designation shall have
      been given to the Indenture Trustee.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Record
      Date:
      As
      defined in the Sale and Servicing Agreement.

     

    Redemption
      Date:
      In the
      case of a redemption of the Notes pursuant to Section 10.1, the Payment Date
      specified by the Indenture Trustee pursuant to Section 10.1.

     

    Registered
      Holder:
      The
      Person in whose name a Note is registered on the Note Register on the applicable
      Record Date.

     

    Responsible
      Officer:
      As
      defined in the Sale and Servicing Agreement.

     

    Sale
      and Servicing Agreement:
      The
      Sale and Servicing Agreement dated as of November 1, 2006, among the Seller,
      the
      Depositor, the Issuer, the Master Servicer and the Indenture
      Trustee.

     

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

     

    Standard
      & Poor’s:
      Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies,
      Inc.

     

    State:
      Any one
      of the 50 States of the United States of America or the District of
      Columbia.

     

    Successor
      Master Servicer:
      As
      defined in Section 3.7(e) hereof.

     

    Transaction
      Documents:
      As
      defined in the Sale and Servicing Agreement. 

     

    Transferor:
      As
      defined in the Trust Agreement.

     

    Trust:
      The
      Issuer.

     

    Trust
      Estate:
      The
      assets subject to the Sale and Servicing Agreement, the Mortgage Loan Purchase
      Agreement, the Trust Agreement and the lien and security interest of this
      Indenture, which assets consist of: (i) each Mortgage Loan and the related
      Mortgage File, including its Principal Balance (including all Additional
      Balances resulting from Draws made pursuant to the related Mortgage Note prior
      to the termination of the Trust) and all collections in respect of interest
      and
      principal received after the Cut-Off Date; (ii) property that secured a Mortgage
      Loan that has become REO Property; (iii) the Seller’s rights under any insurance
      policies maintained by the Mortgagors or the Master Servicer in respect of
      the
      Mortgage Loans (including any Insurance Proceeds); (iv) such other assets as
      shall from time to time be identified as on deposit in the Collection Account
      and Distribution Account in accordance with the Sale and Servicing Agreement;
      (v) the Depositor’s rights under the Mortgage Loan Purchase Agreement; (vi) the
      benefit of the Insurance Policy and the proceeds of any draw thereunder; (vii)
      any proceeds of any of the foregoing (i) through (vi); and (viii) all other
      assets included or to be included in the Trust for the benefit of Noteholders
      and the Insurer. In addition, on or prior to the Closing Date, the Seller shall
      cause the Insurer to deliver the Insurance Policy to the Indenture Trustee
      for
      the benefit of the Noteholders. Terms used in this definition and not defined
      in
      this Indenture have the meanings assigned thereto in the Sale and Servicing
      Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Trust
      Indenture Act or TIA:
      The
      Trust Indenture Act of 1939 as in force on the date hereof, unless otherwise
      specifically provided.

     

    UCC:
      Unless
      the context otherwise requires, the Uniform Commercial Code, as in effect in
      the
      relevant jurisdiction from time to time.

     

    Section
      1.2 Incorporation
      by Reference of Trust Indenture Act.
      Whenever this Indenture
      refers to a provision of
      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:
      The
      Securities and Exchange Commission.

     

    indenture
      securities:
      The
      Notes.

     

    indenture
      security holder:
      A
      Noteholder.

     

    indenture
      to be qualified:
      This
      Indenture.

     

    indenture
      trustee or institutional trustee:
      The
      Indenture Trustee.

     

    obligor:
      On the
      indenture securities means the Issuer and any other obligor on the indenture
      securities.

     

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

     

    Section
      1.3 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
      (as
      provided in such agreements) 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

    THE
      NOTES

     

    Section
      2.1 Form.
      The
      Notes shall be designated as the “First Horizon ABS Trust 2006-HE2, First
      Horizon HELOC Notes, Series 2006-HE2”. Each Note shall be in substantially the
      form set forth in Exhibit A with such appropriate insertions, omissions,
substitutions
      and other variations as are required
      or
      permitted
      by
      this Indenture,
      and
      may have such
      letters, numbers or other marks of identification and such legends or
      endorsements placed
      thereon
      as may, consistently herewith, be determined by the officers executing such
      Notes,
      as
      evidenced by their execution thereof. Any portion
      of
      the text of any Note may be
      set
      forth
      on the
      reverse thereof,
      with
      an appropriate
      reference thereto
      on the
      face of such Note.

     

    The
      Definitive Notes shall be typewritten, printed, lithographed or engraved or
      produced by any combination of these methods, all as determined by the officers
      executing such Definitive Notes, as evidenced by their execution of such
      Definitive Notes.

     

    The
      terms
      of the Notes are set forth in Exhibit A hereto. The terms of the Notes are
      part
      of the terms of this Indenture.

     

    Section
      2.2 Execution,
      Authentication, Delivery and Dating.
      The
      Notes shall
      be
      executed on behalf of the Issuer by an Authorized
      Officer of the Owner Trustee. 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 Owner Trustee
      shall bind the Issuer, 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
      Indenture Trustee shall upon receipt of an Issuer Order, authenticate and
      deliver the Notes for original issue in the principal amount equal to
      $355,000,000. The aggregate principal amount of the Notes outstanding at any
      time may not exceed such amount.

     

    The
      Notes
      that are authenticated and delivered by the Indenture Trustee to or upon the
      order of the Issuer on the Closing Date shall be dated November 21, 2006. All
      other Notes that are authenticated after the Closing Date for any other purpose
      under the Indenture shall be dated the date of their authentication. The Notes
      shall be issuable as registered Notes in the minimum denomination of $25,000
      and
      multiples of $1,000 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
      Indenture Trustee 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.

     

    Section
      2.3 Registration;
      Registration of Transfer and Exchange.
      The
      Issuer shall cause
      to
      be kept
      a
      register (the “Note Register”) in which, subject to such reasonable
      regulations
      as it
      may prescribe, the Issuer shall provide for the registration of Notes and the
      registration of transfers of Notes. The Indenture Trustee initially shall be
      the
“Note Registrar” for the purpose of registering Notes and transfers of Notes as
      herein provided. Upon any resignation of any Note Registrar, the Issuer shall
      promptly appoint a successor or, if it elects not to make such an appointment,
      assume the duties of the Note Registrar.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If
      a
      Person other than the Indenture Trustee is appointed by the Issuer as Note
      Registrar, the Issuer will give the Indenture Trustee and the Insurer prompt
      written notice of the appointment of such Note Registrar and of the location,
      and any change in the location, of the Note Register, and the Indenture Trustee
      shall have the right to inspect the Note Register at all reasonable times and
      to
      obtain copies thereof, and the Indenture Trustee shall have the right to rely
      upon a certificate executed on behalf of the Note Registrar by an Executive
      Officer thereof as to the names and addresses of the Holders of the Notes and
      the principal amounts and number of such Notes.

     

    Upon
      surrender for registration of transfer of any Note at the office or agency
      of
      the Issuer to be maintained as provided in Section 3.2 hereof, the Owner Trustee
      on behalf of the Issuer shall execute, and the Indenture Trustee shall
      authenticate and the Noteholder shall obtain from the Indenture Trustee, in
      the
      name of the designated transferee or transferees, one br more new Notes in
      any
      authorized denominations, of a like aggregate principal amount.

     

    At
      the
      option of the Holder, Notes may be exchanged for other Notes in any authorized
      denominations, of a like aggregate principal amount, upon surrender of the
      Notes
      to be exchanged at such office or agency. Whenever any Notes are so surrendered
      for exchange, the Issuer shall execute, and the Indenture Trustee shall
      authenticate and the Noteholder shall obtain from the Indenture Trustee, the
      Notes which the Noteholder making the exchange is entitled to
      receive.

     

    All
      Notes
      issued upon any registration of transfer or exchange of Notes shall be the
      valid
      obligations of the Issuer, evidencing the same debt, and entitled to the same
      benefits under this Indenture, as the Notes surrendered upon such registration
      of transfer or exchange.

     

    Every
      Note presented or surrendered for registration of transfer or exchange shall
      be
      duly endorsed by, or be accompanied by a written instrument of transfer in
      form
      satisfactory to the Indenture Trustee duly executed by, the Holder thereof
      or
      such Holder’s attorney duly authorized in writing, with such signature
      guaranteed by an “eligible guarantor institution” meeting the requirements of
      the Note Registrar, which requirements include membership or participation
      in
      the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other
“signature guarantee program” as may be determined by the Note Registrar in
      addition to, or in substitution for, STAMP, all in accordance with the Exchange
      Act.

     

    No
      service charge shall be made to a Holder for any registration of transfer or
      exchange of Notes, but the Issuer may require payment of a sum sufficient to
      cover. any tax or other governmental charge that may be imposed in connection
      with any registration of transfer or exchange of Notes, other than exchanges
      pursuant to Section 2.4 or Section 9.6 hereof not involving any
      transfer.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    By
      acquiring a Note, each purchaser and transferee shall be deemed to represent
      and
      warrant that either (a) it is not acquiring the Note with the plan assets of
      an
“employee benefit plan” as defined in Section 3(3) of ERISA, whether or not
      subject to Title I of ERISA, or a “plan” as defined in Section 4975(e)(1) of the
      Code whether or not subject to Section 4975 of the Code, or any entity deemed
      to
      hold the “plan assets” of the foregoing; or (b) the acquisition and holding of
      the Note will not give rise to a non-exempt prohibited transaction under Section
      406(a) of ERISA or Section 4975 of the Code which is not eligible for exemptive
      relief under Prohibited Transaction Class Exemption (“ PTCE”) 84-14, PTCE 90-1,
      PTCE 91-38, PTCE 95-60, PTCE 96-23 or a similar prohibited transaction exemption
      and does not cause a non-exempt violation of any substantially similar
      laws.

     

    Section
      2.4 Mutilated,
      Destroyed, Lost or Stolen Notes.

     

    (i) any
      mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
      receives evidence to its satisfaction of the destruction, loss or theft of
      any
      Note, and

     

    (ii) there
      is
delivered
      to the
      Indenture Trustee such security or indemnity as may be reasonably required
      by it
      to hold the Issuer and the Indenture Trustee harmless,

     

    then,
      in
      the absence of notice to the Issuer, the Note Registrar or the Indenture Trustee
      that such Note has been acquired by a protected purchaser, an Authorized Officer
      of the Owner Trustee shall execute, and upon request the Indenture Trustee
      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, or shall have been called
      for redemption, instead of issuing a replacement Note, the Issuer may pay such
      destroyed, lost or stolen Note when so due or payable or upon the Redemption
      Date 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 protected purchaser of the original Note in lieu of which
      such replacement Note was issued presents for payment such original Note, the
      Issuer and the Indenture Trustee 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 protected 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 Issuer or the
      Indenture Trustee in connection therewith. The calculation of Insured Payments
      shall be made without regard to the issuance of any replacement
      Note.

     

    Upon
      the
      issuance of any replacement Note under this Section 2.4, the Issuer 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 Indenture Trustee)
      connected therewith.

     

    Every
      replacement Note issued pursuant to this Section 2.4 in replacement of any
      mutilated, destroyed, lost or stolen Note shall constitute an original
      additional contractual obligation of the Issuer, 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 2.4 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
      2.5 Persons
      Deemed Owner.
      Prior
      to due presentment for registration of transfer
      of any Note, the Issuer, the Indenture
      Trustee
      and any agent of the Issuer or the Indenture
      Trustee 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 on, if any, such Note and for all other purposes whatsoever,
      whether
      or not such Note be overdue, and none of the Issuer, the Indenture Trustee
      or
      any
      agent of the Issuer or the Indenture Trustee shall be affected by notice to
      the
      contrary.

     

    Section
      2.6 Payment
      of Principal and Interest Defaulted Interest.

     

    (a) Each
      Note
      shall accrue interest at the Note Rate and such interest shall be payable on
      each Payment Date as specified in Exhibit A hereto, subject to Section 3.1
      hereof. Any installment of interest or principal, if any, payable on any Note
      that is punctually
      paid or duly provided for by the Issuer on the applicable Payment Date
      shall be
      paid to
      the
      Person in whose name such Note (or one or more
      Predecessor Notes) is registered
      on the
      Record Date in the manner set forth in Section 5.01(c) of the Sale and Servicing
      Agreement.

     

    (b) The
      principal of each Note shall be payable in installments on each Payment Date
      as
      provided in the forms of the Notes set forth in Exhibit A hereto.
      Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
      shall be due and payable, if not previously paid, on the earliest of (i) the
      Final Payment Date, (ii) the Redemption Date or (iii) the date on which an
      Event
      of Default shall have occurred and be continuing, if the Notes shall have been
      declared or otherwise shall become immediately due and payable in the manner
      provided in Section 5.2 below. All principal payments on the Notes shall be
      in
      the manner set forth in the Sale and Servicing Agreement. The Indenture Trustee
      shall notify the Person in whose name a Note is registered at the close of
      business on the Record Date preceding the Payment Date on which the Issuer
      expects that the final installment of principal of and interest on such Note
      will be paid. Such notice shall be mailed or transmitted by facsimile prior
      to
      such Final Payment Date and shall specify that such final installment 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 payment of such
      installment. Notices in connection with redemptions of Notes shall be mailed
      to
      Noteholders and the Insurer as provided in Section 8.01 of the Sale and
      Servicing Agreement.

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      2.8 [Reserved].

     

    Section
      2.9 Release
      of Trust Estate.

     

    (a) Except
      as
      otherwise provided in subsections (b) and (c) of this Section 2.9 and Section
      11.1 hereof and the terms of the Transaction Documents, the Indenture Trustee
      shall release
      property from the lien of this Indenture only upon consent of the
      Insurer and receipt
      of an Issuer
      Request accompanied by an Officer’s Certificate,
      an
      Opinion of Counsel and Independent
      Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or an Opinion
      of Counsel in lieu of such Independent Certificates to the effect that the
      TIA
      does not require any such Independent Certificates.

     

    (b) The
      Master Servicer, on behalf of the Issuer and with the consent of the Insurer,
      shall be entitled to obtain a release from the lien of this Indenture for any
      Mortgage Loan and the related Mortgaged Property at any time in accordance
      with
      the provisions of Section 3.08 of the Sale and Servicing Agreement.

     

    (c) The
      Indenture Trustee shall, if requested by the Master Servicer, temporarily
      release to the Master Servicer the Indenture Trustee’s Mortgage File pursuant to
      the provisions of Section 3.08 of the Sale and Servicing Agreement upon
      compliance by the Master Servicer of the provisions thereof provided that the
      Indenture Trustee’s Mortgage File shall have been stamped to signify the
      Issuer’s pledge to the Indenture Trustee under this Indenture.

     

    Section
      2.10 Book-Entry
      Notes.
      The
      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 Clearing Agency or its custodian, by, or on behalf of,
      the
      Issuer. The Book-Entry Notes shall be registered initially on the Note Register
      in the name of Cede & Co., the nominee of the initial Clearing Agency, and
      no Note Owner thereof will receive a definitive Note representing such Note
      Owner’s interest in such Note, except as provided in Section 2.12 below. Unless
      and until definitive, fully registered Notes (the “Definitive Notes”) have been
      issued to such Note Owners pursuant to Section 2.12 below:

     

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

     

    (ii) the
      Note
      Registrar and the Indenture Trustee shall be entitled to deal with the Clearing
      Agency 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
      Note Owners;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    (iv) the
      rights of Note Owners shall be exercised only through the Clearing Agency and
      shall be limited to those established by law and agreements between such Note
      Owners and the Clearing Agency and/or the Clearing Agency Participants pursuant
      to the Note Depository Agreement. Unless and until Definitive Notes are issued
      pursuant to Section 2.12 below, the initial Clearing Agency will make book
      entry
      transfers among the Clearing Agency Participants and receive and transmit
      payments of principal of and interest on the Notes to such Clearing Agency
      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
      Outstanding Amount of the Notes, the Clearing Agency shall be deemed to
      represent such percentage only to the extent that it has received instructions
      to such effect from Note Owners and/or Clearing Agency Participants owning
      or
      representing, respectively, such required percentage of security entitlements
      with respect to the Notes and has delivered such instructions to the Indenture
      Trustee.

     

    Section
      2.11 Notices
      to Clearing Agency.
      Whenever a notice or other communication to the Noteholders is required under
      this Indenture, unless and until Definitive Notes shall have been issued to
      such
      Note Owners pursuant to Section 2.12, the Indenture Trustee shall give all
      such
      notices and communications specified herein to be given to Holders of the Notes,
      to the Clearing Agency, and shall have no obligation to such Note
      Owners.

     

    Section
      2.12 Definitive
      Notes.
      If (i)
      the Clearing Agency or the Issuer advises the Indenture Trustee in writing
      that
      the Clearing Agency is no longer willing or able to properly discharge its
      responsibilities with respect to the Book Entry Notes and the Clearing Agency
      or
      the Issuer is unable to locate a qualified successor, (ii) the Issuer at its
      option advises the Indenture Trustee in writing that it elects to terminate
      the
      book entry system through the Clearing Agency or (iii) after the occurrence
      of
      an Event of Default, Note Owners of security entitlements representing
      beneficial interests aggregating at least a majority of the Outstanding Amount
      of such Notes advise the Clearing Agency in writing that the continuation of
      a
      book entry system through the Clearing Agency is no longer in the best interests
      of such Note Owners, then the Clearing Agency shall notify all Note Owners
      and
      the Indenture Trustee of the occurrence of such event and of the availability
      of
      Definitive Notes to Note Owners requesting the same. Upon surrender to the
      Indenture Trustee of the typewritten Notes representing the Book Entry Notes
      by
      the Clearing Agency, accompanied by registration instructions, the Issuer shall
      execute and the Indenture Trustee shall authenticate the Definitive Notes in
      accordance with theinstructions of the Clearing Agency. None of the Issuer,
      the
      Note Registrar or the Indenture Trustee shall be liable for any delay in
      delivery of such instructions and may conclusively rely on, and shall be
      protected in relying on, such instructions. Upon the issuance of Definitive
      Notes, the Indenture Trustee and the Note Registrar shall recognize the Holders
      of the Definitive Notes as Noteholders.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      2.13 Tax
      Treatment.
      The
      Issuer has entered into this Indenture, and the Notes will be issued, with
      the
      intention that, for all tax purposes, the Notes will qualify as indebtedness
      secured by the Trust Estate. The Issuer, by entering into this Indenture, and
      each Noteholder, by its acceptance of a Note (and each Note Owner by its
      acceptance of a security entitlement with respect to the applicable Book Entry
      Note), agree to treat the Notes for all purposes as indebtedness of the
      Issuer.

     

    ARTICLE
      III

    COVENANTS

     

    Section
      3.1 Payment
      of Principal and Interest.
      The
      Issuer will duly and punctually pay (or will cause to be duly and punctually
      paid) the principal of and interest on the Notes in accordance with the terms
      of
      the Notes and this Indenture. Without limiting the foregoing, the Indenture
      Trustee shall, pursuant to Section 5.01 of the Sale and Servicing Agreement,
      distribute all amounts on deposit in the Distribution Account on each Payment
      Date deposited therein pursuant to the Sale and Servicing Agreement, and held
      therein for distribution to the Noteholders and the Insurer for the benefit
      of
      such Noteholders and the Insurer. Amounts properly withheld under the Code
      by
      any Person from a payment to any Noteholder of interest and/or principal shall
      be considered as having been paid by the Issuer to such Noteholder for all
      purposes of this Indenture.

     

    The
      Notes
      shall be non-recourse obligations of the Issuer and shall be limited in
right
      of
      payment to amounts available from the Trust Estate, as provided in this
      Indenture.
      The
      Issuer
      shall not otherwise be liable for payments on the Notes. If any other provision
      of this Indenture shall be deemed to conflict with the provisions of this
      Section 3.1, the provisions of this Section 3.1 shall control.

     

    Section
      3.2 Maintenance
      of Office or Agency.
      The
      Issuer will maintain an office or
      agency
      where
      Notes
      may be surrendered
      for registration
      of transfer or exchange,
      and
      where
      notices and demands to or upon the Issuer in respect of the Notes and this
      Indenture
      may be served.
      The
      Issuer hereby initially appoints the Indenture Trustee to serve as
      its
      agent
      for the foregoing purposes and to serve as Paying Agent with respect to the
      Notes. If at any time the Issuer shall fail to maintain any such office or
      agency or shall fail to furnish the Indenture Trustee with the address thereof,
      such surrenders, notices and demands may be made or served at the Corporate
      Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
      to receive all such surrenders, notices and demands.

     

    Section
      3.3 Money
      for Payments To Be Held in Trust.
      As
      provided in Section 8.2(a) and (b), all payments of amounts due and payable
      with
      respect to any Notes
      that
      are to be remitted from amounts withdrawn from the Distribution Account pursuant
      to
      Section
      8.2(c) shall be made on behalf of the issuer by the Indenture Trustee or by
      the
      Paying Agent,
      and no amounts so withdrawn from the Distribution Account for payments on the
      Notes
      shall
      be paid over to the Issuer except as provided in this Section 3.3.

     

    Any
      Paying Agent shall be appointed by Issuer Order with written notice thereof
      to
      the Indenture Trustee and the Insurer. Any Paying Agent appointed by the Issuer
      shall be a Person who
      would
      be eligible to be Indenture Trustee hereunder as provided in Section 6.11
      hereof. The
      Issuer
      shall not appoint any Paying Agent (other than the Indenture Trustee) which
      is
      not, at the time of such appointment, a Depository Institution.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      Issuer will cause each Paying Agent to execute and deliver to the Indenture
      Trustee
      an
      instrument in which such Paying Agent shall agree with the
      Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby
      so agrees), subject to the provisions of this Section 3.3, that such Paying
      Agent will:

     

    (i) hold
      all
      sums held by it for the payment of amounts’ due with respect to the Notes in
      trust for the benefit of the Persons entitled thereto until such sums shall
      be
      paid
      to such Persons or otherwise disposed of as herein provided and pay such sums
      to
      such
      Persons as herein provided;

     

    (ii) give
      the
      Indenture Trustee and the Insurer notice of any default by the issuer
      (or any other obligor upon the Notes) (such notice to be given within
      three Business
      Days)
      of which
      it has actual knowledge in the making of any payment required
      to be
      made with respect to the Notes;

     

    (iii) at
      any
time
      during
the
      continuance of any such default, upon the written request
      of the
      Indenture Trustee
      or the
      Insurer, forthwith pay to the Indenture Trustee all sums
      so
      held in trust by such Paying Agent;

     

    (iv) immediately resign
      as a
      Paying Agent and forthwith pay to the Indenture Trustee all sums held by it
      in
      trust for the payment of Notes if at any time it ceases to meet the standards
      required to be met by a Paying Agent at the time of its appointment;
      and

     

    (v) comply
      with all requirements of the Code with respect to the withholding from
      any
      payments made by it on any Notes of any applicable withholding taxes imposed
      thereon and with respect to any applicable reporting requirements in
      connection
      therewith; provided, however, that with respect to withholding and reporting
      requirements applicable to original issue discount (if any) on the Notes, the
      Issuer shall have first provided the calculations pertaining thereto to the
      Indenture Trustee.

     

    The
      Issuer may at any time, for the purpose of obtaining the satisfaction and
      discharge of this Indenture or for any other purpose, by Issuer Order direct
      any
      Paying Agent to pay to the Indenture Trustee all sums held in trust by such
      Paying Agent, such sums to be held by the Indenture Trustee upon the same terms
      as those upon which the sums were held by such Paying Agent; and upon such
      payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall
      be
      released from all further liability with respect to such money.

     

    Any
      termination and release of a Trust Estate shall be done in accordance with
      the
      provisions of Section 8.01 of the Sale and Servicing Agreement.

     

    Section
      3.4 Existence.

     

    (a) Subject
      to Section 3.4(b) below, the Issuer 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 Issuer hereunder is or becomes, organized under the laws of
      any
      other
      State or
      of the United States of America, in which case the Issuer 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 the
      Trust Estate.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) Any
      successor to the Owner Trustee appointed pursuant to Section 10.2 of the Trust
      Agreement shall be the successor Owner Trustee under this Indenture without
      the
      execution or filing of any paper, instrument or further act to be done on the
      part of the parties hereto.

     

    (c) Upon
      any
      consolidation or merger of or other succession to the Owner Trustee, the Person
      succeeding to the Owner Trustee under the Trust Agreement may exercise every
      right and power of the Owner Trustee under this Indenture with the same effect
      as if such Person had been named as the Owner Trustee herein.

     

    Section
      3.5 Protection
      of Trust Estate.
      The
      Issuer will from time to time 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:

     

    (a) provide
      further assurance with respect to a Grant of all or any portion of the related
      Trust Estate;

     

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

     

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

     

    (d) enforce
      any rights with respect to the Trust Estate; or

     

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

     

    Section
      3.6 Annual
      Opinions as to the Trust Estate.
      Within
      90 days after the Issuer’s fiscal year end, beginning with the year 2007, the
      Issuer shall furnish to the Indenture Trustee and the Insurer an Opinion of
      Counsel either stating that, in the opinion of such counsel, such action has
      been taken with respect to the recording, filing, rerecording and re-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 is necessary to maintain perfection
      of
      the lien and security interest created by this Indenture and reciting the
      details of such action or stating that in the opinion of such counsel no such
      action is necessary to maintain the perfection of such lien and security
      interest. Such Opinion of Counsel shall also describe the recording, filing,
      re-recording and re-filing 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 perfection of the lien and security interest
      of
      this Indenture.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      3.7 Performance
      of Obligations: Servicing of Mortgage Loans.

     

    (a) The
      Issuer will not take any action and will use its best efforts not to permit
      any
      action to be taken by others that would release any Person from any of such
      Person’s covenants or obligations under any instrument or agreement included in
      the Trust Estate or that would result in the amendment, hypothecation,
      subordination, termination or discharge of, or impair the validity or
      effectiveness of, any such instrument or agreement, except as expressly provided
      in this Indenture, the Sale and Servicing Agreement or such other instrument
      or
      agreement.

     

    (b) The
      Issuer may contract with or otherwise obtain the assistance of 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 Issuer shall be deemed to be action taken by the Issuer.
      Initially, the Issuer has contracted with the Administrator to assist the Issuer
      in performing its duties under this Indenture.

     

    (c) The
      Issuer will punctually perform and observe all of its obligations and agreements
      contained in this Indenture, the Transaction Documents and in the instruments
      and agreements included in the Trust Estate, including but not limited to (i)
      filing or causing to be filed all UCC financing statements and continuation
      statements required to be filed by the terms of this Indenture, the Mortgage
      Loan Purchase Agreement and the Sale and Servicing Agreement and (ii) recording
      or causing to be recorded all Mortgages, Assignments of Mortgage, all
      intervening Assignments of Mortgage and all assumption and modification
      agreements required to be recorded by the terms of the Sale and Servicing
      Agreement and the Mortgage Loan Purchase Agreement, in accordance with and
      within the time periods provided for in this Indenture and/or the Sale and
      Servicing Agreement, as applicable. Except as otherwise expressly provided
      therein, the Issuer shall not waive, amend, modify, supplement or terminate
      any
      Transaction Document or any provision thereof without the consent of the
      Indenture Trustee, the Insurer and the Holders of at least a majority of the
      Outstanding Amount of the Notes.

     

    (d) Subject
      to the terms of the Sale and Servicing Agreement, if the Issuer shall have
      knowledge of the occurrence of an Event of Servicing Termination under the
      Sale
      and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee,
      the Seller, the Depositor, the Insurer, the Master Servicer and the Rating
      Agencies thereof, and shall specify in such notice the action, if any, the
      Master Servicer is taking with respect of such default. If such an Event of
      Servicing Termination shall arise from the failure of the Master Servicer to
      perform any of its duties or obligations under the Sale and Servicing Agreement
      with respect to the Mortgage Loans, the Issuer shall take all reasonable steps
      available to it to remedy or cause to be remedied such failure.

     

    (e) Subject
      to the terms of the Sale and Servicing Agreement, as promptly as possible after
      the giving of notice of termination to the Master Servicer of the Master
      Servicer’s rights and powers pursuant to Section 8.01 of the Sale and Servicing
      Agreement, a successor servicer (the “Successor Master Servicer”) shall be
      appointed pursuant to Section 7.02 of the Sale and Servicing Agreement. If
      the
      Indenture Trustee shall succeed to the Master Servicer’s duties as servicer of
      the Mortgage Loans as provided therein, it shall do so in its individual
      capacity and not in its capacity as Indenture Trustee and, accordingly, the
      provisions of Article VI hereof shall be inapplicable to the Indenture Trustee
      in its duties as successor Master Servicer and the servicing of the Mortgage
      Loans, but rather the provisions of the Sale and Servicing Agreement shall
      be
      applicable. In case the Indenture Trustee shall become successor Master Servicer
      under the Sale and Servicing Agreement, the Indenture Trustee shall be entitled
      to appoint as Successor Master Servicer any one of its Affiliates reasonably
      acceptable to the Insurer.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f) Without
      derogating from the absolute nature of the assignment granted to the Indenture
      Trustee under this Indenture or the rights of the Indenture Trustee hereunder,
      the Issuer agrees (i) that it will not, without the prior written consent of
      the
      Indenture Trustee (acting at the direction of the holders of at least 51% of
      the
      Outstanding Amount of the Notes) and the Insurer (which consent shall not be
      unreasonably withheld), amend, modify, waive, supplement, terminate or
      surrender, or agree to any amendment, modification, supplement, termination,
      waiver or surrender of, the terms of the Trust Estate (except to the extent
      otherwise provided in the Sale and Servicing Agreement or the other Transaction
      Documents), or waive timely performance or observance by the Master Servicer
      or
      the Seller under the Sale and Servicing Agreement; and (ii) that any such
      amendment shall not (A) increase or reduce in any manner the amount of, or
      accelerate or delay the timing of, distributions that are required to be made
      for the benefit of the Noteholders or (B) reduce the percentage of the Notes,
      set forth in Section 9.2, that is required to consent to any such amendment,
      without the consent of the Holders of all the outstanding Notes. If any such
      amendment, modification, supplement or waiver shall be so consented to by the
      Indenture Trustee (acting at the direction of the holders of at least 51% of
      the
      Outstanding Amount of the Notes) and the Insurer, the Issuer agrees, promptly
      following a request by the Indenture Trustee or the Insurer to do so, to execute
      and deliver, in its own name and at its own expense, such agreements,
      instruments, consents and other documents as the Indenture Trustee or the
      Insurer may deem necessary or appropriate in the circumstances.

     

    Section
      3.8 Negative
      Covenants.
      So long
      as any Notes are Outstanding, the Issuer shall not, unless the Insurer otherwise
      consents in writing:

     

    (a) except
      as
      expressly permitted by this Indenture or the Sale and Servicing Agreement,
      sell, transfer, exchange or otherwise dispose of any of the properties or
      assets
      of the
      Issuer, including those included in the
      Trust
      Estate, unless directed
      to do so
      by the Indenture Trustee and consented to by the Insurer;

     

    (b) claim
      any
      credit on, or make any deduction from the principal or interest payable in
      respect of, the Notes (other than amounts properly withheld from such payments
      under the Code) or assert any claim against any present or former Noteholder
      by
      reason of the payment of the taxes levied or assessed upon any part of the
      Trust
      Estate;

     

    (c) engage
      in
      any business or activity other than as permitted by the Trust Agreement or
      other
      than in connection with, or relating to, the issuance of Notes pursuant to
      this
      Indenture and the Transferor Interest pursuant to the Trust Agreement, or amend
      the Trust Agreement as in effect on the Closing Date other than in accordance
      with Section 11.1 thereof;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) issue
      debt obligations under any other indenture;

     

    (e) incur
      or
      assume any indebtedness or guaranty any indebtedness of any Person, except
      for
      such indebtedness as may be incurred by the Issuer in connection with the
      issuance of the Notes pursuant to this Indenture;

     

    (f) dissolve
      or liquidate in whole or in part, or, subject to Section 3.16, merge or
      consolidate with any other Person;

     

    (g) (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 (other
      than
      tax liens, mechanics’ liens and other liens that arise by operation of law, in
      each case on any of the Mortgaged Properties and arising solely as a result
      of
      an action or omission of the related Mortgagor) or (C) permit the lien of this
      Indenture not to constitute a valid first priority (other than with respect
      to
      any such tax, mechanics’ or other lien) security interest in the Trust
      Estate;

     

    (h) change
      its name, the location of its chief executive office, the jurisdiction of its
      formation, or the type of entity it is, unless it has first (A) taken all
      actions, including the making of all filings under the UCC as in effect in
      all
      applicable jurisdictions, as are necessary to maintain and continue the
      first-priority perfected security interest of the Indenture Trustee in the
      Collateral, and (B) delivered to the Indenture Trustee and the Insurer an
      Opinion of Counsel acceptable to the Indenture Trustee and the Insurer that
      the
      Issuer has made all filings or taken such actions under the UCC as are necessary
      to maintain and continue the first-priority perfected security interest of
      the
      Indenture Trustee in the Collateral; or

     

    (i) take
      any
      other action or fail to take any action which may cause the Issuer to be taxable
      as (a) an association pursuant to Section 7701 of the Code and the corresponding
      regulations or (b) a taxable mortgage pool pursuant to Section 7701(i) of the
      Code and the corresponding regulations.

     

    Section
      3.9 Annual
      Statement as to Compliance.
      The
      Issuer will deliver to the Indenture
      Trustee and the Insurer, no later than March 15th
      of each
      year (commencing with the fiscal year 2007), an Officer’s Certificate stating,
      as to the Authorized
      Officer signing such Officer’s Certificate,
      that:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (a) a
      review
      of the activities of the Issuer during such year and of its performance under
      this Indenture has been made under such Authorized Officer’s supervision;
      and

     

    (b) to
      the
      best of such Authorized Officer’s knowledge, based on such review, the Issuer
      has complied with all conditions and covenants under this Indenture 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
      3.10 Covenants
      of the Issuer (not Covenants of the Owner Trustee).
      All
      covenants of the Issuer in this Indenture are covenants of the Issuer and are
      not covenants of the Owner Trustee. The Owner Trustee is, and any successor
      Owner Trustee under the Trust Agreement will be, executing this Indenture solely
      as Owner Trustee under the Trust Agreement and not in its respective individual
      capacity, and in no case whatsoever shall the Owner Trustee or any such
      successor Owner Trustee be personally liable on, or for any loss in respect
      of,
      any of the statements, representations, warranties or obligations of the Issuer
      hereunder, as to all of which the parties hereto agree to look solely to the
      property of the Issuer.

     

    It
      is
      expressly understood and agreed by the parties that (a) this Indenture is
      executed and delivered by Wilmington Trust Company, not individually or
      personally, but solely as Owner Trustee, in the exercise of the powers and
      authority conferred and vested in it, pursuant to the Trust Agreement, (b)
      each
      of the representations, undertakings and agreements herein made on the part
      of
      the Trust is made and intended not as personal representations, undertakings
      and
      agreements by Wilmington Trust Company but is made and intended for the purpose
      for binding only the Trust, (c) nothing herein contained shall be construed
      as
      creating any liability on Wilmington Trust Company, individually or personally,
      to perform any covenant either expressed or implied contained herein, all such
      liability, if any, being expressly waived by the parties hereto and by any
      person claiming by, through or under the parties hereto, and (d) under no
      circumstances shall Wilmington Trust Company be personally liable for the
      payment of any indebtedness or expenses of the Trust or be liable for the breach
      or failure of any obligation, representation, warranty or covenant made or
      undertaken by the Trust under this Indenture or any other related
      documents.

     

    Section
      3.11 Master
      Servicer’s Obligations.
      The
      Issuer shall cause the Master Servicer to comply with its obligations under
      the
      terms of the Sale and Servicing Agreement.

     

    Section
      3.12 Restricted
      Payments.
      The
      Issuer 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 Issuer or otherwise with respect to any ownership
      or
      equity interest or security in or of the Issuer or to the Master Servicer,
      (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 Issuer may make, or cause to be
      made(x) distributions to the Master Servicer, the Indenture Trustee, the Owner
      Trustee, the Administrator, the Insurer, the Transferor Interest and the
      Noteholders as contemplated by, and to the extent funds are available for such
      purpose under this Indenture, the Sale and Servicing Agreement or the Trust
      Agreement. The Issuer will not, directly or indirectly, make or cause to be
      made
      payments to or distributions from the Collection Account except in accordance
      with this Indenture and the Transaction Documents.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      3.13 Treatment
      of Notes as Debt for All Purposes.
      The
      Issuer shall treat the Notes as indebtedness for all purposes.

     

    Section
      3.14 Notice
      of Events of Default.
      The
      Issuer shall give the Indenture Trustee, the Seller, the Insurer and the Rating
      Agencies prompt written notice of each Event of Default hereunder, each default
      on the part of the Master Servicer of its obligations under the Sale and
Servicing
      Agreement and each default on the part of the Depositor or the Seller of its
      obligations
      under
      the Sale and Servicing Agreement.

     

    Section
      3.15 Further
      Instruments and Acts.
      Upon
      request of the Indenture Trustee or the Insurer, the Issuer 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
      3.16 Issuer
      May Consolidate, etc.

     

    (a) The
      Issuer shall not consolidate or merge with or into any other Person,
      unless:

     

    (i) the
      Person (if other than the Issuer) formed by or surviving such consolidation
      or merger shall be a Person organized and existing under the laws of
      the
      United
      States of America or any State or the District of Columbia and shall expressly
      assume, by an indenture supplemental hereto, executed and delivered to the
      indenture Trustee,
      in form reasonably satisfactory to the Insurer, the due and punctual payment
      of the
      principal of and interest on all Notes and to the Paying Agent, on behalf
      of
      the
      holder of the Transferor Interest and the performance or observance of every
      agreement and covenant of this Indenture on the part of the Issuer to be
      performed or observed, all as provided herein;

     

    (ii) immediately
      after giving effect to such transaction, no Event of Default shall have occurred
      and be continuing;

     

    (iii) the
      Insurer shall have consented in writing (which consent shall not be unreasonably
      withheld) thereto and each Rating Agency shall have notified the Issuer that
      such transaction will not cause a reduction or withdrawal by a Rating Agency
      of
      its then current rating of the Notes, without regard to the Insurance
      Policy;

     

    (iv) the
      Issuer shall have received an Opinion of Counsel (and shall have delivered
      copies thereof to the Indenture Trustee and the Insurer) to the effect that
      such
      transaction will not have any material adverse tax consequence to the Issuer,
      any Noteholder or the Insurer;

     

    (v) any
      action that is necessary to maintain the lien and security interest created
      by
      this Indenture, and the perfection thereof, shall have been taken;
      and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (vi) the
      Issuer shall have delivered to the Indenture Trustee and the Insurer an
      Officer’s Certificate and an Opinion of Counsel each stating that such
      consolidation or merger and such supplemental indenture comply with this Article
      III and that all conditions precedent herein provided for relating to such
      transaction have been complied with (including any filing required by the
      Exchange Act).

     

    (b) The
      Issuer shall not convey or transfer its properties or assets, substantially
      as
      an entirety, to any Person, unless:

     

    (i) (A)
      the
      Person that acquires by conveyance or transfer the properties and assets of
      the
      Issuer, the conveyance or transfer of which is hereby restricted, (1) is a
      United States citizen or a Person organized and existing under the laws of
      the
      United States of America or any State, (2) expressly assumes, by an indenture
      supplemental hereto, executed and delivered to the Indenture Trustee and the
      Insurer, in form satisfactory to the Insurer, the due and punctual payment
      of
      the principal of and interest on all Notes and the performance or observance
      of
      every agreement and covenant of this Indenture on the part of the Issuer to
      be
      performed or observed, all as provided
      herein, (3) expressly agrees by means of such supplemental indenture that
      all
      right,
      title and interest so conveyed or transferred shall be subject and subordinate
      to the rights of Holders of the Notes and the Insurer, (4) unless otherwise
      provided in such supplemental indenture, expressly agrees to indemnify, defend
      and hold harmless the Issuer and the Insurer against and from any loss,
      liability or expense arising under or related
      to this Indenture and the Notes and (5) expressly agrees by means of
      such
      supplemental indenture that such Person (or if a group of Persons, then one
      specified Person) shall make all filings with the Commission (and any other
      appropriate Person) required by the Exchange Act in connection with the
      Notes;

     

    (B) immediately
      after giving effect to such transaction, no Default or Event of Default shall
      have occurred and be continuing;

     

    (C) the
      Insurer shall have consented thereto, and each Rating Agency shall have notified
      the Issuer that such transaction will not cause a reduction or withdrawal by
      a
      Rating Agency of its then current rating of the Notes, without regard to the
      Insurance Policy;

     

    (D) the
      Issuer shall have received an Opinion of Counsel (and shall have
      delivered copies thereof to the Indenture Trustee) to the effect that such
      transaction will not have any material adverse tax consequence to the Issuer,
      the Insurer or any Noteholders

     

    (E) any
      action that is necessary to maintain the lien and security interest created
      by
      this Indenture and the perfection thereof shall have been taken;
      and

     

    (F) the
      Issuer shall have delivered to the Indenture Trustee and the Insurer an
      Officer’s Certificate and an Opinion of Counsel each stating that such
      conveyance or transfer and such supplemental indenture comply with this Article
      III and that all conditions precedent herein provided for relating to such
      transaction have been complied with (including any filing required by the
      Exchange Act); or

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii) such
      conveyance or transfer is made in connection with a termination pursuant to
      Section 8.01(b) of the Sale and Servicing Agreement.

     

    Section
      3.17 Successor
      or Transferee.

     

    (a) Upon
      any
      consolidation or merger of the Issuer in accordance with Section 3.16(a) above,
      the Person formed by or surviving such consolidation or merger (if other than
      the Issuer) shall succeed to, and be substituted for, and may exercise every
      ri
      ght and power of, the Issuer under this Indenture with the same effect as if
      such Person had been named as the Issuer herein.

     

    (b) Upon
      a
      conveyance or transfer of the assets and properties of the Issuer pursuant
      to
      Section 3.16(b) above, the Issuer shall be released from every covenant and
      agreement (except such obligations that survive such transfer) of this Indenture
      to be observed or performed on the part of the Issuer with respect to the Notes
      immediately upon the delivery of written notice to the Indenture Trustee of
      such
      conveyance or transfer.

     

    Section
      3.18 No
      Other Business.
      The
      Issuer shall not engage in any business other than financing,
      purchasing, owning, selling and
      managing
      the Mortgage Loans
      and
      the issuance
      of the
      Notes in the manner contemplated by this Indenture and the Transaction Documents
      and all activities incidental thereto.

     

    Section
      3.19 No
      Borrowing.
      The
      Issuer shall not issue, incur, assume, guarantee or otherwise become liable,
      directly or indirectly, for any indebtedness except for the Notes.

     

    Section
      3.20 Guarantees
      Loans Advances and Other Liabilities.
      Except
      as contemplated
      by this Indenture or the other Transaction
      Documents, the Issuer 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
      3.21 Capital
      Expenditures.
      The
      Issuer shall not make any expenditure (by long-term or operating lease or
      otherwise) for capital assets (either realty or personalty).

     

    Section
      3.22 Validity
      of Notes.

     

    (a) The
      Issuer represents and warrants that the 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
      Issuer.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) The
      Issuer represents and warrants that the Issuer owns and has good and marketable
      title to the Collateral free and clear of any lien, claim or encumbrance of
      any
      Person.

     

    (c) The
      Issuer represents and warrants that the Issuer has caused or will have caused,
      within ten days, 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.

     

    (d) The
      Issuer represents and warrants that other than the security interest Granted
      to
      the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged,
      assigned, sold, granted a security interest in, or otherwise conveyed any of
      the
      Collateral. The Issuer has not authorized the filing of and is not aware of
      any
      financing statements against the Issuer that include a description of the
      Collateral other than any financing statement relating to the security interest
      Granted to the Indenture Trustee hereunder or that has been terminated. The
      Issuer is not aware of any judgment or tax lien filings against the
      Issuer.

     

    (e) The
      Issuer represents and warrants that the Custodian on behalf of the Issuer has
      in
      its possession all original copies of the Mortgage Notes that constitute or
      evidence the Mortgage Loans. The Mortgage Notes that constitute or evidence
      the
      Mortgage Loans 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. All financing statements filed or to be filed against the Issuer in
      favor of the Indenture Trustee in connection herewith describing the Collateral
      contain a statement to the following effect: “A purchase of or security interest
      in any collateral described in this financing statement will violate the rights
      of the Indenture Trustee.”

     

    (f) The
      Issuer represents and warrants that the Mortgage Notes constitute either
“instruments” or “general intangibles” within the meaning of the applicable
      UCC.

     

    (g) The
      Issuer represents and warrants that the Issuer is duly authorized under
      applicable law and the Trust Agreement to create and issue the Notes, to execute
      and deliver this Indenture, the other documents referred to herein to which
      it
      is a party and deliver all instruments
      included in the Collateral which it has delivered hereunder, and that all
      corporate action and governmental consents, authorizations and approvals
      necessary or required therefor have been duly and effectively taken or obtained.
      The Notes, when issued, will be, and .this Indenture and such other documents
      are, valid and legally binding obligations of the Issuer enforceable in
      accordance with their terms.

     

    (h) [Reserved].

     

    (i) The
      Issuer represents and warrants that the Indenture is duly qualified under the
      1939 Act and that the Issuer is not required to be registered as an “investment
      company” under the 1940 Act.

     

    Such
      representations
      and warranties
      shall survive the discharge of this Indenture and may
      not be
      waived.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
      IV

    SATISFACTION
      AND DISCHAGE

     

    Section
      4.1 Satisfaction
      and Discharge of Indenture.
      Subject
      to and in accordance with section 8.01 of the Sale and Servicing Agreement,
      this
      Indenture shall cease to be of further effect with respect to the Notes (except
      as to (i) rights of registration of transfer and exchange, (ii) substitution
      of
      mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
      receive payments of principal thereof and interest thereon, (iv) Sections 3.3,
      3.4, 3.5, 3.8, 3.10 and 11.17, (v) the rights, obligations and immunities of
      the
      Indenture Trustee hereunder (including the rights of the Indenture Trustee
      under
      Section 6.7 below and the obligations of the Indenture Trustee under Section
      4.2) and (vi) the rights of Noteholders as beneficiaries hereof with respect
      to
      the property so deposited with the Indenture Trustee payable to all or any
      of
      them), and the Indenture Trustee, on demand of and at the expense of the Issuer,
      shall
      execute proper instruments acknowledging satisfaction and discharge of this
      Indenture with
      respect
      to the Notes, when all of the following have occurred:

     

    (a) either

     

    (i) all
      Notes
      theretofore authenticated and delivered (other than (i) Notes that have been
      destroyed, lost or stolen and that have been replaced or paid as provided in
      Section 2.4 and (ii) Notes for whose payment money has theretofore been
      deposited in trust or segregated and held in trust by the Issuer and thereafter
      repaid to the Issuer or discharged from such trust, as provided in Section
      3.3
      above) have been delivered to the Indenture Trustee for cancellation;
      or

     

    (ii) all
      Notes
      not theretofore delivered to the Indenture Trustee for cancellation

     

    A. have
      become due and payable,

     

    B. will
      become due and payable within one year prior to the Final Payment Date,
      or

     

    C. are
      to be
      called for redemption within one year under arrangements satisfactory to the
      Indenture Trustee for the giving of notice of redemption by the Indenture
      Trustee in the name, and at the expense, of the Issuer,

     

    and
      the
      Issuer, in the case of a., b. or c. above, has irrevocably deposited or caused
      to be irrevocably deposited with the Indenture Trustee cash or direct
      obligations of or obligations guaranteed by the United States of America (which
      will mature prior to the date such amounts are payable), in trust for such
      purpose, in an amount sufficient to pay and discharge the entire indebtedness
      on
      such Notes not theretofore delivered to the Indenture Trustee for cancellation
      when due to the Final Payment Date or Redemption Date (if Notes shall
have
      been
      called for redemption pursuant to Section 10.1 below) and all amounts due and
      owing
      the
      Insurer and the Indenture Trustee have been paid, as the case may
      be,

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) the
      later
      of (a) twelve months after payment in full of all outstanding obligations under
      the Notes, (b) the payment in full of all unpaid fees and expenses of the
      Indenture Trustee hereunder and the other Transaction Documents, (c) the payment
      of all amounts due and owing to the Insurer for unpaid premiums and unreimbursed
      Insured Payments and all other amounts owing to the Insurer, together with
      interest thereon as provided under the Insurance and Indemnity Agreement and
      (d)
      the date on which the Issuer has paid or caused to be paid all other sums
      payable hereunder by the Issuer; and

     

    (c) the
      Issuer has delivered to the Indenture Trustee and the Insurer an Officer’s
      Certificate, an Opinion
      of
      Counsel and
      (if
      required by the TIA or the Indenture Trustee) an Independent Certificate from
      a
firm
      of
      certified public accountants, each meeting the applicable requirements of
      Section 11.1(a) below and, subject to Section 11.2 below, each stating that
      all
      conditions precedent herein
      provided for relating to the satisfaction and discharge of this Indenture
      with
      respect
      to the Notes have been complied with.

     

    Section
      4.2 Application
      of Trust Money.
      All
      moneys deposited with the Indenture Trustee pursuant to Sections 3.3 and 4.1
      shall be held in trust and applied by it, in accordance with the provisions
      of
      the Sale and Servicing Agreement, to the payment, either directly or
through
      any Paying Agent to the Holders of the particular Notes and the Insurer for
      the
      payment
      or redemption of which such moneys have been deposited with the Indenture
      Trustee, of
      all
      sums due and to become due thereon for principal and interest; but such moneys
      need not be
      segregated from other funds except to the extent required herein or in the
      Sale
      and Servicing
      Agreement or required by law.

     

    Section
      4.3 Subrogation
      and Cooperation.

     

    (a) The
      Issuer and the Indenture Trustee acknowledge that (i) to the extent the
      Insurer
      makes
      payments under the Insurance Policy on account of principal of or interest
      on
      the Mortgage Loans, the Insurer will be fully subrogated to the rights of the
      Noteholders to receive such principal of and interest on the Mortgage Loans
      of
      the related Trust Estate, and (ii) the insurer shall be paid such principal
      and
      interest only from the sources and in the manner provided herein and in the
      Insurance and Indemnity Agreement for the payment of such principal and
      interest.

     

    (b) The
      Indenture Trustee shall cooperate in all respects with any reasonable request
      or
      direction by the Insurer for action to preserve or enforce the Insurer’s rights
      or interest under this Indenture or the Insurance and Indemnity 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 an Insurer Default, 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 Notes or
      under
      this Indenture in respect to the Notes and all amounts payable under the
      Insurance and Indemnity Agreement and to enforce any judgment obtained and
      collect from the Issuer monies adjudged due;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii) 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;

     

    (iii) file
      or
      record all Assignments of Mortgages that have not previously been
      recorded;

     

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

     

    (v) 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 Insurer
      hereunder.

     

    Following
      the payment in full of the Notes, the Insurer shall continue to have all rights
      and privileges provided to it under this Section 4.3 and in all other provisions
      of this Indenture, until all amounts owing to the Insurer have been paid in
      full.

     

    Section
      4.4 Repayment
      of Moneys Held by Paying Agent.
      In
      connection with the satisfaction and discharge of this Indenture with respect
      to
      the Notes, all moneys then held by any Paying Agent other than the Indenture
      Trustee under the provisions of this Indenture with respect to such Notes shall,
      upon demand of the Issuer, be paid to the Indenture Trustee to be held and
      applied according to Section 3.3 above and thereupon such Paying Agent shall
      be
      released from all further liability with respect to such moneys.

     

    ARTICLE
      V

    REMEDIES

     

    Section
      5.1 Events
      of Default.
“Event
      of Default,” wherever used herein, means with respect to the Notes 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):

     

    (a) default
      in the payment of any interest on any Note when the same becomes due and
      payable, and continuance of such default for a period of five (5) days;
      or

     

    (b) default
      in the payment in full of the principal of the Note Principal Balance on the
      Final Payment Date; or

     

    (c) default
      in the observance or performance of any covenant or agreement of the Issuer
      made
      in this Indenture (other than a covenant or agreement, a default in the
      observance or performance of which is elsewhere in this Section 5.1 specifically
      dealt with), or any representation or warranty of the Issuer made in this
      Indenture, the Sale and Servicing Agreement 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 misrepresentation 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
      with
      a copy to the Insurer by the Indenture Trustee or to the Issuer and the
      Indenture Trustee by the Insurer or the Holders of at least 51% of the
      Outstanding Amount of the 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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) the
      occurrence of a draw under the Insurance Policy that remains unreimbursed for
      a
      period of 90 days; or

     

    (e) 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 90 consecutive days;
      or

     

    (f) 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 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.

     

    The
      Issuer shall deliver to the Indenture Trustee, the Transferor and the Insurer
      within five days after the occurrence thereof, 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 (c) above, its status and what action the Issuer is taking or
      proposes to take
      with
      respect thereto.

     

    Section
      5.2 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 may
      with the
      written consent of the Insurer, or shall at the direction of the Insurer or
      upon
      the prior written direction of the Holders of Notes representing not less than
      a
      majority of the Outstanding Amount of the Notes, declare all the Notes to be
      immediately due and payable, by a notice in writing to the Issuer and the
      Insurer (and to the Indenture Trustee if given
      by
      Noteholders), and upon any such declaration the unpaid principal
      amount of such Class A
      Notes,
      together with accrued and unpaid interest thereon through the date of
      acceleration, shall become immediately due and payable.

     

    At
      any
      time after such declaration of acceleration of maturity 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 Insurer or
      the
      Holders of Notes representing a majority of the Outstanding Amount of the
      related Notes, with the written consent of the Insurer, by written notice to
      the
      Issuer and the Indenture Trustee, may rescind and annul such declaration and
      its
      consequences if:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (a) the
      Issuer has paid or deposited with the Indenture Trustee a sum sufficient to
      pay:

     

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

     

    (ii) all
      sums
      paid or advanced by the Indenture Trustee hereunder and the reasonable
      compensation, expenses, disbursements and advances of the Indenture Trustee
      and
      its agents and counsel; and

     

    (b) 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 below.

     

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

     

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

     

    (a) The
      Issuer covenants that if (i) default occurs 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 (5) days, or (ii) default occurs in the payment of the principal
      of or any installment of the principal of any Note when the same becomes due
      and
      payable, and such default continues for a period of five (5) days, the Issuer
      will, upon demand of the Indenture Trustee or the Insurer if the Insurer has
      made a payment under the Insurance Policy, pay to the Indenture Trustee or
      the
      Insurer, as applicable, for the benefit of the Holders of the Notes or the
      insurer, the whole amount then due and payable on such Notes for principal
      and
      interest, with interest upon the overdue principal and, to the extent payment
      at
      such rate of interest shall be legally enforceable, upon overdue installments
      of
      interest at the rate borne by the Notes 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, the Insurer and its agents and counsel.

     

    (b) In
      case
      the Issuer shall fail forthwith to pay such amounts upon such demand, the
      Indenture Trustee may with the written consent of the Insurer, and shall at
      the
      direction of the Insurer, 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 Issuer or other obligor upon such
      Notes and collect in the manner provided by law out of the property of the
      Issuer or other obligor upon such Notes, wherever situated, the moneys adjudged
      or decreed to be payable.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) If
      an
      Event of Default occurs and is continuing, the Indenture Trustee may, with
      the
      consent of the Insurer, and shall at the written direction of the Insurer or
      of
      the Holders of 51% or more of the Outstanding Amount of the Notes, with the
      consent of the Insurer, as more particularly provided in Section 5.4 below,
      proceed to protect and enforce its rights and the rights of the Noteholders
      and
      the Insurer, by such appropriate Proceedings as the Insurer shall deem
      most
      effective 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 Issuer 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 Issuer or its property or such other obligor or Person,
      or in case of any other comparable judicial Proceedings relative to the Issuer
      or other obligor upon the Notes, or to the creditors or property of the Issuer
      or such other obligor, the Indenture Trustee, 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 5.3, shall
      be
      entitled and empowered by intervention in such Proceedings with the consent
      of
      or at the direction of the Insurer 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 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, each predecessor Indenture Trustee and its 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 or bad faith), and of the Noteholders and
      the
      Insurer allowed in such Proceedings;

     

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

     

    (iii) to
      collect and receive any moneys 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 Indenture Trustee and the Insurer 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 Insurer
      or
      the Holders of Notes allowed in any judicial proceedings relative to the Issuer,
      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 Indenture Trustee and, in the event
      that the Indenture Trustee 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 except as a
      result of negligence or bad faith.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (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 or
      the
      Insurer 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 or the
      Insurer 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.

     

    (g) In
      any
      Proceedings brought by the Indenture Trustee (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 Noteholders, and it shall not be necessary to make any Noteholder a party
      to
      any such Proceedings.

     

    Section
      5.4 Remedies;
      Priorities.

     

    (a) If
      an
      Event of Default shall have occurred and be continuing of which a Responsible
      Officer of the Indenture has actual knowledge, the Indenture Trustee may with
      the consent of the Insurer, or, at the direction of the Insurer, shall or,
      if an
      Insurer Default shall be continuing, at the direction of a majority of the
      Holders of the Notes shall, do one or more of the following (subject to Section
      5.5 below):

     

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

     

    (iv) sell
      the
      Trust Estate or any portion thereof or rights or interest therein in a
      commercially reasonable manner, 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 (A) the Indenture Trustee
      obtains the consent of the Insurer and the Holders of 100% of the Outstanding
      Amount of the Notes, (B) the proceeds of such
      sale
      or liquidation distributable to the Noteholders are sufficient to discharge
      in
      full all amounts
      then due and unpaid upon such Notes for principal and interest and to reimburse
      the Insurer for any unreimbursed Insured Payments and any other amounts due
      the
      Insurer under the Insurance and Indemnity Agreement or (C) the Indenture Trustee
      determines that the Trust Estate will not continue to provide sufficient funds
      for the payment of principal of and
      interest on the Notes as they would have become due if the Notes had not been
      declared due and payable, and the Indenture Trustee obtains the consent of
      the
      Insurer and the Holders of 66 213% of the Outstanding Amount of the Notes.
      In
      determining such sufficiency or insufficiency with respect to clauses (B) and
      (C) above, 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.

     

    (b) If
      the
      Indenture Trustee collects any money or property pursuant to this Article V,
      the
      Indenture Trustee and the Paying Agent shall pay out the money or property
      in
      the following order:

     

    FIRST:
      to
      the Indenture Trustee for any costs or expenses incurred by it in connection
      with the enforcement of the remedies provided for in this Article
      V;

     

    SECOND:
      any amounts payable to the Master Servicer pursuant to Section 5.01 of the
      Sale
      and Servicing Agreement and any premium owing to the Insurer;

     

    THIRD:
      to
      the Indenture Trustee for the Indenture Trustee Fee then due; 34

     

    FOURTH:
      to the Noteholders for amounts due and unpaid on the Notes for interest pro
      rata
      among the Holders of the Notes, according to the amounts due and payable on
      such
      Notes;

     

    FIFTH:
      to
      the Noteholders for amounts due and unpaid on the Notes for principal, pro
      rata,
      among the Holders of the Notes according to the amounts due and payable until
      the Note Principal Balance is reduced to zero;

     

    SIXTH:
      to
      the Insurer, any other amounts owed to the Insurer under the Insurance and
      Indemnity Agreement;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SEVENTH:
      to the Indenture Trustee for any other amounts then due and outstanding;
      and

     

    EIGTH:
      to
      the Paying Agent under the Trust Agreement, as applicable, for any amounts
      to be
      distributed to the holder of the Transferor Interest, in the manner set forth
      in
      Section 5.01 of the Sale and Servicing Agreement.

     

    The
      Indenture Trustee may fix a record date and payment date for any payment to
      be
      made to the Noteholders pursuant to this Section 5.4. At least 15 days before
      such record date, the
      Indenture Trustee shall mail to each Noteholder, the Insurer and the Issuer
      a
      notice
      that
      states
      the
      record date, the payment date and the amount to be paid.

     

    Section
      5.5 Optional
      Preservation of the Trust Estate.
      If the
      Notes have been declared to be due and payable under Section 5.2 above 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
      Insurer, but need not (but shall at the written
      direction of the Insurer), elect to 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
      (although the parties hereto understand that there exists the possibility of
      a
      shortfall in collections of the Mortgage Loans), and the Indenture Trustee
      shall
      take such desire into account when determining whether or not to maintain
      possession of the Trust Estate. In determining whether to 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
      5.6 Limitation
      of Suits.
      No
      Holder of any Note 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 the Insurer has otherwise
      consented in writing thereto and:

     

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

     

    (b) the
      Holders of not less than 25% of the Outstanding Amount of the Notes have made
      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;

     

    (c) 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;

     

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

     

    (e) 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
      Outstanding Amount of the Notes.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    It
      is
      understood and intended that no Noteholders 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 Noteholders 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.

     

    Section
      5.7 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 date thereof expressed in such
      Note
      or in this Indenture
      (or,
      in the case of redemption,
      on
      or after the Redemption Date)
      to
      the extent funds are
      available
      therefor out of the Trust
      Estate
      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
      5.8 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 or to such Noteholder, then and in every such case the Issuer, 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 and the Noteholders shall continue as though no such Proceeding had
      been
      instituted.

     

    Section
      5.9 Rights
      and Remedies Cumulative.
      No
      right or remedy herein conferred upon or reserved to the Indenture Trustee,
      the
      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 Insurer or any Noteholder to
      exercise any right or remedy accruing upon any Default or Event of Default
      shall
      impair any such right or remedy or constitute a waiver of any such Default
      or
      Event of Default or an acquiescence therein. Every right and remedy given
by
      this
      Article V or by law to the Indenture Trustee, the Insurer or to the Noteholders
      may be exercised from time to time, and as often as may be deemed expedient,
      by
      the Indenture Trustee, the Insurer or by the Noteholders, as the case may
      be.

     

    Section
      5.11 Control
      by Noteholders.
      The
      Insurer (so long as no Insurer Default exists) or if an Insurer Default exists
      the Holders of a majority of the Outstanding Amount of the Notes, 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:

     

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

     

    (b) [reserved];

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) if
      the
      conditions set forth in Section 5.5 above have been satisfied and the Indenture
      Trustee elects to retain the Trust Estate pursuant to such Section 5.5, then
      any
      direction to the Indenture Trustee by Holders of Notes representing less than
      100% of the Outstanding Amount of the Notes to sell or liquidate the Trust
      Estate shall be of no force and effect; and

     

    (d) the
      Indenture Trustee may take any other action deemed proper by the Indenture
      Trustee that is not inconsistent with such direction.

     

    Notwithstanding
      the rights of the Noteholders set forth in this Section 5.11, subject to Section
      6.1 hereof, the Indenture Trustee need not take any action that it determines
      might involve it in liability or might materially adversely affect the rights
      of
      any Noteholders not consenting to such action.

     

    Section
      5.12 Waiver
      of Past Defaults.
      Prior
      to the declaration of the acceleration of the maturity of the Notes as provided
      in Section 5.2 above, the Insurer (so long as no Insurer Default exists) or
      the
      Holders of Notes representing not less than a majority of the Outstanding Amount
      of the Notes, with the consent of the Insurer (so long as no Insurer
      Default
      exists), may waive any past
      Default or Event of Default and its consequences except
      a
      Default (a) in the payment of principal of or interest on any of the Notes
      or(b)
      in respect of a covenant or provision hereof that cannot be modified or amended
      without the consent of the Holder of each Note. In the case of any such waiver,
      the Issuer, the Insurer, the Indenture Trustee 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 Default or impair
      any
      right consequent thereto.

     

    Upon
      any
      such waiver, such Default shall cease to exist and be deemed to have been cured
      and not to have occurred, and 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 Default
      or
      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 by such Holder’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 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
      Outstanding Amount 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
      (or,
      in the case of redemption, on or after the Redemption Date).

     

    Section
      5.14 Waiver
      of Stay or Extension Laws.
      The
      Issuer 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 Issuer (to the extent that it may lawfully do so) hereby
      expressly waives all benefit or advantage of any such law, and covenants that
      it
      will 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 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 or the
      Noteholders shall be impaired by the recovery of any judgment by the Indenture
      Trustee against the Issuer 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 Issuer.
      Any money or property collected by the Indenture Trustee shall be applied in
      accordance with Section 5.4(b) above.

     

    Section
      5.16 Performance
      and Enforcement of Certain Obligations.

     

    (a) Promptly
      following a request from the Insurer or the Indenture Trustee, with the consent
      of the Insurer to do so, the Issuer shall take all such lawful action as the
      Indenture Trustee or the Insurer, as applicable, may request to compel or secure
      the performance and observance by the Seller, the Depositor and the Master
      Servicer, as applicable, of each of their obligations to the Issuer under or
      in
      connection with the Sale and Servicing Agreement and other Transaction
      Documents, and to exercise any and all rights, remedies, powers and privileges
      lawfully available to the Issuer under or in connection with the Sale and
      Servicing Agreement and the other Transaction Documents to the extent and in
      the
      manner directed by the Indenture Trustee or the Insurer, as applicable,
      including the transmission of notices of default on the part of the Seller,
      the
      Depositor or the Master Servicer thereunder and the institution of legal or
      administrative actions or proceedings to compel or secure performance by the
      Seller, the Depositor or the Master Servicer of each of their obligations under
      the Sale and Servicing Agreement and the other Transaction
      Documents.

     

    (b) If
      an
      Event of Default has occurred and is continuing, the Indenture Trustee, subject
      to the rights of the Insurer hereunder and under the Sale and Servicing
      Agreement, may, and at the direction (which direction shall be in writing or
      by
      telephone, confirmed in writing promptly thereafter) of the Insurer or the
      Holders of a majority of the Outstanding Amount if there is an Insurer Default
      shall, exercise all rights, remedies, powers, privileges and claims of the
      Issuer against the Seller, the Depositor or the Master Servicer under or in
      connection with the Sale and Servicing Agreement and the other Transaction
      Documents, including the right or power to take any action to compel or secure
      performance or observance by the Seller, the Depositor or the Master Servicer,
      as the case may be, of each of their obligations to the Issuer thereunder and
      to
      give any consent, request, notice, direction, approval, extension, or waiver
      under the Sale and Servicing Agreement and the other Transaction Documents,
      and
      any right of the Issuer to take such action shall be suspended.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
      VI

    THE
      INDENTURE TRUSTEE

     

    Section
      6.1 Duties
      of Indenture Trustee.

     

    (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 circumstanced in the conduct of such person’s own
      affairs.

     

    (b) Except
      during the continuance of an Event of Default.

     

    (i) the
      Indenture Trustee undertakes to perform such duties and only such duties as
      are
      specifically set forth in this Indenture and no implied covenants or obligations
      shall be read into this Indenture against the Indenture Trustee;
      and

     

    (ii) in
      the
      absence of bad faith on its part, the Indenture Trustee may conclusively rely,
      as to the truth of the statements and the correctness of the opinions expressed
      therein, upon certificates or opinions furnished to the Indenture Trustee and
      conforming to the requirements of this Indenture; however, the Indenture Trustee
      shall examine the certificates and opinions to determine whether or not they
      conform to the requirements of this Indenture.

     

    (c) The
      Indenture Trustee 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
      6.1;

     

    (ii) the
      Indenture Trustee shall not be liable for any error of judgment made in good
      faith by a Responsible Officer unless it is proved that the Indenture Trustee
      was negligent in ascertaining the pertinent facts; and

     

    (iii) the
      Indenture Trustee shall not be liable with respect to any action it takes or
      omits to take in good faith in accordance with a direction received by it
      pursuant to Section
      5.11 above or any direction from the Insurer that the Insurer is entitled to
      give under the terms of the Transaction Documents.

     

    (d) Every
      provision of this Indenture that in any way relates to the Indenture Trustee
      is
      subject to paragraphs (a), (b), (c) and (g) of this Section 6.1.

     

    (e) The
      Indenture Trustee shall not be liable for interest on any money received by
      it
      except as the Indenture Trustee may agree in writing with the
      Issuer.

     

    (f) Money
      held in trust by the Indenture Trustee shall be segregated from other funds
      except to the extent permitted by law or the terms of this Indenture or the
      Sale
      and Servicing Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g) No
      provision of this Indenture shall require the Indenture Trustee 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
      adequate indemnity 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 to perform, or be responsible for the manner
      of
      performance of, any of the obligations of the Master Servicer, the Issuer or
      Transferor under this Indenture 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 this Indenture.

     

    (h) The
      Indenture Trustee shall challenge or cause to be challenged any attempt at
      substantive consolidation of the assets and liabilities of the Issuer with
      those
      of any Transferor (as defined in the Trust Agreement) in connection with any
      insolvency proceeding of the Issuer.

     

    (i) Every
      provision of this Indenture relating to the conduct or affecting the liability
      of or affording protection to the Indenture Trustee shall be subject to the
      provisions of this Section 6.1 and to the provisions of the TIA.

     

    (j) Subject
      to the other provisions of this Indenture and without limiting the generality
      of
      this Section 6. 1, the Indenture Trustee shall have no duty (A) to see to any
      recording, filing, or depositing of this Indenture or any agreement referred
      to
      herein or any financing statement or continuation statement evidencing a
      security interest, or to see to the maintenance of any such recording or filing
      or depositing or to any rerecording, refiling or redepositing of any thereof,
      (B) to see to any insurance, (C) to see to the payment or discharge of any
      tax,
      assessment, or other governmental charge or any lien or encumbrance of any
      kind
      owing with respect to, assessed or levied against, any part of the Trust Estate
      other than from funds available in the Distribution Account, (D) to confirm
      or
      verify the contents of any reports or certificates of the Issuer, Insurer or
      Master Servicer delivered to the Indenture Trustee pursuant to this Indenture
      believed by the Indenture Trustee to be genuine and to have been signed or
      presented by the proper party or parties.

     

    Section
      6.2 Rights
      of Indenture Trustee.

     

    (a) The
      Indenture Trustee may conclusively rely and shall be fully protected in acting
      or refraining from acting on any resolution, certificate of auditors or any
      other certificate, statement, instrument, opinion, report, notice, request,
      consent, order, appraisal, bond or other paper or document believed by it to
      be
      genuine and to have been signed or presented by the proper person. The Indenture
      Trustee need not investigate any fact or matter stated in the
      document.

     

    (b) Before
      the Indenture Trustee acts or refrains from acting, it may require and shall
      be
      entitled to receive an Officer’s Certificate or an Opinion of Counsel. The
      Indenture Trustee shall not be liable for any action it takes or omits to take
      in good faith in reliance on an Officer’s Certificate or opinion of
      Counsel.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) The
      Indenture trustee may execute any of the trusts or powers hereunder or perform
      any duties hereunder either directly or by or through agents or attorneys or
      a
      custodian or nominee and the Indenture Trustee shall not be responsible for
      any
      misconduct or negligence on the part of such agent, attorney, nominee or
      custodian appointed by the Indenture Trustee with due care.

     

    (d) The
      Indenture Trustee shall not be liable for any action it takes or omits to take
      in goal faith which it believes to be authorized or within its rights or powers;
      provided, however, that such action or omission by the Indenture Trustee does
      not constitute willful misconduct, negligence or bad faith.

     

    (e) The
      Indenture Trustee may consult with counsel, and the advice or opinion of counsel
      selected by it with due care with respect to legal matters relating to this
      Indenture, the Notes and the Transaction Documents to which it is a party,
      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 advice or opinion of such counsel.

     

    (f) The
      Indenture Trustee shall be under no obligation to exercise any of the trusts
      or
      powers vested in it by this Indenture or to institute, conduct or defend any
      litigation hereunder or in relation hereto at the request, order or direction
      of
      the Insurer or any of the Noteholders, pursuant to the provisions of this
      Indenture, unless the Insurer or such Noteholders shall have offered to the
      Indenture Trustee 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 shall have actual knowledge (which has not been cured), 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 or use under the circumstances in the conduct of such person’s
      own affairs.

     

    (g) The
      Indenture Trustee shall not be bound to make any investigation into the facts
      or
      matters stated in any resolution, certificate, statement, instrument, opinion,
      report, notice, request, consent, order, approval, bond or other paper or
      document, unless requested in writing to do so by the Insurer or the Majority
      Noteholders; provided, however, that if the payment within a reasonable time
      to
      the Indenture Trustee of the costs, expenses or liabilities likely to be
      incurred by it in the making of such investigation is, in the opinion of the
      Indenture Trustee, not reasonably assured to the Indenture Trustee by the
      security afforded to it by the terms of this Indenture, the Indenture Trustee
      may require reasonable indemnity against such cost, expense or liability as
      a
      condition to taking any such action. The reasonable expense of every such
      examination shall be paid by the Issuer or, if paid by the Indenture Trustee,
      shall be repaid by the Issuer upon demand.

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i) The
      Indenture Trustee shall not be required to give any bond or surety in respect
      of
      the execution of the Trust created hereby or the powers granted
      hereunder.

     

    (j) The
      Indenture Trustee shall have no liability in connection with the malfeasance
      or
      nonfeasance by the Issuer, the Master Servicer or the Administrator. The
      Indenture Trustee shall have no liability in connection with compliance by
      the
      Issuer or the Master Servicer with statutory or regulatory requirements related
      to the Collateral or the Trust Estate. The Indenture Trustee shall not make
      or
      be deemed to have made any representations or warranties with respect to the
      Collateral or the Trust Estate or the validity or sufficiency of any assignment
      of the Collateral or the Trust Estate to the Indenture Trustee.

     

    (k) In
      the
      event that the Indenture Trustee is also acting as Paying Agent or Registrar
      hereunder, the rights, protection, immunities and indemnities afforded to the
      Indenture Trustee pursuant to this Article VI shall also be afforded to such
      Paying Agent or Registrar.

     

    Section
      6.3 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 Issuer or its Affiliates
      with the same rights it would have if it were not Indenture Trustee. Any Paying
      Agent, Note Registrar, co registrar or co paying agent may do the same with
      like
      rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12
      below.

     

    Section
      6.4 Indenture
      Trustee’s Disclaimer.
      The
      Indenture Trustee shall not be (i) responsible for and makes no representation
      as to the validity or adequacy of this Indenture or the Notes, (ii) accountable
      for the Issuer’s use of the proceeds from the Notes or (iii) responsible for any
      statement of the Issuer in this Indenture or in any document issued in
      connection with the sale of the Notes or in the Notes other than the Indenture
      Trustee’s certificate of authentication.

     

    Section
      6.5 Notice
      of Defaults.
      If a
      Default occurs and is continuing and if it is actually known to a Responsible
      Officer of the Indenture Trustee, the Indenture Trustee shall give prompt notice
      thereof to the Insurer. The Indenture Trustee shall not be charged with the
      knowledge of an Event of Default unless a Responsible Officer has received
      written notice or has actual knowledge thereof. The Indenture Trustee shall
      mail
      to each Noteholder, the Master Servicer and the Seller notice of the Default
      within 30 days after it occurs at the expense of the Issuer. Except in the
      case
      of a Default in payment of principal of or interest on any Note, the Indenture
      Trustee may withhold the notice to the Noteholders if and so long as a committee
      of its Responsible Officers in good faith determines that withholding the notice
      is in the interests of Noteholders.

     

    Section
      6.6 Reports
      by Indenture Trustee to Holders.
      The
      Indenture Trustee shall deliver to each Noteholder such information as may
      be
      required to enable such holder to prepare its federal and state income tax
      returns. In addition, upon Issuer Request, the Indenture Trustee shall promptly
      furnish such information reasonably requested by the Issuer that is reasonably
      available to the Indenture Trustee to enable the Issuer to perform its federal
      and state income tax reporting obligations.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      6.7 Compensation
      and Indemnity.
      As
      compensation for its services hereunder, the Indenture Trustee shall be entitled
      to receive, on each Payment Date, the Indenture Trustee’s Fee pursuant to
      Section 5.01 of the Sale and Servicing Agreement (which compensation shall
      not
      be limited by any law on compensation of a trustee of an express trust) and
      shall be entitled to reimbursement for all reasonable out of pocket expenses
      incurred or made by it, including costs of collection, in addition to the
      compensation for its services. Such expenses shall include the reasonable
      compensation and expenses, disbursements and advances of the Indenture Trustee’s
      agents, counsel, accountants and experts. The Indenture Trustee shall be
      indemnified by the Master Servicer, and if not by the Master Servicer, then
      by
      the Trust Estate pursuant to the seventh clause of Section 5.4 herein against
      any and all loss, liability or expense (including attorneys’ fees) incurred by
      it in connection with the administration of this trust and the performance
      of
      its duties hereunder. The Indenture Trustee shall notify the Issuer promptly
      of
      any claim for which it may seek indemnity. Failure by the Indenture Trustee
      to
      so notify the Issuer shall not relieve the Issuer of its obligations hereunder.
      The Issuer shall defend any such claim, and the Indenture Trustee may have
      separate counsel and the Issuer shall pay the fees and expenses of such counsel.
      The Indenture Trustee shall not be entitled to any such reimbursement of any
      expense or to indemnification against any loss, liability or expense incurred
      by
      the Indenture Trustee through the Indenture Trustee’s own willful misconduct,
      negligence or bad faith. Anything in this Indenture to the contrary
      notwithstanding, in no event shall the Indenture Trustee be liable for special,
      indirect or consequential loss or damage of any kind whatsoever (including
      but
      not limited to lost profits), even if the Indenture Trustee has been advised
      of
      the likelihood of such loss or damage and regardless of the form of action.
      This
      indemnity shall survive the termination of this Indenture.

     

    The
      Issuer’s payment obligations to the Indenture Trustee pursuant to this Section
      6.7 shall survive the discharge of this Indenture. When the Indenture Trustee
      incurs expenses or provides services after the occurrence of a Default specified
      in Section 5.1(e) or (f) hereof with respect to the Issuer, the expenses and
      fees for such services 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
      6.8 Replacement
      of Indenture Trustee.
      No
      resignation or removal of the Indenture Trustee and no appointment of a
      successor Indenture Trustee shall become effective until the acceptance of
      appointment by the successor Indenture Trustee acceptable to the Insurer
      pursuant to this Section. The Indenture Trustee may resign at any time by so
      notifying the Issuer and the Insurer. As a condition to the effectiveness of
      any
      such resignation, at least 15 calendar days prior to the effective date of
      such
      resignation, the Indenture Trustee shall provide (x) written notice to the
      Depositor of any successor pursuant to this Section and (y) in writing and
      in
      form and substance reasonably satisfactory to the Depositor, all information
      reasonably requested by the Depositor in order to comply with its reporting
      obligation under Item 6.02 of Form 8-K with respect to the resignation of the
      Indenture Trustee. The Insurer or the Holders of a majority in Outstanding
      Amount of the Notes (with the prior written consent of the Insurer) may remove
      the Indenture Trustee by so notifying the Indenture Trustee and the Insurer
      (if
      given by such Noteholders) and may appoint a successor Indenture Trustee
      acceptable to the Insurer. The Issuer shall (with the prior written consent
      of
      the Insurer) remove the Indenture Trustee if:

     

    (a) the
      Indenture Trustee fails to comply with Section 6.11 below;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) the
      Indenture Trustee is adjudged a bankrupt or insolvent;

     

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

     

    (d) the
      Indenture Trustee otherwise becomes incapable of acting.

     

    If
      the
      Indenture Trustee resigns or is removed or if a vacancy exists in the office
      of
Indenture
      Trustee
      for any reason
      (the Indenture Trustee in such event being referred to herein as
      the
      retiring Indenture Trustee), the Issuer shall promptly appoint a successor
      Indenture Trustee with the consent of the Insurer, which consent shall not
      be
      unreasonably withheld.

     

    A
      successor Indenture Trustee shall deliver a written acceptance of its
      appointment to the retiring Indenture Trustee and to the Issuer and shall
      provide to the Depositor, in writing and in form and substance reasonably
      satisfactory to the Depositor, all information reasonably requested by the
      Depositor in order to comply with its reporting obligation under Item 6.02
      of
      Form 8-K with respect to the resignation of the Indenture Trustee. Thereupon
      the
      resignation or removal of the retiring Indenture Trustee shall become effective,
      and the successor Indenture Trustee shall have all the rights, powers and duties
      of the Indenture Trustee under this Indenture. The successor Indenture Trustee
      shall mail a notice of its succession to Noteholders. The retiring Indenture
      Trustee shall promptly transfer all property held by it as Indenture Trustee
      to
      the successor Indenture Trustee.

     

    If
      a
      successor Indenture Trustee does not take office within 60 days after the
      retiring Indenture Trustee resigns or is removed, the retiring Indenture
      Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the
      Notes may petition any court of competent jurisdiction for the appointment
      of a
      successor Indenture Trustee.

     

    If
      the
      Indenture Trustee fails to comply with Section 6.11 below, any Noteholder may
      (with the consent of the Insurer) petition any court of competent jurisdiction
      for the removal of the Indenture Trustee and the appointment of a successor
      Indenture Trustee.

     

    Notwithstanding
      the replacement of the Indenture Trustee pursuant to this Section 6.8, the
      Issuer’s obligations under Section 6.7 above shall continue for the benefit of
      the retiring Indenture Trustee.

     

    Section
      6.9 Successor
      Indenture Trustee by Merger.
      If the
      Indenture Trustee consolidates with, merges or converts into, or transfers
      all
      or substantially all 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;
      provided, that such corporation or banking association shall be otherwise
      qualified and eligible under Section 6.11 below. The
      Indenture Trustee shall provide (x) written notice to the Depositor of any
      successor due to merger or consolidation of the Indenture Trustee pursuant
      to
      this Section within five (5) days of the effectiveness of such merger or
      consolidation and (y) in writing and in form and substance reasonably
      satisfactory to the Depositor, all information reasonably requested by the
      Depositor in order to comply with its reporting obligation under Item 6.02
      of
      Form 8-K with respect to a replacement Indenture Trustee.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    In
      case
      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
      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 in
      case
      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;
      and in all such cases such certificates shall have the full force which it
      is
      anywhere in the Notes or in this Indenture provided that the certificate of
      the
      Indenture Trustee shall have.

     

    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
      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 Insurer, such title
      to
      the Trust Estate, or any part hereof, and, subject to the other provisions
      of
      this Section 6.10, such powers, duties, obligations, rights and trusts as the
      Indenture Trustee 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 below and no notice to Noteholders of
      the
      appointment of any co trustee or separate trustee shall be required under
      Section 6.8 above.

     

    (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 cc 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 Agreement 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, jointly with the Indenture Trustee, 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 Agreement
      on
      its behalf and in its name. If any separate trustee or co trustee shall die,
      become incapable of acting, resign or be removed, all of its estates,
      properties, rights, remedies and trusts shall vest in and be exercised by the
      Indenture Trustee, to the extent permitted by law, without the appointment
      of a
      new or successor trustee. The Indenture Trustee shall remain primarily liable
      for all actions of a co-trustee.

     

    Section
      6.11 Eligibility:
      Disqualification.
      The
      Indenture Trustee shall at all times satisfy the requirements of TIA Section
      310(a). The Indenture Trustee shall (i) have a combined capital and surplus
      of
      at least $50,000,000 as set forth in its most recent published annual report
      of
      condition, (ii) be subject to supervision or examination by federal or state
      authority, and (iii) have a credit rating which would not cause either of the
      Rating Agencies to reduce their respective then-current ratings of the Notes
      (or
      having provided such security from time to time as is sufficient to avoid such
      reduction) . The Indenture Trustee shall comply with TIA. Section 310(b),
      including the optional provision permitted by the second sentence of TIA Section
      310(b)(9); provided, however, that there shall be excluded from the operation
      of
      TIA Section 310(b)(1) any indenture or indentures under which other securities
      of the Issuer are outstanding if the requirements for such exclusion set forth
      in TIA Section 310(b)(1) are met.

     

    Section
      6.12 Preferential
      Collection of Claims Against Issuer.
      The
      Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
      relationship listed in TIA Section 31 l (b). An Indenture Trustee who has
      resigned or been removed shall be subject to TIA Section 311 (a)
      to
      the extent indicated therein.

     

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

     

    (a) The
      Indenture Trustee is duly organized, validly existing and 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 currently conducted.

     

    (b) 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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) 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 association 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.

     

    Section
      6.14 Directions
      to
      Indenture Trustee.
      The
      Indenture
      Trustee
      is
      hereby
      directed:

     

    (a) to
      accept
      the pledge of the Mortgage Loans and hold the Trust Estate in trust for the
      Noteholders and the Insurer;

     

    (b) to
      authenticate and deliver the Notes substantially in the form prescribed by
      Exhibit A in accordance with the terms of this Indenture; and

     

    (c) to
      take
      all other actions as shall be required to be taken by the terms of this
      Indenture.

     

    Section
      6.15 Indenture
      Trustee To Act Solely with Consent of the Insurer.
      Unless
      an Insurer Default exists, the Indenture Trustee shall not, without the
      Insurer’s consent or unless directed by the Insurer:

     

    (a) terminate
      the rights and obligations of the Master Servicer as Master
      Servicer;

     

    (b) agree
      to
      any amendment pursuant to Section 9 hereof; or

     

    (c) undertake
      any litigation.

     

    The
      insurer may, in writing and in its sole discretion renounce all or any of its
      rights under this Indenture or any requirement for the Insurer’s consent for any
      period of time.

     

    Section
      6.16 Mortgage
      Loans, Trust Estate and Accounts Held for Benefit of the Insurer.
      The
      Indenture Trustee shall hold the Trust Estate and the Mortgage Files for the
      benefit of the Noteholders and the Insurer and all references in this Indenture
      and in the Class’ Notes to the benefit of Holders of the Notes shall be deemed
      to include the Insurer. The Indenture Trustee shall cooperate in all reasonable
      respects with any reasonable request by the Insurer for action to preserve
      or
      enforce the Insurer’s rights or interests under this Indenture and the Notes
      unless, as stated in an Opinion of Counsel addressed to the Indenture Trustee
      and the Insurer, such action is adverse to the interests of the Noteholders
      or
      diminishes the rights of the Noteholders or imposes additional burdens or
      restrictions on the Noteholders.

     

    ARTICLE
      VII

    NOTEHOLDERS’
      LISTS AND REPORTS

     

    Section
      7.1 Issuer
      To
      Furnish Indenture Trustee Names and Addresses of Noteholders.
      The
      Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not
      more
      than
      five (5) days after the earlier of (i) each Record Date and (ii) three
      (3)
      months after the last
      Record Date, a list, in such form as the Indenture Trustee may reasonably
      require, of the names and addresses of the Noteholders as of such Record Date,
      (b) at such other times as the Indenture Trustee and the Insurer may request
      in
      writing, within 30 days after receipt by the Issuer 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 Indenture Trustee
      is
the
      Note
      Registrar, no such list shall be required to be furnished.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      7.2 Preservation
      of Information; Communications to Noteholders.

     

    (a) The
      Indenture Trustee shall preserve, in as current a form as is reasonably
      practicable, the names and addresses of the Noteholders contained in the most
      recent list furnished to the Indenture Trustee as provided in Section 7.1 above
      and the names and addresses of Noteholders received by the Indenture Trustee
      in
      its capacity as Note Registrar. The Indenture Trustee may destroy any list
      furnished to it as provided in such Section 7.1 upon receipt’of a new list so
      furnished.

     

    (b) Noteholders
      may communicate pursuant to TIA Section 312(b) with other Noteholders with
      respect to their rights under this Indenture or under the Notes.

     

    (c) The
      Issuer, the Indenture Trustee and the Note Registrar shall have the protection
      of TIA Section 312(c).

     

    Section
      7.3 Reports
      by Issuer.

     

    (a) The
      Issuer shall:

     

    (i) file
      with
      the Indenture Trustee, within 15 days after the Issuer is required, pursuant
      to
      the Sale and Servicing Agreement, to file the same with the Commission, copies
      of the annual reports and of the information, documents and other reports (or
      copies of such portions of any of the foregoing as the Commission may from
      time
      to time by rules and regulations prescribe) that the Issuer may be required
      to
      file with the Commission pursuant to Section 13 or 15(d) of the Exchange
      Act;

     

    (ii) file
      with
      the Indenture Trustee and the Commission in accordance with the rules and
      regulations prescribed from time to time by the Commission such additional
      information, documents and reports with respect to compliance by the Issuer
      with
      the conditions and covenants of this Indenture as may be required from time
      to
      time by such rules and regulations; and

     

    (iii) make
      available to the Indenture Trustee (and the Indenture Trustee shall make
      available to all Noteholders described in TIA Section 313(c)) and the Insurer
      such summaries of any information, documents and reports required to be filed
      by
      the Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) and by rules
      and regulations prescribed from time to time by the Commission.

     

    (b) Unless
      the Issuer otherwise determines, the fiscal year of the Issuer shall end on
      December 31 of each year.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      7.4 Reports
      by Indenture Trustee.
      If
      required by TIA Section 313(a), within 60 days after each August 1, beginning
      with 2007, the Indenture Trustee shall mail to each
      Noteholder as required by TIA Section 313(c) and to the Insurer a brief
      report
      dated
      as of such
      date
      that complies with TIA Section 313(a). The Indenture Trustee
      also shall comply with
      TIA
      Section 313(b).

     

    A
      copy of
      each report at the time of its mailing to Noteholders shall be provided by
      the
Indenture
      Trustee
      to
      the Insurer and shall
      be
      filed by the Indenture
      Trustee
      with
      the
      Commission and
      each
      securities exchange, if any, on which the Notes are listed. The Issuer shall
      notify the
      Indenture
      Trustee
      if
      and when the Notes are listed on any securities
      exchange.

     

    ARTICLE
      VIII

    ACCOUNTS,
      DISBURSEMENTS AND RELEASES

     

    Section
      8.1 Collection
      of Money.
      Except
      as otherwise expressly provided herein, the indenture Trustee 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 Indenture Trustee pursuant to this
      Indenture. The Indenture Trustee 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 herein.

     

    Section
      8.2 Accounts,
      Distributions.

     

    (a) On
      or
      prior to the Closing Date, the Indenture Trustee shall establish and maintain
      or
      cause to be established and maintained, in the name of the Indenture Trustee
      for
      the benefit of the Noteholders, the Transferor and the Insurer, the Distribution
      Account as provided in Article V of the Sale and Servicing Agreement into which
      amounts shall be deposited in accordance with the terms of the Sale and
      Servicing Agreement.

     

    (b) The
      Indenture Trustee shall deposit into the Distribution Account any amounts
      representing payments on and any collections in respect of the Mortgage Loans
      received by it, if any, and any other amounts required by the terms of the
      Transaction Documents to be so deposited, immediately following receipt thereof,
      including, without limitation, all amounts withdrawn by the Master Servicer
      from
      the Collection Account pursuant to Section 3.03 of the Sale and Servicing
      Agreement for deposit to the Distribution Account. Amounts on deposit in the
      Distribution Account may be invested in Eligible Investments pursuant to Section
      5.06 of the Sale and Servicing Agreement.

     

    (c) On
      each
      Payment Date and the Redemption Date, to the extent funds are available in
      the
      Distribution
      Account, the Indenture Trustee shall make the distributions and payments in
      the
      amounts
      and in the priority set forth in Section 5.01 of the Sale and Servicing
      Agreement (except as otherwise provided in Section 5.4(b) above).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) On
      each
      Payment Date and the Redemption Date, to the extent of the interest of the
      indenture Trustee in the Distribution Account (as described in Section 5.05
      of
      the Sale and Servicing Agreement), the Indenture Trustee hereby authorizes
      the
      Paying Agent, as applicable, to make the distributions from the Distribution
      Account as required pursuant to Section 5.01 of the Sale and Servicing
      Agreement.

     

    (e) On
      or
      prior to the Closing Date, the Indenture Trustee shall establish and maintain
      or
      cause to be established and maintained, in the name of the Indenture Trustee
      for
      the benefit of the
      Noteholders, the Transferor and the Insurer, the Pre-Funding Account and the
      Capitalized Interest Account as provided in Section 3.17 of the Sale and
      Servicing Agreement.

     

    Section
      8.3 [Reserved].

     

    Section
      8.4 Master
      Servicer’s Monthly Statements.
      On each
      Payment Date, the Indenture Trustee shall make available the Servicing
Certificate
      (as defined in Section 5.03 of the Sale and Servicing Agreement) with respect
      to
      such
      Payment
      Date to DTC and the Rating Agencies.

     

    Section
      8.5 [Reserved].

     

    Section
      8.6 Opinion
      of Counsel.
      The
      Indenture Trustee shall receive at least seven days notice when requested by
      the
      Issuer to take any action pursuant to Section 2.9(a) above, accompanied by
      copies of any instruments involved, and the Indenture Trustee shall also require
      with a copy to the Insurer, as a condition to such action, an Opinion of
      Counsel, 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 and such action will not materially and adversely
      impair the security for the Notes or the rights of the Noteholders or the
      Insurer in contravention of the provisions of this Indenture; provided, however,
      that such Opinion of Counsel shall not be required to express an opinion as
      to
      the fair market value of a Trust Estate. Counsel rendering any such opinion
      may
      rely, without independent investigation, on the accuracy and validity of any
      certificate or other instrument delivered to the Indenture Trustee in connection
      with any such action.

     

    ARTICLE
      IX

    SUPPLEMENTAL
      INDENTURES

     

    Section
      9.1 Supplemental
      Indentures Without Consent of Noteholders.

     

    (a) Without
      the consent of the Holders of any Notes but with prior notice to the Rating
      Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer
      Order, at any time and from time to time and only with the prior written consent
      of the Insurer, may enter into one or more indentures supplemental hereto (which
      shall conform to the provisions of the Trust Indenture Act as in force at the
      date of the execution thereof), in form satisfactory to the Indenture Trustee,
      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 Issuer, and the assumption by any such successor of the
      covenants of the Issuer herein and in the Notes contained;

     

    (iii) to
      add to
      the covenants of the Issuer, for the benefit of the Noteholders or the insurer,
      or to surrender any right or power herein conferred upon the
      Issuer;

     

    (iv) to
      convey, transfer, assign, mortgage or pledge any property to or with the
      Indenture Trustee;

     

    (v) 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 or 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 adversely affect the interests
      of the Noteholders or the Insurer;

     

    (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 herein; or

     

    (vii) to
      modify, eliminate or add to the provisions of this Indenture to such extent
      as
      shall be necessary to effect the qualification of this Indenture under the
      TIA
      or under any similar federal statute hereafter enacted and to add to this
      Indenture such other provisions as may be expressly required by the
      TIA.

     

    The
      Indenture Trustee is 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) The
      Issuer and the Indenture Trustee, when authorized by an Issuer Order, may,
      also
      without the consent of any of the Noteholders but with prior consent of the
      Rating Agencies and the insurer, 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 Noteholders under this Indenture;
      provided, however, that such action shall not, as evidenced by an Opinion of
      Counsel and satisfaction of the Rating Agency Condition, adversely affect in
      any
      material respect the interests of any Noteholder or the Insurer or cause the
      Issuer to be subject to entity level tax. However, except as provided in the
      following sentence, no such supplemental indenture pursuant to this Section
      shall (i) conflict with the provisions of Section 9.2 or (ii) without the
      consent of a Majority in Interest of the Notes, permit the Issuer to (A) modify
      the definition of the term “Eligible Investments” except as provided therein, to
      expand the types of Eligible investments specified in that definition, (B)
      enter
      into a derivative contract for the benefit of the Noteholders or (C) increase
      (x) the Transferor’s discretion in the selection of accounts to be transferred
      to the Transferor or (y) the frequency of such transfer under Section 2.09
      of
      the Sale and Servicing Agreement. However, the preceding sentence shall not
      prevent the adoption without Noteholder consent of any supplemental indenture
      descri bed in clause (ii) thereof, if (i) that supplemental indenture otherwise
      satisfies the first sentence of this Section 9.1(b) and (ii) the adoption of
      that supplemental indenture (a) is necessary to correct a manifest error in
      a
      Transaction Document, (b) is necessary to conform the terms of any Transaction
      Document to the terms of the Notes described in the Prospectus Supplement,
      where
      such Transaction Document and the Prospectus Supplement are inconsistent, (c)
      is
      required by the Rating Agencies or (d) is, as evidenced by the written opinion
      of the Master Servicer’s internal accountants, delivered and acceptable to the
      Indenture Trustee, necessary to comply with or to conform to then-current
      financial accounting standards.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      9.2 Supplemental
      Indentures with Consent of Noteholders.
      The
      Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
      may,
      with prior consent of the Rating Agencies and the Insurer, and with the consent
      of the Holders of not less than a majority of the Outstanding Amount of the
      Notes, by Act of such Holders delivered to the Issuer 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 Outstanding Note affected
      thereby:

     

    (a) change
      the date of payment of any installment of principal of or interest on any Note,
      or reduce the principal amount thereof, the interest rate thereon or the amount
      required to be paid on the Notes following the exercise of the option set forth
      in Section 8.01 of the Sale and Servicing Agreement, change the provisions
      of
      this Indenture relating to the application of collections on, or the proceeds
      of
      the sale of, the Trust Estate 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 herein, to
      the
      payment of any such amount due on the Notes on or after the respective due
      dates
      thereof (or, in the case of redemption, on or after the Redemption
      Date);

     

    (b) reduce
      the percentage of the Outstanding Amount of the 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;

     

    (c) modify
      or
      alter the provisions of the proviso to the definition of the term
“Outstanding”;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) reduce
      the percentage of the Outstanding Amount of the Notes required to direct the
      indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate
      pursuant to Section 5A above;

     

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

     

    (f) 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

     

    (g) permit
      the creation of any lien tanking prior to or on a panty with the lien of this
      indenture with respect to any part of the Trust Estate or, except as otherwise
      expressly 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;
      provided further, that such action shall not, as evidenced by an Opinion of
      Counsel, cause the Issuer to be subject to an entity level tax.

     

    In
      connection with requesting the consent of the Noteholders pursuant to this
      Section 9.2, the Indenture Trustee shall mail to the Holders of the Notes to
      which such amendment or supplemental indenture relates a notice setting forth
      in
      general terns the substance of such supplemental indenture at the Issuer’s
      expense. It shall not be necessary for any Act of Noteholders under this Section
      9.2 to approve the particular form of any proposed supplemental indenture,
      but
      it shall be sufficient if such Act shall approve the substance
      thereof.

     

    Section
      9.3 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 shall be entitled to receive,
      and subject to Sections 6.1 and 6.2, shall be fully protected in relying upon,
      an Opinion of Counsel stating that the execution of such supplemental indenture
      is auth6rized or permitted by this Indenture and all conditions precedent to
      the
      execution of such supplemental indenture
      have been met. The Indenture Trustee may, but shall not be obligated to, enter
      into any such supplemental indenture that affects the Indenture Trustee’s own
      rights, duties, liabilities or immunities under this Indenture or
      otherwise.

     

    Section
      9.4 Effect
      of Supplemental Indenture.
      Upon
      the execution of any supplemental indenture pursuant to the provisions hereof,
      this Indenture 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 Issuer 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
      9.5 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
      9.6 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 Indenture Trustee shall,
      bear a notation in form approved by the Indenture Trustee as to any matter
      provided for in such supplemental indenture. If the Issuer or the indenture
      Trustee shall so determine, new Notes so modified as to conform, in the opinion
      of the Indenture Trustee and the Issuer, to any such supplemental indenture
      may
      be prepared and executed by the Issuer and authenticated and delivered by the
      Indenture Trustee in exchange for Outstanding Notes.

     

    ARTICLE
      X

    REDEMPTION
      OF NOTES

     

    Section
      10.1 Redemption.
      The
      Master Servicer may effect an early termination of the Notes pursuant to Section
      8.01 of the
      Sale and
      Servicing Agreement
      on or after any Payment Date on which the Note
      Principal Balance is less than or equal to 10% of the Original Note
      Principal
      Balance by purchasing, on the next succeeding Payment Date, all of the
      outstanding Mortgage
      Loans and REO Properties
      at
      the Termination Price,
      pursuant to the provisions of
      Section
      8.01(b) of the Sale and Servicing Agreement.

     

    The
      Indenture Trustee shall furnish
      notice of any such redemption in accordance with
      Section
      8.01 of the Sale and Servicing Agreement.

     

    ARTICLE
      XI

    MISCELLANEOUS

     

    

     

    Section
      11.1 Compliance
      Certificates and Opinions, etc.

     

    (a) Upon
      any
      application or request by the Issuer made to the Indenture Trustee to take
      any
      action under any provision of this Indenture, the Issuer shall furnish to the
      Indenture Trustee
      and to the 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,
      (ii) an Opinion of Counsel stating that in the opinion of such counsel all
      such
      conditions precedent, if any,
      have been
      complied with
      and
      (iii) (if required
      by the TIA) an Independent Certificate from a
      firm of
      certified public accountants meeting the applicable requirements of this Section
      11, 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:

     

    (i) 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;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii) 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; 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; and

     

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

     

    (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 (except in the case of
      the
      release of Mortgage Loans in accordance with the Sale and Servicing Agreement),
      the Issuer shall, in addition to any obligation imposed in Section 11.1(a)
      herein or elsewhere in this Indenture, 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 of such deposit) to the Issuer
      of the Collateral or other property or securities to be so
      deposited.

     

    (ii) Whenever
      the Issuer is required to furnish to the Indenture Trustee an Officer’s
      Certificate certifying or stating the opinion of any signer thereof as to the
      matters described in clause (i) above, the Issuer shall also deliver to the
      Indenture Trustee an independent Certificate as to the same matters, if the
      fair
      value to the Issuer of the Collateral, other property or securities to be so
      deposited and of all other such Collateral, other property or securities made
      the basis of any such withdrawal or release since the commencement of the then
      current fiscal year of the Issuer, as set forth in the certificates delivered
      pursuant to clause (i) above and this clause (ii), is 10% or more of the
      aggregate Note Principal Balance of the Notes, but such a certificate need
      not
      be furnished with respect to any securities so deposited, if the fair value
      thereof to the Issuer as set forth in the related Officer’s Certificate is less
      than either (A) $25,000 or (B) one percent of the aggregate Note Principal
      Balance of the Notes.

     

    (iii) Whenever
      any property or securities are to be released from the lien of this Indenture,
      the Issuer 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 of 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 Issuer is required to furnish to the Indenture Trustee an officer’s
      Certificate certifying or stating the opinion of any signer thereof as to the
      matters described in clause (iii) above, the Issuer shall also furnish to the
      Indenture Trustee 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 aggregate Note Principal
      Balance 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 aggregate Note Principal Balance of the Notes.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      11.2 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 Issuer 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
      such officer’s 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 Master Servicer, the Transferor or the Issuer,
      stating that
      the
      information with respect to such factual matters is in the possession of the
      Master Servicer, the Transferor or the Issuer, 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 Issuer shall deliver any
      document as a condition of the granting of such application, or as evidence
      of
      the Issuer’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 Issuer 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
      hereof.

     

    Section
      11.3 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 Issuer. 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 6.1
      hereof) conclusive in favor
      of
      the Indenture Trustee
      and the Issuer, if made in the manner provided in this Section
      11.3.

     

    (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 Register.

     

    (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 Issuer in reliance thereon, whether or not notation of such
      action is made upon such Note.

     

    Section
      11.4 Notices.
      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:

     

    (a) the
      Indenture Trustee by any Noteholder or by the Issuer 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 or the Issuer
      to the Insurer, or

     

    (b) the
      Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for
      every purpose hereunder if in writing and mailed first class, postage prepaid
      to
      the Issuer addressed to: First Horizon ABS Trust 2006-HE2, in care of Wilmington
      Trust Company, as Owner Trustee, Rodney Square North, 1100 North Market Street,
      Wilmington, Delaware 19890-0001, Attention: Corporate Trust Department; and
      to
      the Master Servicer addressed to: First Tennessee Bank National Association,
      165
      Madison Avenue, 8th
      Floor,
      Memphis, Tennessee 38103, Attention: Mr. Charles Rutledge, or at any other
      address previously furnished in writing to the Indenture Trustee by the Issuer
      or the Administrator. The Issuer shall promptly transmit any notice received
      by
      it from the Noteholders to the Indenture Trustee and from the Noteholders,
      the
      Indenture Trustee or the Issuer to the insurer.

     

    (c) the
      Insurer, by the Issuer, the Indenture Trustee or by any Noteholders shall be
      sufficient for every purpose hereunder to in writing and mailed, first-class
      postage pre-paid, or personally delivered to: 31 West 52nd Street, New York,
      NY
      10019, Attention: Managing Director - Transaction Oversight, Re: First Horizon
      HELOC Notes, Series 2006-HE2, Facsimile: (212) 339-3518, Confirmation: (212)
      826,0100 (in each case in which notice or other communication to the Insurer
      refers to an Event of Default, a claim on the Policy or with respect to which
      failure on the part of the Insurer to respond shall be deemed to constitute
      consent or acceptance, then a copy of such notice or other communication should
      also be sent to the attention of the general counsel of the Insurer, in all
      cases, both any original and all copies shall be marked to indicate “URGENT
      MATERIAL ENCLOSED”. The Insurer shall promptly transmit any notice received by
      it from the Issuer, the Indenture Trustee or the Noteholders to the Issuer
      or
      Indenture Trustee, as the case may be.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Notices
      required to be given to the Rating Agencies by the Indenture Trustee or the
      Owner Trustee shall be in writing, personally delivered or mailed by certified
      mail, return receipt requested,
      to (i) in the case of Standard & Poor’s, at the following address: 55 Water
      Street, New York, New York 10041 and (ii) in the case of Moody’s, at the
      following address: 99 Church Street, 6th Floor, New York, New York 10007,
      Attention: Residential Mortgage Monitoring; or as to each of the foregoing,
      at
      such other address as shall be designated by written notice to the other
      parties.

     

    Section
      11.5 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
      in
      writing and mailed, first class, postage prepaid to each Noteholder affected
      by
      such event, at his 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.

     

    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 Agencies, failure to give
      such
      notice shall not affect any other rights or obligations created
      hereunder.

     

    Section
      11.6 Rights
      of the Insurer to Exercise Rights of Noteholders.
      By
      accepting its Note, each Noteholder agrees that unless an Insurer Default
exists,
      the Insurer shall have the right to exercise all rights of the Noteholders
      as
      specified under
      this
      Agreement without any further consent of the Noteholders. Any right conferred
      to
      the Insurer hereunder shall be suspended and shall run to the benefit of the
      Noteholders during any period in which there exists an Insurer Default,
      provided, however, that during an Insurer Default, the consent of the Insurer
      must be obtained with respect to any amendments that may materially adversely
      affect the Insurer. Upon the payment of any Insurance Policy Payment Amount
      in
      accordance with the terms of the Insurance Policy, the Insurer shall be fully
      subrogated to the rights of the Noteholders to receive the amount so paid and
      shall be deemed to be a Noteholder with respect thereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      11.7 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 Sections 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
      11.8 Effect
      of Headings and Table of Contents.
      The
      Article and Section headings herein and the Table of Contents are for
      convenience only and shall not affect the construction hereof.

     

    Section
      11.9 Successors
      and Assigns.
      All
      covenants and agreements in this Indenture and the Notes by the Issuer 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
      11.10 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
      11.11 Benefits
      of Indenture.
      Nothing
      in this Indenture or in the Notes, express or implied, shall give to any Person,
      other than the parties hereto and their successors
      hereunder, and the Noteholders, the Insurer, and any other party
      secured
      hereunder, and
      any
      other Person with an ownership interest in any part
      of the
      Trust Estate, any benefit or
      any
      legal or equitable right, remedy or claim under this Indenture.

     

    I

    Section
      11.12 Legal
      Holidays.
      In any
      case where the date on which any payment isdue
      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
      11.13 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, AND THE OBLIGATIONS,
      RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMR-4ED IN ACCORDANCE
      WITH SUCH LAWS.

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      11.15 Recording
      of Indenture.
      If this
      Indenture is subject to recording
      in any
      appropriate public recording offices, such recording is to be effected by the
      Issuer and at its expense
      accompanied by an Opinion of Counsel (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
      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
      11.16 Trust
      Obligation.
      No
      recourse may be taken, directly or indirectly, with respect to the obligations
      of the Issuer, the Owner Trustee or the Indenture Trustee 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 Issuer
      or (iii) any partner, owner, beneficiary, agent, officer, director, employee
      or
      agent of the Indenture Trustee or the Owner Trustee in its individual capacity,
      any holder of a beneficial interest in the Issuer, 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 Issuer hereunder, the Owner Trustee shall be subject to, and entitled
      to
      the benefits of, the terms and provisions of Articles VI, VII and VIII of the
      Trust Agreement.

     

    Section
      11.17 No
      Petition.
      The
      Indenture Trustee, by entering into this Indenture, and each Noteholder, by
      accepting a Note, hereby covenant and agree that they will not at any time
      institute against the Transferor (and any wholly-owned subsidiary thereof),
      the
      Depositor, the Master Servicer or the Issuer, or join in any institution against
      the Transferor (and any wholly-owned subsidiary thereof), the Depositor, the
      Master Servicer or the Issuer 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 Transaction
      Documents.

     

    Section
      11.18 Inspection.
      The
      Issuer shall, upon the reasonable request of the Indenture Trustee or Insurer,
      permit the Indenture Trustee or Insurer or their authorized agents, or cause
      the
      Indenture Trustee or Insurer or their authorized agents to be permitted (in
      the
      case of the Issuer) to inspect the books and records of the Issuer as they
      may
      relate to the Notes, the obligations of the Issuer under the Transaction
      Documents to which it is a party and the Transaction. Such inspections and
      discussions shall be conducted during normal business hours and shall not
      unreasonably disrupt the business of the Issuer. The books and records of the
      Issuer shall be maintained at the address of the Issuer designated in this
      Indenture for receipt of notices.

     

    Section
      11.19 Inconsistencies
      With the Sale and Servicing Agreement.
      In the
      event certain provisions of this Agreement conflict with the provisions of
      the
      Sale and Servicing Agreement, the parties hereto agree that the provisions
      of
      the Sale and Servicing Agreement shall be controlling.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      11.20 Third
      Party Beneficiaries.
      This
      Indenture will inure to the benefit of and be binding upon the parties hereto,
      the Noteholders, the Note Owners, the Insurer and their respective successors
      and permitted assigns. Except as otherwise provided in this Indenture, no other
      person will have any right or obligation hereunder.

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture
      to be duly executed by their respective officers, thereunto duly authorized
      and
      duly
      attested, all as of the day and year first above written.

     

    
      	 	
              FIRST
                HORIZON ABS TRUST 2006-HE2

            
	 	 	 
	 	
              By: 
                Wilmington Trust Company,

            
	 	
              not
                in its individual capacity but

            
	 	
              solely
                as Owner Trustee

            
	 	 	 
	 	 	 
	 	
              By:

            	
            
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 	 
	 	 	 
	 	
              THE
                BANK OF NEW YORK,

            
	 	
              not
                in its individual capacity but

            
	 	
              solely
                as Indenture Trustee

            
	 	 	 
	 	 	 
	 	
              By:

            	
            
	 	
              Name:

            	 
	 	
              Title:

            	 

    

    

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    
      	
              STATE
                OF DELAWARE

            	
              )

            	 
	 	
              )

            	
              ss:

            
	
              COUNTY
                OF NEWCASTLE

            	
              )

            	 

    

    

    BEFORE
      ME, the undersigned authority, a Notary Public in and for said county and state,
      on this day personally appeared _________________________ known to me to be
      the
      person and officer whose name is subscribed to the foregoing instrument and
      acknowledged to me that the same was the act of the said WILMINGTON TRUST
      COMPANY, not in its individual capacity, but solely as Owner Trustee on behalf
      of FIRST HORIZON ABS TRUST 2006-HE2, a Delaware statutory trust, and that such
      person executed the same as the act of said statutory trust for the purpose
      and
      consideration therein expressed, and in the capacities therein
      stated.

     

    GIVEN
      UNDER MY HAND AND SEAL OF OFFICE, this 21st day of November, 2006.

     

    
      	 	 
	 	
              Notary
                Public in and for the State of New York

            
	 	 
	 	 
	
              (Seal)

            	 
	 	 
	
              My
                commission expires:

            	 
	
            	 

    

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    

      
        	
                STATE
                  OF NEW YORK

              	
                )

              	 
	 	
                )

              	
                ss:

              
	
                COUNTY
                  OF MANCHESTER

              	
                )

              	 

      

    BEFORE
      ME, the undersigned authority, a Notary Public in and for said county and state,
      on this day personally appeared _________________________ known to me to be
      the
      person and officer whose name is subscribed to the foregoing instrument and
      acknowledged to me that the same was the act of THE BANK OF NEW YORK, a New
      York
      banking corporation, and that such person executed the same as the act of said
      statutory trust for the purpose and consideration therein expressed, and in
      the
      capacities therein stated.

     

    GIVEN
      UNDER MY HAND AND SEAL OF OFFICE, this 21st day of November, 2006.

     

    

     

    
      	 	 
	 	
              Notary
                Public in and for the State of New York

            
	 	 
	 	 
	
              (Seal)

            	 
	 	 
	
              My
                commission expires:

            	 
	 	 

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    SCHEDULE
      A

     

    MORTGAGE
      LOAN SCHEDULE

     

     

    [Available
      Upon Request] 

     

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      A

     

    FORM
      OF NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC” ), TO THE ISSUER OR ITS AGENT FOR
      REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
      IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
      AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
      TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
      ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
      PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
      AN INTEREST HEREIN.

     

    THE
      PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
      ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
      BE
      LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

     

    
      	
              No.

            	
              CUSIP
                NO.

            
	 	 
	
              Aggregate
                Class Note Principal Balance:

            	
              Denomination
                of this Note:

            
	
              $

            	
              $

            

    

    

    FIRST
      HORIZON ABS TRUST 2006-HE2

     

    FIRST
      HORIZON HELOC NOTES, SERIES 2006-HE2

     

    FIRST
      HORIZON ABS TRUST 2006-HE2, a statutory trust organized and existing
under
      the
      laws of the State of Delaware (herein referred
      to
      as the “Trust”), for value received,
      hereby
      promises to pay to Cede & Co., or registered assignees, the principal sum
      of

     

    $____________
      payable on each Payment Date in an amount equal to the result obtained by
      multiplying (i) a fraction the numerator of which is the initial principal
      amount of this Note and the denominator of which is the aggregate principal
      amount of all Notes by (ii) the aggregate amount, if any, payable from the
      Distribution Account in respect of principal on the Note pursuant to Section
      5.01 of the Sale and Servicing Agreement dated as of November 1, 2006 (the
“Sale
      and Servicing Agreement”), among the Trust, First Horizon Asset Securities Inc.,
      as Depositor (the “Depositor”), First Tennessee Bank National Association as
      Seller and Master Servicer (“FTBN”), and The Bank of New York, a New York
      banking corporation, as Indenture Trustee (the “Indenture Trustee”); provided,
      however, that the entire unpaid principal amount of this Note shall be due
      and
      payable on the earliest to occur of (i) the Payment Date occurring in October
      2026 (the “Final Maturity Date”), (ii) any termination date pursuant to Section
      8.01 of the Sale and Servicing Agreement or (iii) the date on which an Event
      of
      Default under the Indenture dated as of November 1, 2006, between the Trust
      and
      the Indenture Trustee shall have occurred and be continuing, if the Insurer
      or
      the Indenture Trustee or the Holders of Notes representing not less than a
      majority of the Outstanding Amount of the Notes, in either such case with the
      written consent of the Insurer, have declared the Notes to be immediately due
      and payable in the manner provided in Section 5.2 of the Indenture. Capitalized
      terms used but not defined herein are defined in Article I of the Indenture,
      which also contains rules as to construction that shall be applicable
      herein.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      Trust
      will pay interest on this Note at the rate per annum described in the Sale
      and
      Servicing Agreement with respect to the Note on the principal amount of this
      Note outstanding on the preceding Payment Date (after giving effect to all
      payments of principal made on the preceding Payment Date) on each Payment Date
      until the principal of this Note is paid or made available for payment in full.
      Interest on this Note will accrue for each Payment Date during the period from
      the preceding Payment Date to the day preceding such Payment Date (or, in the
      case of the first Payment Date, the period from the Closing Date to the day
      preceding the First Payment Date) (each, an “Interest Accrual Period”). Interest
      will be computed on the basis of the actual number of days in each Interest
      Accrual Period and a 360-day year. Such principal of and interest on this Note
      shall be paid in the manner specified on the reverse hereof.

     

    The
      principal of and interest on this Note are payable in such coin or currency
      of
      the United States of America as at the time of payment is legal tender for
      payment of public and private debts. All payments made by the Trust with respect
      to this Note shall be applied first to interest due and payable on this Note
      as
      provided above and then to the unpaid principal) of this Note.

     

    Reference
      is made to the further provisions of this Note set forth on the reverse hereof,
      which shall have the same effect as though fully set forth on the face of this
      Note.

     

    Unless
      the certificate of authentication hereon has been executed by the Indenture
      Trustee whose name appears below by manual signature, this Note shall not be
      entitled to any benefit under the Indenture referred to on the reverse hereof,
      or be valid or obligatory for any purpose.

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    IN
      WITNESS WHEREOF, the Trust has caused this instrument to be signed, manually
      or
      in facsimile, by its Authorized Officer, as of the date set forth
      below.

     

    
      	
              Date:
                ______ ___, 20__

            	 	 
	 	
              FIRST
                HORIZON ABS TRUST 2006-HE2

            
	 	 	 
	 	
              By: 
                Wilmington Trust Company,

            
	 	
              not
                in its individual capacity but

            
	 	
              solely
                as Owner Trustee

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 	 
	
               INDENTURE
                TRUSTEE’S CERTIFICATE OF AUTHENTICATION

               

            
	
              This
                is one of the Notes designated above and referred to in the within
                mentioned Indenture.

               

            
	
              Date:
                ______ _____, 20__

            	 	 
	 	
              THE
                BANK OF NEW YORK,

            
	 	
              not
                in its individual capacity but

            
	 	
              solely
                as Indenture Trustee

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

    (REVERSE
      OF NOTE)

     

    This
      Note
      is one of a duly authorized issue of Notes of the Trust, designated as its
      First
      Horizon HELOC Notes, Series 2006-HE2, all issued under the Indenture, to which
      Indenture and all indentures supplemental thereto reference is hereby made
      for a
      statement of the respective rights and obligations thereunder of the Trust,
      the
      Indenture Trustee and the Holders of the Notes. The Notes are subject to all
      terms of the Indenture.

     

    The
      Notes
      are and will be secured by the collateral pledged as security therefor as
      provided in the Indenture.

     

    Principal
      of the Notes will be payable on each Payment Date in an amount described on
      the
      face hereof. “Payment Date” means the 25th day of each month, or, if any such
      date is not a Business Day, the next succeeding Business Day, commencing in
      December 2006.

     

    As
      described above, the entire unpaid principal amount of this Note shall be due
      and payable on the earlier of the Final Maturity Date and any termination date
      pursuant to Section 8.01 of the Sale and Servicing Agreement. Notwithstanding
      the foregoing, the entire unpaid principal amount of the Notes shall be due
      and
      payable on the date on which an Event of Default under the Indenture shall
      have
      occurred and be continuing and the Insurer or the Indenture Trustee, at the
      direction or upon the prior written consent of the Holders of the Notes I
      representing not less than a majority of the Outstanding Amount of the Notes
      and
      with the written consent of the Insurer, shall have declared the Notes to be
      immediately due and payable in the manner provided in Section 5.2 of the
      Indenture. All principal payments on the Notes shall be made pro rata to the
      Holders of the Notes entitled thereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Payments
      of interest on this Note due and payable on each Payment Date, together with
      the
      related installment of principal, if any, to the extent not in full payment
      of
      this Note, shall be made by wire transfer of immediately available funds to,
      or
      by check mailed to, the Person whose name appears as the Registered Holder
      of
      this Note (or one or more Predecessor Notes) on the Note Register as of the
      close of business on each Record Date, except that with respect to Notes
      registered on the Record Date in the name of the nominee of the Clearing Agency
      (initially, such nominee to be Cede & Co.), payments will be made by wire
      transfer in immediately available funds to the account designated by such
      nominee. Such checks shall be mailed to the Person entitled thereto at the
      address of such Person as it appears on the Note Register as of the applicable
      Record Date without requiring that this Note be submitted for notation of
      payment. Any reduction in the principal amount of this Note (or any one or
      more
      Predecessor Notes) effected by any payments made on any Payment Date shall
      be
      binding upon all future Holders of this Note and of any Note issued upon the
      registration of transfer hereof or in exchange hereof or in lieu hereof, whether
      or not noted hereon. If funds are expected to be available, as provided in
      the
      Indenture, for payment in full of the then remaining unpaid principal amount
      of
      this Note on a Payment Date, then the Indenture Trustee, in the name of and
      on
      behalf of the Trust, will notify the Person who was the Registered Holder hereof
      as of the Record Date preceding such Payment Date by notice mailed or
      transmitted by facsimile prior to such Payment Date, and the amount then due
      and
      payable shall be payable only upon presentation and surrender
      of this Note at the Indenture Trustee’s principal Corporate Trust Office or at
      the office of the Indenture Trustee’s agent appointed for such purposes located
      in New York, New York.

     

    As
      provided in the Sale and Servicing Agreement, the Notes may be redeemed in
      whole, but not in part, at the option of the Master Servicer, on any Payment
      Date on and after the date on which the Note Principal Balance is less than
      or
      equal to 10% of the Original Note Principal Balance.

     

    As
      provided in the Indenture and subject to certain limitations set forth therein,
      the transfer of this Note may be registered on the Note Register upon surrender
      of this Note for registration of transfer at the office or agency designated
      by
      the Trust pursuant to the Indenture, duly endorsed by, or accompanied by a
      written instrument of transfer in form satisfactory to the Indenture Trustee
      duly executed by, the Holder hereof or such Holder’s attorney duly authorized in
      writing, with such signature guaranteed by an “eligible guarantor institution”
meeting the requirements of the Note Registrar, which requirements include
      membership or participation in the Securities Transfer Agent’s Medallion Program
      (“STAMP”) or such other “signature guarantee program” as may be determined by
      the Note Registrar in addition to, or in substitution for, STAMP, all in
      accordance with the Securities Exchange Act of 1934, as amended, and thereupon
      one or more new Notes of authorized denominations and in the same aggregate
      principal amount will be issued to the designated transferee or transferees.
      No
      service charge will be charged for any registration of transfer or exchange
      of
      this Note, but the Trust may require payment of a sum sufficient to cover any
      tax or other governmental charge that may be imposed in connection with any
      such
      registration of transfer or exchange. By acquiring this Note, the Noteholder
      hereof shall be deemed to represent and warrant that either (a) it is not
      acquiring the Note with the plan assets of an “employee benefit plan” as defined
      in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “plan” as
      defined in Section 4975 of the Code; of (b) the acquisition and holding of
      the
      Note will not give rise to a nonexempt prohibited transaction under Section
      406(a) of ERISA or Section 4975 of the Code.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Each
      Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note
      Owner, a security entitlement with respect to a Note, covenants and agrees
      that
      no recourse may be taken, directly or indirectly, with respect to the
      obligations of the Trust, the Owner Trustee or the Indenture Trustee on the
      Notes or under the Indenture or any certificate or other writing delivered
      in
      connection therewith, against (i) the Indenture Trustee or the Owner Trustee
      in
      its individual capacity, (ii) any owner of a beneficial interest in the Trust
      or
      (iii) any partner, owner, beneficiary, agent, officer, director or employee
      of
      the Indenture Trustee or the Owner Trustee in its individual capacity, any
      holder of a beneficial interest in the Trust, 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 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.

     

    Each
      Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note
      Owner, a security entitlement with respect to a Note, covenants and agrees
      by
      accepting the benefits of the Indenture that such Noteholder or Note Owner
      will
      not at any time institute against the Depositor or the Trust, or join in any
      institution against the Depositor or the Trust of, any bankruptcy,
      reorganization, arrangement, insolvency or liquidation proceedings under any
      United States federal or state bankruptcy or similar law in connection with
      any
      obligations relating to the Notes, the Indenture or the Transaction
      Documents.

     

    The
      Trust
      has entered into. the Indenture and this Note is issued with the intention
      that,
      for federal, state and local income, single business and franchise tax purposes,
      the Notes will qualify as indebtedness of the Trust secured by the Trust Estate.
      Each Noteholder, by acceptance of a Note (and each Note Owner by acceptance
      of a
      beneficial interest in a Note), agrees to treat the Notes for federal, state
      and
      local income, single business and franchise tax purposes as indebtedness of
      the
      Trust.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Trust, the
      Indenture Trustee and any agent of the Trust or the Indenture Trustee may treat
      the Person in whose name this Note (as of the day of determination or as of
      such
      other date as may be specified in the Indenture) is registered as the owner
      hereof for all purposes, whether or not this Note be overdue, and none of the
      Trust, the Indenture Trustee or any such agent shall be affected by notice
      to
      the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Trust and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Trust
      with the consent of the Holders of Notes representing a majority of the
      Outstanding Amount of all Notes at the time Outstanding The Indenture also
      contains provisions permitting the Holders of Notes representing specified
      percentages of the Outstanding Amount of the Notes, on behalf of the Holders
      of
      all the Notes, to waive compliance by the Trust with certain provisions of
      the
      Indenture and certain past defaults under the Indenture and their consequences.
      Any such consent or waiver by the Holder of this Note (or any one or more
      Predecessor Notes) shall be conclusive and binding upon such Holder and upon
      all
      future Holders of this Note and of any Note issued upon the registration of
      transfer hereof or in exchange hereof or in lieu hereof whether or not notation
      of such consent or waiver is made upon this Note. The Indenture also permits
      the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of Holders of the Notes issued
      thereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      term
“Trust” as used in this Note includes any successor to the Trust under the
      Indenture.

     

    The
      Notes
      are issuable only in registered form in denominations as provided in the
      Indenture, subject to certain limitations therein set forth.

     

    This
      Note
      and the Indenture shall be construed in accordance with the laws of the State
      of
      New York, without reference to its conflict of law provisions, and the
      obligations, rights and remedies of the parties hereunder and thereunder shall
      be determined in accordance with such laws.

     

    No
      reference herein to the Indenture and no provision of this Note or of the
      Indenture shall alter or impair the obligation of the Trust, which is absolute
      and unconditional, to pay the principal of and interest on this Note at the
      times, place and rate, and in the coin or currency herein
      prescribed.

     

    Anything
      herein to the contrary notwithstanding, except as expressly provided in the
      Transaction Documents, none of the Trust in its individual capacity, the Owner
      Trustee in its individual capacity, any owner of a beneficial interest in the
      Trust, or any of their respective partners, beneficiaries, agents, officers,
      directors, employees or successors or assigns shall be personally liable for,
      nor shall recourse be had to any of them for, the payment of principal of or
      interest on this Note or performance of, or omission to perform, any of the
      covenants, obligations or indemnifications contained in the Indenture. The
      Holder of this Note by its acceptance hereof agrees that, except as expressly
      provided in the Transaction Documents, in the case of an Event of Default under
      the Indenture, the Holder shall have no claim against any of the foregoing
      for
      any deficiency, loss or claim therefrom; provided, however, that nothing
      contained herein shall be taken to prevent recourse to, and enforcement against,
      the assets of the Trust for any and all liabilities, obligations and
      undertakings contained in the Indenture or in this Note.

     

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    ASSIGNMENT

     

    Social
      Security or taxpayer I.D. or other identifying number of
      assignee:____________________    

     

    

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto:

     

     

     

      
        

      

    

    (name
      and
      address of assignee)

     

    the
      within Note and all rights thereunder, and hereby irrevocably consttutes and
      appoints attorney, to transfer said Note on the books kept for registration
      thereof, with full power of substitution in the premises.

     

    

      
        	
                Dated:_____________________

              	 
	 	
                */

              
	 	
                Signature
                  Guaranteed:

              
	 	 
	 	 
	 	
                */

              
	 	 
	
                ______________________

              	 

      

    

    Dated:   

     

    */
      NOTICE: The signature to this assignment must correspond with the name of the
      registered owner as it appears on the face of the within Note in every
      particular, without alteration, enlargement or any change whatever. Such
      signature must be guaranteed by an “eligible guarantor institution” meeting the
      requirements of the Note Registrar, which requirements include membership or
      participation in STAMP or such other “signature guarantee program” as may be
      determined by the Note Registrar in addition to, or in substitution for, STAMP,
      all in accordance with the Securities Exchange Act of 1934, as
      amended.

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